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Presented By:

DeDe JonesExtension Program Specialist III

Risk Management

2013 Beef CattleMarket Outlook

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Overview

Drought

Demand Supplies

Changing MarketsPrices

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U S ANNUAL CORN PRODUCTION

Crop Year

2

4

6

8

10

12

14

16

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Bil. Bushels

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COMMERCIAL PORK PRODUCTION

Quarterly

5.0

5.2

5.4

5.6

5.8

6.0

6.2

6.4

6.6

JAN-MAR APR-JUN JUL-SEP OCT-DEC

Bil. Pounds

Avg.2007/11

2012

2013

2014

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RTC BROILER PRODUCTION

Quarterly

8.0

8.4

8.8

9.2

9.6


Bil. Pounds

Avg.2007/11

2012

2013

2014

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SOUTHERN PLAINS CORN PRICES

Weekly

3.00

4.00

5.00

6.00

7.00

8.00

9.00

JAN

APR JU

LOCT

$ Per Bu.

Avg.2006-10

2011

2012

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MED. & LRG. #1 STEER CALF PRICES

500-600 Pounds, Southern Plains, Weekly

100110

120

130

140

150

160

170

180

190

200

JAN APR JUL OCT

$ Per Cwt.

Avg.2006-10

2011

2012

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Drought and Feed

AdjustmentAdjust all users including ethanol

High prices ration use

Next Year More acres planted?

Given lower corn futures prices, good question

Yields?

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Beef and Cattle Demand

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RETAIL BEEF PRICE

All Fresh, Monthly

375

400

425

450

475

500

JAN MAR MAY JUL SEP NOV

Cents Per Pound

Avg.2006-10

2011

2012

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RETAIL ALL FRESH BEEF DEMAND INDEX

Third Quarter, Using CPI 1990=100

100 99

91 8986 84

75 73 7578

82 82 8385

9287

83 8378

74 75 7678

0

20

40

60

80

100

120

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Index Value

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BOXED BEEF CUTOUT VALUE

Choice 600-900 Lbs. Carcass, Weekly

135

145

155

165

175

185

195

205

JAN APR JUL OCT

$ Per Cwt.

Avg.2006-10

2011

2012

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U S BEEF AND VEAL EXPORTS

Carcass Weight, Monthly

100

120

140

160

180

200

220

240

260

280

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Mil. Pounds

Avg.

2006-10

2011

2012

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SLAUGHTER STEER PRICES

Southern Plains, Weekly

80

85

90

95

100

105110

115

120

125

130

135

JAN APR JUL OCT

$ Per Cwt.

Avg.2006-10

2011

2012

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CHOICE MINUS SELECT BEEF PRICES

Carcass Cutout Value 600-900 Lbs., Weekly

0

5

10

15

20

25

JAN APR JUL OCT

$ Per Cwt.

Avg.2006-10

2011

2012

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Demand Factors

Beef Demand Has Been Growing Record high retail prices

But, Near Term Beef Demand

High beef prices Live Animal Demand

Cattle feeding losses

Packing losses Drought

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Cattle Supplies

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JANUARY 1 TOTAL CATTLE INVENTORY

U.S., Annual

70

80

90

100

110

120

130

140

1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012

Mil. Head

-2.1 Percent

2012 = 90.8 Million Head

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U S CATTLE IMPORTS FROM MEXICO

Monthly

25

45

65

85

105

125

145

165

185

205

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Thou. Head

Avg.2006-10

2011

2012

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COMMERCIAL BEEF PRODUCTION

Quarterly

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0


Bil. Pounds

Avg.2007/11

2012

2013

2014

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Supply Factors

Continued Tight Supplies Calves, feeder cattle, cows

COF below year ago

Continue for Several Years Drought forces more liquidation

Declining per capita supplies

Beef prices relative to pork, chicken

i f 0 0

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11-1300 7-800 5-600

2011 114.74 131.98 140.00

2012 I 125.29 154.03 176.70

II 120.91 152.23 178.85

III 119.69 136.70 154.26

IV 125.54 141.81 158.76

2013 I 128-131 140-143 151-155

II 128-132 143-148 153-159

III 126-131 145-151 155-163

IV 128-134 146-153 153-160

2014 I 132-138 151-159 165-174II 133-141 154-164 168-180

III 131-140 155-166 164-177

IV 133-142 153-165 161-176

Prices for 2011-2014

Texas CombinedAuction for 5-600

and 7-800

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Cattle Insurance Programs

PRF Rainfall insurance, based on a coverage level and

productivity factor (% of county base value). Have toinsure a minimum of 2 two month intervals and a

maximum of 6 two month intervals. Deadline Nov 15th

NAP - Non-insured Crop Disaster Assistance Program

(NAP) provides financial help to a farmer who has non-

insurable crops when a low yield, loss of acreage or

prevented planting occurs because of a natural disaster.

Deadline Sept 31st

. LRP Livestock Rick Protection allows you to choose a

coverage price and ending period that is at least 13 weeks

in the future. If market prices fall below coverage prices,

producer receives an indemnity. Continuous sign-up.

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2012 Farm Bill Extension

Authorized limited livestock disaster

assistance for fiscal years 2012 and 2013:

$80 million for indeminity payments

$400 million for the forage disaster program

$50 million for emergency assistance

Extends CRP (EQIP was extended in another

bill). Continues DP and current crop ins

programs.

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NRCS Programs

EQIP Cost share program that helps pay for Water wells

Solar Pumps

Troughs/Pipelines Crossfencing

Brush management (spraying sand cedars and

mesquite) Also have a prescribed grazing program that pays

$ per acre to lay off land. Ex Prairie Chicken

Deadline is February 15th

!!!

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Cattle Marketing

Put buyer has the right (but not obligation)to sell a specified quantity of cattle at a

specified price (strike price) on or before a

certain time period. Puts increase in valuewhen prices are going down. May want to

consider in next 45 days or so.

Call buyer has the right to buy cattle at a

specified quantity on or before a specific date.

Calls increase in value when prices go up.

Documents

DeDe 1-8-13