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Ron Plain
D. Howard Doane Professor of Agricultural Economics
University of Missouri-Columbia http://web.missouri.edu/~plainr/
Outlook for
Hog Profits
in 2012
NPB Swine Conference, Sioux Falls, September 29, 2011
Presentation Outline
• Meat demand
• Macro outlook
• Corn outlook
• Competing meats
• Hog outlook
Meat Demand
Change in Retail Meat Demand Base Elasticity = - 0.75
-8
-6
-4
-2
0
2
4
6
8
10
2002 >
May
Sep
2003 >
May
Sep
2004 >
May
Sep
2005 >
May
Sep
2006 >
May
Sep
2007>
May
Sep
2008>
May
Sep
2009>
May
Sep
2010>
May
Sep
2011>
May
% change
from year ago
Boneless Retail Meat Prices as % of Bologna,
Monthly, 2007-2011
80
100
120
140
160
180
200
220
240
260
280
20
07
>
Ap
r
Ju
l
Oc
t
20
08
>
Ap
r
Ju
l
Oc
t
20
09
>
Ap
r
Ju
l
Oc
t
20
10
>
Ap
r
Ju
l
Oc
t
20
11
>
Ap
r
Ju
l
Percent Beef Sirloin Pork Chops Chicken Breast
Source: USDA/ERS
CHOICE MINUS SELECT BEEF PRICESCarcass Cutout Value 600-900 Lbs., Weekly
0
2
4
6
8
10
12
14
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-68
09/12/11Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
Change in Pork Demand Base Elasticity = - 0.75
-15
-10
-5
0
5
10
152002 >
May
Sep
2003 >
May
Sep
2004 >
May
Sep
2005 >
May
Sep
2006 >
May
Sep
2007>
May
Sep
2008>
May
Sep
2009>
May
Sep
2010>
May
Sep
2011>
May
% change
from year ago
Retail Boneless Pork Prices Retail Prices, Monthly, 2001-2011
250
300
350
400
450
500
20
01
>M
ay
Se
p2
00
2 >
Ma
yS
ep
20
03
>M
ay
Se
p 2
00
4 >
Ma
yS
ep
20
05
>M
ay
Se
p2
00
6 >
Ma
yS
ep
20
07
>M
ay
Se
p2
00
8 >
Ma
yS
ep
20
09
>M
ay
Se
p2
01
0 >
Ma
yS
ep
20
11
>M
ay
Cents/lb
Bacon Chops Ham
Source: USDA/ERS
The Great Recession
Growth in Real GDP
-10
-8
-6
-4
-2
0
2
4
6 0
5-1
05
-3
06
-1
06
-3
07
-1
07
-3
08
-1
08
-3
09
-1
09
-3
10
-1
10
-3
11
-1
Percen
t C
han
ge
Source: U.S. Commerce Department
AVERAGE RETURNS TO CATTLE FEEDERSFeeding 725 Lb. Steers, S. Plains, Monthly
-250
-200
-150
-100
-50
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
$ Per Head
Source: LMIC
2008-09 recession
Farrow to Finish Profits, 1997-2011
Iowa State University Calculations
-70
-50
-30
-10
10
30
50
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
$ Per Head
Source: Shane Ellis, Iowa State University
2008-09 recession
Change in Real GDP from Previous
Year Seasonally Adjusted, Annual Rate, 1950-
2010
-4
-2
0
2
4
6
8
101
95
0
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
20
06
20
10
Perc
en
t
Source: U.S. Department of Commerce, Bureau of Economic Analysis
Consumer
Confidence
• Job market
• Home values
• Stock market
• Government
U.S. Unemployment Rate, Seasonally Adjusted, 1996-2011
3
4
5
6
7
8
9
10
111
99
6
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Pe
rce
nt
Source: Bureau of Labor Statistics
The average person looking for work in America
has been unemployed for over 40 weeks
Consumer
Confidence
• Job market
• Home values
• Stock market
• Government
Consumer
Confidence
• Job market
• Home values
• Stock market
• Government
Dow Jones Industrial Average
Consumer
Confidence
• Job market
• Home values
• Stock market
• Government
-1,700,000
-1,500,000
-1,300,000
-1,100,000
-900,000
-700,000
-500,000
-300,000
-100,000
100,000
300,000
50
54
58
62
66
70
74
78
82
86
90
94
98
02
06
10
14
18
Million $
Federal Surplus, 1950-2021
President’s Budget, February 2011
Actual Forecast
Debt Ceiling Crisis
• The debt ceiling agreement calls
for the federal debt to increase
from $14.3 trillion to $23.3 trillion
over the next 10 years rather
than from $14.3 trillion to $25.7
trillion as previously planned.
Ever Growing Debt
• The federal government plans to
pay its bills by borrowing more
and more money. As long as
someone will loan the
government enough money, they
can pay their bills.
Federal Funds Rate, monthly average, 1996-2011
0
1
2
3
4
5
6
7
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Pe
rce
nt
Source: Board of Governors, Federal Reserve System
St Louis Adjusted Monetary Base
0
500
1000
1500
2000
2500
30001
97
0
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Bil
lio
n $
Source: St Louis Federal Reserve Bank
Current Situation
• The government is broke, the unemployment rate is over 9%, the economy is barely growing, the stock market is down, and the poverty rate is the highest since 1993.
• This is not good for meat demand.
Corn Outlook
Omaha Corn Prices, Weekly, 2008-2011
2
3
4
5
6
7
82008
2009
2010
2011
$/B
ush
el
Source: USDA/AMS
U.S. Corn Acres Planted, 1970-11
55
60
65
70
75
80
85
90
957
0
73
76
79
82
85
88
91
94
97
00
03
06
09
Millio
n A
cre
s P
lan
ted 2011 is 2nd largest since 1944
U.S. Average Corn Yield, 1970-11
0
20
40
60
80
100
120
140
160
1807
0
73
76
79
82
85
88
91
94
97
00
03
06
09
Bu
sh
els
Yield is increasing by
2 bu/year
U.S. Corn Production, 1970-11
0
2
4
6
8
10
12
147
0
73
76
79
82
85
88
91
94
97
00
03
06
09
Bil
lio
n B
ush
els
Production is increasing by
190 million bu/year
Corn Milled for Ethanol
0
1
2
3
4
5
69
0-9
1
92
-9
3
94
-9
5
96
-9
7
98
-9
9
00
-0
1
02
-0
3
04
-0
5
06
-0
7
08
-0
9
10
-1
1
Billio
n B
ush
els
Forecast
% corn for ethanol:
2000-01: 6%
2005-06: 14%
2007-08: 23%
2009-10: 35%
2011-12: 40%
U.S. Corn Price, 1970-12
0
1
2
3
4
5
6
7
87
0-7
1
72
-73
74
-75
76
-77
78
-79
80
-81
82
-83
84
-85
86
-87
88
-89
90
-91
92
-93
94
-95
96
-97
98
-99
00
-01
02
-03
04
-05
06
-07
08
-09
10
-11
Do
llars
Per
Bu
sh
el
Value of U.S. Corn Crop, 1970-11
0
10
20
30
40
50
60
70
80
901
97
0
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Billio
n D
ollars
Value of U.S. Corn Crop, 1970-11
0
10
20
30
40
50
60
70
80
901
97
0
19
72
19
74
19
76
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Billio
n D
ollars
From 1979-2005, the U.S. livestock &
poultry industry spent $10 billion
annually to buy half the corn crop. This
year it will spend $33 billion to buy 37%
of the corn.
Grains, Feed and Residual
0
1
2
3
4
5
6
7
8
19
78
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
Bil. Bushels
DDGS
Wheat
Oats
Barley
Sorghum
Corn
U.S. Per Capita Meat Consumption
150
160
170
180
190
200
210
220
230
240
2501
94
5
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
Pounds
Source: USDA/ERS
2011 per person meat
consumption lowest
since 1997
U.S. Per Capita Meat Consumption
0
10
20
30
40
50
60
70
80
90
100
19
45
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
Pounds Pork Beef Broilers Turkey Fish
Source: USDA/ERS
U.S. Monthly Average Corn Price
1
2
3
4
5
6
7Ja
n-0
0
Ja
n 0
1
Ja
n 0
2
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Ja
n 1
2
Ja
n 1
3
Do
lla
rs P
er B
ush
el Cash futures
Thru Dec 2014 all corn futures contracts are above $5.52 per bushel
Choice Steer Breakeven PriceS. Plains Cattle Feedlots, Monthly
75
85
95
105
115
125
135
2004 2005 2006 2007 2008 2009 2010 2011
$ Per Cwt
Breakeven Projected Breakeven
Source: LMIC
Cost of Slaughter Hog Production Iowa State University Calculations, 1987-2011
35
40
45
50
55
60
65
70
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Marketing Month
$ Per Live Cwt
Source: Shane Ellis, Iowa State University
Corn, Average Price Received, Monthly, 1987-2011
0
1
2
3
4
5
6
7
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
$ p
er
bu
she
l
Source: USDA/NASS
Corn Price & Cost of Hog Production Monthly, 1987-2011
25
30
35
40
45
50
55
60
65
70
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
0
1
2
3
4
5
6
7Hog Cost
Corn $
Source: John Lawrence, Iowa State University
Corn Price & Cost of Hog Production Monthly, 1987-2011
25
30
35
40
45
50
55
60
65
70
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
0
1
2
3
4
5
6
7Hog Cost
Corn $
Source: Shane Ellis, Iowa State University
$7 corn implies hog cost at $70/cwt live or $92/cwt car.
Breakeven Hog Price & U.S. Corn Price Iowa State University Calculations, 1990-2010
37
42
47
52
57
62
67
72
1.5
2.5
3.5
4.5
5.5
6.5
Corn Price
$ Per Live Cwt
Outlook for 2012
• The futures market is predicting
$6.28/bu corn for CY 2012. That
should give a hog breakeven price of
$66/cwt live or $87/cwt carcass.
• The futures market is predicting $87.75
hogs for CY 2012.
• That indicates a profit of $1.50/head
Iowa Farrow to Finish Profits, 1997-2011
Iowa State University Calculations
-70
-50
-30
-10
10
30
50
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
$ Per Head
Source: Shane Ellis, Iowa State University
Monthly Profit Per Pig
-80
-60
-40
-20
0
20
40
60
97
&0
7
98
&0
8
99
&0
9
00
&1
0
01
&1
1
02
&1
2
Dollars 1997-02 2007-11
Source: Shane Ellis, Iowa State University
Correlation of Profit & Lagged Hog Slght
-20
-10
0
10
208
2-1
84
-1
86
-1
88
-1
90
-1
92
-1
94
-1
96
-1
98
-1
00
-1
02
-1
04
-1
06
-1
08
-1
10
-1
%ChDaHogSlt Lag 5 Qtr Profit
Competing Meats
U.S. Calf Crop, 1950-2011
34
36
38
40
42
44
46
48
50
52
54
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Mil
lio
n H
ea
d
2011: 35.5 million head, Down 0.5%
2011 calf crop is smallest since 1950
BROILER PRODUCTIONFederally Inspected, Weekly
650
700
750
800
850
900
950
1000
JAN
APR
JUL
OCT
Mil. Lbs
Avg.2005-09
2010
2011
P-S-20
09/08/11Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
BROILER EGGS SETWeekly
185
190
195
200
205
210
215
220
JAN
APR
JUL
OCT
Mil. Eggs
Avg.2005-09
2010
2011
P-S-10
09/08/11Livestock Marketing Information Center
Data Source: USDA-NASS
TURKEY PRODUCTIONFederally Inspected, Weekly
70
85
100
115
130
145
160
175
JAN
APR
JUL
OCT
Mil. Lbs
Avg.2005-09
2010
2011
P-S-21
09/08/11Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS
Forecast Change in Meat Production
--Percent Change--
Type 2010-11 2011-12
Beef - 0.3% - 4.4%
Pork +0.8% +1.5%
Chicken +1.3% +0.2%
Turkey +2.4% - 0.7%
All Meats +0.8% - 0.9%
Source: USDA-OCE WASDE, September 2011
Hog Outlook
International Trade
U.S. Meat Exports, 2000-2011
0
100000
200000
300000
400000
500000
600000
700000
800000
Jan-
00
Jul Jan-
01
Jul Jan-
02
Jul Jan
03
Jul Jan-
04
Jul Jan
05
Jul Jan
06
Jul Jan
07
Jul Jan
08
Jul Jan
09
Jul Jan
10
Jul Jan
11
Jul
Tth
ou
san
d p
ou
nd
s
Beef Pork Broiler Turkey
U.S. Pork Imports & Exports, 2000-2011
Monthly Carcass Weight Equivalent
0
100
200
300
400
500
600Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
07
Jan
08
Jan
09
Jan
-10
Jan
11
Mil. lbs.
Imports Exports
U.S. Pork Imports & Exports as % of U.S.
Pork Production, 2006-2011
Monthly Carcass Weight Equivalent
0
5
10
15
20
25
30
Jan
06
AP
R
JU
L
OC
T
Jan
07
AP
R
JU
L
OC
T
Jan
08
AP
R
JU
L
OC
T
Jan
09
Ap
r
Ju
l
Oct
Jan
10
Ap
r
Ju
l
Oct
Jan
11
Ap
r
Ju
l
% o
f P
ro
du
cti
on
Imports Exports
U.S. Hog Imports from Canada
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
Head per mo.
Slaughter Hogs Feeders Pigs
Inventory Surveys
U.S. Swine Breeding Herd, 1999-2011
5700
5800
5900
6000
6100
6200
6300
Dec
99
Dec
00
Dec
01
Dec
02
Dec
03
Dec
04
Dec
05
Dec
06
Dec
07
Dec
08
Dec
09
Dec
10
Th
ou
san
d H
ead
Actual & Predicted Change in B&G Slaughter U.S. Weekly F.I. Hog Slaughter, 2011
-4
-2
0
2
4
6
82011
Fe
b
Ma
r
Ap
r
Ma
y
Ju
n
Ju
l
Au
g
Sep
Oct
No
v
De
c
% change from
yr. ago
Actual USDA Sep Forecast
Hog Inventory Reports
U.S. Sept Canada July All Hogs & Pigs 101.0 101.4
Kept for Breeding 100.6 98.8
Kept for Marketing 101.0 101.1
Under 50 lbs 100.4 99.5
50-119 lbs. 100.4 101.3
120-179 lbs. 100.7 102.5
180 lbs. and over 103.4
Dec-Feb Farrowings 99.0 97.9
Mar-May Farrowings 98.2 96.5
Jun-Aug Farrowings 98.5 99.9
Sep-Nov Farrowing Intentions 99.8 100.2
Dec-Feb Farrowing Intentions 100.5
Hog Inventory Reports
U.S. Sept Canada July All Hogs & Pigs 101.0 101.4
Kept for Breeding 100.6 98.8
Kept for Marketing 101.0 101.1
Under 50 lbs 100.4 99.5
50-119 lbs. 100.4 101.3
120-179 lbs. 100.7 102.5
180 lbs. and over 103.4
Dec-Feb Farrowings 99.0 97.9
Mar-May Farrowings 98.2 96.5
Jun-Aug Farrowings 98.5 99.9
Sep-Nov Farrowing Intentions 99.8 100.2
Dec-Feb Farrowing Intentions 100.5
Which is
important?
More sows or
fewer litters?
Daily Hog Slaughter by Quarter
-10
-8
-6
-4
-2
0
2
4
6
8
10D
JF
99
DJF
00
DJF
01
DJF
02
DJF
03
DJF
04
DJF
05
DJF
06
DJF
07
DJF
08
DJF
09
DJF
10
DJF
11
% change from
yr. ago
Hog Slaughter & Breeding Herd by
Quarter
-10
-8
-6
-4
-2
0
2
4
6
8
10D
JF
99
DJF
00
DJF
01
DJF
02
DJF
03
DJF
04
DJF
05
DJF
06
DJF
07
DJF
08
DJF
09
DJF
10
DJF
11
% change from
yr. ago
Br Herd D Hog Slt
Correlation = 0.20
Sows Farrowed & Hog Slaughter by
Quarter
-10
-8
-6
-4
-2
0
2
4
6
8
10D
JF
99
DJF
00
DJF
01
DJF
02
DJF
03
DJF
04
DJF
05
DJF
06
DJF
07
DJF
08
DJF
09
DJF
10
DJF
11
DJF
% change from
yr. ago
Sows Far D Hog Slt
Correlation = 0.78
Sows Farrowed-U.S. & Canada Combined
-6
-4
-2
0
2
4
6
DJ
F9
9
DJ
F0
0
DJ
F0
1
DJ
F0
2
DJ
F0
3
DJ
F0
4
DJ
F0
5
DJ
F0
6
DJ
F0
7
DJ
F0
8
DJ
F0
9
DJ
F1
0
DJ
F1
1
% change
from yr. ago
U.S. Pigs Per Litter by Quarter
-1
-0.5
0
0.5
1
1.5
2
2.5
3D
JF
99
DJ
F0
0
DJ
F0
1
DJ
F0
2
DJ
F0
3
DJ
F0
4
DJ
F0
5
DJ
F0
6
DJ
F0
7
DJ
F0
8
DJ
F0
9
DJ
F1
0
DJ
F1
1
% change
from yr. ago
Barrow & Gilt Live WeightsIowa-Minnesota Weekly Average
257
259
261
263
265
267
269
271
273
275
277
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NO
VDEC
Pounds
2008
2009
2010
2011
Weekly Pork Production
300
320
340
360
380
400
420
440
460
480
500
Jan Apr Jul Oct
Mil
lio
n P
ou
nd
s
2002-09 2010 2011
Source: USDA Prior Day Purchased reports
Prices
U.S. Retail Pork Prices, 2000-2011
200
220
240
260
280
300
320
340
360J
an
00
Ja
n 0
1
Ja
n 0
2
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Cen
ts P
er P
ou
nd
Hog Cutout Value, Weekly
45
50
55
60
65
70
75
80
85
90
95
100
105
110
115
JAN
APR
JUL
OCT
$ per cwt.
Avg.
2004-08
2009
2010
2011
Source: USDA/AMS
National Base Slaughter Hog Price,
Weekly
45
50
55
60
65
70
75
80
85
90
95
100
105
JAN
APR
JUL
OCT
$ per cwt.
Avg.
2004-08
2009
2010
2011
Source: USDA Prior Day Purchased reports
Weekly Gross Pork Packer Margin,
200 Pound Carcass
0
10
20
30
40
50
60
JAN APR JUL OCT
$ p
er H
ead
Avg 02-09 2010 2011
Calculation: Byproduct + Cutout – Negotiated net
My Forecast
Commercial Hog Slaughter Forecast Million Head
*actual
2010 2011 2012
Qtr 1 27.630* 27.486* 27.600
Qtr 2 26.074* 26.113* 26.500
Qtr 3 26.930* 27.320 27.600
Qtr 4 29.626* 29.360 30.380
Year 110.260* 110.279 112.080
------Change------
10-11 11-12.
- 0.5% +0.4%
+ 0.2% +1.5%
+ 1.4% +1.0%
- 0.9% +3.5%
+ 0.0% +1.6%
Note: Q1 10 & Q4 11 & Q3 12 have only 63 slaughter days
Iowa-Minn Hog Price Forecast Negotiated Base Price Per Carcass Hundredweight
2009 2010 2011 2012
Qtr 1 $57.23* $66.81* $78.95* $80-84
Qtr 2 $57.32* $79.04* $91.80* $87-91
Qtr 3 $51.43* $79.44* $93.95 $85-89
Qtr 4 $54.98* $65.20* $77-81 $68-72
Year $55.23* $72.67* $85-87 $80-84
*actual price – prior day purchased
Iowa-Minn Live Hog Price Forecast Negotiated Live Base Price Equivalent
2009 2010 2011 2012
Qtr 1 $43.49* $50.78* $60.25* $60-64
Qtr 2 $43.56* $60.07* $69.77* $66-70
Qtr 3 $39.09* $60.37* $71.40 $64-68
Qtr 4 $41.78* $49.56* $58-62 $52-56
Year $41.97* $55.19* $65-67 $61-65
*actual carcass price x 76%
U.S. Hog Net Carcass Price, Monthly Average, 2002-2011
30
40
50
60
70
80
90
100
110 J
an
02
Ja
n 0
3
Ja
n 0
4
Ja
n 0
5
Ja
n 0
6
Ja
n 0
7
Ja
n 0
8
Ja
n 0
9
Ja
n 1
0
Ja
n 1
1
Ja
n 1
2
Ja
n 1
3
Do
lla
rs P
er
Cw
t
Cash Futures
Thru February 2013 all hog futures contracts are above $80 per cwt
Major Uncertainties
• U.S. & World Economy
• Domestic pork demand
• Meat exports
– Exchange rates
• Corn prices & cost of gain
• Slaughter capacity
Any Questions?
Grains, Feed and Residual
0
1
2
3
4
5
6
7
81978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Bil. Bushels
Grains, Feed and Residual
-25
-20
-15
-10
-5
0
5
10
15
201
97
8
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
% Change
Grains Fed to U.S. Livestock & Poultry
1976 2011
Corn 74.3%
Sorghum 9.8%
Barley 3.6%
Oats 9.3%
Wheat 2.7%
DDGS 0.3%
Corn 74.2%
Sorghum 0.8%
Barley 0.6%
Oats 1.4%
Wheat 3.6%
DDGS 19.4%
OMAHA CORN PRICESWeekly
2.50
3.50
4.50
5.50
6.50
7.50
8.50
JAN
APR
JUL
OCT
$ Per Bu.
Avg.2004-08
2009
2010
2011
Livestock Marketing Information Center
Data Source: USDA-AMS
DISTILLER DRIED GRAIN PRICESChicago, Illinois, Weekly
65
85
105
125
145
165
185
205
225
JAN
APR
JUL
OCT
$ Per Ton
Avg.2004-08
2009
2010
2011
Livestock Marketing Information Center
Data Source: USDA-AMS
DISTILLERS GRAIN PRICESIllinois - E Cornbelt, Weekly
0
50
100
150
200
250
Jan-
10 Apr Ju
lOct
Jan-
11 Apr Ju
l
$ Per Ton
Dried w/Solubles
ModifiedWet
Wet
09/08/11Livestock Marketing Information Center
Data Source: USDA-AMS
CENTRAL ILLINOIS SOYBEAN MEAL
(48%) PRICESWeekly
200
225
250
275
300
325
350
375
400
JAN
APR
JUL
OCT
$ Per Ton
Avg.2005-09
2010
2011
G-P-07
08/26/11Livestock Marketing Information Center
Data Source: USDA-AMS
IOWA ETHANOL PRICEWeekly
1.30
1.50
1.70
1.90
2.10
2.30
2.50
2.70
2.90
3.10
Jan-
10 Apr Ju
lOct
Jan-
11 Apr Ju
l
$ Per Gallon
09/08/11Livestock Marketing Information Center
Data Source: USDA-AMS
Change in Domestic Beef Demand Base Elasticity = -0.75
-10
-5
0
5
10
152
00
2A
pr
Ju
lO
ct
20
03
Ap
rJ
ul
Oct
20
04
Ap
rJ
ul
Oct
20
05
Ap
rJ
ul
Oct
20
06
Ap
rJ
ul
Oct
20
07
Ap
rJ
ul
Oct
20
08
Ap
rJ
ul
Oct
20
09
Ap
rJ
ul
Oct
20
10
Ap
rJ
ul
Oct
20
11
Ap
rJ
ul
% C
ha
ng
e Y
ea
r A
go
Source: Ron Plain, University of Missouri
Percentage of U.S. Consumers Who
Eat Animal Proteins
0
20
40
60
80
100
120
Beef Pork Lamb Chicken Fish&Seafood
Pe
rce
nt
Source: IPSOS Public Affairs, 10-survey average, 2008-10
95% 90%
34%
97%
88%
CHOICE MINUS SELECT BEEF PRICESCarcass Cutout Value 600-900 Lbs., Weekly
0
2
4
6
8
10
12
14
JAN APR JUL OCT
$ Per Cwt.
Avg.2005-09
2010
2011
C-P-68
09/12/11Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled & Analysis by LMIC
240
250
260
270
280
290
300
310
320
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
cen
ts/l
b
240
250
260
270
280
290
300
310
320
330
340
Ye
n/l
b
U.S. $ Yen
U.S. Pork Prices, cents/lb and Yen/lb
Frozen Pork, 2000-2011, Start of the Month
300
350
400
450
500
550
600
650
700
Jan
00
JUL Jan
01
JUL Jan
02
JUL Jan
03
Jul Jan
04
Jul Jan
05
Jul Jan
06
Jul Jan
07
Jul Jan
08
Jul Jan
09
Jul Jan
10
Jul Jan
11
Jul
Mil
lio
n P
ou
nd
s
U.S. Pork Exports, 2000-2011
Monthly Carcass Weight Equivalent
0
100
200
300
400
500
600
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
07
Jan
08
Jan
09
Jan
-10
Jan
11
Mil. lbs.
Frozen Pork & U.S. Pork Exports, 2000-2011
0
100
200
300
400
500
600
700
Jan-
00
Jul Jan-
01
Jul Jan-
02
Jul Jan-
03
Jul Jan-
04
Jul
Jan-
05
Jul
Jan-
06
Jul Jan
07
Jul Jan
08
Jul Jan
09
Jul Jan
10
Jul Jan
11
Jul
Fro
zen
Po
rk (
mil
lio
n p
ou
nd
s)
0
100
200
300
400
500
600
Po
rk E
xp
ort
s (m
illi
on
po
un
ds)
Cold Storage Exports
Crop Condition Report, 9/11
• U.S. Corn: 53% good/excellent
– Week ago: 52% good/excellent
– Year ago: 68% good/excellent
• U.S. Soybeans: 56% good/excellent
– Week ago: 56% good/excellent
– Year ago: 63% good/excellent
Source: USDA/NASS
2007 Renewable Fuels Mandate
0
5
10
15
20
25
30
35
40
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
Bil
lio
n G
all
on
s
Corn ethanol Cellulosic Bio-diesel More non-grain
Corn for ethanol needs to increase 220 million bushels/year
Change in Pork Export Demand Base Elasticity = - 0.5
-50
-30
-10
10
30
50
70
90
110
20
02
>M
ay
Se
p 2
00
3 >
Ma
yS
ep
20
04
>M
ay
Se
p2
00
5 >
Ma
yS
ep
20
06
>M
ay
Se
p2
00
7>
Ma
yS
ep
20
08
>M
ay
Se
p2
00
9>
Ma
yS
ep
20
10
>M
ay
Se
p2
01
1>
Ma
y
% change from
year ago
Change in Hog Demand Base Elasticity = - 0.2
-12
-7
-2
3
8
13
18
20
02
>M
ay
Se
p 2
00
3 >
Ma
yS
ep
20
04
>M
ay
Se
p2
00
5 >
Ma
yS
ep
20
06
>M
ay
Se
p2
00
7>
Ma
yS
ep
20
08
>M
ay
Se
p2
00
9>
Ma
yS
ep
20
10
>M
ay
Se
p2
01
1>
Ma
y
% change from
year ago
Been a rough summer, no rain, heat over 100 every
day and lots of wind, but I made it so far.
How about you?
BROILER CHICKS PLACEDWeekly
155
160
165
170
175
180
JAN
APR
JUL
OCT
Mil. Birds
Avg.2005-09
2010
2011
P-S-11
09/08/11Livestock Marketing Information Center
Data Source: USDA-NASS
Barrow & Gilt Negotiated Base Price
50
55
60
65
70
75
80
85
90
95
100
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2002-09 2010 2011
Source: USDA Prior Day Slaughter reports
$/cwt
Pork Cutout and Hog Price, Weekly, 2009-2011
50
60
70
80
90
100
110
1202
00
9
Ap
r
Ju
l
Oc
t
20
10
Ap
r
Ju
l
Oc
t
20
11
Ap
r
Ju
l
$/c
wt
Cutout
Carcass
Source: USDA/AMS
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