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2013 Cattle Market Situation and Outlook

2013 Cattle Market Situation and Outlook. Derrell S. Peel Breedlove Professor of Agribusiness and Livestock Marketing Specialist. 2012 Recap. Widespread drought in U.S. Continued herd liquidation Not as severe in Oklahoma this summer Limited water and forage for winter

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2013 Cattle Market Situation and Outlook

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  1. 2013 Cattle Market Situation and Outlook Derrell S. Peel Breedlove Professor of Agribusiness and Livestock Marketing Specialist

  2. 2012 Recap • Widespread drought in U.S. • Continued herd liquidation • Not as severe in Oklahoma this summer • Limited water and forage for winter • Record high grain and forage prices • Record high cattle prices • Reduced cow-calf profitability • Poor feedlot and packer margins • Higher wholesale and retail beef prices • Limited beef demand • Weaker beef exports

  3. Livestock Marketing Information Center Data Source: USDA-AMS

  4. Livestock Marketing Information Center Data Source: USDA-AMS

  5. Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  6. Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  7. Livestock Marketing Information Center Data Source: USDA-AMS

  8. 2013 Cattle Market Environment • Continued drought? • More liquidation • …Or normal weather • More heifer retention • Tighter cattle supplies…into 2014 • Beef demand is the key unknown • tied to general economy

  9. Data Source: USDA-NASS, Calculations by Derrell Peel

  10. 2013 Cattle Market Expectations • Cattle and beef prices pushed higher by limited supplies • Beef production down by 4-4.5% • Beef demand will limit price increases • Question is “How much higher?” • Moderation in feed prices • Higher cow and heifer prices (if no drought) • Breeding cow and heifer demand

  11. Commercial Beef Production Total Cattle Inventory Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  12. Cattle Sector Implications • Cow-calf • Good profit potential; cost management key • Rebuilding strategy and costs • Producer transition • Stocker • Good value of gain • Feedlots and packers will continue to struggle • Loss of capacity likely • Production challenges bigger than marketing challenges

  13. Price-Weight RelationshipMedium/Large No. 1 Steers, 7 Oklahoma Auctions

  14. Steer Price, Total Value and Value of Gain November 9, 2012, 7 Auction, Oklahoma

  15. Livestock Marketing Information Center Data Source: USDA-AMS, Compiled & Analysis by LMIC

  16. Agricultural Economics

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