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Ron Plain D. Howard Doane Professor University of Missouri-Columbia Chicken & Competing Meats.

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Presentation on theme: "Ron Plain D. Howard Doane Professor University of Missouri-Columbia Chicken & Competing Meats."— Presentation transcript:

1 Ron Plain D. Howard Doane Professor University of Missouri-Columbia Chicken & Competing Meats

2 The darker the color, the more severe the drought

3 U.S. Average Corn Yield, Source: USDA/NASS Lowest yield per acre since 1995

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

5 Drought Impact Drought causes reduced crop production which causes higher feed prices which causes red ink for livestock & poultry which leads to herd/flock reduction which adds meat in the short run but eventually means less meat and higher meat prices which means better profits and herd expansion

6 Biology of Herd Reduction Cattle –Move calves from pasture to feedlots sooner –Sell cows and breeding heifers Pigs –Sell pigs sooner –Sell sows and breeding gilts Chickens –Sell fewer heavy weight birds

7 Biology of Animal Reproduction Cattle –9 months of gestation –18-24 months of growth Pigs –4 months of gestation –6 months of growth Chickens –3 weeks of incubation –6 weeks of growth

8 Feed Cost

9 U.S. Corn Acres Planted, : most since 1937 Source: USDA/NASS

10 U.S. Corn Production, Source: USDA/NASS Smallest corn harvest since 2006

11 U.S. Corn Exports, Source: USDA/NASS

12 Corn Milled for Ethanol Forecast % corn for ethanol: : 6% : 14% : 23% : 35% : 42% Source: USDA/NASS

13 US Feed & Residual Use of Corn, Source: USDA/NASS

14

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16 September Corn Futures Daily Close, 2012 Source: CMEGroup

17 U.S. Corn Price, Source: USDA/NASS

18 Livestock Marketing Information Center Data Source: USDA-AMS

19 Livestock Marketing Information Center Data Source: USDA-AMS

20 Livestock Marketing Information Center Data Source: USDA-AMS

21 U.S. Monthly Average Corn Price Thru Dec 2015 all corn futures contracts are above $5.85 per bushel

22 South America A large soybean harvest is expected –Brazil up 22% –Argentina up 34%

23 Meat Demand

24 Growth in Real GDP Source: U.S. Commerce Department

25 U.S. Civilian Employment, Source: Bureau of Labor Statistics, household survey, seasonally adjusted & MU, /month In September 2012, U.S million jobs under trend

26 Gasoline Prices & Meat Demand, Source: U.S. Energy Information Administration Correlation = -0.37

27 Index of Retail Meat Demand Base Elasticity = Source: Ron Plain, MU

28 Boneless Retail Meat Prices as % of Bologna, Monthly, Source: USDA/ERS

29 Change in Retail Meat Demand Base Elasticity =

30 Seasonal Price Patterns

31 Livestock Marketing Information Center Data Source: USDA-AMS

32

33 Seasonal Average Hog Price Source: USDA Prior Day Slaughter reports $/cwt

34 Broiler Situation

35 Livestock Marketing Information Center Data Source: USDA-NASS

36 Livestock Marketing Information Center Data Source: USDA-NASS

37 Livestock Marketing Information Center Data Source: USDA-NASS

38 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS Broiler slaughter is down 4.0%

39 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS Broiler production is down 4.1%

40 Livestock Marketing Information Center Data Source: USDA-AMS

41 Livestock Marketing Information Center Data Source: USDA-AMS

42 Livestock Marketing Information Center Data Source: USDA-AMS

43 Livestock Marketing Information Center Data Source: USDA-AMS

44 Broiler Price & Production 2012 broiler production is expected to be down 1.2% from 2011 with wholesale prices that are 6.3% higher than in broiler production is expected to be down 1.1% from 2012 with wholesale prices that are 4.8% higher than in Source: USDA-OCE WASDE, September 2012

45 Plain’s Forecast % 79 cents/lb % 86 cents/lb % 90 cents/lb % 85 cents/lb Broiler Broiler Production Price

46 Turkey Situation

47 Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS Turkey production is up 1.8%

48 Livestock Marketing Information Center Data Source: USDA-AMS

49 Turkey Production 2012 turkey production is expected to be up 2.9% from 2011 with wholesale prices that are 5.4% higher than in turkey production is expected to be down 3.2% from 2012 with wholesale prices that are 0.9% lower than in Source: USDA-OCE WASDE, September 2012

50 Cattle Situation

51 2012: 90.8 million head, Down 2.1% Lowest inventory since 1952 Source: USDA/NASS

52 July 2012 Cattle Inventory percent of year earlier All Cattle & Calves 97.8 Beef Cows 97.1 Dairy Cows100.0 Beef Replace. Heifers100.0 Dairy Replace. Heifers 97.6 Other Heifers 97.4 Steers 500 lbs & up 98.6 Calves under 500 lbs 97.4

53 2012: 34.5 million head, Down 2.3% Source: USDA/NASS

54 2011: 26.2 billion pounds, down 0.4%

55 July 2012 Cattle Inventory percent of year earlier Steers 500 lbs & up98.6 Other heifers 97.4 Calves under 500 lbs97.4 Combined97.8 Combined 97.8% = 2.2% fewer cattle being kept for marketing which should mean the number of fed cattle marketed in coming months will be down 2.2%

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

57 2012 cow slaughter is down 4.6%

58 Beef Price & Production 2012 beef production is expected to be down 1.6% from 2011 with slaughter steer prices that are 5.5% higher than in beef production is expected to be down 4.3% from 2012 with slaughter steer prices that are 5.0% higher than in Source: USDA-OCE WASDE, September 2012

59 Plain’s Forecast %$114.73/cwt %$122/cwt %$132/cwt %$135/cwt Beef Steer Production Price

60 Pork Situation

61 Annual U.S. Pork Production,

62 Source: USDA/NASS

63 Hog Inventory Reports U.S. Sept Canada July

64

65 U.S. Pigs Per Litter by Quarter

66 Pork Price & Production 2012 pork production is expected to be up 2.0% from 2011 with slaughter hog prices that are 8.5% lower than in pork production is expected to be down 1.3% from 2012 with slaughter hog prices that are 6.6% higher than in Source: USDA-OCE WASDE, September 2012

67 Plain’s Forecast %$87.56/cwt %$82.00/cwt %$85.00/cwt %$87.00/cwt Pork Carcass Production Price

68 Meat Trade

69 U.S. Meat Exports,

70 Meat Imports/Exports as % of U.S. Production In 2011, the U.S. exported –10.6% of beef production –22.8% of pork production –18.8% of broiler production –12.1% of turkey production In 2011, U.S. imports equaled –7.8% of beef production –3.5% of pork production –0.3% of broiler production –0.4% of turkey production

71 Livestock Marketing Information Center Data Source: USDA-FAS

72 Livestock Marketing Information Center Data Source: USDA-FAS

73 Livestock Marketing Information Center Data Source: USDA-FAS

74 Meat Situation

75 Source: USDA/ERS 2013 per capita meat consumption lowest since 1990

76 Source: USDA/ERS

77 Forecast Change in Meat Production --Percent Change-- Type Beef - 1.6% - 4.3% Pork +2.0% - 1.3% Chicken - 1.2% - 1.1% Turkey +2.9% - 3.2% All Meats - 0.2% - 2.2% Source: USDA-OCE WASDE, September 2012

78 Any Questions?


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