Ron Plain D. Howard Doane Professor University of Missouri-Columbia Chicken & Competing Meats
The darker the color, the more severe the drought
U.S. Average Corn Yield, Source: USDA/NASS Lowest yield per acre since 1995
Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC
Drought Impact Drought causes reduced crop production which causes higher feed prices which causes red ink for livestock & poultry which leads to herd/flock reduction which adds meat in the short run but eventually means less meat and higher meat prices which means better profits and herd expansion
Biology of Herd Reduction Cattle –Move calves from pasture to feedlots sooner –Sell cows and breeding heifers Pigs –Sell pigs sooner –Sell sows and breeding gilts Chickens –Sell fewer heavy weight birds
Biology of Animal Reproduction Cattle –9 months of gestation –18-24 months of growth Pigs –4 months of gestation –6 months of growth Chickens –3 weeks of incubation –6 weeks of growth
Feed Cost
U.S. Corn Acres Planted, : most since 1937 Source: USDA/NASS
U.S. Corn Production, Source: USDA/NASS Smallest corn harvest since 2006
U.S. Corn Exports, Source: USDA/NASS
Corn Milled for Ethanol Forecast % corn for ethanol: : 6% : 14% : 23% : 35% : 42% Source: USDA/NASS
US Feed & Residual Use of Corn, Source: USDA/NASS
September Corn Futures Daily Close, 2012 Source: CMEGroup
U.S. Corn Price, Source: 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
U.S. Monthly Average Corn Price Thru Dec 2015 all corn futures contracts are above $5.85 per bushel
South America A large soybean harvest is expected –Brazil up 22% –Argentina up 34%
Meat Demand
Growth in Real GDP Source: U.S. Commerce Department
U.S. Civilian Employment, Source: Bureau of Labor Statistics, household survey, seasonally adjusted & MU, /month In September 2012, U.S million jobs under trend
Gasoline Prices & Meat Demand, Source: U.S. Energy Information Administration Correlation = -0.37
Index of Retail Meat Demand Base Elasticity = Source: Ron Plain, MU
Boneless Retail Meat Prices as % of Bologna, Monthly, Source: USDA/ERS
Change in Retail Meat Demand Base Elasticity =
Seasonal Price Patterns
Livestock Marketing Information Center Data Source: USDA-AMS
Seasonal Average Hog Price Source: USDA Prior Day Slaughter reports $/cwt
Broiler Situation
Livestock Marketing Information Center 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-AMS & USDA-NASS Broiler slaughter is down 4.0%
Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS Broiler production is down 4.1%
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
Broiler Price & Production 2012 broiler production is expected to be down 1.2% from 2011 with wholesale prices that are 6.3% higher than in broiler production is expected to be down 1.1% from 2012 with wholesale prices that are 4.8% higher than in Source: USDA-OCE WASDE, September 2012
Plain’s Forecast % 79 cents/lb % 86 cents/lb % 90 cents/lb % 85 cents/lb Broiler Broiler Production Price
Turkey Situation
Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS Turkey production is up 1.8%
Livestock Marketing Information Center Data Source: USDA-AMS
Turkey Production 2012 turkey production is expected to be up 2.9% from 2011 with wholesale prices that are 5.4% higher than in turkey production is expected to be down 3.2% from 2012 with wholesale prices that are 0.9% lower than in Source: USDA-OCE WASDE, September 2012
Cattle Situation
2012: 90.8 million head, Down 2.1% Lowest inventory since 1952 Source: USDA/NASS
July 2012 Cattle Inventory percent of year earlier All Cattle & Calves 97.8 Beef Cows 97.1 Dairy Cows100.0 Beef Replace. Heifers100.0 Dairy Replace. Heifers 97.6 Other Heifers 97.4 Steers 500 lbs & up 98.6 Calves under 500 lbs 97.4
2012: 34.5 million head, Down 2.3% Source: USDA/NASS
2011: 26.2 billion pounds, down 0.4%
July 2012 Cattle Inventory percent of year earlier Steers 500 lbs & up98.6 Other heifers 97.4 Calves under 500 lbs97.4 Combined97.8 Combined 97.8% = 2.2% fewer cattle being kept for marketing which should mean the number of fed cattle marketed in coming months will be down 2.2%
Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
2012 cow slaughter is down 4.6%
Beef Price & Production 2012 beef production is expected to be down 1.6% from 2011 with slaughter steer prices that are 5.5% higher than in beef production is expected to be down 4.3% from 2012 with slaughter steer prices that are 5.0% higher than in Source: USDA-OCE WASDE, September 2012
Plain’s Forecast %$114.73/cwt %$122/cwt %$132/cwt %$135/cwt Beef Steer Production Price
Pork Situation
Annual U.S. Pork Production,
Source: USDA/NASS
Hog Inventory Reports U.S. Sept Canada July
U.S. Pigs Per Litter by Quarter
Pork Price & Production 2012 pork production is expected to be up 2.0% from 2011 with slaughter hog prices that are 8.5% lower than in pork production is expected to be down 1.3% from 2012 with slaughter hog prices that are 6.6% higher than in Source: USDA-OCE WASDE, September 2012
Plain’s Forecast %$87.56/cwt %$82.00/cwt %$85.00/cwt %$87.00/cwt Pork Carcass Production Price
Meat Trade
U.S. Meat Exports,
Meat Imports/Exports as % of U.S. Production In 2011, the U.S. exported –10.6% of beef production –22.8% of pork production –18.8% of broiler production –12.1% of turkey production In 2011, U.S. imports equaled –7.8% of beef production –3.5% of pork production –0.3% of broiler production –0.4% of turkey production
Livestock Marketing Information Center Data Source: USDA-FAS
Livestock Marketing Information Center Data Source: USDA-FAS
Livestock Marketing Information Center Data Source: USDA-FAS
Meat Situation
Source: USDA/ERS 2013 per capita meat consumption lowest since 1990
Source: USDA/ERS
Forecast Change in Meat Production --Percent Change-- Type Beef - 1.6% - 4.3% Pork +2.0% - 1.3% Chicken - 1.2% - 1.1% Turkey +2.9% - 3.2% All Meats - 0.2% - 2.2% Source: USDA-OCE WASDE, September 2012
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