2011 cattle situation and outlook
DESCRIPTION
Presentation by Tim Petry, NDSU Extension Service livestock economist. This slideshow was part of the 2011 NDSU Feedlot School.TRANSCRIPT
Cattle Situation and OutlookCattle Situation and Outlook
January 2011
Tim PetryLivestock Economist
www.ag.ndsu.edu/livestockeconomics
01/27/11Carrington-Jan2011
www.lmic.info
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Authors:
Darrell Mark, Ph.D.University of Nebraska Lincoln
Dillon Feuz, Ph.D.Utah State University
Tim Petry, M.S.North Dakota State University
John Michael Riley, Ph.D.Mississippi State University
In The Cattle MarketsNovember 8, 2010
Tim Petry, Livestock EconomistNorth Dakota State University Extension Service
Northern Plains Calf Markets
The fall calf marketing season started a little later than normal in the Northern Plains, but is now ramping up. Good pasture and range conditions, plenty of crop aftermath grazing, and ideal fall weather for harvesting late maturing crops limited fall calf marketing. So, unlike the relatively poor pasture conditions and short hay supplies in the Southeastern U.S. that John Michael Riley reported in the “In The Cattle Markets” column last week; the Northern Plains is in very good shape. Hay prices reported by NASS, USDA are lower in North Dakota than in any other state.
A rain and snow storm in parts of the Dakotas and Montana on October 25-27 further limited movement of calves to market, but put producers in the mood to start weaning and marketing. Last week (Nov. 1-6) saw the biggest runs of calves at Northern Plains’ auction barns for the season. This week should be another big week for marketing calves.
Calf prices in the Northern Plains have generally been declining seasonally the last couple of months as corn prices have surged. But prices have averaged about $15 per hundredweight above the last two year’s depressed levels. A wide range in prices for the same weight and grade of calves at the same auction market is being reported due to the many factors that affect calf value. North Dakota auctions last week reported a $12 to $13 per cwt. range in prices as typical for a 50 pound weight range in steer prices. Some “value added” calves were reported to bring $15 to $16 per cwt. more than the lowest priced calves in the weight range. A 575 pound steer calf that brings $12/cwt. more returns an additional $69 per head. So, producers are encouraged to contact their market soon for tips on marketing and management practices that can help bring the highest possible prices.
Several Northern Plains auctions reported contra seasonally higher calf prices in the last couple of weeks, just as the heavy runs started. There are several reasons for that. Higher corn prices have caused the spread between the lighter weight calves and the heavier feeder cattle to narrow as feedlots prefer to purchase weight. That has created an opportunity for backgrounding programs that can utilize cheaper forages, co-products, silage, and alternative feed grains such as feed barley in rations. With the ample supply of these in the Northern Plains, the demand for calves to background has picked up.
Another interesting recent development is the renewed interest in Northern Plains’ calves from Canadian feedlots. For the first time since 2003, there are reports of U.S. feeder calves heading north into Canada. Feed barley prices in the Northern Plains and Canada have not increased as much as corn prices. I have been traveling to producer meetings with Dr. Frayne Olson, NDSU Extension crops economist. When giving the crop price outlook he has been mentioning the above average amounts of wheat and field peas in Canada that have suffered from adverse weather conditions and are feed grade. These will also cheapen rations for the Canadian livestock feeding sector. For the week ending November 5, the average price of 501-600 lb. steer prices on a $U.S. basis at cattle auctions in Saskatchewan was reported at $132.09/cwt. compared to across the border in Montana at $123.59. So the cheaper cost of gain there is evident and shows why there may be interest in Northern Plains’ calves.
Bear VS BullDemand Supply
National Restaurant Association’s Restaurant IndexValues Greater than 100 = Expansion; Values Less than 100 = Contraction
Sou
rce:
Nat
iona
l Res
taur
ant A
ssoc
iati
on
U.S. Meat TradeU.S. Meat TradePercent Change, 2010 from 2009
Jan-Nov
18%
-12%
16%
2%
-11%
-2%
7%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Beef Exports Beef Imports Cattle Imports Pork Exports
Hog Imports Broiler Exports Turkey Exports
Livestock Price and Production Patterns1. Seasonal
2. Cycle
3. Long term
4. Unexpected
HEIFERS HELD AS BEEF COW REPLACEMENTS
July 1, U.S.
3
4
5
6
7
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
Mil. Head
C-N-3707/23/10
-2.2 %
JULY 1 FEEDER CATTLE SUPPLIESResidual, Outside Feedlots, U.S.
30
35
40
45
50
55
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010
Mil. Head
C-N-3207/23/10
Livestock Marketing Information CenterData Source: USDA/NASS
-3%
Is the Cattle Cycle Dead?Is the Cattle Cycle Dead?
RIPRIP
CattleCattleCycleCycle
20092009
When will beef cow slaughter decline?When will beef herd rebuilding start?
Cattle Price Outlook or LOOK OUT!
1.50
2.50
3.50
4.50
5.50
6.50
7.50
$ Per Bu.
OMAHA CORN PRICESWeekly
Avg.2002-06
2007
2008
2009
2010
2011
Corn Prices – New Plateau!
G-P-02Data Source: USDA-AMS, Compiled by LMIC
2010 Corn Prices
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Omaha Southern Plains Hunter
2009 Hay Prices
40
60
80
100
120
140
J F M A M J J A S O N D
ND Other ND Alfalfa US Other US Alfalfa
MED. FRAME #1 STEER CALF PRICES550-600 Pounds, Dakotas, Weekly
90
100
110
120
130
140
150
JAN APR JUL OCT
20072008200920102011
80
90
100
110
120
130
140
150
$ Per Cwt.
MED. FRAME #1 STEER CALF PRICES550-600 Pounds, Dakotas, Weekly
2005
2006
2011
Livestock Marketing Information Center
MED. & LRG. #1 FEEDER STEER PRICES750-800 Pounds, Dakotas, Weekly
80
85
90
95
100
105
110
115
120
125
130
JAN APR JUL OCT
2007
2008
2009
2010
2011
Fut 2011
Livestock Marketing Information Center
74
84
94
104
114
124
134
$ P
er C
wt.
MED. & LRG. #1 FEEDER STEER PRICES750-800 Pounds, Dakotas, Weekly
2005
2006
2011
SF_LS796Sioux Falls, SD Fri Jan 21, 2011 USDA-ND Dept Ag Market News
North Dakota Weekly Auction Summary - For the week ending Jan 21, 2011
Receipts: 9,831 Last Week 13,705 Last Year 16,527
Combined results of 4 auctions this week: Kist, Napoleon, Stockmen’s and West Fargo.
Compared to last week’s larger receipt numbers feeder steers 500-800 lbs 3.00 to 7.00 higher; over 800 lbs steady. Feeder heifers 400-700 lbs mostly 4.00 to 6.00 higher; 700-800 lbs 1.00 to 3.00 higher. All other weights lacked comparable sales for trending purposes. The action at the auction barns remains very good for most calves offered. Buyers remain very active in their pursuit of feeder cattle. The corn and live cattle futures continue their positive outlooks.
Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price 26 368-398 385 162.50-165.50 164.28 47 401-445 433 156.00-167.00 159.48 48 456-488 480 150.00-163.00 154.62 226 501-546 521 143.00-158.75 152.43 339 553-596 576 137.00-149.50 144.11 5 563 563 155.00 155.00 Fancy 638 600-649 625 130.50-145.50 139.07 Calves 769 655-697 681 126.50-138.00 133.54 Calves 526 700-742 718 126.00-134.75 131.08 385 703-746 725 118.00-132.00 128.33 Calves 49 715 715 137.75 137.75 Fancy 15 718 718 137.00 137.00 Value Added 695 750-796 776 121.50-131.00 127.14 30 750-782 771 124.50-127.25 125.47 Calves 659 800-849 820 120.00-126.50 122.80 164 850-898 869 116.00-122.75 119.90 68 904-945 921 115.50-117.25 116.48
SF_LS796Sioux Falls, SD Fri Jan 21, 2011 USDA-ND Dept Ag Market News
North Dakota Weekly Auction Summary - For the week ending Jan 21, 2011
Receipts: 9,831 Last Week 13,705 Last Year 16,527
Combined results of 4 auctions this week: Kist, Napoleon, Stockmen’s and West Fargo.
Compared to last week’s larger receipt numbers feeder steers 500-800 lbs 3.00 to 7.00 higher; over 800 lbs steady. Feeder heifers 400-700 lbs mostly 4.00 to 6.00 higher; 700-800 lbs 1.00 to 3.00 higher. All other weights lacked comparable sales for trending purposes. The action at the auction barns remains very good for most calves offered. Buyers remain very active in their pursuit of feeder cattle. The corn and live cattle futures continue their positive outlooks.
Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price 82 400-448 428 142.00-158.50 149.83 135 450-492 471 138.50-153.00 145.79 262 508-547 533 134.00-141.50 138.26 376 551-599 576 125.25-140.25 133.37 670 600-648 627 122.50-133.00 128.03 Calves 533 650-698 672 119.00-127.00 123.26 Calves 7 690 690 116.50 116.50 Fleshy 386 700-746 726 117.00-126.50 120.19 105 701-748 720 119.00-124.75 120.80 Calves 80 731-733 732 134.75-137.50 136.68 Replacement 107 751-790 778 113.75-120.25 118.05 33 802-829 815 106.50-115.00 112.16 6 811 811 101.50 101.50 Fleshy 12 854-859 857 109.50-110.00 109.79 5 907 907 99.25 99.25 Fleshy 28 952-985 973 110.00-114.50 111.57
CHOICE SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly
75
80
85
90
95
100
105
110
115
120
JAN APR JUL OCT
2007
2008
2009
2010
2011
Fut 2011
330
340
350
360
370
380
390
400
J F M A M J J A S O N D
Billi
on D
olla
rs
U.S. Monthly Retail and Food Sales
Source: U.S. Census Bureau
20072008
2010
2009
Live
stoc
k M
arke
ting
Info
rmat
ion
Cen
ter
Dat
a S
ourc
e: U
SD
A-A
MS
WHOLESALE BEEF LOIN STRIP PRICESBoneless 0x1, Weekly
350
400
450
500
550
600
650
700
$ Per Cwt.
Avg.2004-08
2009
2010
2011
01/03/11
WHOLESALE BONELESS BEEF PRICESFresh, 90% Lean, Weekly
120
130
140
150
160
170
180
190$ Per Cwt.
Avg.2004-08
2009
2010
2011
M-P-2401/03/11
Competing MeatsCompeting MeatsBARROW AND GILT PRICES
Iowa - So. Minnesota, Carcass Base Price, Weekly
40
45
50
55
60
65
70
75
80
85
90$ Per Cwt.
Avg.2005-09
2010
2011
H-P-0901/18/11
Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
BROILER PRICES12-City Composite, Weekly
68
73
78
83
88
93Cents Per Pound
Avg.2005-09
2010
2011
P-P-0101/18/11
SLAUGHTER LAMB PRICESWooled, 110-130 lbs, Sioux Falls, Weekly
85
95
105
115
125
135
145
155
165
175
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
S-P-0501/18/11
38
43
48
53
58
63
68
JAN APR JUL OCT
$ Per Cwt.
SLAUGHTER COW PRICES85-90% Lean, Weekly
Avg. 2002-06
2007
2008
2009
2010
2011
C-P-3501/05/09Data Source: USDA-AMS, Compiled by LMIC
Price Risk Management Tools
• Cash forward contract• Video and internet auctions• CME futures• CME options• Livestock Risk Protection (LRP)• Livestock Gross Margin (LGM)• Which one or combination fits your
marketing plan?
A Pot of Gold for the Next Several Years
Questions?Questions?