1. Current Economic Climate of the Cattle Business Derrell S. Peel Breedlove Professor of Agribusiness and Extension Livestock Marketing Specialist Oklahoma State University

2. Current Economic Climate Short and Medium Term – Current market situation – Industry and external factors Long Term – Industry structural change

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

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

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

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. Oklahoma Cattle Inventory, January 1 2012 Forecast 20112012 % Head Change Beef Cows 2,036,0001,780,000-256,000-12.6% Beef Heifers 355,000239,000-116,000-32.7% Feeder Supply 2,120,0001,102,000-1,018,000-48.0% All Cattle and Calves 5,100,0003,723,000-1,377,000-27.0%

10. Oklahoma and U.S. Cattle Cycles: Beef Cow Inventory, January 1

11. Oklahoma All Cattle and Calves

12. Oklahoma Cattle Inventory by Agricultural Statistics District, January 1, 2012 Forecast All Cattle and CalvesBeef Cows % 20112012Change20112012Change PANHANDLE 629,000452,000-28.1%88,50069,000-22.0% WEST CENTRAL 443,500248,500-44.0%167,000129,000-22.8% SOUTHWEST 495,000251,000-49.3%180,000137,500-23.6% NORTH CENTRAL 572,000305,000-46.7%177,000143,500-18.9% CENTRAL 758,400526,000-30.6%324,000273,000-15.7% SOUTH CENTRAL 675,700447,000-33.8%319,000276,500-13.3% NORTHEAST 750,900755,5000.6%353,500345,000-2.4% EAST CENTRAL 499,500498,500-0.2%280,000266,000-5.0% SOUTHEAST 276,000239,500-13.2%147,000140,500-4.4% Total 5,100,0003,723,000-27.0%2,036,0001,780,000-12.6%

13. Estimated Change in Grazing Animal Density, Head/Sq. mile, Jan. 1,2011 to 2012 State Ave. 130 => 91 Panhandle 70 => 29 W. Cent. 112 => 58 S. W. 143 => 71 N. Cent. 136 => 70 Central 147 => 100 N. East. 150 => 150 E. Cent. 155 => 155 S. East. 155 => 135 S. Cent. 127 => 84 OKLAHOMA

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

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

16. Price-Weight Relationship Medium/Large No. 1 Steers

17. Steer Price, Total Value and Value of Gain, Oct 2011, Oklahoma 7-Market Ave. Weight (lbs) Average Price ($/cwt.) Total Value ($/head) Value of Gain 425 lb. Beg. Weight ($/lb.) Value of Gain 525 lb. Beg. Weight ($/lb.) Value of Gain 625 lb. Beg. Weight ($/lb.) 425160.31681.32 475151.80721.05 525148.23778.21 575143.42824.67 625140.42877.630.98 675143.86970.851.16 725143.501040.381.201.31 775140.781091.051.171.25 825138.131139.571.151.201.31 875139.031216.511.36 925134.651245.511.23

18. Cattle Markets are Providing Twin Signals to Producers Increase Calf Production – Herd Expansion More Stocker Production – Keep feeder cattle on forage longer Both Signals Imply Increased Demand for Forage Different From History When Cow-Calf and Stocker Production was a Tradeoff

19. Total Meat Supplies Down in 2012 20112012 Beef↓0.25%↓3.5% Pork↑1.5%↑0.5% Broilers↑0.8%↓2.5% Total Meat↑0.8%↓1.9%

20. Commercial Beef Production Beef Cow Inventory (left axis) 2012 Projected. Compiled from USDA data with analysis by the Livestock Marketing Information Center and Derrell Peel

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

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

23. The Weekly Email Newsletter From OSU Animal Science and Agricultural Economics Send Email to derrell.peel@okstate.edu