1 / 30

WELCOME: BEEF ECONOMICS WEBINAR

WELCOME: BEEF ECONOMICS WEBINAR. Audio Announcement: all lines are currently muted and we will begin promptly at 1:30pm CST Please select your audio now. To dial the conference, select “Use Telephone” in your audio pane and enter your unique audio pin.

pravat
Télécharger la présentation

WELCOME: BEEF ECONOMICS WEBINAR

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WELCOME: BEEF ECONOMICS WEBINAR • Audio Announcement: all lines are currently muted and we will begin promptly at 1:30pm CST • Please select your audio now. • To dial the conference, select “Use Telephone” in your audio pane and enter your unique audio pin. • Select “Use Mic & Speakers” to use VoIP audio. • Submit questions and comments via the Chat panel • Note: Today’s presentation is being recorded and will be provided within 48 hours.

  2. November 8, 2012 Sponsored by: Presenter: Dr. Glynn Tonsor, Kansas State University

  3. WEBINAR OVERVIEW • Broad Economic Outlook Overview for Industry • Stocker Value of Gain Projection Resources • Feedlot Return Projection Resources • Situation and Research Updates: • Beef demand assessment • Mandatory country of origin labeling • Animal welfare

  4. Economic Outlook Overview: Cow-Calf • Strong calf price pullback during 2012 • National vs. regional drought magnified market impact compared to 2011 • Eventually: beneficiary of tight supplies and probable expanded heifer retention… • majority of owners (not industry % of cows) are not necessarily seeking to maximize profits as core goal … • Returns over cash costs • 2012 (2013) estimates have fell over $170/cow ($75) since March • Will 2015 now be “the peak return year” ? • Further widening between top 1/3 and bottom 1/3 of producers? • Cost management drives majority of differences in KS cow-calf returns and likely is even more critical in period of drought response ….

  5. As of: 11/7/12 Nov. FC: 11/7/12: $145 10/8/12: $146 8/7/12: $143

  6. 10/31/10’: 19.9% of Cows Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  7. IL, IN, IA, MI, MN, MO, OH, & WI 14.5% of Cows (2012) Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  8. CO, KS, MT, NE, ND, SD, & WY 29.2% of Cows (2012) Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  9. AZ, CA, ID, NV, NM, OR, UT, & WA 10.2% of Cows (2012) Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  10. OK & TX 20.4% of Cows (2012) Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  11. AL, AR, FL, GA, KY, LA, MS, NC, SC, TN, VA, & WV 24.5% of Cows (2012) Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  12. Data source: USDA-ERS Will SE lead a national beef cow herd expansion? Operating Cost Area with “good” 2012 pasture conditions… Value of Production Herds > 20 cows Operating Costs = 37% (MP) to 52% (NGP) of Total Costs

  13. Economic Outlook Overview : Stockers • Historically high Values of Gain (VOG) • But also historically high Costs of Gain (COG)… • Of course, not everyone has their typical feedstuffs/resources to engage this fall/winter • VOG = rewards for sound management • COG = pain of hiccups or poor management • Many producers feeding something new… • Is there a widening gap between returns of stocker operations?

  14. How Should VOG Be Projected? • Naïve (current cash market offering) vs. Forward Looking (futures market & basis) • Important to recognize no crystal ball exist • Salina, KS / 550 to 750 lb in 3 month case / Jan. 07’ to July 12’ period: • naïve is less accurate • Forward-looking VOG projections are now updated daily on AgManager http://www.agmanager.info/livestock/budgets/production/beef/KSU_FactSheet_ ValueOfGainForecastingApproaches.pdf

  15. http://www.agmanager.info/livestock/marketing/graphs/cattle/prices/VOG.asphttp://www.agmanager.info/livestock/marketing/graphs/cattle/prices/VOG.asp

  16. Historical VOG Projections (11/7/12): $120-$130

  17. Economic Outlook Overview : Feedlots • Excess capacity concerns remain & will be growing… • Drought: mitigates this initially / magnifies it later … • Mexican supplies: mitigates this recently / magnifies it soon • Losses persist… • July & August closeouts were at historically high losses… • Elevated cost of gain + Feeders purchased before spring pullback • Recent placements at break-even or + projections… • Important to watch response to shrinking available supplies

  18. Historical and Projected Kansas Feedlot Net Returns (as of 11/8/12’) (http://www.agmanager.info/livestock/marketing/outlook/newsletters/FinishingReturns/default.asp) September 12’: -$197.58/steer Rolling 12 month average thru August:-$98.16/steer Representative Barometer for Trends in Profitability

  19. Historical and Projected Kansas Feedlot Net Returns (as of 11/8/12’) (http://www.agmanager.info/livestock/marketing/outlook/newsletters/FinishingReturns/default.asp)

  20. QUARTERLY FORECASTS (LMIC: 10/26/12)

  21. QUARTERLY FORECASTS (LMIC: 10/26/12)

  22. Beef Demand: Situation and Assessment • Meat prices are rising … • “bacon shortage” discussions are exaggerations; • record retail meat prices in 2013 are not… • as prices increase, public will require more “quality”… • debates on various technologies likely will intensify within industries, with customers, and with consumers… • feed 9 billion, “control” food prices, and do so in an “acceptable” manner is the story …

  23. Year-over-Year increases in 8 of last 9 quarters (since Q3 of ’10): Q3.2012 = +1.9% Actual Quantity & Price Changes: 1990: 67.8 lbs (per capita cons.);$2.00 (real All Fresh price) 2011: 57.3 lbs (per capita cons.);$1.97 (real All Fresh price) Q3.2012: Per Capita Consumption = -1.2% (Year-over-Year) Real All Fresh Beef Prices = +3.3% IF Real All Fresh Beef Prices +1.4% = 0% Demand Change

  24. Year-over-Year increases in 7 of last 9 quarters (since Q3 of ’10): Q3.2012 = -0.8% Q3.2012: Per Capita Consumption = -1.2% (Year-over-Year) Real Choice Beef Prices = +0.6% IF Real Choice Beef Prices +1.4% = 0% Demand Change

  25. Situation and Research Update: MCOOL • WTO resolution process continues… • On August 21, the U.S. informed the WTO it intended to: • “implement recommendations and rulings in a manner that respects its WTO obligations and that they would need a reasonable period of time to do so.” • 18 months have at least been rumored to be the desired timeline • On Sept. 13, Canada requested that the reasonable period of time be determined through binding arbitration process … http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds384_e.htm

  26. Situation and Research Update: MCOOL • Wrapping up USDA funded ex post assessment: • Majority of the public is unaware of MCOOL • Fail to reject: “Product of U.S.” = “Product of North America” • No observed change in exercised demand in retail, grocery store based assessment since implementation in March 2009 • Bottom line view: • Aggregate economic loss from MCOOL is apparent • The quicker WTO resolution occurs the better for aggregate economic welfare … • Important implications for excess capacity resolution also…

  27. Situation and Research Update: Animal Welfare • Beef cattle have not been main subject of focus • Naïve to assume immunity… • Vote vs. Buy decision distinctions • Prevalent and important to recognize • Is industry response to AW concerns/inquires a “cost of doing business?” • Ongoing USDA funded beef and dairy cattle project

  28. Sponsored by:

  29. Questions typed by participants during the webinar presentation which were not directly responded to are addressed in the remaining subsequent slides.

  30. Sponsored by:

More Related