Cattle Outlook and Market Economics Presented by John D. Lawrence and Gary May Iowa State University

Factor Shaping Markets Short supply Feedlots current Excellent demand Canadian border Japanese tariffs and demands

Total Meat Production 20026/30/03 Red meat production+3.3%-.4% Beef+3.8%-.1% Pork+2.8%+.5% Poultry production+3.1%-.4% Combined RM&P+3.2%-.4%

Per Capita Consumption Retail Weight Basis Pounds% Chg Red meat production Beef Pork Poultry production Combined RM&P

Strong Domestic Demand

Export Beef Demand 2002 v –Exports+7.8% –Imports+1.7% Jan-May 2003 v –Exports+3.5% –Imports-0.6%

Million

Percentage Change in Cattle Slaughter ’02v’01’03v’02 * Steers Heifers All Cows Dairy Cows Other Cows Total *Through end of July

Average 13.5# less

Choice Live Steer Price Forecast FuturesAAEAUSDA Q Q Q Q

Cattle inventories in Alberta, Canada, and the US AlbertaCanadaUS 1000 Head Total Cattle & Calves5,22013,37296,106 Cows & Heifers 1,9375,69142,099 Beef Cows1,8454,61632,947 Milk Cows921,0759,152 1 year & over Over 500# Heifers 7711,92519,601 Steers 6781,13516,590 Bulls ,253 Calves 1,7404,38315,563

Canadian Beef Imported to the US % of US Consumption Million As AsTotal Pounds Beef Cattle%

Live Cattle Imports from Canada FeederSlghtr Slghtr Total CattleStr&HfrCowsCattle ,36784,420645,485971, ,837832,744185,4261,270, ,685754,108259,5091,610,232 Jan-Apr 0387,884248,17185,768447,734 Cows as a percent of imported cattle from Canada % % % Jan-Apr %

Canadian Market May 17June 28July 26 Wkly Slght69,45646,20859,576 Car Wt Low Price High Price

Live Cattle Futures Before and after May 20 BSE Announcement ContractMay 12-16High 6/2Low 6/19July 10 MAY JUN JUL AUG OCT DEC FEB APR

Re-opening Canadian Border Don’t know when, but watch Sept 1 –Japan deadline Japan hold up –Develop COOL for Japan??? –Base trade on sound science –May need to change trade rules Phased opening –Muscle cuts from animals under 30 months –Cattle under 30 months with ID

Re-opening Canadian Border Don’t know when, but watch Sept 1 US supplies drawn down Restricted to young animals/meat –Cow beef is typically 15% of mix Canadian backlog is a concern –Heavier carcasses –Supplies that would have come earlier –Canadian COF down

Web Site Tools Iowa Farm Outlook Historic Basis Futures and Options research Central contact for all things beef at Iowa State University