Cattle Situation and OutlookCattle Situation and Outlook

January 2011

Tim PetryLivestock Economist

www.ag.ndsu.edu/livestockeconomics

01/27/11Carrington-Jan2011

www.lmic.info

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Authors:

Darrell Mark, Ph.D.University of Nebraska Lincoln

Dillon Feuz, Ph.D.Utah State University

Tim Petry, M.S.North Dakota State University

John Michael Riley, Ph.D.Mississippi State University

In The Cattle MarketsNovember 8, 2010

Tim Petry, Livestock EconomistNorth Dakota State University Extension Service

Northern Plains Calf Markets

The fall calf marketing season started a little later than normal in the Northern Plains, but is now ramping up. Good pasture and range conditions, plenty of crop aftermath grazing, and ideal fall weather for harvesting late maturing crops limited fall calf marketing. So, unlike the relatively poor pasture conditions and short hay supplies in the Southeastern U.S. that John Michael Riley reported in the “In The Cattle Markets” column last week; the Northern Plains is in very good shape. Hay prices reported by NASS, USDA are lower in North Dakota than in any other state.

A rain and snow storm in parts of the Dakotas and Montana on October 25-27 further limited movement of calves to market, but put producers in the mood to start weaning and marketing. Last week (Nov. 1-6) saw the biggest runs of calves at Northern Plains’ auction barns for the season. This week should be another big week for marketing calves.

Calf prices in the Northern Plains have generally been declining seasonally the last couple of months as corn prices have surged. But prices have averaged about $15 per hundredweight above the last two year’s depressed levels. A wide range in prices for the same weight and grade of calves at the same auction market is being reported due to the many factors that affect calf value. North Dakota auctions last week reported a $12 to $13 per cwt. range in prices as typical for a 50 pound weight range in steer prices. Some “value added” calves were reported to bring $15 to $16 per cwt. more than the lowest priced calves in the weight range. A 575 pound steer calf that brings $12/cwt. more returns an additional $69 per head. So, producers are encouraged to contact their market soon for tips on marketing and management practices that can help bring the highest possible prices.

Several Northern Plains auctions reported contra seasonally higher calf prices in the last couple of weeks, just as the heavy runs started. There are several reasons for that. Higher corn prices have caused the spread between the lighter weight calves and the heavier feeder cattle to narrow as feedlots prefer to purchase weight. That has created an opportunity for backgrounding programs that can utilize cheaper forages, co-products, silage, and alternative feed grains such as feed barley in rations. With the ample supply of these in the Northern Plains, the demand for calves to background has picked up.

Another interesting recent development is the renewed interest in Northern Plains’ calves from Canadian feedlots. For the first time since 2003, there are reports of U.S. feeder calves heading north into Canada. Feed barley prices in the Northern Plains and Canada have not increased as much as corn prices. I have been traveling to producer meetings with Dr. Frayne Olson, NDSU Extension crops economist. When giving the crop price outlook he has been mentioning the above average amounts of wheat and field peas in Canada that have suffered from adverse weather conditions and are feed grade. These will also cheapen rations for the Canadian livestock feeding sector. For the week ending November 5, the average price of 501-600 lb. steer prices on a $U.S. basis at cattle auctions in Saskatchewan was reported at $132.09/cwt. compared to across the border in Montana at $123.59. So the cheaper cost of gain there is evident and shows why there may be interest in Northern Plains’ calves.

Bear VS BullDemand Supply

National Restaurant Association’s Restaurant IndexValues Greater than 100 = Expansion; Values Less than 100 = Contraction

Sou

rce:

Nat

iona

l Res

taur

ant A

ssoc

iati

on

U.S. Meat TradeU.S. Meat TradePercent Change, 2010 from 2009

Jan-Nov

18%

-12%

16%

2%

-11%

-2%

7%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Beef Exports Beef Imports Cattle Imports Pork Exports

Hog Imports Broiler Exports Turkey Exports

Livestock Price and Production Patterns1. Seasonal

2. Cycle

3. Long term

4. Unexpected

HEIFERS HELD AS BEEF COW REPLACEMENTS

July 1, U.S.

3

4

5

6

7

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Mil. Head

C-N-3707/23/10

-2.2 %

JULY 1 FEEDER CATTLE SUPPLIESResidual, Outside Feedlots, U.S.

30

35

40

45

50

55

1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Mil. Head

C-N-3207/23/10

Livestock Marketing Information CenterData Source: USDA/NASS

-3%

Is the Cattle Cycle Dead?Is the Cattle Cycle Dead?

RIPRIP

CattleCattleCycleCycle

20092009

When will beef cow slaughter decline?When will beef herd rebuilding start?

Cattle Price Outlook or LOOK OUT!

1.50

2.50

3.50

4.50

5.50

6.50

7.50

$ Per Bu.

OMAHA CORN PRICESWeekly

Avg.2002-06

2007

2008

2009

2010

2011

Corn Prices – New Plateau!

G-P-02Data Source: USDA-AMS, Compiled by LMIC

2010 Corn Prices

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Omaha Southern Plains Hunter

2009 Hay Prices

40

60

80

100

120

140

J F M A M J J A S O N D

ND Other ND Alfalfa US Other US Alfalfa

MED. FRAME #1 STEER CALF PRICES550-600 Pounds, Dakotas, Weekly

90

100

110

120

130

140

150

JAN APR JUL OCT

20072008200920102011

80

90

100

110

120

130

140

150

$ Per Cwt.

MED. FRAME #1 STEER CALF PRICES550-600 Pounds, Dakotas, Weekly

2005

2006

2011

Livestock Marketing Information Center

MED. & LRG. #1 FEEDER STEER PRICES750-800 Pounds, Dakotas, Weekly

80

85

90

95

100

105

110

115

120

125

130

JAN APR JUL OCT

2007

2008

2009

2010

2011

Fut 2011

Livestock Marketing Information Center

74

84

94

104

114

124

134

$ P

er C

wt.

MED. & LRG. #1 FEEDER STEER PRICES750-800 Pounds, Dakotas, Weekly

2005

2006

2011

SF_LS796Sioux Falls, SD Fri Jan 21, 2011 USDA-ND Dept Ag Market News

North Dakota Weekly Auction Summary - For the week ending Jan 21, 2011

Receipts: 9,831 Last Week 13,705 Last Year 16,527

Combined results of 4 auctions this week: Kist, Napoleon, Stockmen’s and West Fargo.

Compared to last week’s larger receipt numbers feeder steers 500-800 lbs 3.00 to 7.00 higher; over 800 lbs steady. Feeder heifers 400-700 lbs mostly 4.00 to 6.00 higher; 700-800 lbs 1.00 to 3.00 higher. All other weights lacked comparable sales for trending purposes. The action at the auction barns remains very good for most calves offered. Buyers remain very active in their pursuit of feeder cattle. The corn and live cattle futures continue their positive outlooks.

Feeder Steers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price 26 368-398 385 162.50-165.50 164.28 47 401-445 433 156.00-167.00 159.48 48 456-488 480 150.00-163.00 154.62 226 501-546 521 143.00-158.75 152.43 339 553-596 576 137.00-149.50 144.11 5 563 563 155.00 155.00 Fancy 638 600-649 625 130.50-145.50 139.07 Calves 769 655-697 681 126.50-138.00 133.54 Calves 526 700-742 718 126.00-134.75 131.08 385 703-746 725 118.00-132.00 128.33 Calves 49 715 715 137.75 137.75 Fancy 15 718 718 137.00 137.00 Value Added 695 750-796 776 121.50-131.00 127.14 30 750-782 771 124.50-127.25 125.47 Calves 659 800-849 820 120.00-126.50 122.80 164 850-898 869 116.00-122.75 119.90 68 904-945 921 115.50-117.25 116.48

SF_LS796Sioux Falls, SD Fri Jan 21, 2011 USDA-ND Dept Ag Market News

North Dakota Weekly Auction Summary - For the week ending Jan 21, 2011

Receipts: 9,831 Last Week 13,705 Last Year 16,527

Combined results of 4 auctions this week: Kist, Napoleon, Stockmen’s and West Fargo.

Compared to last week’s larger receipt numbers feeder steers 500-800 lbs 3.00 to 7.00 higher; over 800 lbs steady. Feeder heifers 400-700 lbs mostly 4.00 to 6.00 higher; 700-800 lbs 1.00 to 3.00 higher. All other weights lacked comparable sales for trending purposes. The action at the auction barns remains very good for most calves offered. Buyers remain very active in their pursuit of feeder cattle. The corn and live cattle futures continue their positive outlooks.

Feeder Heifers Medium and Large 1 Head Wt Range Avg Wt Price Range Avg Price 82 400-448 428 142.00-158.50 149.83 135 450-492 471 138.50-153.00 145.79 262 508-547 533 134.00-141.50 138.26 376 551-599 576 125.25-140.25 133.37 670 600-648 627 122.50-133.00 128.03 Calves 533 650-698 672 119.00-127.00 123.26 Calves 7 690 690 116.50 116.50 Fleshy 386 700-746 726 117.00-126.50 120.19 105 701-748 720 119.00-124.75 120.80 Calves 80 731-733 732 134.75-137.50 136.68 Replacement 107 751-790 778 113.75-120.25 118.05 33 802-829 815 106.50-115.00 112.16 6 811 811 101.50 101.50 Fleshy 12 854-859 857 109.50-110.00 109.79 5 907 907 99.25 99.25 Fleshy 28 952-985 973 110.00-114.50 111.57

CHOICE SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly

75

80

85

90

95

100

105

110

115

120

JAN APR JUL OCT

2007

2008

2009

2010

2011

Fut 2011

330

340

350

360

370

380

390

400

J F M A M J J A S O N D

Billi

on D

olla

rs

U.S. Monthly Retail and Food Sales

Source: U.S. Census Bureau

20072008

2010

2009

Live

stoc

k M

arke

ting

Info

rmat

ion

Cen

ter

Dat

a S

ourc

e: U

SD

A-A

MS

WHOLESALE BEEF LOIN STRIP PRICESBoneless 0x1, Weekly

350

400

450

500

550

600

650

700

$ Per Cwt.

Avg.2004-08

2009

2010

2011

01/03/11

WHOLESALE BONELESS BEEF PRICESFresh, 90% Lean, Weekly

120

130

140

150

160

170

180

190$ Per Cwt.

Avg.2004-08

2009

2010

2011

M-P-2401/03/11

Competing MeatsCompeting MeatsBARROW AND GILT PRICES

Iowa - So. Minnesota, Carcass Base Price, Weekly

40

45

50

55

60

65

70

75

80

85

90$ Per Cwt.

Avg.2005-09

2010

2011

H-P-0901/18/11

Livestock Marketing Information Center

Data Source: USDA-AMS, Compiled & Analysis by LMIC

BROILER PRICES12-City Composite, Weekly

68

73

78

83

88

93Cents Per Pound

Avg.2005-09

2010

2011

P-P-0101/18/11

SLAUGHTER LAMB PRICESWooled, 110-130 lbs, Sioux Falls, Weekly

85

95

105

115

125

135

145

155

165

175

JAN APR JUL OCT

$ Per Cwt.

Avg.2005-09

2010

2011

S-P-0501/18/11

38

43

48

53

58

63

68

JAN APR JUL OCT

$ Per Cwt.

SLAUGHTER COW PRICES85-90% Lean, Weekly

Avg. 2002-06

2007

2008

2009

2010

2011

C-P-3501/05/09Data Source: USDA-AMS, Compiled by LMIC

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