2019 Cattle Market Update Derrell S. Peel Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist Oklahoma State University

Ronan, Montana February, 2019

2019 Cattle and Beef Market Issues Cattle inventories peaking Continued but slow growth in beef production Continued strong beef demand is key Domestic and international Biggest threats are external Slowing economic growth in U.S. and global Trade Issues

2019 Cattle and Beef Market Issues cont. Trade Issues USMCA U.S. steel and aluminum tariffs CP-TPP (continues without U.S.) Japan China E.U./Brexit ??

Data Source: USDA-AMS Livestock Marketing Information Center

Data Source: USDA-AMS Livestock Marketing Information Center

Price-Weight Relationship Medium/Large No. 1 Steers, Oklahoma

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, Compiled & Analysis by LMIC Livestock Marketing Information Center

Data Source: USDA-AMS Livestock Marketing Information Center

Hay Stocks, December 1 YOY Change OK -3.3 % TX -29.7 % KS -4.4 % AR -19.5 % MO -17.6 % 5-state total -16.0 % U.S. -6.4 %

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

U.S. Cattle Inventory January 1 2017 2018 2019* % Change 1000 Head All Cattle and Calves 93704.6 94399.2 95189.8 +0.8 Beef Cows 31213.2 31723.0 31881.6 +0.5 Dairy Cows 9346.0 9399.6 9375.0 -0.3 Beef Replacements 6368.2 6131.2 5780.0 -5.7 Dairy Replacements 4754.0 4781.3 4760.0 -0.4 Feeder Supply 26712.6 26105.3 26906.7 +3.1 Cattle on Feed 13067.0 14006.4 14272.5 +1.9 2016 Calf Crop 35092.7 35808.2 36414.7 +1.7 *Forecasts by Derrell Peel

Data Source: USDA-NASS Livestock Marketing Information Center

Beef Replacement Heifers as % of Beef Cows, January 1

Analysis by Derrell Peel Average: Heifer % = 17.9 Culling % = 9.53 Analysis by Derrell Peel Data Source: USDA-NASS

Data Source: USDA-NASS Livestock Marketing Information Center

Data Source: USDA-NASS Livestock Marketing Information Center

Monthly Placements and Cattle on Feed 12 Month Moving Ave.

Cattle Slaughter Federally Inspected, 1000 Head 2016 2017 % Change 2016 to 2017 2018 YTD % Change Steers 16495 16771 +1.7 -0.7 Heifers 7698 8611 +11.9 +6.4 Dairy Cows 2886 2988 +3.6 +5.2 Beef Cows 2543 2784 +9.5 +8.7 Bulls 494 550 +11.4 -0.5 Total 30115 31771 +5.3 +2.6 Latest data: December 31, 2018

Cattle Slaughter Federally Inspected, 1000 Head 2017 2018 % Change 2017 to 2018 2019 YTD % Change Steers 16771 16645 -0.7 -6.3 Heifers 8611 9163 +6.4 +5.0 Dairy Cows 2988 3143 +5.2 +4.1 Beef Cows 2784 3025 +8.7 -2.0 Bulls 550 547 -0.5 -2.5 Total 31771 32522 +2.6 -1.6 Latest data: January 19, 2018

Steer to Heifer Slaughter Ratio 12 month MA September, 2018

Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center

Data Source: USDA-AMS & USDA-NASS Livestock Marketing Information Center

Dressed Weights 12 month Moving Average, Federally Inspected

2018/2019 Meat Production and Consumption Consum. Change Consum. Per Capita Change 2017 2018 2017-2018 2019 2018- 2018-2019 Million lbs. % Million lbs. Retail Lbs. Beef 26187 26867 +2.6 27298 +1.6 +0.0 57.0 +0.2 Pork 25584 26323 +2.9 26966 +2.4 +1.2 50.8 Broilers 41217 42266 +2.5 42540 +0.6 +1.8 91.9 -0.5 Total 99739 102171 103072 +0.9 +1.0 217.8 -0.4 2018 projected and 2019 forecast LMIC, February 6, 2019

Data Source: USDA-AMS, Compiled by LMIC Livestock Marketing Information Center

Data Source: USDA-ERS January, 2019

January, 2019 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC January, 2019

Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC Livestock Marketing Information Center

Data Source: USDA-FAS, Oct 2018 Livestock Marketing Information Center

Data Source: USDA-FAS, Oct 2018

Data Source: USDA-FAS

China: Beef Imports

U.S. Beef Exports 2016 (1000 lbs.) % Change 2015 to 2016 2017 % of Total Exports YTD % Of 2017 Japan 655426 +21.5 826204 +26.1 28.9 +6.8 Mexico 394952 +8.9 419506 +6.2 14.7 +7.3 Hong Kong 293813 -7.0 335719 +14.3 11.7 -5.9 Canada 311905 -4.8 +1.2 10.8 -1.6 S. Korea 459158 +44.0 472768 +3.0 16.5 +36.6 Total 2555698 +12.7 2861557 +12.0 +11.3 YTD: Jan-Nov

2018 U.S. Beef Exports Share of Total, January-November

Data Source: USDA-ERS & USDA-FAS, Compiled and Forecasts by LMIC Livestock Marketing Information Center

U.S. Beef Imports 2016 (1000 lbs.) % Change 2015 to 2016 2017 % of Total Imports 2018 YTD % of 2017 Australia 767216 -39.0 695253 -9.4 +23.2 -1.6 Canada 717798 +14.2 741070 +3.2 +24.8 +6.0 New Zealand 612549 -7.4 557529 -9.1 +18.6 +4.3 Mexico 493446 +25.9 573520 +16.2 +19.2 -12.9 Brazil 152703 +2.1 138430 -9.3 +4.6 +2.6 Total 3014636 -10.6 2994382 -0.7 +0.1 YTD: Jan-Nov

2018 U.S. Beef Imports Share of total, January-November

Data Source: USDA-ERS & USDA-FAS, Compiled and Forecasts by LMIC 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 Livestock Marketing Information Center

Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center

2019-2020 Cattle Price Forecasts   Feeder Steer Price (Southern Plains) Fed Steer 5-600 lb. ($/cwt.) % chg from Last Year 7-800 lb. 5-mkt avg. ($/cwt) 2017 Annual 166.00 0.0 148.17 +2.1 121.52 +0.5 2018 171.39 +3.2 150.00 +1.2 117.12 -3.6 2019 I 167-171 -6.1 142-145 -3.5 123-124 -1.7 II 170-176 +1.7 143-148 +0.7 118-120 +2.0 III 167-175 +3.3 145-151 -5.1 109-112 -0.3 IV 164-173 146-154 -0.5 155-119 +1.5 167-174 144-150 -2.0 116-119 +0.3 2020 170-179 +2.3 147-154 +2.4 117-1210 +1.3 LMIC, February 6, 2019

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