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Livestock Market Outlook 2010: Trends and Predictions

Explore insights into the livestock market outlook for 2010 and beyond, including data on meat consumption, beef supply, pork industry trends, and influencing factors. Get informed about key market indicators and potential challenges.

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Livestock Market Outlook 2010: Trends and Predictions

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  1. Livestock Outlook 2010 and Beyond Shane Ellis Extension Livestock Economist Iowa State University November 2010

  2. Livestock Marketing Information Center

  3. Livestock Marketing Information Center

  4. 01-2005 Meat expenditures up avg. of 4% 2009 Meat expenditures down 2% Livestock Marketing Information Center

  5. Meat Demand Factors • Total red meat and poultry consumption • 2009 at 210 lbs. per cap. lowest since 1996 • 2010 at 206 lbs. per cap. lowest since 1991 • Spending on food • Domestic spending on food down. • 1999-08 avg. growth of 5.1%/year, 2009 -0.3%

  6. Beef Situation • Beef prices connected to economy • consumer demand stronger, exports up • Industry still in retraction • Cow herd still declining • Beef production level • Choice meat supplies down • more cattle on feed, weights down • Profit outlook remains mixed

  7. Beef Supply Summary 2009 • Total Beef Production: -2.2% • Total Slght -3.0%, wts +0.8% 2010 • Total Beef Production: +0.1% • Total Slght 1.5%, wts -1.4%

  8. July 2010 Cattle Report

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

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

  11. Yr/yr % Prd & Con 0.1 & -2.3 -1.9 & -2.0 -2.6 & -3.1 Data Source: USDA-NASS, Compiled and Forecasts by LMIC

  12. Oct Cattle on feed US up 2 % 10.8 million (1000+ lots) IA up 1 % 1.195 million Large feedlots up 10% 48% of IA COF Small feedlots down 5% 52% of IA COF Livestock Marketing Information Center Data Source: USDA/NASS

  13. YTD up 2.3% Livestock Marketing Information Center Data Source: USDA-NASS

  14. YTD up 4.5% Livestock Marketing Information Center Data Source: USDA-NASS

  15. YTD up 11% Livestock Marketing Information Center Data Source: USDA-NASS

  16. Livestock Marketing Information Center

  17. Data Source: USDA-NASS, Compiled and Forecasts by LMIC

  18. Data Source: USDA-AMS, Compiled by LMIC

  19. up 17% YTD Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

  20. Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS

  21. US Beef Exports • Total +17.1% • Mexico -25.7% • Canada +2.3% • Japan +21.3% • South Korea +131.5%

  22. Cattle Crush Margin Farms differ, but approximately a $150 margin is needed to breakeven http://www.econ.iastate.edu/margins

  23. Things to Watch • Economy remains vulnerable • Weak US dollar, heavy dollar supply • Higher prices for international commodities, fuel, food • Commodity price response to inflation

  24. Cattle Summary • Demand connected with the economy • Demand added support to prices • Beef production declining until 2014+ • Higher cost for cowherds • Higher cost of gain can pressure feeder prices • Feeding profitability outlook is mixed for next year Fed:$99-105 Corn:$5.50 Feeder:$111-118

  25. Swine Overview • Recent drop in hog prices • Pork supplies tight YTD • Slaughter up in 4th quarter? • Demand steady to stronger • Long term upward trend in exports • Domestic pork consumption per capita down • Profitability elusive remainder year

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

  27. Livestock Marketing Information Center Data Source: USDA-AMS & USDA-NASS

  28. 2010 Estimated • Total Pork Supply: -3.6% • Barr &Gilt Slght: -3.5% • wts unchanged • Total Sow Slght: -7%

  29. Sep 10’ Hogs & Pigs Summary

  30. Hogs & Pigs Summary Mil head Change Pig Crop Mar-May 29.01 -0.8% Jun-Aug 28.51 -0.7% Farrowing Intentions Sep-Nov 2.88 -1.2% Dec-Feb 2.89 +0.5% Pigs per litter 9.81 up 1.1%

  31. Yr/yr % Prd & Con -3.6 & -6.4 -0.1 & -2.2 1.4 & 0.1 Livestock Marketing Information Center

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

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

  34. Pigs per litter trending higher 9.11 to 9.81 in 6 years More litters per sow Shift during late 2007

  35. Livestock Marketing Information Center

  36. YTD up 8% Data Source: USDA-ERS & FAS; Compiled & Forecasts by LMIC

  37. Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC

  38. Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC

  39. Wean-Finish Crush Margin The Crush Margin is the return over pig, corn and SBM cost.  The Crush Margin is based on the following assumptions.  Carcass weight: 200 pounds Corn: 10 bu/hd Pig price: 50% of 5 month out LHF SBM: 150 lbs/hd Farms differ, but approximately a $40 margin is needed to breakeven

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