Livestock Outlook
Kathleen R. Brooks, Ph.D.Extension Livestock Marketing Specialist
Department of Agricultural EconomicsUniversity of Nebraska-Lincoln
Outline Beef Cattle Hog
Beef Cattle Outlook
Photo taken by Troy Waltz
2013 Recap Drought conditions in U.S improving Herd liquidation stabilizing toward end of 2013
Declining grain and forage prices Record high cattle prices Increased cow-calf profitability potential Poor feedlot and packer margins with some
improvement towards end of yearExcess capacity within feedlot industry
Record high wholesale and retail prices Beef demand domestically & export markets
No Drought: 10.25%Abnormally Dry to Moderate: 63.25%Severe to Extreme Drought: 26.50%
Cattle Inventory Report, January 1, 2014
All cattle & calves -1.8%, 87.7 mil hd (smallest since 1951) NE: -2.4% at 6.15 mil hd
Beef cow inventory -0.9%, 29.0 mil hd NE: -0.4% at 1.797 mil hd
Beef replacement heifers +1.7%, 5.5 mil hd NE: +10.6%, 387 thousand hd
Calf crop -1.0%, 33.9 mil hd NE: -2.3%, 1.68 mil hd
Cattle & calves on feed for slaughter -5%, 12.7 mil hd NE: -3.9% 2.5 mil hd
C-S-3412/27/13Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
2013 Slaughter-6.4% (vs. 2012)
-10.7% (vs. 2007-11)
Since September slaughter 17.6% below 2012 and 18.9% below 2007-11 average…
…Period of herd stabilization (with little or no growth) that often occurs in first year of herd expansion???
ESTIMATED AVERAGE COW CALF RETURNSReturns Over Cash Cost (Includes Pasture Rent), Annual
-100-50
050
100150200250300350400
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
$ Per Cow
C-P-6601/29/14Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
Cow-Calf Outlook Improved margins Improved pasture conditions, declining input
prices, record calf prices
Is it enough to trigger expansion??? Market signals vs.
mother nature
Longer-Term Projections (as of Feb. 2014) http://www.usda.gov/oce/commodity/projections/index.htm
30,158
29,295
29,050 29,349
29,678
30,734
31,558 31,953
32,300 32,739
33,293
33,668
28,000
29,000
30,000
31,000
32,000
33,000
34,000
2012 2014 2016 2018 2020 2022
Beef Cow
Inventory (1,000
Head)
15% Increase in herd for 2023 compared to 2013
Livestock Marketing Information CenterData Source: USDA-NASS, Compiled by LMIC & Analysis by Kate Brooks
Livestock Marketing Information CenterData Source: USDA-NASS, Compiled by LMIC & Analysis by Kate Brooks
Feedlot Sector Significant improvements in returns over last several
months
Capacity issues still a concern
AVERAGE RETURNS TO CATTLE FEEDERSFeeding 725 Lb. Steers, S. Plains, Monthly
-325-275
-225-175-125-75
-252575
125175
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Per Head
Livestock Marketing Information CenterData Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
C-P-2202/20/14
Livestock Marketing Information CenterData Source: USDA-AMS
SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly
95
105
115
125
135
145
155
JAN APR JUL OCT
$ Per Cwt.
Avg.2008-12
2013
2014
CHOICE STEER PRICE vs BREAKEVENCattle Feeding, S. Plains, Monthly
75
85
95
105
115
125
135
145
155
2006 2007 2008 2009 2010 2011 2012 2013 2014
$ Per Cwt
SteerPrice
Breakeven
ProjectedBreakeven
Livestock Marketing Information CenterData Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
C-P-2102/20/14
CATTLE ON FEEDUS Total, Monthly
9.5
10.0
10.5
11.0
11.5
12.0
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Head
Avg.2008/12
2013
2014
C-N-1002/21/14Livestock Marketing Information Center
Data Source: USDA-NASS
*Futures as of the close on Wed February 26, 2014
Thru June 2015 all cattle futures contracts are above $130 per cwt
*Futures as of the close on Wed February 26, 2014
Thru Nov 2014 all feeder cattle futures contracts are above $171 per cwt
% Chg. Average % Chg. Comm'l % Chg.Comm'l from Dressed from Beef from
Slaughter Year Ago Weight Year Ago Production Year Ago(1,000 Head) (Lbs.) (Mil. Lbs.)
2012I 8026 -3.5 783 1.5 6282 -2.0II 8309 -3.8 779 2.6 6473 -1.3III 8333 -4.6 790 2.5 6586 -2.2IV 8283 -1.3 794 2.6 6572 1.3
Year 32951 -3.3 786 2.3 25913 -1.12013
I 7779 -3.1 793 1.4 6172 -1.7II 8325 0.2 783 0.5 6517 0.7III 8322 -0.1 794 0.5 6609 0.4IV 8033 -3.0 799 0.7 6420 -2.3
Year 32459 -1.5 792 0.8 25718 -0.82014
I 7280 -6.4 796 0.4 5797 -6.1II 7711 -7.4 786 0.4 6061 -7.0III 7735 -7.1 799 0.6 6177 -6.5IV 7529 -6.3 802 0.4 6041 -5.9
Year 30255 -6.8 796 0.4 24076 -6.42015
I 6985 -4.1 801 0.6 5595 -3.5II 7366 -4.5 792 0.8 5836 -3.7III 7453 -3.6 806 0.9 6006 -2.8IV 7362 -2.2 806 0.5 5937 -1.7
Year 29166 -3.6 801 0.7 23374 -2.9
Quarterly Forecasts (LMIC: 2/3/14)
YearQuarter
Live Sltr. % Chg. Feeder Steer PriceYear Steer Price from Southern Plains d
Quarter 5-Mkt Avg Year Ago 7-800# 5-600#($/Cwt.) ($/Cwt.)
2012I 125.30 13.8 154.25 182.41
II 120.91 7.2 152.65 178.65 III 119.69 4.9 141.82 150.57 IV 125.54 2.9 146.50 161.42
Year 122.86 7.1 148.81 168.26 2013
I 125.51 0.2 142.41 170.13 II 124.95 3.3 137.34 159.71
III 122.30 2.2 155.95 171.19 IV b 130.77 4.2 167.04 187.56
Year 125.88 2.5 150.69 172.15 2014
I c 139-142 11.9 169-172 200-205 II 138-141 11.6 170-175 205-212
III 133-137 10.4 171-177 199-207 IV 136-141 5.9 168-175 195-204
Year 137-140 10.0 169-175 199-208 2015
I 139-145 1.1 170-178 199-210 II 140-147 2.9 171-180 205-217
III 136-144 3.7 173-184 198-211 IV 138-146 2.5 170-182 192-207
Year 139-145 2.5 172-180 199-211
Quarterly Forecasts (LMIC: 02/03/14)
RETAIL ALL FRESH BEEF DEMAND INDEXAnnual, Using CPI 1990=100
10096
9186 86 82 79
75 75 77 80 81 85 8392 88 85 85
8077 75 77 79 81
0
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Index Value
Livestock Marketing Information CenterData Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
U S BEEF EXPORTS TO MAJOR MARKETSCarcass Weight, Monthly
010
203040
506070
8090
2005 2006 2007 2008 2009 2010 2011 2012 2013
Mil. Pounds
Japan
Canada
Mexico
SouthKorea
I-N-3502/07/14Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS
Livestock Marketing Information CenterData Source: USDA-ERS & USDA-FAS
U S BEEF AND VEAL EXPORTSCarcass Weight, Monthly
130
150
170
190
210
230
250
270
290
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
Avg.2007-11
2012
2013
I-N-1602/07/14
2013 Beef Exports up 5.3%
Hog Outlook
Diagnostic Case Submissions Testing Positive for PEDv
December 2013 Hog Inventory Report2013
(1,000 head)2013 as
% of 2012All Hogs & Pigs 65,940 99.3Kept for Breeding 5,757 98.9Kept for Marketing 60,183 99.4
Under 50 lbs. 19,049 98.750-119 lbs. 16,669 99.5120-179 lbs. 12,626 99.9180 lbs. and over 11,838 99.7
(thousand litters)
Mar-May Farrowings 2,816 95.4June-Aug Farrowings 2,925 99.9Sep-Nov Farrowings 2,882 99.8Dec-Feb Farrowing Intentions 2,825 101.3Mar-May Farrowing Intentions 2,855 101.4
Livestock Marketing Information CenterData Source: USDA-NASS, Compiled by LMIC & Analysis by Kate Brooks
PIGS PER LITTERQuarterly
7.2
7.7
8.2
8.7
9.2
9.7
10.2
10.7
1988 1991 1994 1997 2000 2003 2006 2009 2012
Head
H-N-5812/27/13Livestock Marketing Information Center
Data Source: USDA-NASS
BARROW AND GILT DRESSED WEIGHTFederally Inspected, Weekly
194196198200202204206208210212214
JAN
APR
JUL
OCT
Pounds
Avg.2008-12
2013
2014
H-S-2402/24/14Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
Est 2012 Profits = -$3.54Est 2013 Profits = -$0.89
Forecasted 2014 Profits = +$41.80Forecasted Jan-July 2015 Profits = +$26.06
EARLY WEANED PIG PRICESNational, 10-12 Lbs, Delivered, Weekly
2025303540455055606570
JAN
APR
JUL
OCT
$ Per Head
Avg.2008-12
2013
2014
H-P-2102/24/14Livestock Marketing Information Center
Data Source: USDA-AMS
FEEDER PIG PRICES40 Pounds, Weekly
10
30
50
70
90
110
130
JAN
APR
JUL
OCT
$ Per Head
Avg.2008-12
2013
2014
H-P-0102/24/14Livestock Marketing Information Center
Data Source: USDA-AMS
BARROW AND GILT PRICESIowa - So. Minnesota, Carcass Base Price, Weekly
50
60
70
80
90
100
110
JAN
APR
JUL
OCT
$ Per Cwt.
Avg.2008-12
2013
2014
H-P-0902/24/14Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
U S NET PORK EXPORTSCarcass Weight, Monthly
225
275
325
375
425
475
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
Mil. Pounds
Avg.2007-11
2012
2013
I-N-3202/07/14Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC
Source: USDA/ERS, Bureau of Labor Statistics
U.S. Pork Exports, Jan-Dec 2013
Source: USDA/ERS, Bureau of Labor Statistics
Change from a Year AgoCountry Carcass Weight, 1,000 lbs Percent
Japan -37,673 -2.7%Mexico 76,472 6.6%Canada -9,358 -1.6%South Korea -135,944 -32.6%China (Mainland) -141,601 -22.2%Russia -257,928 -93.7%Hong Kong 14,594 10.5%China (Taiwan) 7,319 24.7%Other Countries 83,025 12.1%TOTAL -388,285 -7.2%
RETAIL PORK DEMAND INDEXAnnual, Using CPI 1990=100
100 97 9590 89
83 83 8491 92 91 90 91 90 90
8580 83
79 80 79 80 7984
0
20
40
60
80
100
120
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Index Value
Livestock Marketing Information CenterData Source: Bureau of Labor Statistics, USDA-ERS, Compiled & Analysis by LMIC
% Chg.Average % Chg. Comm'l % Chg.Year Comm'l fromCarcass from Pork from
Quarter Slaughter Year Ago Weightear Ago Production Year Ago(1,000 Head) (Lbs.) (Mil. Lbs.) (Re
2012I 28105 2.3 209 0.2 5858 2.4
II 26661 2.1 207 0.6 5519 2.8III 27965 2.1 201 0.3 5631 2.7IV 30433 1.8 206 -0.8 6244 0.9
Year 113163 2.1 206 0.1 23253 2.22013
I 27874 -0.8 208 -0.5 5777 -1.4II 26778 0.4 206 -0.5 5519 -0.0
III 27668 -1.1 204 1.2 5624 -0.1IV 29808 -2.1 211 2.6 6278 0.5
Year 112126 -0.9 207 0.7 23197 -0.22014
I 27803 -0.3 213 2.4 5912 2.3II 26569 -0.8 211 2.0 5593 1.3
III 27684 0.1 205 0.7 5678 1.0IV 30257 1.5 212 0.3 6402 2.0
Year 112313 0.2 210 1.3 23585 1.72015
I 28343 1.9 214 0.8 6074 2.7II 27184 2.3 213 1.0 5779 3.3
III 28467 2.8 208 1.4 5921 4.3IV 31287 3.4 213 0.7 6667 4.1
Year 115281 2.6 212 1.0 24441 3.6
Quarterly Hog & Pork Forecasts (LMIC: 2/27/14)
% Chg. Prices % Chg.Year Per Capita from National Wtd from
Quarter Consumption Year Ago Avg Base Year Ago(Retail Wt.) ($/Cwt.)
2012I 11.1 -2.6 84.11 7.3
II 10.9 -1.2 85.31 -4.7III 11.2 1.8 84.74 -8.6IV 12.7 3.6 80.59 -5.2
Year 45.9 0.5 83.69 -3.12013
I 11.5 3.1 81.08 -3.6II 11.3 3.0 89.32 4.7
III 11.4 2.0 95.25 12.4IV 12.7 0.0 82.98 3.0
Year 46.8 1.9 87.16 3.62014
I 11.7 2.0 84-86 4.8II 11.3 0.5 93-96 5.8
III 11.4 -0.4 95-99 1.8IV 12.6 -0.9 83-88 3.0
Year 47.0 0.3 89-92 4.02015
I 11.8 0.9 83-89 1.2II 11.3 -0.3 88-95 -3.2
III 11.4 0.6 87-95 -6.2IV 12.9 2.7 76-85 -5.8
Year 47.5 1.0 84-91 -3.3
Quarterly Hog & Pork Forecasts (LMIC: 2/27/14)