1. 2003-04 Cattle Outlook and Market Economics Presented by John D. Lawrence and Gary May Iowa State University

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

8. 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%

9. Per Capita Consumption Retail Weight Basis Pounds% Chg Red meat production58.9-1.07 Beef33.0-1.90 Pork25.0+.20 Poultry production48.3-.17 Combined RM&P107.2-.51

10. Strong Domestic Demand

12. Export Beef Demand 2002 v. 2001 –Exports+7.8% –Imports+1.7% Jan-May 2003 v. 2001 –Exports+3.5% –Imports-0.6%

15. Million

20. Percentage Change in Cattle Slaughter ’02v’01’03v’02 * Steers+2.4+1.2 Heifers-0.5-0.1 All Cows-0.5+7.5 Dairy Cows+0.7+12.1 Other Cows-1.5+3.6 Total +0.9+1.7 *Through end of July

21. Average 13.5# less

28. Choice Live Steer Price Forecast FuturesAAEAUSDA Q30375.1074.5972-74 Q40376.3576.2773-79 200376.7575-77 Q10475.3178.3874-80 Q20472.8479.7478-84 200478.0377-83

29. 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 942372,253 Calves 1,7404,38315,563

30. Canadian Beef Imported to the US % of US Consumption Million As AsTotal Pounds Beef Cattle% 20009183.42.76.1 20019873.73.67.2 200210903.94.38.2

31. Live Cattle Imports from Canada FeederSlghtr Slghtr Total CattleStr&HfrCowsCattle 200079,36784,420645,485971,033 2001157,837832,744185,4261,270,185 2002457,685754,108259,5091,610,232 Jan-Apr 0387,884248,17185,768447,734 Cows as a percent of imported cattle from Canada 200066.5% 200114.5% 200216.1% Jan-Apr 0319.2%

32. Canadian Market May 17June 28July 26 Wkly Slght69,45646,20859,576 Car Wt785815833 Low Price104.8035.0029.35 High Price109.9051.5539.50

33. Live Cattle Futures Before and after May 20 BSE Announcement ContractMay 12-16High 6/2Low 6/19July 10 MAY76.8782.00 JUN73.9576.8371.67 JUL70.2972.4568.8772.35 AUG69.4271.2567.1271.15 OCT70.5371.6068.4572.45 DEC73.3174.8571.8574.30 FEB74.6975.6573.6575.28 APR75.6876.7574.2575.25

34. 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

35. 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

36. Web Site Tools www.econ.iastate.edu/faculty/lawrence Iowa Farm Outlook Historic Basis Futures and Options research www.iowabeefcenter.org Central contact for all things beef at Iowa State University