Livestock Outlook & Profit Potential Lee Schulz, Department of - - PowerPoint PPT Presentation
Livestock Outlook & Profit Potential Lee Schulz, Department of Economics, Iowa State University (515) 294-3356; lschulz@iastate.edu ESTIMATED AVERAGE COW CALF RETURNS Returns Over Cash Cost (Includes Pasture Rent), Annual $ Per Cow
Lee Schulz, Department of Economics, Iowa State University (515) 294-3356; lschulz@iastate.edu
C-P-66 11/13/17
100 200 300 400 500
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
$ Per Cow
ESTIMATED AVERAGE COW CALF RETURNS Returns Over Cash Cost (Includes Pasture Rent), Annual
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Projections for 3/3/17 6/7/17 10/1/17 11/13/17 2017
$3 $19 $69 2018
$4
100 200 300 400 500 600 700 800 900 1000
1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017
$ Per Cow
ESTIMATED AVERAGE COW CALF COSTS Total Cash Cost Plus Pasture Rent, Annual
11/13/17
1990: $367 2000: $384 2010: $554 2014: $879 2015: $871 2016: $803 2017f: $806 2018f: $802
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Source: USDA/AMS
C-S-34 11/17/17
35 40 45 50 55 60 65 70
JAN APR JUL OCT
BEEF COW SLAUGHTER Federally Inspected, Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
2017 Slaughter +10% (vs. 2016)
Source: USDA/AMS
Source: USDA/AMS
Sale Weight Sale Date Sell Price, $/cwt ADG DOF VOG, $/cwt VOG, $/head 650 1/08/18 $164.35 2.50 41 $146.23 $146.23 750 2/17/18 $156.43 2.50 81 $125.57 $251.14 850 3/29/18 $146.03 2.50 121 $106.41 $319.22
Backgrounding and Stocker Example
November 29th 550 Pound Calves in Iowa @ $167.65/cwt
Source: USDA/AMS, CME Group
Projected VOG 80% of Projected VOG COG ($/cwt) $125.57 $100.46 $85.00 $81.14 $30.91 $95.00 $61.14 $10.91 $105.00 $41.14 ($9.09) $115.00 $21.14 ($29.09) $125.00 $1.14 ($49.09) Increased Value ($/hd) Trucking, interest, etc. must be subtracted to identify returns
Source: USDA/AMS
Source: USDA/AMS
Source: USDA/AMS
C-N-08A 11/19/17
0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
CATTLE PLACED WEIGHING LESS THAN 700 POUNDS 1,000 Plus Capacity Feedlots, U.S., Monthly
2016 2017
C-N-08B 11/19/17
0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
CATTLE PLACED WEIGHING MORE THAN 700 POUNDS 1,000 Plus Capacity Feedlots, U.S., Monthly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
(1,000+ head capacity feedlots & <1,000 in Iowa)
– Vs. +5.7% pre-report est. (+4.8%, +7.0%)
– Vs. +7.1% pre-report est. (+3.6%, +13.1%)
– Vs. +5.4% pre-report est. (+5.0%, +5.8%)
Data Source: USDA/NASS
C-N-12 11/19/17
2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
CATTLE ON FEED OVER 120 DAYS US Total, Monthly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
C-N-13 11/19/17
1.2 1.4 1.6 1.8 2.0 2.2 2.4
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
CATTLE ON FEED OVER 90 DAYS MINUS OVER 120 DAYS US Total, Monthly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
C-S-18 11/17/17
902 820 840 860 880 900 920 940
JAN APR JUL OCT
Pounds
STEER DRESSED WEIGHT Federally Inspected, Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
$119.35 90 100 110 120 130 140 150
JAN APR JUL OCT
$ Per Cwt.
SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Historical and Projected Iowa Finishing Yearling Steer Returns
(http://www2.econ.iastate.edu/estimated-returns/)
October 2017 Summary
Revenue: $1,457/steer (1,300 lbs @ $112.05/cwt) Feeder Cattle Purchase: $1,112/steer (750 lbs @ $152.30/cwt)
Gross Margin (Fat-Feeder): $314/steer Break-Even COG (550 lbs added): $0.5716/lb
VS
Estimated COG: $0.7058/lb = -$73.82/steer margins
2014 = +$197.24 [+$41 to +$269] 2015 = -$225.12 [-$530 to +$43] 2016 = -$110.62 [-$359 to +$113] 2017f = +$139.56 [-$74 to +$415] 2018f = -$36.23 [-$130 to +$63]
Historical and Projected Iowa Finishing Yearling Steer Returns (as of 11/20/17)
(http://www2.econ.iastate.edu/estimated-returns/)
* Net return is $/head and all other values are $/cwt. ** FCOG = Feeding cost of gain. Projected using basis adjusted futures prices.
Place Closeout Net Fed Feeder Breakeven Breakeven Breakeven Mo-Yr Mo-Yr Return* FCOG** Price Price FCOG** Fed Price Feeder Price
May-17 Oct-17
70.58 112.05 152.30 57.16 117.73 142.46 Jun-17 Nov-17 23.02 70.35 120.30 153.87 74.53 118.53 156.94 Jul-17 Dec-17
70.36 115.43 155.77 60.41 119.63 148.48 Aug-17 Jan-18 62.50 71.10 123.31 153.27 82.46 118.51 161.61 Sep-17 Feb-18 19.32 72.10 122.24 156.44 75.61 120.75 159.01 Oct-17 Mar-18 13.16 73.37 125.13 161.34 75.76 124.12 163.09 Nov-17 Apr-18 19.04 74.49 125.66 160.65 77.95 124.20 163.19 Dec-17 May-18 33.82 75.36 122.12 151.90 81.51 119.51 156.41 Jan-18 Jun-18 4.71 75.81 119.01 150.07 76.66 118.65 150.70 Feb-18 Jul-18
76.32 114.43 150.01 65.90 118.83 142.37 Mar-18 Aug-18
76.77 113.36 148.65 65.22 118.24 140.18 Apr-18 Sep-18
77.87 111.07 150.12 57.81 119.56 135.41 May-18 Oct-18
78.42 110.20 150.33 55.49 119.90 133.51 Jun-18 Nov-18
78.92 111.50 148.76 60.70 119.21 135.40 Jul-18 Dec-18
79.05 112.03 153.53 55.43 122.02 136.21 Aug-18 Jan-19
79.70 115.04 152.42 64.06 121.66 140.95 Sep-18 Feb-19
79.58 113.97 153.29 60.34 122.11 139.18 Oct-18 Mar-19
79.87 116.16 153.76 64.87 122.50 142.76
NATIONAL WEEKLY DIRECT SLAUGHTER CATTLE - PRIOR WEEK SLAUGHTER AND CONTRACT PURCHASES (LM_CT153)
LC (11/20/2017)
Feb 18: 123.025 Apr 18: 123.700 Jun 18: 116.350
Data Source: USDA/AMS
Source: USDA/AMS
$210.22 170 180 190 200 210 220 230 240 250 260
JAN APR JUL OCT
$ Per Cwt.
BOXED BEEF CUTOUT VALUE Choice 600-900 Lbs., Carcass, Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Source: USDA/AMS
U.S. Beef Exports, Jan-Sep 2017
Source: USDA/ERS
Sep-17/Aug-17 Sep-17/Sep-16
Year-to-Date Country
Percent Percent
1,000 lbs Percent Share Japan
40% 142,497 29% 31% Mexico
8% 20,185 7% 15% Canada
8% 8,634 4% 11% South Korea
3% 26,340 8% 16% Hong Kong
16,641 9% 10% China (Taiwan) 2% 5% 7,904 8% 5% Vietnam
17% 10,779 98% 1% Netherlands 16% 8% 2,186 8% 1% Philippines 35% 21% 5,267 29% 1% Chile
3,868 19% 1% Bahamas
0% United Arab Emirates 26% 18%
1% Dominican Republic
1,048 8% 1% China (Mainland) 83% 3,462 0% Other Countries 15% 16% 15,396 14% 6% Total
14% 262,710 14%
(Carcass Weight Basis)
WASDE U.S.: 2016: 2,556 mil lbs 2017: 2,855 (+12%) 2018: 2,970 (+4%)
U.S. Beef Imports, Jan-Sep 2017
Sep-17/Aug-17 Sep-17/Sep-16 Year-to-Date Country Percent Percent 1,000 lbs Percent Share Australia
46%
22%
Canada
11,371 2% 24%
New Zealand
1%
21%
Brazil
6,037 6% 5%
Mexico
10% 98,071 29% 19%
Uruguay
6,910 8% 4%
Nicaragua
6% 18,327 23% 4%
Costa Rica
1%
Other Countries
421 6% 0%
Total
5%
Source: USDA/ERS
(Carcass Weight Basis)
WASDE U.S.: 2016: 3,015 mil lbs 2017: 2,966 (-2%) 2018: 3,030 (+2%)
Source: CME Group
2013 = +$6.21 [-$25.60 to +$24.57] 2014 = +$61.85 [+$13.15 to +$107.25] 2015 = +$7.93 [-$18.40 to +$26.25] 2016 = -$1.26 [-$35.52 to +$32.92] 2017f = +$12.42 [-$12.68 to +$47.62] 2018f = +$10.47 [-$12.08 to +$30.63]
Closeout Total Cost Lean Hog Price Net Return Net Return Month Year $/carcass cwt $/carcass cwt $/carcass cwt $/head 2013 87.34 90.41 3.07 6.21 2014 75.34 105.89 30.54 61.85 2015 64.70 68.61 3.91 7.93 Jan-Mar 2016 61.24 60.41
Apr-Jun 2016 62.01 73.08 11.07 22.42 Jul-Sep 2016 62.91 63.62 0.71 1.43 Oct-Dec 2016 60.21 46.77
2016 61.59 60.97
Jan-Mar 2017 60.37 66.37 5.99 12.14 Apr-Jun 2017 60.98 69.45 8.47 17.16 Jul-Sep 2017 61.00 71.28 10.28 20.83 Oct-Dec 2017f 59.88 59.66
2017f 60.55 66.69 6.14 12.42 Jan-Mar 2018f 61.79 65.78 3.98 8.06 Apr-Jun 2018f 63.52 74.36 10.83 21.94 Jul-Sep 2018f 64.84 74.30 9.47 19.17 Oct-Dec 2018f 64.84 61.25
2018f 63.75 68.92 5.17 10.47
Historical and Projected Iowa Farrow to Finish Returns (as of 11/20/17)
(http://www2.econ.iastate.edu/estimated-returns/)
* Projected using basis adjusted futures prices.
USDA Quarterly Hogs and Pigs Report – United States
September 28, 2017
2017 as % Pre-Report Pre-Report Actual - 2016 2017
Range Estimate Estimate
Inventories on Sep 1 * All hogs and pigs 71,786 73,549 102.5 101.7 - 103.3 102.5 0.0 Kept for breeding 6,016 6,087 101.2 100.8 - 101.4 101.2 0.0 Market 65,770 67,462 102.6 101.7 - 103.5 102.6 0.0 Under 50 pounds 21,215 21,568 101.7 101.7 - 103.5 102.4
50-119 pounds 19,271 19,626 101.8 100.7 - 104.0 102.6
120-179 pounds 13,600 14,129 103.9 101.5 - 103.7 102.9 1.0 180 pounds and over 11,683 12,139 103.9 101.5 - 103.9 102.6 1.3 Farrowing ** Jun – Aug sows farrowed 3,057 3,103 101.5 100.2 - 102.0 101.0 0.5 Sep – Nov intentions 3,046 3,070 100.8 99.7 - 101.0 100.6 0.2 Dec – Feb intentions 2,986 3,025 101.3 97.8 - 101.2 100.1 1.2 Jun – Aug pigs per litter 10.58 10.65 100.7 100.0 - 101.4 100.8
Jun – Aug pig crop * 32,331 33,048 102.2 100.3 - 103.0 101.8 0.4
* 1,000 head, ** 1,000 litters Data Source: USDA-NASS estimates. Urner Barry pre-report estimates.
Source: USDA/AMS
National Direct Delivered Feeder Pig Report: Week Ending November 17, 2017 Weekly Summary of prices on a delivered farm to farm basis
Source: USDA/AMS
2013 = +$4.77 [-$14.80 to +$22.07] 2014 = +$39.48 [+$1.62 to +$84.64] 2015 = -$14.32 [-$30.32 to +$4.70] 2016 = -$13.10 [-$45.69 to +$17.05] 2017f = +$1.92 [-$30.32 to +$24.89] 2018f = -$0.05 [-$19.57 to +$19.77]
Place Market Net LH SEW BE BE LH BE SEW Mo-Yr Mo-Yr Return* FCOG** Price Price* FCOG** Price Price*
2013 4.77 54.86 90.41 36.78 56.71 88.06 41.55 2014 39.48 46.53 105.89 54.90 61.83 86.39 94.38 2015
40.48 68.61 48.83 34.93 75.69 34.51 Jul-Sep 2015 Jan-Mar 2016
37.84 60.41 30.46 35.61 63.25 24.70 Oct-Dec 2015 Apr-Jun 2016 9.31 38.60 73.08 39.09 42.21 68.48 48.40 Jan-Mar 2016 Jul-Sep 2016
38.97 63.62 47.51 31.51 73.11 28.28 Apr-Jun 2016 Oct-Dec 2016
37.27 46.77 35.28 23.04 64.91
2016
38.17 60.97 38.08 33.09 67.44 24.98 Jul-Sep 2016 Jan-Mar 2017 8.02 37.81 66.37 28.82 40.92 62.41 36.84 Oct-Dec 2016 Apr-Jun 2017 8.82 37.94 69.45 33.93 41.36 65.09 42.76 Jan-Mar 2017 Jul-Sep 2017
38.18 71.28 46.09 38.08 71.41 45.84 Apr-Jun 2017 Oct-Dec 2017f
37.33 59.66 33.39 33.89 64.06 24.50 2017f 1.92 37.82 66.69 35.56 38.56 65.74 37.48 Jul-Sep 2017 Jan-Mar 2018f 2.16 38.75 65.78 31.06 39.59 64.71 33.22 Oct-Dec 2017 Apr-Jun 2018f 10.29 40.18 74.36 36.61 44.17 69.27 46.90 Jan-Mar 2018 Jul-Sep 2018f 4.40 41.05 79.19 38.85 47.09 71.48 54.45 Apr-Jun 2018 Oct-Dec 2018f
41.05 66.09 40.04 36.35 72.08 27.91 2018f
40.21 68.92 35.89 40.18 68.95 35.83
Historical and Projected Iowa Wean to Finish Returns (as of 11/20/17)
(http://www2.econ.iastate.edu/estimated-returns/)
*Net return and SEW price is $/head and all other values are $/carcass cwt. ** FCOG = Feeding cost of gain.
f Projected using basis adjusted futures prices.
Source: USDA/AMS
Source: USDA/AMS
Source: USDA/AMS. * Steve Meyer, EMI.
+8.1% (‘15 vs ‘14) +2.4% (‘16 vs ‘15) +2.9% (’17YTD vs ’16YTD)
Source: Steve Meyer. Published in National Hog Farmer Magazine, July 27, 2017.
H-N-13 09/28/17
y = 540.41x + 50346 R² = 0.8318 40 45 50 55 60 65 70 75
1992 1995 1998 2001 2004 2007 2010 2013 2016
SEPTEMBER 1 MARKET HOGS U.S. Inventory
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
2000 to 2017 = +27%
Data Source: USDA/ERS
Wholesale-Retail Share (56.9%), ‘15=62.1%, ‘16=60.0%, ‘17=57.3% Farmers’ Share (29.5%), ‘15=22.7%, ‘16=21.4%, ‘17=24.1% Farm-Wholesale Share (13.6%), ‘15=15.1%, ‘16=18.6%, ‘17=18.6%
Source: USDA/AMS
H-P-10 11/11/17
$81.04 65 70 75 80 85 90 95 100 105 110
JAN APR JUL OCT
$ Per Cwt.
PORK CUTOUT VALUE (Voluntary data prior to 2013), Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Source: USDA/AMS
M-P-29 11/06/17
$113.19 80 100 120 140 160 180 200 220 240
JAN APR JUL OCT
Cents Per Pound
WHOLESALE PORK BELLY PRICES Skin-on, 12-14 Pounds, Weekly
2016 2017
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Sep-17/Aug-17 Sep-17/Sep-16 Year-to-Date Country Percent Percent 1,000 lbs Percent Share
Japan
3,535 0% 22% Mexico
1% 201,425 18% 32% Canada 14% 1%
0% 10% South Korea 16% 38% 83,831 30% 9% China (Mainland) 1%
7% Hong Kong 31% 29%
2% Australia
4,223 3% 4% Philippines 43% 14% 14,278 26% 2% China (Taiwan)
55% 8,800 64% 1% Colombia 28% 90% 57,330 84% 3% Honduras
1% 2,194 4% 1% Dominican Republic 7%
17,228 31% 2% Guatemala 44% 38% 1,870 7% 1% Chile
26,520 97% 1% Other Countries 0% 8% 16,773 13% 3% Total 1% 2% 305,360 8%
U.S. Pork Exports, Jan-Sep 2017
Source: USDA/ERS
(Carcass Wt Basis)
WASDE U.S.: 2016: 5,239 mil lbs 2017: 5,588 (+7%) 2018: 5,900 (+6%)
U.S. Exports to China (Mainland) Jan-Sep Yr/Yr 2012 508,169 2013 377,320
2014 285,313
2015 191,357
2016 404,210 111% 2017 286,246
Carcass weight, 1,000 pounds
Source: InterPig
InterPIG 2016 Average National Total Costs Euro/Kg hot weight
QUARTERLY POULTRY PRODUCTION AND PRICESa
% Chg. Broilers % Chg. % Chg. % Chg. % Chg. % Chg. Year from National from from Turkeys from Table from Eggs from Quarter Broilers Year Ago Composite Year Ago Turkeys Year Ago National Year Ago Eggs Year Ago New York Year Ago (Mil. Lbs.) (₵/lb) (Mil. Lbs.) (₵/lb) (Mil. doz.) (₵/doz.) 2015 I 9,718 4.5 97.00
1,429 7.3 99.60
1,820 1.4 146.90 2.9 II 10,021 4.2 104.20
1,389
108.50 2.7 1,726
170.30 26.5 III 10,372 5.5 83.70
1,352
124.60 13.1 1,664
235.70 82.3 IV 9,937 1.3 77.20
1,458
130.10 14.2 1,728
174.10 7.0 Year 40,048 3.8 90.50
5,627
116.20 8.0 6,938
181.80 27.8 2016 I 10,039 3.3 84.60
1,435 0.4 114.70 15.2 1,793
121.50
II 10,253 2.3 93.00
1,520 9.4 116.50 7.4 1,827 5.9 67.90
III 10,338
81.70
1,515 12.1 120.70
1,876 12.7 71.60
IV 10,065 1.3 78.00 1.0 1,511 3.6 116.60
1,939 12.2 81.70
Year 40,695 1.6 84.30
5,981 6.3 117.10 0.8 7,435 7.2 85.70
2017 I 10,223 1.8 88.50 4.6 1,487 3.6 100.40
1,902 6.1 80.00
II 10,407 1.5 104.70 12.6 1,481
99.10
1,896 3.8 74.70 10.0 III b 10,450 1.1 94.90 16.2 1,490
96.90
1,910 1.8 102.10 42.6 IV c 10,350 2.8 85-89 11.5 1,550 2.6 97-101
1,950 0.6 112-116 39.5 Year 41,440 1.8 93.80 11.3 6,008 0.5 98.80
7,658 3.0 92.70 8.2 2018 I c 10,400 1.7 87-93 1.7 1,500 0.9 94-100
1,925 1.2 92-98 18.8 II c 10,625 2.1 86-94
1,530 3.3 97-105 1.9 1,900 0.2 82-88 13.8 III c 10,700 2.4 84-92
1,520 2.0 102-110 9.4 1,940 1.6 91-99
IV c Year 42,275 2.0 85-92
6,140 2.2 100-108 5.3 7,765 1.4 91-99 2.5
a/ Totals may not add due to rounding. b/ Estimated quarter c/ Forecasted quarters Source: World Agricultural Supply and Demand Estimates and Supporting Materials.
QUARTERLY COMMERCIAL SHEEP AND LAMB SLAUGHTER, PRODUCTION, AND LAMB PRICESa
% Chg. Average % Chg. Comm'l % Chg.
% Chg.
% Chg. Year Comm'l from Carcass from Pork from
from 3-Mkt Avg from Quarter Slaughter Year Ago Weight Year Ago Production Year Ago
60-90 lbs Year Ago (1,000 Head) (Lbs.) (Mil. Lbs.) ($/cwt) ($/Cwt.) 2016 I 543 1.3 70
38.0 1.3 275.69
201.39
II 571 1.4 69
39.2 0.3 263.61
193.37
III 558 0.3 65
36.0
301.03 0.9 178.34
IV 566
65 0.7 37.0 0.3 298.70
166.86
Year 2,238 0.6 67
150.2
284.76
184.99
2017 I 533
70
37.2
273.50
211.90 5.2 II 548
65
35.7
315.75 19.8 222.01 14.8 III d 544
65
35.1
322-324 7.3 184-189 4.6 IV e 559
64
35.8
295-300
190-198 16.3 Year 2,185
66
143.8
302-303 6.2 203-206 10.5 2018 I e 521
68
35.7
294-300 8.6 200-209
II e 559 2.0 66 1.4 36.9 3.5 305-312
207-217
III e 541
65 0.5 35.1
319-327 0.0 189-200 4.3 IV e 569 1.7 65 1.3 36.9 3.1 296-305 1.0 185-198
Year 2,190 0.2 66 0.3 144.6 0.5 304-311 1.6 195-206
2019 I e 516
69 0.5 35.5
290-300
191-205
II e 563 0.8 67 0.9 37.5 1.6 292-303
195-210
III e 556 2.8 65 0.6 36.3 3.5 304-316
190-206 1.8 IV e 582 2.3 65 0.6 38.0 3.0 286-299
182-199
Year 2,217 1.2 67 0.7 147.3 1.9 293-305
190-205
a/ Totals may not add due to rounding. d/ Estimated quarter b/ Slaughter lamb prices are formula purchases on a dressed weight basis. e/ Forecasted quarters c/ Feeder Lamb Prices are a three market (CO, SD, & TX) average; live weight basis. Sources: Livestock Slaughter - USDA Publications; USDA Livestock Market News; Forecasts - LMIC Projections.
More information available at:
Iowa Farm Outlook & News
www.econ.iastate.edu/ifo/
Ag Decision Maker
www.extension.iastate.edu/agdm/
ISU Estimated Livestock Returns
www.econ.iastate.edu/estimated-returns/
ISU Livestock Crush Margins
www.econ.iastate.edu/margins/
http://www.iowabeefcenter.org/ http://www.ipic.iastate.edu/