Competing Meats Situation and

Outlook

Chicken Marketing Seminar 2013

July 22, 2013, Coeur d’ Alene, Idaho

James G. Robb

Director

james.robb@lmic.info

USDA Members:

ERS

APHIS

GIPSA

NASS

WAOB

AMS

Associate Members:

AFBF

ASI

NCBA

NPB

CME-Group

Canadian Consortium

Noble Foundation

CoBank

TCFA

CWB

TCU

29 land Grant Universities:

Topics: Major Market Drivers…

• Drought – Crops and More

• Consumer Demand – Beef and Pork

• International Trade Comments

• Pork Complex

• Beef and Cattle

• Turkey

USDA Data Sources – NASS, AMS, FAS, and ERS

All Forecasts – LMIC

Drought –

Lingering But

Greatly Improved

US RANGE AND PASTURE CONDITIONPercent Poor and Very Poor, Weekly

10

20

30

40

50

60

70

May Jul Sep

Percent

Avg.2007-11

2012

2013

Data Source: USDA-NASS

U S TOTAL CORN SUPPLY AND PRICECrop Year

8

9

10

11

12

13

14

15

1988 1991 1994 1997 2000 2003 2006 2009 2012

Bil. Bushels

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

$ Per Bushel

Supply

Price

Data Source: USDA-NASS, Forecasts by LMIC

US Consumer Demand

Beef and Pork

RETAIL ALL FRESH BEEF DEMAND INDEXFirst Quarter, Using CPI 1990=100

10095 94

86 8783 86

75 77 7680 80

83 83

9187 85 85

82 81

7477 80 80

0

20

40

60

80

100

120

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

Index Value

Data Source: LMIC

RETAIL PORK DEMAND INDEXFirst Quarter, Using CPI 1990=100

100100 100

9388 87 86 85

9396 94 93 92

8995

8884 83 83

86

7681 81 82

0

20

40

60

80

100

120

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

Index Value

Data Source: LMIC

International

Trade

Comments

U S BEEF AND VEAL EXPORTSAs a Percentage of Production, Carcass Weight, Annual

0

2

4

6

8

10

12

1989 1992 1995 1998 2001 2004 2007 2010 2013

Percent

Data Source: USDA-ERS & USDA-FAS, Forecasts by LMIC

U S BEEF AND VEAL EXPORTSCarcass Weight, Monthly

120

140

160

180

200

220

240

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

Mil. Pounds

Avg.

2007-11

2012

2013

Data Source: USDA-FAS and ERS

U S BEEF EXPORTS TO MAJOR MARKETSCarcass Weight, Monthly

0

10

20

30

40

50

60

70

80

90

2005 2006 2007 2008 2009 2010 2011 2012 2013

Mil. Pounds

Japan

Canada

Mexico

South

Korea

Data Source: USDA-FAS and ERS

U S BEEF AND VEAL EXPORTSCarcass Weight, Annual

0.0

0.5

1.0

1.5

2.0

2.5

3.0

1989 1992 1995 1998 2001 2004 2007 2010 2013

Bil. Pounds

Data Source: USDA-FAS and ERS, Forecasts by LMIC

Data Source: USDA-FAS and ERS, Forecasts by LMIC

U S BEEF AND VEAL IMPORTSCarcass Weight, Annual

1.5

2.0

2.5

3.0

3.5

4.0

1989 1992 1995 1998 2001 2004 2007 2010 2013

Bil. Pounds

FEEDER CATTLE IMPORTS FROM MEXICOWeekly

0

10

20

30

40

50

60

70

JAN APR JUL OCT

Thou. Head

Avg.2007-11

2012

2013

Data Source: USDA-AMS & APHIS

U S PORK EXPORTSAs a Percentage of Production, Carcass Weight, Annual

0

5

10

15

20

25

1989 1992 1995 1998 2001 2004 2007 2010 2013

Percent

Data Source: USDA-FAS and ERS, Forecasts by LMIC

U S PORK EXPORTSCarcass Weight, Monthly

300

350

400

450

500

550

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

Mil. Pounds

Avg.

2007-11

2012

2013

Data Source: USDA-ERS & USDA-FAS

U S PORK EXPORTS TO MAJOR MARKETSCarcass Weight, Monthly

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009 2010 2011 2012 2013

Mil. Pounds

Japan

Canada

Mexico

Russia

Data Source: USDA-ERS & USDA-FAS

U S PORK EXPORTS TO MAJOR MARKETSCarcass Weight, Monthly

0

20

40

60

80

100

120

140

160

2005 2006 2007 2008 2009 2010 2011 2012 2013

Mil. Pounds

Japan

South

Korea

Hong

Kong

China-

Mainland

Data Source: USDA-ERS & USDA-FAS

Hogs/Pork

PIGS PER LITTERQuarterly

7.2

7.7

8.2

8.7

9.2

9.7

10.2

10.7

1988 1991 1994 1997 2000 2003 2006 2009 2012

Head

Data Source: USDA-NASS

JUNE 1 MARKET HOGSU.S. Inventory

35

40

45

50

55

60

65

1988 1991 1994 1997 2000 2003 2006 2009 2012

Mil. Head

Data Source: USDA-NASS

COMMERCIAL PORK PRODUCTIONQuarterly

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

Data Source: USDA-NASS, Forecasts by LMIC

WHOLESALE PORK LOIN PRICES1/4 Inch Trim, Vacuum Sealed, Weekly

85

95

105

115

125

135

145

155

165

JAN

APR

JUL

OCT

$ Per Cwt.

Avg.2007-11

2012

2013

Data Source: USDA-AMS

WHOLESALE PORK BELLY PRICESSkin-on, 14-16 Pounds, Weekly

70

90

110

130

150

170

190

JAN

APR

JUL

OCT

$ Per Cwt.

Avg.2007-11

2012

2013

Data Source: USDA-AMS

Cattle and Beef

TOTAL CATTLE INVENTORY BY CYCLEU.S., January 1

65

75

85

95

105

115

125

135

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mil. Head

1938-49

1949-58

1958-67

1967-79

1979-90

1990-04

2004-13

Data Source: USDA-NASS, Compiled & Analysis by LMIC

Data Source: USDA-NASS, Forecasts by LMIC

JANUARY 1 TOTAL COW INVENTORYU.S., Annual

36

38

40

42

44

46

48

50

1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

Mil. Head

BEEF PRODUCTION

vs. CATTLE INVENTORYInventory on January 1, U.S.

85

90

95

100

105

110

115

1988 1991 1994 1997 2000 2003 2006 2009 2012

Mil. Head

22

23

24

25

26

27

28

Bil. Pounds

Commercial Beef Production

Total Cattle Inventory

Data Source: USDA-NASS

COMMERCIAL BEEF PRODUCTIONQuarterly

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

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

Bil. Pounds

Avg.2007/11

2012

2013

2014

Data Source: USDA-NASS, Forecasts by LMIC

ANNUAL AVERAGE CATTLE PRICESSouthern Plains

55

75

95

115

135

155

175

1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

$ Per Cwt

500-600lbSteerCalves

700-800lbFeederSteers

FedSteers

Data Source: USDA-AMS, Forecasts by LMIC

Data Source: USDA-AMS

SLAUGHTER STEER PRICES5 Market Weighted Average, Weekly

85

90

95

100

105

110

115

120

125

130

135

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013

BOXED BEEF CUTOUT VALUEChoice 600-900 Lbs. Carcass, Weekly

140

150

160

170

180

190

200

210

220

JAN APR JUL OCT

$ Per Cwt.

Avg.2007-11

2012

2013

Data Source: USDA-AMS

WHOLESALE BONELESS BEEF PRICESFresh, 90% Lean, Weekly

130

150

170

190

210

230

250

JAN

APR

JUL

OCT

$ Per Cwt.

Avg.2007-11

2012

2013

Data Source: USDA-AMS

RTC TURKEY PRODUCTIONQuarterly

1.2

1.3

1.4

1.5

1.6

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

Bil. Pounds

Avg.2007/11

2012

2013

2014

Data Source: USDA-NASS, Forecasts by LMIC

TURKEY PRICESNational Hens, 8-16 Pounds, Weekly

65

75

85

95

105

115

125

JAN

APR

JUL

OCT

Cents Per Pound

Avg.2007-11

2012

2013

Data Source: USDA-AMS

Thank You!

www.lmic.info