Ron-Plains-PowerPoint-Presentation

Report
Chicken & Competing Meats
Ron Plain
D. Howard Doane Professor
University of Missouri-Columbia
http://web.missouri.edu/~plainr
The darker the color, the more severe the drought
U.S. Average Corn Yield, 1970-12
180
160
Lowest yield per acre
since 1995
120
100
80
60
40
Source: USDA/NASS
12
09
06
03
00
97
94
91
88
85
82
79
76
73
20
0
70
Bushels
140
US RANGE AND PASTURE CONDITION
Percent Poor and Very Poor, Weekly
Percent
65
60
55
Avg.
2006010
2011
50
45
40
35
2012
30
25
20
15
May
Jul
Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC
Sep
G-NP-30
10/01/12
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
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
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
Feed Cost
100
95
2012: most since 1937
90
85
80
75
70
65
Source: USDA/NASS
12
09
06
03
00
97
94
91
88
85
82
79
76
73
60
55
70
Million Acres Planted
U.S. Corn Acres Planted, 1970-12
U.S. Corn Production, 1970-12
14
Smallest corn harvest
since 2006
10
8
6
4
2
Source: USDA/NASS
12
09
06
03
00
97
94
91
88
85
82
79
76
73
0
70
Billion Bushels
12
Source: USDA/NASS
11-12
09-10
07-08
05-06
03-04
01-02
99-00
97-98
95-96
93-94
91-92
89-90
87-88
85-86
83-84
81-82
79-80
77-78
75-76
Billion Bushels
U.S. Corn Exports, 1975-12
2.5
2.0
1.5
1.0
0.5
0.0
Corn Milled for Ethanol
Forecast
% corn for ethanol:
5
2000-01: 6%
4
2005-06: 14%
3
2007-08: 23%
2
2009-10: 35%
1
2012-13: 42%
Source: USDA/NASS
12-13
10-11
08-09
06-07
04-05
02-03
00-01
98-99
96-97
94-95
92-93
0
90-91
Billion Bushels
6
Source: USDA/NASS
12-13
10-11
08-09
06-07
04-05
02-03
00-01
98-99
96-97
94-95
92-93
90-91
88-89
86-87
84-85
82-83
80-81
78-79
76-77
74-75
Billion Bushels
US Feed & Residual Use of Corn, 1975-12
7
6
5
4
3
2
1
0
Grains: Feed and Residual
Bil. Bushels
8
7
DDGS
6
5
Wheat
4
Oats
3
Barley
2
Sorghum
1
Source: USDA/NASS
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
Corn
1978
0
Grains: Feed and Residual
Bil. Bushels
8
7
6
DDGS
5
Wheat
4
Oats
3
Barley
2
Sorghum
1
Source: USDA/NASS
2012
2010
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
Corn
1978
0
September Corn Futures Daily Close, 2012
8.50
8.00
$/Bushel
7.50
7.00
6.50
6.00
5.50
5.00
Source: CMEGroup
Jul
Jun
Ma
Apr
Mar
Feb
Jan
4.50
Source: USDA/NASS
12-13
10-11
08-09
06-07
04-05
02-03
00-01
98-99
96-97
94-95
92-93
90-91
88-89
86-87
84-85
82-83
80-81
78-79
76-77
74-75
72-73
70-71
Dollars Per Bushel
U.S. Corn Price, 1970-12
9
8
7
6
5
4
3
2
1
0
OMAHA CORN PRICES
Weekly
$ Per Bu.
9.50
8.50
Avg.
2006010
7.50
6.50
5.50
2011
4.50
3.50
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
2.50
G-P-02
10/04/12
DISTILLER DRIED GRAIN PRICES
Chicago, Illinois, Weekly
$ Per Ton
365
315
Avg.
2006010
265
215
2011
165
115
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
65
10/04/12
CENTRAL ILLINOIS SOYBEAN MEAL
(48%) PRICES
Weekly
$ Per Ton
600
Avg.
2006010
550
500
450
2011
400
350
300
2012
250
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
200
G-P-07
10/04/12
U.S. Monthly Average Corn Price
7.00
Cash
futures
6.00
5.00
4.00
3.00
2.00
Jan 14
Jan 13
Jan 12
Jan 11
Jan 10
Jan 09
Jan 08
Jan 07
Jan 06
Jan 05
Jan 04
Jan 03
Jan 02
Jan 01
1.00
Jan-00
Dollars Per Bushel
8.00
Thru Dec 2015 all corn futures contracts are above $5.85 per bushel
South America
• A large soybean harvest is expected
– Brazil up 22%
– Argentina up 34%
Meat Demand
Source: U.S. Commerce Department
12-1
11-3
11-1
10-3
10-1
09-3
09-1
08-3
08-1
07-3
07-1
06-3
06-1
05-3
05-1
Percent Change
Growth in Real GDP
6
4
2
0
-2
-4
-6
-8
-10
U.S. Civilian Employment, 1948-2012
170
actual
130
110
90
70
Source: Bureau of Labor Statistics, household survey, seasonally adjusted
& MU, 1.00143/month
2008
2011
2002
2005
1996
1999
1990
1993
1969
1972
1963
1966
1957
1960
1951
1954
1948
50
1984
1987
In September 2012, U.S. 17.7
million jobs under trend
1975
1978
1981
Million
150
1.7% trend
Gasoline Prices & Meat Demand,
1999-2012
450
Correlation = -0.37
8
6
350
cents per gallon
4
300
2
250
0
200
-2
150
-4
100
50
-6
retail gas $
meat demand
-8
Source: U.S. Energy Information Administration
2009
Jul
2010
Jul
2011
Jul
2012
Jul
-10
1999
Jul
2000
Jul
2001
Jul
2002
Jul
2003
Jul
2004
Jul
2005
Jul
2006
Jul
2007
Jul
2008
0
% change meat demand
400
10
Index of Retail Meat Demand
Base Elasticity = - 0.75
1998 = 100
114
112
110
108
106
104
102
Source: Ron Plain, MU
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
98
1998
100
Boneless Retail Meat Prices as % of Bologna, Monthly,
2007-2012
280
260
240
220
200
180
160
140
120
100
80
Beef Sirloin
Pork Chops
Chicken Breast
2007 >
Apr
Jul
Oct
2008 >
Apr
Jul
Oct
2009 >
Apr
Jul
Oct
2010 >
Apr
Jul
Oct
2011 >
Apr
Jul
Oct
2012>
Apr
Jul
Percent
Source: USDA/ERS
10
8
6
4
2
0
-2
-4
-6
-8
2002 >
May
Sep
2003 >
May
Sep
2004 >
May
Sep
2005 >
May
Sep
2006 >
May
Sep
2007>
May
Sep
2008>
May
Sep
2009>
May
Sep
2010>
May
Sep
2011>
May
Sep
2012>
May
Change in Retail Meat Demand
Base Elasticity = - 0.75
% change from
year ago
Seasonal Price Patterns
BROILER PRICES
12-City Composite, Weekly
Cents Per Pound
84
82
80
78
76
Avg.
2006-10
74
72
70
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
68
P-P-01
09/10/12
n
Fe
b
M
ar
Ap
r
M
ay
Ju
n
Ju
l
Au
g
Se
p
Oc
t
No
v
De
c
96
94
92
90
88
86
84
82
Ja
$/cwt
Monthly Average Slaughter Steer
Prices, 2002-2011
Seasonal Average Hog Price
$/cwt
75
70
65
60
55
50
45
40
Jan
Feb
Mar
Apr May Jun
Source: USDA Prior Day Slaughter reports
Jul
Aug Sep
Oct Nov
Dec
Broiler Situation
BROILER-TYPE HATCHING LAYERS
Average Number On Hand During Month
Million
58
Avg.
2006-10
57
56
55
2011
54
53
52
2012
51
50
JAN
MAR
MAY
Livestock Marketing Information Center
Data Source: USDA-NASS
JUL
SEP
NOV
09/24/12
BROILER EGGS SET
Weekly
Mil. Eggs
220
215
210
Avg.
200610
205
200
195
2011
190
185
180
2012
Livestock Marketing Information Center
Data Source: USDA-NASS
T
O
C
L
JU
AP
R
JA
N
175
P-S-10
10/04/12
BROILER CHICKS PLACED
Weekly
Mil. Birds
180
175
Avg.
200610
170
165
160
2011
155
150
2012
Livestock Marketing Information Center
Data Source: USDA-NASS
T
O
C
L
JU
AP
R
JA
N
145
P-S-11
10/04/12
BROILER SLAUGHTER
Federally Inspected, Weekly
Mil. Birds
180
170
Avg.
200610
160
150
140
2011
130
120
Broiler slaughter is down 4.0%
2012
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
T
O
C
L
JU
AP
R
JA
N
110
P-S-16
10/04/12
BROILER PRODUCTION
Federally Inspected, Weekly
Mil. Lbs
1040
990
Avg.
200610
940
890
840
2011
790
740
690
Broiler production is down 4.1%
2012
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
T
O
C
L
JU
AP
R
JA
N
640
P-S-20
10/04/12
BROILER PRICES
12-City Composite, Weekly
Cents Per Pound
98
Avg.
2006-10
93
88
83
2011
78
73
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
68
P-P-01
09/24/12
WHOLESALE CHICKEN BREAST PRICES
Skinless/Boneless, Northeast, Truckload, Weekly
Cents Per Pound
160
Avg.
2006-10
150
140
130
2011
120
110
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
100
P-P-02
09/24/12
WHOLESALE CHICKEN
LEG QUARTER PRICES
Northeast, Truckload, Weekly
Cents Per Pound
60
Avg.
2006-10
55
50
45
2011
40
35
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
30
09/24/12
WHOLESALE CHICKEN WING PRICES
Northeast, Truckload, Weekly
Cents Per Pound
200
185
Avg.
2006-10
170
155
140
2011
125
110
95
2012
80
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
65
P-P-07
09/24/12
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 2011.
• 2013 broiler production is expected to be
down 1.1% from 2012 with wholesale prices
that are 4.8% higher than in 2012.
Source: USDA-OCE WASDE, September 2012
Plain’s Forecast
Broiler
Production
•
•
•
•
2011
2012
2013
2014
+1.8%
- 1.5%
- 1.4%
+2.3%
Broiler
Price
79 cents/lb
86 cents/lb
90 cents/lb
85 cents/lb
Turkey Situation
TURKEY PRODUCTION
Federally Inspected, Weekly
Mil. Lbs
175
160
Avg.
200610
145
130
115
2011
100
85
Turkey production is up 1.8%
2012
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
T
O
C
L
JU
AP
R
JA
N
70
P-S-21
10/04/12
TURKEY PRICES
National Hens, 8-16 Pounds, Weekly
Cents Per Pound
120
110
Avg.
2005-10
100
90
2011
80
70
2012
Livestock Marketing Information Center
Data Source: USDA-AMS
T
O
C
L
JU
AP
R
JA
N
60
P-P-08
09/24/12
Turkey Production
• 2012 turkey production is expected to be up
2.9% from 2011 with wholesale prices that are
5.4% higher than in 2011.
• 2013 turkey production is expected to be
down 3.2% from 2012 with wholesale prices
that are 0.9% lower than in 2012.
Source: USDA-OCE WASDE, September 2012
Cattle Situation
U.S. CATTLE INVENTORY, January 1
Mil. Head
140
130
120
110
100
90
80
2012: 90.8 million head, Down 2.1%
70
Lowest inventory since 1952
60
1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011
Source: USDA/NASS
July 2012 Cattle Inventory
percent of year earlier
All Cattle & Calves
Beef Cows
Dairy Cows
Beef Replace. Heifers
Dairy Replace. Heifers
Other Heifers
Steers 500 lbs & up
Calves under 500 lbs
97.8
97.1
100.0
100.0
97.6
97.4
98.6
97.4
U.S. Calf Crop, 1945-2012
55
2012: 34.5 million head, Down 2.3%
Million Head
50
45
40
35
30
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Source: USDA/NASS
U.S. Beef Production, 1950-2011
30
2011: 26.2 billion pounds, down 0.4%
Billion Pounds
25
20
15
10
5
0
1950 1955 1960
1965 1970 1975 1980 1985
1990 1995 2000 2005
2010
July 2012 Cattle Inventory
percent of year earlier
Steers 500 lbs & up
Other heifers
Calves under 500 lbs
98.6
97.4
97.4
Combined
97.8
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%
ESTIMATED AVERAGE COW CALF RETURNS
Returns Over Cash Cost (Includes Pasture Rent), Annual
$ Per Cow
150
100
50
0
-50
-100
1981
1983
1985
1987 1989
1991
1993
1995
Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC
1997
1999
2001
2003
2005 2007
2009
2011
COW SLAUGHTER
Thou. Head
2011
2012
OC
T
JU
L
2012 cow slaughter is down 4.6%
AP
R
JA
N
150
145
140
135
130
125
120
115
110
105
100
95
90
Federally Inspected Weekly
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 2011.
• 2013 beef production is expected to be down
4.3% from 2012 with slaughter steer prices
that are 5.0% higher than in 2012.
Source: USDA-OCE WASDE, September 2012
Plain’s Forecast
Beef
Production
•
•
•
•
2011
2012
2013
2014
- 0.4%
- 1.8%
- 3.3%
- 3.8%
Steer
Price
$114.73/cwt
$122/cwt
$132/cwt
$135/cwt
Pork Situation
Annual U.S. Pork Production, 1930-2011
Billion Pounds
25
actual
1.5% trend
20
15
10
5
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
1945
1940
1935
1930
0
U.S. Swine Breeding Herd, 1999-2012
6300
6100
6000
5900
5800
Source: USDA/NASS
De
c1
1
10
De
c
09
De
c
08
De
c
07
De
c
06
De
c
05
De
c
04
De
c
03
De
c
02
De
c
01
De
c
00
De
c
99
5700
De
c
Thousand Head
6200
Hog Inventory Reports
U.S. Sept
All Hogs & Pigs
Kept for Breeding
Kept for Marketing
100.4
99.7
100.4
Under 50 lbs
50-119 lbs.
120-179 lbs.
180 lbs. and over
99.5
98.8
100.6
104.5
Dec-Feb Farrowings
101.7
Mar-May Farrowings
100.1
Jun-Aug Farrowings
98.8
Sep-Nov Farrowing Intentions
97.3
Dec-Feb Farrowing Intentions
98.5
Canada July
101.5
101.0
101.5
101.4
102.1
101.1
99.3
101.1
98.6
98.7
ar
05
ar
04
ar
03
ar
02
ar
01
ar
00
ar
06
M
AM
07
M
AM
08
M
AM
09
M
AM
10
M
AM
11
M
AM
12
M
M
M
M
M
M
M
Thousand Head
U.S. Sows Farrowed, 2000-2012
3300
3200
3100
3000
2900
2800
2700
2600
2500
U.S. Pigs Per Litter by Quarter
% change
from yr. ago
3
2.5
2
1.5
1
0.5
0
-0.5
DJF12
DJF11
DJF10
DJF09
DJF08
DJF07
DJF06
DJF05
DJF04
DJF03
DJF02
DJF01
DJF00
DJF99
-1
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 2011.
• 2013 pork production is expected to be down
1.3% from 2012 with slaughter hog prices that
are 6.6% higher than in 2012.
Source: USDA-OCE WASDE, September 2012
Plain’s Forecast
•
•
•
•
2011
2012
2013
2014
Pork
Production
Carcass
Price
+ 1.4%
+ 2.4%
+ 0.0%
+ 1.0%
$87.56/cwt
$82.00/cwt
$85.00/cwt
$87.00/cwt
Meat Trade
0
2011
2010
2009
2008
2007
2006
2005
2004
Broiler
2003
2002
2001
Pork
2000
1999
1998
Beef
1997
1996
1995
8
1994
1993
1992
1991
1990
1989
1988
Billion pounds
U.S. Meat Exports, 1980-2011
Turkey
7
6
5
4
3
2
1
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
BRAZILIAN BROILER PRODUCTION
Ready to Cook Equivalent, Annual
Mill MT
14
13
12
11
10
9
8
7
6
5
4
2002
2003
2004
2005
Livestock Marketing Information Center
Data Source: USDA-FAS
2006
2007
2008
2009
2010
2011
04/18/12
BROILER EXPORTS
Carcass Weight, Annual
Mill MT
3.5
2007
2008
2009
2010
2011
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Brazil
European Union - 27
Livestock Marketing Information Center
Data Source: USDA-FAS
Thailand
US
04/18/12
BROILER IMPORTS
Carcass Weight, Annual
Mill MT
1.4
2007
2008
2009
2010
2011
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Russian
Federation
Japan
Livestock Marketing Information Center
Data Source: USDA-FAS
European Union - Peoples Republic
27
of China
US
04/18/12
Meat Situation
U.S. Per Capita Meat Consumption
Pounds
250
240
230
220
210
200
190
180
170
160
150
Source: USDA/ERS
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
1945
2013 per capita meat
consumption lowest
since 1990
U.S. Per Capita Meat Consumption
Pounds
Pork
Beef
Turkey
Broilers
Fish
Source: USDA/ERS
2010
2005
2000
1995
1990
1985
1980
1975
1970
1965
1960
1955
1950
1945
100
90
80
70
60
50
40
30
20
10
0
Forecast Change in Meat Production
Type
Beef
Pork
Chicken
Turkey
All Meats
--Percent Change-2011-12
2012-13
- 1.6%
- 4.3%
+2.0%
- 1.3%
- 1.2%
- 1.1%
+2.9%
- 3.2%
- 0.2%
- 2.2%
Source: USDA-OCE WASDE, September 2012
Any Questions?

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