1. Cattle and Beef Markets: Short and Long Run Challenges and Opportunities
Derrell S. Peel
Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist
Oklahoma State University

2. Major Beef Market Factors
Cattle Inventory and Beef Production
Beef Demand
International Trade
Feed and Input Markets
Forage Conditions

3. Livestock Marketing Information Center
Data Source: USDA-AMS

4. Livestock Marketing Information Center
Data Source: USDA-AMS

5. Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

6. Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

7. Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

8. Livestock Marketing Information Center
Data Source: USDA-AMS

9. Livestock Marketing Information Center
Data Source: USDA-NASS

10. Input Shock-Recession Liquidation Liquidation Drought Expansion
Cyclical
Liquidation
Cyclical
Input Shock-Recession
Liquidation
Liquidation
Drought
Expansion
Cyclical
Liquidation
Drought
Livestock Marketing Information Center
Data Source: USDA-NASS

11. Livestock Marketing Information Center
Data Source: USDA-NASS

12. Livestock Marketing Information Center
Data Source: USDA-NASS

13. Commercial Beef Production
Total Cattle Inventory
Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

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

17. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Forecasts by LMIC

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

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

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

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

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

24. Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

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

26. Livestock Marketing Information Center
Data Source: USDA-AMS

27. Livestock Marketing Information Center
Data Source: USDA-AMS

28. Livestock Marketing Information Center
Data Source: USDA-AMS

29. Livestock Marketing Information Center
Data Source: USDA-AMS

30. Livestock Marketing Information Center
Data Source: USDA-AMS

31. Livestock Marketing Information Center
Data Source: USDA-AMS

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

33. Livestock Marketing Information Center
Data Source: USDA-AMS

34. Livestock Marketing Information Center
Data Source: USDA-AMS

35. Livestock Marketing Information Center
Data Source: USDA-AMS

36. Livestock Marketing Information Center
Data Source: USDA-AMS

37. Livestock Marketing Information Center
Data Source: USDA-AMS

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

39. Livestock Marketing Information Center
Data Source: USDA-AMS

40. Livestock Marketing Information Center
Data Source: USDA-AMS

41. Livestock Marketing Information Center
Data Source: USDA-AMS

42. Livestock Marketing Information Center
Data Source: USDA-NASS

43. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS

44. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

45. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

46. U.S. Beef Exports
Major Markets

47. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS

48. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

49. United States: Beef Trade 2013-2014 Projected

50. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

51. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

52. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS

53. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS

54. Livestock Marketing Information Center
Data Source: USDA-AMS

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

56. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Forecasts by LMIC

57. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Forecasts by LMIC

58. Livestock Marketing Information Center
Data Source: USDA-AMS

59. Livestock Marketing Information Center
Data Source: USDA-NASS

60. Livestock Marketing Information Center
Data Source: USDA-NASS

61. Livestock Marketing Information Center
Data Source: USDA-NASS

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

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

64. 2013 Cattle Market Expectations
Cattle and beef prices pushed higher by limited supplies
Beef production down by %
Beef demand will limit price increases
Question is “How much higher?”
Moderation in feed prices
Higher cow and heifer prices (if no drought)
Breeding cow and heifer demand

65. Data Source: USDA-NASS, Calculations by Derrell Peel

66. Data Source: USDA-NASS, Calculations by Derrell Peel

68. 2012, Projected

69. Source: Nevil Speer. Based on corn at 88% and hay at 55% TDN

70. Stocker Value of Gain, Average Weekly, 1992-2006
Weeks
Weight
Gain
Beg. 12 15 16 17 18 19 20 22 23 24
200 lbs
ADG>>
2.38
1.79
1.58
1.43
475
0.559
0.568
0.572
0.576
525
0.571
0.581
0.586
0.587
575
0.583
0.593
0.596
0.598
625
0.579
0.590
0.592
250 lbs
2.10
1.88
1.55
0.575
0.577
0.573
0.578
0.582
0.588
300 lbs
2.14
1.95
0.574

71. Feedlot Cost of Gain Kansas, $/cwt.

72. Steer Price, Total Value and Value of Gain 2010-2012, OKC, 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
$167.07
$668
450
$159.11
$716
$0.95
500
$152.33
$762
$0.93
$0.91
550
$146.85
$808
$0.92
600
$141.85
$851
$0.90
$0.89
$0.87
650
$137.62
$895
700
$134.35
$940
$0.88
750
$131.58
$987
800
$128.72
$1,030
850
$125.58
$1,067
$0.86
900
$121.55
$1,094
$0.85
$0.84
$0.83
$0.82
$0.81
$0.80

73. Data Source: KSU Focus on Feedlots, Compiled by LMIC

74. Corn Price and Estimated Feedlot Cost of Gain Based on Kansas Feedlot Data
$/Bu
Estimated Feedlot Cost of Gain $/cwt.
5.00
87.1
5.50
92.5
6.00
97.8
6.25
100.3
6.50
102.9
6.75
105.4
7.00
107.8
7.25
110.3
7.50
112.7
7.75
115.0
8.00
117.4
8.25
119.7
8.50
122.0

75. Change in Beef Cow Inventory, January 1, 2007-2012
-18.1%
+5.4%
-8.3%
-9.9%
-1.4%
0.0%
-0.9%
-3.5%
-2.0%
+0.9%
-2.6%
-11.4%
+6.7%
-0.8%
-2.9%
+4.9%
-22.5%
-16.7%
-4.1%
+3.3%
-6.5%
-4.9%
-11.4%
-11.8%
-15.4%
-8.2%
-7.5%
-15.7%
-1.75, 2011
-17.6%
-1.3%
-9.4%
-5.4%
-0.4%
-12.5%
-5.4%
-16.4%
-3.7%, 2011
U.S. Ave., -8.5 %
-7.8%
-1.1%

76. Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC

77. Cattle Sector Implications
Cow-calf
Good profit potential; cost management key
Rebuilding strategy and costs
Producer transition
Stocker
Good value of gain
Feedlots and packers will continue to struggle
Loss of capacity likely
Production challenges bigger than marketing challenges

78. Send Email to derrell.peel@okstate.edu
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79. Thank you!