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

2. 2016 Market Setting
Global
U.S. Economy
Agriculture
Cattle Industry

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

4. Current Situation

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

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

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

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

9. Data Source: USDA-AMS

10. Data Source: USDA-ERS

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

12. U.S. Beef Cow Inventory

13. Data Source: USDA-NASS, Analysis by LMIC
Livestock Marketing Information Center

14. Beef Cow Inventory by Cycle U.S., January 1
Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC

18. Decreasing Crop Values $/bushel, Crop Years
2010
2011
2012
2013
2014
2015
2016*
% Change
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

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

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

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

22. Cattle Slaughter and beef production

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

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

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

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

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

28. 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

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

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

31. Steer to Heifer Slaughter Ratio 12 month MA

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

33. Beef Cow Slaughter Percent of Total Cow Slaughter, 12 month MA

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

35. Steer Carcass Weights, lbs.

37. 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 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

38. 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

39. Primals as Percent of Cutout, Choice 2005-2015

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

43. Commercial Beef Production
Beef Cow Inventory
Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC and Derrell Peel
Forecast

44. Data Source: USDA/NASS
Livestock Marketing Information Center

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

46. Meat Production and Consumption
Consum. Change
Consum.
Per Capita
Change
2014
2015
2016
2015-
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

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

48. International trade

49. 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

50. India: Beef Exports

51. China: Beef Imports

52. Mexico: Beef Exports

53. 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

54. 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

55. 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

56. 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
-11.9
+8.6
*January-September

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

58. U.S. Beef Exports
Major Markets

59. U.S. Beef Imports 2015 (1000 lbs.) % Change 2014 to 2015
% Change YTD 2015 to 2016*
Australia
+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
+14.4
-12.0
*January-September

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

61. U.S. Beef Imports
Major Markets

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

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

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

65. Cattle Imports from Canada Major Categories, Annual

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

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

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

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

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

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

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

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

74. 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

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

76. Send Email to derrell.peel@okstate.edu
The Weekly Newsletter From OSU Animal Science and Agricultural Economics
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77. Other Hay Production Tons Per Beef Cow

78. Oklahoma Hay Use per Beef Cow
tons/cow 1,740 lbs
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

79. 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

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

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

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

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

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

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

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

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

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

89. Data Source: USDA-NASS, Forecasts by LMIC
Livestock Marketing Information Center

90. Data Source: Bureau of Labor Statistics & USDA-ERS
Livestock Marketing Information Center

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

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

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

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

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

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

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

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

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

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

101. Data Source: USDA-NASS, Forecasts by LMIC
Livestock Marketing Information Center

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

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

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

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

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

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

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

109. Data Source: Bureau of Labor Statistics & USDA-ERS
Livestock Marketing Information Center

110. 2015: 91.98 million head +3.2 % Data Source: USDA-NASS
Livestock Marketing Information Center

111. OK Combined and 5-MKT Fed

112. Analysis by Derrell Peel
Average:
Heifer % = 17.4
Culling % = 9.6
Analysis by Derrell Peel
Data Source: USDA-NASS

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

114. Monthly Placements and Cattle on Feed 12 Month Moving Ave.

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