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Livestock Outlook 2010 and Beyond

Livestock Outlook 2010 and Beyond. Shane Ellis Extension Livestock Economist Iowa State University November 2010. 01-2005 Meat expenditures up avg. of 4% 2009 Meat expenditures down 2%. Livestock Marketing Information Center. Meat Demand Factors. Total red meat and poultry consumption

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Livestock Outlook 2010 and Beyond

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  1. Livestock Outlook 2010 and Beyond Shane Ellis Extension Livestock Economist Iowa State University November 2010

  2. Livestock Marketing Information Center

  3. Livestock Marketing Information Center

  4. 01-2005 Meat expenditures up avg. of 4% 2009 Meat expenditures down 2% Livestock Marketing Information Center

  5. Meat Demand Factors • Total red meat and poultry consumption • 2009 at 210 lbs. per cap. lowest since 1996 • 2010 at 206 lbs. per cap. lowest since 1991 • Spending on food • Domestic spending on food down. • 1999-08 avg. growth of 5.1%/year, 2009 -0.3%

  6. Beef Situation • Beef prices connected to economy • consumer demand stronger, exports up • Industry still in retraction • Cow herd still declining • Beef production level • Choice meat supplies down • more cattle on feed, weights down • Profit outlook remains mixed

  7. Beef Supply Summary 2009 • Total Beef Production: -2.2% • Total Slght -3.0%, wts +0.8% 2010 • Total Beef Production: +0.1% • Total Slght 1.5%, wts -1.4%

  8. July 2010 Cattle Report

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

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

  11. Yr/yr % Prd & Con 0.1 & -2.3 -1.9 & -2.0 -2.6 & -3.1 Data Source: USDA-NASS, Compiled and Forecasts by LMIC

  12. Oct Cattle on feed US up 2 % 10.8 million (1000+ lots) IA up 1 % 1.195 million Large feedlots up 10% 48% of IA COF Small feedlots down 5% 52% of IA COF Livestock Marketing Information Center Data Source: USDA/NASS

  13. YTD up 2.3% Livestock Marketing Information Center Data Source: USDA-NASS

  14. YTD up 4.5% Livestock Marketing Information Center Data Source: USDA-NASS

  15. YTD up 11% Livestock Marketing Information Center Data Source: USDA-NASS

  16. Livestock Marketing Information Center

  17. Data Source: USDA-NASS, Compiled and Forecasts by LMIC

  18. Data Source: USDA-AMS, Compiled by LMIC

  19. up 17% YTD Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

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

  21. US Beef Exports • Total +17.1% • Mexico -25.7% • Canada +2.3% • Japan +21.3% • South Korea +131.5%

  22. Cattle Crush Margin Farms differ, but approximately a $150 margin is needed to breakeven http://www.econ.iastate.edu/margins

  23. Things to Watch • Economy remains vulnerable • Weak US dollar, heavy dollar supply • Higher prices for international commodities, fuel, food • Commodity price response to inflation

  24. Cattle Summary • Demand connected with the economy • Demand added support to prices • Beef production declining until 2014+ • Higher cost for cowherds • Higher cost of gain can pressure feeder prices • Feeding profitability outlook is mixed for next year Fed:$99-105 Corn:$5.50 Feeder:$111-118

  25. Swine Overview • Recent drop in hog prices • Pork supplies tight YTD • Slaughter up in 4th quarter? • Demand steady to stronger • Long term upward trend in exports • Domestic pork consumption per capita down • Profitability elusive remainder year

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

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

  28. 2010 Estimated • Total Pork Supply: -3.6% • Barr &Gilt Slght: -3.5% • wts unchanged • Total Sow Slght: -7%

  29. Sep 10’ Hogs & Pigs Summary

  30. Hogs & Pigs Summary Mil head Change Pig Crop Mar-May 29.01 -0.8% Jun-Aug 28.51 -0.7% Farrowing Intentions Sep-Nov 2.88 -1.2% Dec-Feb 2.89 +0.5% Pigs per litter 9.81 up 1.1%

  31. Yr/yr % Prd & Con -3.6 & -6.4 -0.1 & -2.2 1.4 & 0.1 Livestock Marketing Information Center

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

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

  34. Pigs per litter trending higher 9.11 to 9.81 in 6 years More litters per sow Shift during late 2007

  35. Livestock Marketing Information Center

  36. YTD up 8% Data Source: USDA-ERS & FAS; Compiled & Forecasts by LMIC

  37. Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC

  38. Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC

  39. Wean-Finish Crush Margin The Crush Margin is the return over pig, corn and SBM cost.  The Crush Margin is based on the following assumptions.  Carcass weight: 200 pounds Corn: 10 bu/hd Pig price: 50% of 5 month out LHF SBM: 150 lbs/hd Farms differ, but approximately a $40 margin is needed to breakeven

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