Cattle Market Update Derrell S. Peel Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist Oklahoma State University
2016 Market Setting Global U.S. Economy Agriculture Cattle Industry
Major Beef Market Factors Cattle Inventory and Beef Production Beef Demand International Trade Feed and Input Markets Forage Conditions
Current Situation
Data Source: USDA-AMS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled and Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS
Data Source: USDA-ERS
Data Source: USDA-AMS Livestock Marketing Information Center
U.S. Beef Cow Inventory 1955-2015
Data Source: USDA-NASS, Analysis by LMIC Livestock Marketing Information Center
Beef Cow Inventory by Cycle U.S., January 1 Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC
Decreasing Crop Values $/bushel, Crop Years 2010 2011 2012 2013 2014 2015 2016* % Change 2015-2016 Wheat 5.70 7.20 7.77 6.87 5.99 4.89 3.70 -24.3 Corn 5.18 6.20 6.89 4.46 3.60 3.30 -8.3 Soybeans 11.30 11.70 14.40 13.00 10.10 8.95 9.20 +2.7 Sorghum 5.02 6.10 6.33 4.28 4.03 3.10 -6.1 Barley 3.86 5.40 6.43 6.06 5.30 5.52 4.85 -12.1 Oats 2.52 3.40 3.89 3.75 3.21 2.12 1.85 -12.7 Rice (cwt.) 12.70 14.30 15.10 16.30 13.40 12.20 10.60 -13.1 *forecast
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Cattle Slaughter and beef production
Data Source: USDA-NASS Livestock Marketing Information Center
Data Source: USDA-NASS Livestock Marketing Information Center
Data Source: USDA-NASS Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-NASS Livestock Marketing Information Center
Cattle Slaughter Federally Inspected, 1000 Head 2014 2015 % Change 2014 to 2015 2016 % Change YTD* Steers 15378 15332 -0.3 +7.0 Heifers 8378 7350 -12.3 +3.3 Dairy Cows 2816 2914 +3.5 -1.4 Beef Cows 2565 2236 -12.8 +13.3 Bulls 548 463 -15.5 +6.2 Total 29684 28295 -4.7 +5.7 *Data through November 12, 2016
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Steer to Heifer Slaughter Ratio 12 month MA
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Beef Cow Slaughter Percent of Total Cow Slaughter, 12 month MA
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Steer Carcass Weights, lbs.
Increasing Steer Carcass Weights Last 50 years +5 pounds/year Last 25 years +6 pounds/year Last 10 years +8 pounds/year Last 5 years +11 pounds/year Last year (2015) +20 pounds/year Is there a limit? Production? Demand? Bigger cattle may not be helping on the ranch and may not be helping at retail
Beef Demand Issues Carcass weight and product size Steak size (surface area) versus thickness Weight and cost per plate or package Maximizing total carcass value Value cuts “Steak” versus “Hamburger” tradeoff? Quality versus quantity
Primals as Percent of Cutout, Choice 2005-2015
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Commercial Beef Production Beef Cow Inventory Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC and Derrell Peel 2016-2017 Forecast
Data Source: USDA/NASS Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Meat Production and Consumption Consum. Change Consum. Per Capita Change 2014 2015 2014-2015 2016 2015- 2015-2016 Million lbs. % Million lbs. Retail Lbs. Beef 24252 23698 -2.3 24938 +5.2 0.0 55.2 +2.0 Pork 22843 24501 +7.3 24874 +1.5 +8.5 50.0 0.6 Broilers 38153 39620 +3.8 40341 +1.8 +6.7 90.0 +1.2
Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
International trade
Major Beef Producing and Consuming Countries, 2016 PRODUCTION USA Brazil EU China India Argentina Australia * Mexico Pakistan Turkey CONSUMPTION USA EU China Brazil India Argentina Russia Mexico Pakistan Turkey Source: USDA-FAS, Oct 2016
India: Beef Exports
China: Beef Imports
Mexico: Beef Exports
Major Beef Trading Countries, 2016 EXPORTS India (tie) Brazil (tie) Australia USA New Zealand Canada Paraguay Uruguay EU Mexico IMPORTS USA China Japan Russia South Korea Hong Kong EU Egypt Canada Chile/Malaysia Source: USDA-FAS, Oct 2016
Data Source: Pacific Exchange Rate Service, Univ. of B. C Data Source: Pacific Exchange Rate Service, Univ. of B.C., Compiled by LMIC Livestock Marketing Information Center
Data Source: Pacific Exchange Rate Service, Univ. of B. C Data Source: Pacific Exchange Rate Service, Univ. of B.C., Compiled by LMIC Livestock Marketing Information Center
U.S. Beef Exports 2015 (1000 lbs.) % Change 2014 to 2015 % Change YTD 2015 to 2016* Japan 538353 -18.7 +15.2 Mexico 363023 -16.6 +12.3 Hong Kong 315784 -24.1 -8.5 Canada 323774 -11.1 -7.0 S. Korea 318809 +5.9 +33.4 Total 2265950 -11.9 +8.6 *January-September
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
U.S. Beef Exports Major Markets
U.S. Beef Imports 2015 (1000 lbs.) % Change 2014 to 2015 % Change YTD 2015 to 2016* Australia 1258266 +16.2 -35.8 Canada 628397 +4.4 +12.7 New Zealand 661287 +10.7 0.0 Mexico 391937 +26.4 +10.6 Brazil 149580 +83.6 -16.8 Total 3370484 +14.4 -12.0 *January-September
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
U.S. Beef Imports Major Markets
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
Cattle Imports from Canada Major Categories, Annual
Data Source: USDA-AMS Livestock Marketing Information Center
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma
Price-Weight Relationship Medium/Large No. 1 Steers, OKC
Steer Price, Total Value and Value of Gain November 18, 2016, 7 Mkt Steer Price, Total Value and Value of Gain November 18, 2016, 7 Mkt. Ave., Oklahoma Weight (lbs) Average Price ($/cwt.) Total Value ($/hd) VOG 400 lb. Beg. Weight ($/lb.) 450 lb. Beg. Weight ($/lb 500 lb. Beg. Weight 550 lb. Beg. Weight 600 lb. Beg. Weight 650 lb. Beg. Weight 400 $166.81 $667 450 $159.73 $719 $1.03 500 $151.76 $759 $0.92 $0.80 550 $142.88 $786 $0.79 $0.67 $0.54 600 $134.27 $806 $0.69 $0.58 $0.47 $0.40 650 $130.70 $850 $0.73 $0.65 $0.61 $0.64 $0.88 700 $129.52 $907 $0.75 $0.74 $0.81 $1.01 $1.14 750 $128.61 $965 $0.85 $0.82 $0.89 $1.06 $1.15 800 $128.59 $1,029 $0.90 $0.97 $1.12 $1.19 850 $129.29 $1,099 $0.96 $0.95 $1.04 $1.17 $1.25 900 $127.74 $1,150 $0.98 $1.20
Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center
Send Email to derrell.peel@okstate.edu The Weekly Email Newsletter From OSU Animal Science and Agricultural Economics Send Email to derrell.peel@okstate.edu
Other Hay Production Tons Per Beef Cow
Oklahoma Hay Use per Beef Cow 1970-1984 0.87 tons/cow 1,740 lbs 2000-2014 2.11 tons/cow 4,220 lbs Why 2,480 lbs of extra hay needed per cow? Bigger cows Does not account for increased hay use (maybe 20%) Should they be bigger? What size cow is most efficient? Wasted Hay (maybe 40 %) 50% storage and feeding losses Longer Feeding Time (maybe 40 %) 30-40 days extra feeding
Calculated Grazed Forage and Hay Cost Type of Forage Native (State average) Bermuda Old World Bluestem* (W. Okla.) Fescue (E. Okla.) Bermuda Hay Pasture rental rate, ($/acre/year) $13.39 $21.05 $15.25 $25.86 $83/ton Stocking rate, spring calving cow-calf (acres/cow) 9.1 5.5 9.0 3.5 Grazing season (days) 265 270 285 180* 1700 lbs. available forage Calculated cost of forage ($/pound)^ $0.015 $0.014 $0.016 $0.017 $0.049 Range across regions $0.012-$0.018 $0.012-$0.014
Data Source: USDA-AMS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-NASS, Forecasts by LMIC Livestock Marketing Information Center
Data Source: Bureau of Labor Statistics & USDA-ERS Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-NASS Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center
Data Source: USDA-NASS, Forecasts by LMIC Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: USDA-AMS Livestock Marketing Information Center
Data Source: Bureau of Labor Statistics & USDA-ERS Livestock Marketing Information Center
2015: 91.98 million head +3.2 % Data Source: USDA-NASS Livestock Marketing Information Center
OK Combined and 5-MKT Fed
Analysis by Derrell Peel Average: Heifer % = 17.4 Culling % = 9.6 Analysis by Derrell Peel Data Source: USDA-NASS
Data Source: USDA-NASS Livestock Marketing Information Center
Monthly Placements and Cattle on Feed 12 Month Moving Ave.
Price-Weight Relationship Medium/Large No. 1 Steers, OKC