1. Whats The Cattle Price Outlook For 2006? Dr. Walter Prevatt Dr. Deacue Fields Extension Economists Auburn University

2. Cattle Situation and Outlook

3. U.S. Cattle and Calves Inventory, 1949-2006 Cattle & Calves Inventory Year Million Head

4. U.S. Cattle and Calves Inventory, 1949-2006 Cattle & Calves Inventory Year Million Head 1949-581958-671967-791979-901990-04

5. Length of U.S. Cattle Cycles 1949-58 1958-67 Million Head Number of Years 1967-79 1979-90 1990-04 2004-?

6. U.S. Cattle Inventory & Average Calf Price 1949-2006 Year Million Head

7. U.S. Cattle and Calves Inventory, 97.1 Million Head, Jan. 1, 2006

8. U.S. Cattle & Calves, Jan. 1, 2005 & 2006 Class20052006 Change from 2005 Cattle & Calves 95.497.1 1.664 +1% Cows & Heifers That Have Calved 41.942.3 0.391 +1% Beef Cows 32.933.3 0.341 +1% Milk Cows 9.09.1 0.053 +1% Heifers 500 Pounds and over 19.620.0 0.405 +2% For Beef Cow Replacement 5.75.9 0.214 +4% For Milk Cow Replacement 4.14.3 0.160 +4% Other Heifers 9.89.8 0.032 0% Steers 500 Pounds and Over 16.516.9 0.447 +3% Bulls 500 Pounds and Over 2.22.3 0.044 +2% Under 500 Pounds 15.315.6 0.376 +2% Cattle on Feed 13.714.1 0.387 +3% FC Outside Feedlots 27.728.2 0.468 +2%

9. Percent Change From A Year Ago In U.S. Inventory, Jan. 1, 2006

10. Beef Replacement Heifers Jan 1, 1985-2006

15. Heifers As A Percent Of Total Feedlot Placements, 1980-2005

16. U. S. Beef Production, 1975-2006 * Estimated

17. U.S. Average Cattle Carcass Weights, 1975-2005 Factors affect carcass weights include genetics, marketing technology, corn prices, grid pricing, fed cattle prices, breakeven prices, etc.

18. U.S. Cattle Operations, Number by Year, 1975-2005

19. U.S. Cattle Operations, Number by Size Group, 2005 982,510 U.S. cattle operations, 2005

20. U.S. Cattle Operations & Inventory, Percent by Size Group, 2005 Cattle OperationsCattle Inventory

21. Cattle Situation and Outlook Demand Situation

22. U.S. Per Capita Meat Consumption, Retail Weight Basis, 1976-2006

24. U.S. Beef Imports and Exports, Billion Pounds, 1970-06

25. U.S. Beef Imports and Exports, Billion Dollars, 1976-06

26. Cattle Situation and Outlook Cost of Production

27. U.S. Cow-Calf Cash Expenses, 1972-99 *1990-99 estimates were based on a revised methodology.

28. Southeast Ammonium Nitrate Prices, 1970-06

29. Stocker Gross Margin, Alabama, October-April, 400# -750#, 1979-2006 Gross margin is feeder sale value minus stocker purchase value. Based on steers, med. & lrg., No. 1, Oct. to Apr., 400 to 750 pounds.

30. Source: KSU Cattle Return Series Monthly Feeding Cost of Gain 700 to 800 Lb. Steers in Kansas

31. Cattle Situation and Outlook Market Prices

32. Alabama Feeder Calf Prices, Steers, Med. & Lg., #1, 1990-2006

33. Annual U. S. Beef Production, 2000-06 *Estimated

34. Annual U.S. Beef Production & Average Fed Beef Price, 2000-2006

35. Quarterly U. S. Beef Production, 2004-06 *Estimated (2004 -> 24.5B, 2005 -> 24.7B, 2006 -> 25.9B*)

36. Quarterly U. S. Beef Production & Average Fed Beef Price, 2004-2006 *Estimated

37. 2006 Cattle Price Projections, $/Cwt. Item First Quarter 2006 Second Quarter 2006 Third Quarter 2006 Fourth Quarter 2006 Kansas Fed Cattle Slaughter Wt. $88-$91$83-$87$78-$82$79-$84 Alabama 725# Fdr. Cattle, Med. & Lg., #1 $100-$103$94-$99$92-$97$90-$95 Alabama 525# Fdr. Calves, Med. & Lg., #1 $124-$127$118-$123$115-$121$114-$118 These projections will be revised as new economic information is received and processed.

38. Cattle Situation and Outlook Profit Potential

39. U.S. Cow - Calf Returns Over Cash Expenses, 1972-99 Source: USDA

40. Average Annual Cow-Calf Returns Over Cash Expenses, 1980-2004 Source: Cattle-Fax

41. Average Annual Stocker Cattle Returns Over Cash Expenses, 1980-2006 Source: Cattle-Fax Includes winter and summer grazing programs.

42. Monthly Returns for Finishing 700 to 800 Lb. Steers in Kansas Source: KSU Cattle Return Sales

43. Average Annual Cattle Feeding Returns, 1980-2004 Source: Cattle-Fax

44. Cattle Situation and Outlook Summary Remarks

45. Cattle Situation and Outlook Greed, Fear, and Weather

46. Alabama Feeder Calf Prices, Steers, Med. & Lg., #1, 1990-2006

47. Projected Profit/Loss By Cattle Industry Segments During The Four Price Phases Of The Cattle Cycle* Price Phase* Cow- Calf StockerFeedlot Up Cycle (2000 thru 2006?) Moderate-SignificantProfitsProfits/lossesProfits/Losses Downward Transition (2007 thru 2008?) DecliningProfitability,Profits/Losses Minor- Significant LossesMinor- Significant Losses Down Cycle (2009 thru 2010?) SignificantLosses Marginal Profits/Losses Upward Transition (2011 thru 2012?) ImprovingProfitability,Profits/LossesProfits/LossesProfits/Losses The information in this chart is generalized based on the price phase of the cattle cycle. These projections will be revised as new economic information is received and processed.

48. Whats The Cattle Price Outlook For 2006 Dr. Walter Prevatt Dr. Deacue Fields Extension Economists Auburn University