1. Beef Cattle Situation and Outlook

6. 1.39 million tons

7. Major Items to Watch this Year  Price of corn  Total meat production  Economy  Crude oil prices  U.S. currency value

9. Livestock Marketing Information Center

12. 2008 Outlook

13. Recent and Projected Beef Supply

14. Total Meat Supplies 87.1 93.24 91.0689.5 85.4

15. What is the Market Offering Today- Futures Based Price Projections

17. What You Can Sell for Today-Futures Based Price Projections

18. Inputs

19. Fertilizer Prices 1997-2007 Nitrogen prices have increased 91% since 2002

20. Fuel Prices 1997-2007 Diesel prices are up 300% since 2002

21. Impact of Fuel & Fertilizer Prices on Cost of Production

22. Projected Profits for 2008 ItemSouth Georgia North Georgia Expected Returns Over Variable Costs ($/cow) ($3.13)($30.58) Chance for positive returns48%30% Returns to Land, Labor, Capital and Management ($/cow) $56.87($2.80) Breakeven Price ($/cwt.)$100.32$101.73

24. BEEF COWS THAT HAVE CALVED JANUARY 1, 2008 (1000 Head) Alaska Hawaii US Total Livestock Marketing Information Center Data Source: USDA/NASS

25. CHANGE IN BEEF COW NUMBERS JANUARY 1, 2007 TO JANUARY 1, 2008 (1000 Head) Alaska Hawaii US Total Livestock Marketing Information Center Data Source: USDA/NASS

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

27. Livestock Marketing Information Center Data Source: USDA/NASS -1.0%

28. DEMAND FOR FEEDERS

29. Price Differences between classes

30. Energy Bill  36 billion gallons of ethanol used by blenders by 2022.  15 billion gallons required to come from corn by 2015.  15 billion gallons ethanol ≈5.4 billion bushels of corn.  2007 U.S. corn crop = 13.05 billion bushels.  At 2007 yield of 151 bushels, need 35.76 million acres just for ethanol.

31. Longer Term Trends  Continued pressure from input prices.  Continued consolidation in the beef industry.  Continuing favorable beef demand.  Expanding growth in grass-fed and natural beef segments.  Animal traceability/mandatory animal ID.

32. Summary & Implications  Supply The herd has expanded some but the drought has halted growth for this year. Feeder cattle supplies are tight, … and will be for a while.  Demand Demand for beef remains good but,…economy is a big question!! Higher corn prices will reduce demand for feeders Exports will help.  Profits Most cow-calf producers will be hard pressed to cover out of pocket expenses for next 2-4 years. Higher feed, fuel and fertilizer costs will continue to squeeze profits. We are probably going to have to change our way of doing business. High-quality, source-verified, preconditioned cattle will always top the market.