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July 31st: National Feeder & Stocker Cattle Summary
USDA-MO Dept of Ag Market News

RECEIPTS: Auctions   Direct  Video/Internet    Total
This Week     106,100     36,900         1,500            144,500 
Last Week       93,700     29,000        39,900           162,600 
Last Year       134,900     38,000       108,800          281,700 

Compared to last week, lower prices continued in the feeder cattle markets as feeder cattle and calves traded mostly 5.00-10.00 lower.  Auction receipts were mostly light this week due to the hot temperatures and high humidity causing high heat index levels of near and over 110 degrees in areas across the Midwest and Southern Plains.  Receipts for the most part continue to be dominated by yearling cattle over 700 lbs which is where the best demand exists at this time.  Demand remains moderate to good with best demand in the Northern Plains for yearlings as on Tuesday in Philip, SD at the Philip Livestock Auction sold near 3200 head of mostly yearling cattle with near 300 head of steers weighing between 850-900 lbs averaging 884 lbs sold with a weighted average price of 212.74.  Demand was very good in Kearney, NE at the Huss Platte Valley Livestock Auction on Wednesday where 228 head of yearling steers averaging 925 lbs sold with a weighted average price of 215.48.  A number of good strings of calves and yearlings this week were on offer at the Superior Video Royale sale broadcast on Monday from Ft. Worth, TX then moving to Winnemucca, NV on Wednesday selling 137,000 head of cattle with the final report to be issued on Monday.  

Last week and into Monday of this week Live Cattle and Feeder Cattle contracts took a pounding as long term bulls were nowhere to be found.  The cattle complex did finally pull off a positive day of trading on Tuesday with triple-digit gains that extended with modest gains into Wednesday.  But, the sometimes upside potential has no sense of urgency to rally much higher anytime soon.  Last week USDA issued on Friday its Cattle on Feed Report and the July 1st Cattle Inventory Report all had lots of information and data but little effect on market impact.  There were few surprises and no really bullish news to report.  Pretty much everybody in the industry knows expansion is well underway, but it will be over a year before many of the heifers retained will calve.  Lower corn market this week is having little effect in Feeder Cattle contracts so far as the fed cattle market has plenty of red ink flowing as the fed cattle market tries to carve out its summer low.  

Boxed-beef prices are at their lowest levels since last June and have this week gained some footing hopefully finding their summer low.  Choice boxed-beef closed .09 cents lower on Friday at 233.25.   Retailers still seem to be a bit lax in buying product and slow to stimulate consumer buying.  A strong US dollar and weaker export demand from the Pacific Rim countries especially Hong Kong and Japan have beef exports struggling; also beef exports to Mexico have been laboring as well.  Competing meat prices are strikingly lower than year ago levels as pork prices hit their all-time highs last summer during the PEDv outbreak and chicken prices were also stronger last year.   The attitudes of many in the commodity markets who are trading is getting to be a little bitter and even irritable from grains, precious metals, energy markets, and the Stock Market all rocking back on their heels and struggling with selling interest in the market place at this time.  Corn crop is now rated 70 percent good to excellent up 1 percent from last week, with 78 percent in the silking stage.  Corn prices have moved lower this week as favorable weather is in the forecast for the next week.  Auction volume included 50 percent weighing over 600 lbs and 37 percent heifers.  

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July 31st: Closing Futures Summary

Live cattle futures traded mixed Friday with the nearby up a bit and the deferred months a little lower. Prices held within a narrow range as the trade continues to monitor signs that demand is picking up. Beef cutouts rose today after steeply declining in recent weeks with choice down .09 to 233.25 cent/pound and select down .03 to 229.29. August cattle gained .32 cents to 145.22 cents/pound, while December futures fell .22 cents to 147.90. Meanwhile, August feeder cattle futures lost .02 cents to 211.22 cents/pound at the close Friday, while November feeders dropped .22 to 205.12.

Corn futures were firmer in early trading Friday but ended the day weaker. End-of-month consolidating by the funds is also likely to occur today as investors lift their eyes to August and to the Supply/Demand report due out on the 12th. Although extreme heat has been largely absent in the Corn Belt, there was some talk yesterday of a “flash drought” in scattered pockets that are starting to dry. Cash grain basis bids have firmed as export demand is seen stronger, highlighted by the higher-than-expected new-crop export sales data released yesterday. September corn futures fell 1.5 cents to $3.71/bushel at the close Friday, while December dropped 2 cents to $3.8125.

Soybeans firmed in early Friday trading ahead a day likely to be filled with end-of-month positioning. It’s worth repeating that yesterday, in the USDA daily system, China was also reported to be the buyer of 300,000 tonnes of old-crop beans, a highly bullish and surprising occurrence. Today it was reported that China cancelled 200K tonnes of old-crop bean purchases. The Soyfoods Association stated yesterday that food processors may shift to soy based products to replace eggs in response to price increases related to the Avian Flu outbreak that resulted in the loss of 47 million birds this year. The USDA Fats and Oils report will be out on Monday. August soybeans lost 11.25 cents to $9.8075/bushel Friday, while August soyoil lost 0.30 cents to 29.98 cents/pound and August meal lost $2.3 to $354.6/ton.

Wheat futures traded mixed Friday after trading higher in the overnight session. Lower wheat prices are becoming an attractive feed option for cattle producers while wheat producers are feeling the pain as prices are hitting lows. Reports from Kansas are finding higher yields than expected consider the amount of rain this year. The supply outlook for U.S. and World wheat remains high, which, when combined with less than optimal U.S. wheat exports, puts pressure on prices. September CBOT wheat futures gained 1.75 cents to $4.9925/bushel Friday, while Sep KC wheat closed unchanged at $4.9225/bushel, and September MWE fell 3.25 cents $5.235.

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July 31st: Shootin' the Bull Weekly Analysis
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In my opinion, little changed this week.  A one day rally followed by a sideways trade suggests a hesitation in the main trend.  There is perceived a growing bullish crowd after fats dropped off approximately $12.00 from this months high.  I find it difficult to believe fats will rally.  The consumer is perceived to have adjusted consumption comparable to beefs price at the grocer and restaurant.  The restaurant index dropped for the second month in a row in June.  Consumers have felt no price decline at the retail level.  Similar to gasoline a couple of years ago, the high price curtailed driving and promoted alternative transportation.  High beef prices are doing essentially the same thing, they are driving the consumer to eat less beef or more of an alternative protein source.  While sectors of the industry are perceived haggling amongst themselves for market share,  the consumer is perceived paying the price.  The consumer is the final destination. If you price them out of the market, there is no other market.  Fats remain in a down trend.  I anticipate further downside pressure.

The economics of feeding cattle is poor.  It has been poor all year long and not anticipated to get much better anytime soon.  This is anticipated to make for a very weak market in feeder cattle.  We see this already with the sharp discounts the back months hold.  The down trend remains in tact. Similar to the fats, the feeders had one day up this week and traders have maintained a sideways trade since then.  I anticipate the down trend to resume.  A small cascading pattern is beginning to develop in this down trend.  Unlike the fats, that literally sold straight off, the feeders paused and then dropped a couple of times.  This pattern is anticipated to continue as the short supply on hand is anticipated to give way to more and heavier animals this fall. Feed yards are anticipated to discount the heavier animals.  The more animals at the heavier weights will be perceived detrimental to the index.  I continue to anticipate further declines in feeder cattle prices.  Upon resumption of the down trend, I calculate a downside target for the October contract to $192.80. 

Corn has been relentless in being sold.  With most contracts near where the rally started, I go back to the analysis of corn being at or near intrinsic value. The peak that corn traders made on the charts is difficult to ascertain a next most probable move from.  A weaker US dollar would go a long way in corn looking cheap at this level if a significant enough exchange rate were to materialize. 

Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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July 30th: Cyclical Transition to Lower Cattle Prices

Cyclical transitions to lower cattle prices are expected to become more-and-more apparent in the second half of this year. Still, through 2016 prices will remain high by historical standards. Look for prices to erode year-on-year rather than collapse. On a quarterly average basis, fed cattle, yearlings (700-to 800-pound steer), and calf (500-to 600-pound steer) prices all cyclically peaked in the fourth quarter of 2014. Still those prices posted year-over-year gains in the first half of 2015, but are expected to be mostly below a year ago for the balance of this year and throughout 2016.

The main driver behind year-over-year declines in fed cattle prices in coming months will be increased beef supplies, secondarily pork and chicken will be abundant in the domestic market. One driver behind yearling and calf price increases has been declining feedstuff costs, a trend that has run its course at least well into 2016. In fact, corn costs in recent weeks have been more than 10% above a year ago.

In the first half of 2015, two major factors percolated through the marketing chain and kept fed cattle prices above a year ago: 1) significant year-on-year drops in cattle slaughter (compared to a year ago commercial slaughter fell 5.5% and 7.8% in the first and second quarters, respectively); and 2) strong domestic consumer demand for beef. In contrast, during the final six months of this year, U.S. beef production is forecast to be slightly above 2014’s.

Fed steer prices peaked in the fourth quarter of 2014, with the cash or negotiated 5-market USDA-AMS data averaging $165.59 per cwt. (live weight). That price averaged $162.43 per cwt. for the first quarter of this year, which was 11% above the same quarter in 2014. In the second quarter, the price was $158.11, 7% over a year earlier. Currently, the LMIC forecasts fed cattle prices will be about 5% and 6% below 2014’s in the third and fourth quarters, respectively. Still, for calendar year 2015, fed cattle prices are expected to eclipse the prior record high set in 2014 (up about 1%). 

It is critical to note that rather high fed cattle prices have not translated into profits for cattle feeders, in fact, their red ink has been significant and losses on are increasing. In 2014, cattle feeders posted very high profits, but 2015 has turned into a year of red ink based on feeding-out a 750-pound steer. Those losses are beginning to pressure yearling and calf prices. Over the balance of this summer, the most abrupt adjustments for lower prices and larger price volatility week-to-week could be for heavyweight feeder cattle.

In the Southern Plains, average quality 700-to 800-pound steers were $239.81 per cwt. in the fourth quarter of 2014. Quarterly average prices have eroded since then; coming in at $215.87 and $225.29 for 2015’s first and second quarters, respectively. On a per cwt. basis, that second quarter price was over $32.00 above 2014’s. Record high calf prices were set in the fourth quarter of 2014, with Southern Plains steer weighing 500-to 600-pounds at $285.63 per cwt. So far in 2015, those price calf levels were $276.14 for the first quarter. The second quarter was $279.32, a dramatic $51.65 per cwt. jump compared to one year ago.

This year, LMIC forecasts that both yearling and calf prices peaked in the second quarter. The yearling price (700-to 800-pound average steer in the Southern Plains) in the third quarter is forecast to be about $13.00 per cwt. below the second quarter and down $12.00 to $16.00 compared to a year ago (decline of about 6%). By the fourth quarter, the year-on-year yearling price drop could be 10% to 15%. The third quarter calf price is expected to remain above 2014’s, but by the fourth quarter calves are forecast to be down about 8% compared to last year’s.

LMIC

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July 30th: Corn Crop Condition

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"Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
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July 29th: Feeder Cattle Supply Outlook

Feeder cattle availability this fall is expected to show improvement compared to year ago levels. The total supply of cattle outside of feedlots is calculated using the line items in the USDA cattle inventory survey. The available feeder supply is the sum total of steers over 500 pounds, “other” heifers over 500 pounds and calves under 500 pounds. From this total, one needs to subtract cattle that already are on feed, i.e. the on feed inventory as of July 1. One also needs to make an adjustment for cows and bulls that are on feed, which is a relatively small portion of the overall supply.

Using this calculation, the total supply of steers and heifers outside feedlots as of July 1 was 35.5 million head, 629,000 thousand head (+1.8%) higher than a year ago. This was the biggest year/year increase in the supply of feeder cattle since 1996. Despite the increase, the feeder supply as of July 1, 2015 was still about 1.1 million head (-3%) smaller than in 2011. It is important to keep in mind that ongoing herd rebuilding activity means that the true available supply of feeder cattle may not be as large as the numbers suggest. The supply of calves under 500 pounds as of July 1, 2015 was 26.7 million head, 600,000 head larger than a year ago. This number is part of the feeder supply calculation but this does not mean they will all end up in the feedlot. Rather, some female calves may eventually be retained in the beef cow herd. The supply of steers outside of feedlots was 19.283 million head, 128,000 head (+0.6%) higher than last year. On the other hand, the supply of heifers outside of feedlots was 16.217 million head, 501,000 head (+2.6%) larger than last year. Good pasture conditions and relatively low corn prices continue to provide incentives for producers to retain heifers and that will likely continue in 2016.

Cattle outside of feedlots make up the bulk of the available feeder supply but it is not the entire picture. The United States imports a significant number of feeder cattle from both Mexico and Canada and that supply is a function of the beef cow herd/calf crop in those countries as well as the exchange rate. The strong US dollar certainly has allowed for relatively large imports of feeder cattle from both Mexico and Canada so far this year. Year to date imports from Canada (through July 11) are 224,036 head, 2.6% lower than the same period last year but still about 62% larger than the five year average. Last year imports of Canadian feeder cattle rose sharply in September and October, driven by record prices in the US and a strong US dollar. It is likely we will see strong exports to the US again this year due to the same factors. Statistics Canada will release the results of its cattle inventory survey in a few weeks and that should provide some indication as to whether we should expect a larger Canadian feeder availability this fall than what we saw last year. Imports of Mexican feeder steers so far this year remain well above year ago levels but lower than the five year average. Year to date imports of feeder cattle from Mexico at 633,340 head are 77,159 head (+13.9%) higher than a year ago but 5% lower than the five year average. Imports from Mexico will be seasonally larger in October and November and it is likely shipments to the US will match or surpass year ago levels. The latest USDA forecast pegged the Mexican 2015 calf crop at 6.825 million head, 1.1% larger than the previous year.

Bottom line: Feeder availability is expected to very slowly improve but ongoing herd rebuilding activity implies that initial increases are limited. Notably larger supplies by fall of 2016 and in 2017. Low feed costs mean
that light weight feeders will continue to command strong premiums. Imports from Canada and Mexico are vulnerable to shifts in the exchange rate but so far the strong US dollar has given an assists to US feedlots at the
expense of their Mexican and Canadian counterparts. 

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July 29th: Lower Exports & Deflation in Pork & Chicken Impact Beef

Fed cattle markets continue to be negatively impacted by both seasonal factors as well as growing concerns about beef demand in the second half of 2016. While fed supplies are expected to remain tight through the remainder of the year, at this point futures appear to be focusing increasingly on the demand outlook and implications for prices later going into the fall and winter. Packer margins, which normally are very good over the summer months, so far have been lackluster at best. The steady deterioration in by-product values has made an already tough year even more difficult. Strong demand can fix a lot of the problems currently weighing on the beef market but there is a lot of uncertainty as to how the demand picture will unfold:

  • Beef exports have struggled due to the effect of the strong US dollar and weaker Chinese demand. The latter is important as last year it served as a catalyst for prices not just in the US but Australia and Brazil as well. So far this year, Australian beef shipments to China Mainland are flat while Brazil exports to Hong Kong (they only recently were allowed into China) were down 22%. Based on the weekly export data from USDA/FAS, US beef shipments to Hong Kong in the four weeks ending July 16 were down 48% compared to the same period last year. Since May 1, beef shipments to Japan, South Korea and Hong Kong are down 12%.  So far some of the items that last year were selling at the premium in export markets now have to be absorbed domestically, with prices that in some cases are half of what they were a year ago. This has a very significant impact on packer margins, something that is not immediately apparent if you simply look at cutout values.
  • Prices for competing meats are dramatically lower than a year ago. It is important to remember that going into the fall last year end users were paying all time record prices for holiday items. Ham prices were trading around $110/cwt in September and October. This year they will likely be in the low 60s (down 42%). Chicken prices, especially prices for whole birds, were also strong last year but they have collapsed in recent days. Both white meat values (down 30%) and dark meat (down 50%) provide retailers and foodservice operators with dramatically cheaper alternatives this fall.
The substitution effects for beef sometimes are overblown and historically the effect of lower prices from pork and chicken has been limited.  However, the deflation in pork and chicken has been so dramatic that it will inevitably impact beef demand this fall. 
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July 28th: Beef Is Back Campaign

The USDA July 1st cattle on feed report will be remembered mainly in future graphs as illustrative of the bottoming of cattle on feed numbers and the beginning of increasing numbers of cattle placed on feed to be available for market at a later date. It also is a good starting point for the industry to begin efforts to make the public aware that "beef is back" and to expect larger supplies in the future that will be characterized by MORE BEEF AT CHEAPER PRICES.

If by some act of magic, we were able to deliver a normalized slaughter of 650,000 cattle to the marketplace today, it would be a disaster taking the live market under $1/pound. The marketplace is not prepared to accept more beef. During the past two weeks of 538/539,000 head slaughter, the beef cutout has done little more than lose additional ground. Grocers are concentrating on generous margins generated by pork. Food service businesses have dropped off several beef options from menus and substituted cheaper alternative meat options.

It doesn't take a genius to recognize that material work on the part of the industry is necessary to prepare the ground work necessary to prepare the food service businesses for the return of beef. This will require winning over retailers and restaurants to the fact that not only is beef the preferred meat but those handling beef can do so at a profit.

Many of those involve in beef production currently question the fact that people can make money producing beef. Except for the breeder, all sectors in the beef pipeline are losing money currently. The short supplies of the past two years, now aggravated by holding back breeder heifers, has taken a toll on each sector as competition has kept input cost out of line with the final value recognized at each point of sale.

The bunching of placements expected in late summer and fall will thrown additional supplies on a market early next year and the marketplace is not ready to absorb increasing numbers of cattle without structural changes. American business is too often characterized by short term thinking and the criticism is a fair one. The beef industry needs to reach the decision makers at the top of the many corporations that depend on beef as a source input to their food offerings. It is only when menus change and beef features are commonplace that the marketplace will be able to accept the building supplies without a major disruption to price.

Ag Center Cattle Report

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July 27th: A Tax on Meat

This was posted on the Care2 website... It is likely only a matter of time until politicans in the U.S. have this bright idea:

No one likes to see new taxes, but sometimes they’re necessary to improve society. That’s the opinion that many in Sweden have adopted now that the concept of a “meat tax” is gaining in popularity. Realizing that the Swedish population would be better off for reducing its meat consumption, some think the best tool is to charge more for meat altogether

Like many nations in the western world, Sweden consumes more meat than is healthy or sustainable. Rather than taking away anyone’s right to eat meat, Sweden politicians are considering taxing beef, chicken, etc. to act as a deterrent. If meat is costlier, they figure, fewer families will serve meat with every meal.

As the world population explodes, there are more mouths to feed with less space to grow/raise food. To accommodate for the amount of people, more people will need to shift to a mostly plant-based diet. Using the same amount of land, a farmer growing crops creates 10 times the nutrition as a farmer raising livestock.

Health-wise, a meat reduction makes a lot of sense, too. Studies show that meat consumption puts people at a higher risk of cancer, cardiovascular disease and premature death. While protein and iron from meat can be part of a healthy diet, too many seem to think that meat is an adequate replacement for vegetables. If parts of the world tax people for other unhealthy items like soda and cigarettes, why couldn’t it be the same with meat?

Additionally, many supporters hope that taxing meat would be a big boost to Sweden’s own agricultural economy. The belief is that local farmers’ fruits, vegetables and grains would really thrive once meat were less affordable. Since analysts predict a long-term global trend toward eating less meat, focusing on cultivating vegetarian food now could give Sweden a competitive leg-up in the decades to come.

The environmental factors are just as important. Climate change scientists believe that taxing meat is an important way to curb emissions. Since cattle farts are one of the main sources of greenhouse gases, cutting down on the number of cows raised for slaughter would similarly cut down on methane released into the air. Of course, beef farmers raise as many cows as they can sell for food, so by making meat too costly for shoppers to keep as a dinner staple, farmers will raise fewer cows in turn.

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July 24th: July 1 Cattle Inventory Up 2 Percent
  • All cattle and calves in the United States as of July 1, 2015, totaled 98.4 million head, 2 percent above the 96.3 million on July 1, 2014. The last time all cattle and calves inventory for July 1 increased was 2006.
    • All cows and heifers that have calved, at 39.8 million, were up 2 percent from July 1, 2014.
    • Beef cows, at 30.5 million, were up 3 percent from July 1, 2014.Milk cows, at 9.30 million, were up 1 percent from July 1, 2014.
  • Other class estimates on July 1, 2015 and the percent change from July 1, 2014, are as follows:
    • All heifers 500 pounds and over, 15.9 million, up 2 percent.
    • Beef replacement heifers, 4.90 million, up 7 percent.
    • Milk replacement heifers, 4.20 million, up 2 percent.
    • Other heifers, 6.80 million, down 1 percent.
    • Steers, weighing 500 pounds and over, 14.1 million, up 3 percent.
    • Bulls, weighing 500 pounds and over, 1.90 million, unchanged.
    • Calves under 500 pounds, 26.7 million, up 2 percent.
  • The 2015 calf crop is expected to be 34.3 million, up 1 percent from 2014. Calves born during the first half of the year are estimated at 24.8 million, up 1 percent from the previous year. 
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July 24th: July Cattle on Feed Report

United States Cattle on Feed Up 2 Percent

  • Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.2 million head on July 1, 2015. The inventory was 2 percent above July 1, 2014. The inventory included 6.91 million steers and steer calves, up 7 percent from the previous year. This group accounted for 67 percent of the total inventory. Heifers and heifer calves accounted for 3.33 million head, down 7 percent from 2014. July 1, 2015 heifers and heifer calves inventory is the lowest percent of total July inventory since the series began in 1996.
  • Placements in feedlots during June totaled 1.48 million, 1 percent above 2014. Net placements were 1.41 million head.During June, placements of cattle and calves weighing less than 600 pounds were 350,000, 600-699 pounds were 250,000, 700-799 pounds were 336,000, and 800 pounds and greater were 545,000.
  • Marketings of fed cattle during June totaled 1.75 million, 5 percent below 2014. Marketings are the lowest for June since the series began in 1996.
  • Other disappearance totaled 69,000 during June, 8 percent below 2014.

Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of July 1st
Millions of Head
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Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in June
Millions of Head
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Number of Cattle Marketed from 1,000+ Capacity Feedlots in June
Millions of Head
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Cattle on Feed by State as of July 1st
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July 24th: Diesel Lower Than Gasoline

On July 13, the U.S. average diesel fuel retail price fell below the average regular gasoline retail price for the first time since the week of August 10, 2009.  From August 2009 through June of this year, retail diesel fuel prices sold at an average premium of 34 cents per gallon (gal) over regular grade gasoline, with the premium reaching more than 90 cents/gal in January.

The persistent price premium for diesel relative to gasoline from August 2009 until last week reflected a combination of factors including strong global demand for diesel, federal fuel taxes for diesel that are 6 cents/gal higher than those for gasoline, and the higher production cost of ultra-low sulfur diesel (ULSD) that was phased in between 2006 and 2010.

Since January, the diesel price premium to gasoline has steadily fallen because the typical seasonal demand pattern, which is strongest for diesel in the winter heating season and strongest for gasoline in summer, has been amplified by especially strong demand for gasoline in the United States and abroad. Furthermore, although retail gasoline prices in most parts of the country have in recent weeks followed crude oil prices lower, elevated retail gasoline prices in California, as a result of ongoing supply disruptions has put upward pressure on the U.S. weekly average gasoline retail price.

Tight diesel markets over the past six years have reflected growing diesel demand from developing economies and the switchover to ULSD for home heating oil in Northeastern states, where over 80% of U.S. use of oil for space heating occurs. Over the same period, gasoline demand has generally been weak, reflecting increasing vehicle fuel economy and changing consumer driving patterns. From 2009 through 2014, total U.S. gasoline consumption (as measured by product supplied) fell by an annual average of 0.2%. This decline in gasoline use compared with average annual diesel fuel demand growth of 5.9% over the same period. The contrasting market conditions for these two fuels are reflected in their comparative refinery wholesale margins (the difference between the wholesale price and the price of Brent crude oil). Over the same 2009-14 period, refinery wholesale margins averaged 38 cents/gal for diesel but only 26 cents /gal for gasoline.

Demand for gasoline in the United States began to rise considerably in the latter part of 2014 and through the first half of 2015 as U.S. retail gasoline prices reached some of their lowest levels in years, reflecting the fall in Brent crude oil prices from an average of $112 per barrel (b) in June 2014 to $48/b in January 2015. Gasoline prices followed crude oil prices, falling from $3.69/gal in June to $2.12/gal in January. Based on the latest data from the Federal Highway Administration, Americans drove a record 987.8 billion miles during the first four months of 2015, topping the previous record of 965.6 billion miles set in the first four months of 2007. Global gasoline demand also increased strongly in the first half of 2015.

Rising gasoline demand has driven refinery wholesale gasoline margins to some of their highest levels in recent years, which in turn boosted gasoline prices despite relative stability in crude oil markets. Refinery wholesale gasoline margins increased to 62 cents/gal in June, 28 cents/gal higher than in June of last year and 25 cents/gal higher than the five-year (2010-14) average for June.

Rough price parity between gasoline and diesel is likely to be a relatively short-term phenomenon, as gasoline demand moderates with the end of the summer driving season and diesel demand begins to grow in response to the fall agricultural harvest and the winter heating season. In the July Short-Term Energy Outlook (STEO), EIA projects that the diesel price premium will return and gradually widen later this year, with gasoline retail prices averaging $2.27/gal in December compared with diesel fuel prices at $2.87/gal.

U.S. average gasoline and diesel prices both decline

The U.S. average retail price for regular gasoline decreased three cents from the previous week to $2.80 per gallon as of July 20, 2015, 79 cents per gallon less than the same time last year. The Rocky Mountain price increased two cents to $2.84 per gallon and the West Coast price increased two cents to $3.60 per gallon. The Midwest price registered the largest weekly decrease, a five cent drop to $2.67 per gallon. The East Coast and Gulf Coast prices both declined four cents to $2.67 per gallon and $2.49 per gallon, respectively.

The U.S. average price of diesel fuel decreased three cents from last week to $2.78 per gallon, $1.09 per gallon lower than the same time last year. Prices declined in all regions with the largest decrease occurring on the East Coast, where the price dropped four cents to $2.87 per gallon. The Gulf Coast, West Coast, and Midwest prices each dipped three cents from last week, to $2.67 per gallon, $3.00 per gallon, and $2.68 per gallon, respectively. The Rocky Mountains price decreased two cents to $2.77 per gallon.

Propane inventories gain

U.S. propane stocks increased by 0.3 million barrels last week to 87.7 million barrels as of July 17, 2015, 22.2 million barrels (34.0%) higher than a year ago. Midwest inventories increased by 0.6 million barrels and Rocky Mountain/West Coast inventories increased by 0.2 million barrels. Gulf Coast inventories decreased by 0.5 million barrels while East Coast inventories remained unchanged. Propylene non-fuel-use inventories represented 5.8% of total propane inventories.

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July 24th: Canadian Weekly Cattle Report

Fed cattle weaker

  • The western Canadian fed sales volume was too light last week to establish a reliable market trend.
  • However, the weekly steer price was around $4.25 per hundredweight lower than the previous week, which put prices in the mid-$180s and heifer prices around $2.50 lower.
  • Packers are well bought through July and are struggling with negative operating margins.
  • Chicago live cattle futures fell, and cash cattle in the U.S. Plains sold at US$148 per cwt., $2 to $3 lower than the previous week.
  • A few dressed sales were reported in Alberta midweek at C$308 to $310 per cwt. delivered, down $5 to $6 from the previous week.
  • The weekly cash-to-futures basis is close to the normal July average of -$6.88.
  • Weekly western Canadian fed slaughter to July 11 rose four percent to 33,523 head. Weekly fed exports for the short week ending July 4 rose 69 percent to 3,409 head.
  • Signals from the U.S. market are lower and Canadian packers have good supply, but a more normal Alberta-Nebraska cash basis and a weaker Canadian dollar means there should be new buying interest from American packers.
Cows steady
  • D1, D2 cows were steady, but prices traded at a $4 discount to U.S. utility cow prices.
  • D1, D2 cows ranged $130-$145 to average $135.90 per cwt., and D3 cows ranged $115-$130 to average $124.75. Slaughter bulls averaged $170.18, up more than $3.
  • Bulls are trading $45 higher than the same time last year, while cows are $20-$22 stronger.
  • The spread between butcher bulls and D1, D2 prices is wide at $30.
  • A few cow-calf pairs with older calves at side are being split at auction.
Feeders steady
  • Steers weighing 800-900 pounds traded steady and were only $2.50 short of highs set in June.
  • The forward delivery market was lightly tested with a good mix of yearlings and calves on offer.
  • Yearling prices for August and September delivery were steady, but the basis appeared weaker.
  • Adjusted 850 basis levels f.o.b. on most August delivery steers were -$20 to -$22, weaker than the five year 2010-14 average of -$12.65.
  • Eastern Canadians were active buyers of western Canadian calves, showing particular interest in heavier steers.
  • Alberta and Saskatchewan 700-750 lb. steers for October delivery were priced $279-$298 per cwt., while load lot groups of British Columbia, Alberta and Saskatchewan calves 550-660 lb. for the same delivery window traded from $310.50-$327.75.
  • They were top-end, one-owner cattle, making it difficult to make an apples-to-apples comparison.
  • Steer calf prices for October delivery are $30-$40 higher than October 2014.
Beef falls
  • U.S. boxed beef prices fell with Choice down $5.77 per cwt. and Select down $5.76.
  • Prices are now $13-$16 below year-ago levels and $1-$4 below the spring lows set in February.
  • Canadian boxed beef prices for the weeks ending July 4 and 11 were unavailable.
This cattle market information is from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.
.

July 23rd: USDA June Cold Storage Report
  • Total red meat supplies in freezers were down 3 percent from the previous month but up 23 percent from last year. 
    • Total pounds of beef in freezers were down 2 percent from the previous month but up 30 percent from last year. 
    • Frozen pork supplies were down 3 percent from the previous month but up 18 percent from last year.
    • Stocks of pork bellies were down 31 percent from last month and down 47 percent from last year.
  • Total frozen poultry supplies on June 30,  were up 1 percent from the previous month and up 13 percent from a year ago.
    • Total stocks of chicken were down 2 percent from the previous month but up 22 percent from last year. 
    • Total pounds of turkey in freezers were up 4 percent from last month but down 1 percent from June 30, 2014.
.

July 23rd: Record High Pork in Freezers

U.S. pork held in freezers marked a record high in the month of June, bolstered by increased hog production following industry efforts to control the deadly pig virus, experts said after the government’s monthly cold storage report on Wednesday.

The U.S. Department of Agriculture (USDA) cold storage report for June showed total pork inventories at 632.2 million lbs, a record for the month that topped the 2012 June high of 592.9 million.

"Pork stocks have been high all year. And, usually big production creates big stocks," said independent industry analyst Bob Brown in Edmond, Oklahoma.

Lower feed costs along with the less-severe Porcine Epidemic Diarrhea virus (PEDv) fueled hog herd growth, resulting in a 7.2 percent rise in hog slaughter and 6.8 percent bump in pork production from January to the week ending July 18.

Total hams, the largest single number in the pork category, were at 180.7 million lbs, a record last month that surpassed June 2013's 161.6 million top, according to Missouri-based Doane Advisory Services economist Dan Vaught.

The ham comparison appears larger when made to last year's PEDv-stricken supply, said analysts. Furthermore, end-users typically stash hams into storage as early as April for Thanksgiving and Christmas holiday use, they said.

"To some extent, certainly the idea that we're going to run short on turkeys is probably encouraging ham storage as well," said Vaught.

The amount of frozen whole turkeys, including toms and hens, in June 2015 totaled 262.0 million lbs. That was up 18.7 million lbs from May, but down 6.9 million from June 2014.

Based on the 10-year average of 273.2 million lbs, the industry is down from the normal amount for this time of year due to the avian influenza outbreak that primarily hurt turkey flocks in Minnesota, Vaught said.

"We're looking at relatively short numbers, but the industry will probably aggressively work to limit any reductions by funneling more turkeys into the whole-bird category," he said.

Beef inventories in June were at 467.1 million lbs, down 9.2 million lbs from the month before but up 108.9 million lbs compared to a year earlier.

The government's beef June beef stocks belies the respective 7.0 percent and 4.7 percent year-to-date decline in slaughter and product output.

"Beef's increase versus last year appears to be in the boneless category, likely due to the huge influx of beef imports from Australia and New Zealand," Brown said.

.

July 23rd: Summer Meat Demand

Meat prices are higher in the latest retail prices released for the month of June.  The All Fresh retail beef price was $6.114/lb., up $0.059 cents from May and up $0.606/lb. from one year ago.  The June retail pork price was $3.703/lb., up $0.007/lb. from last month but $0.413/lb. lower than June of 2014.  The retail broiler composite price was $1.987/lb., $0.055/lb. higher than May and up $0.038/lb. year over year. 

Pork and broiler retail prices increased in June despite continued increases in supplies for both meats.  High beef prices may be providing more evident support for the other meats. However, retail beef prices remain record high relative to pork and broiler prices.  In June, retail beef prices were 3.1 times retail broiler prices, continuing a ratio above 3.0 that first occurred in December 2014.  Both retail beef and broiler prices climbed about 6 cents per lb. from May to June.  Wholesale poultry breast meat and leg prices have continued to decline through June and into July, while wing prices have be mostly steady since May.  Weak broiler exports, down 8.6 percent for the year to date, due to the strong dollar, avian influenza and the Russian poultry ban, are contributing to soft broiler wholesale values.

Retail beef prices were a record 1.65 times higher than retail pork prices in June, with retail beef prices up about 6 cents/lb. and retail pork price up less than a penny from May.  Lower pork prices, in the face of sharply increased pork supplies, appear to be stabilizing with pork demand responding to lower pork prices.  Wholesale pork loin prices recovered some from mid-June lows into July while ham values eroded through June and into to July.  Wholesale pork belly prices have increased steadily for several weeks, climbing over 90 percent from late February lows.  Wholesale pork spare rib prices have been above year ago levels since late April, likely driven by strong export demand.  Overall pork exports are down, particularly to China, but remain strong to South Korea, where spare ribs are a popular item.

Demand pressures are building, at least seasonally, in the beef market.  Though June retail All Fresh prices were higher, Choice retail beef prices were $640.6/ lb., down slightly from $6.412/lb. in May but still $0.489/lb. higher compared to June, 2014.  The wholesale Choice-Select spread has narrowed from a peak in May through June and into July.  The spread is following a pattern similar to last year and is more or less seasonal but somewhat exaggerated with Choice values falling sharply relative to Select values.  This partly reflects supply conditions with relatively abundant Choice beef supplies due to high Choice grading percentages and also likely reflects relatively stronger Select demand compared to the more expensive Choice beef. 

Beef demand is caught in the summer doldrums with lots of high temperatures curtailing grilling and abundant pork and poultry supplies catching most of the retail featuring attention. Wholesale ribeye prices have dropped below last year after tracking well above year ago levels for much of the year.   Other middle meats, e.g. loin strips, have dropped sharply off seasonal peaks in May and have fallen below year ago levels. Wholesale values for chucks and rounds are generally holding above year ago levels.  Wholesale values for lean processing beef are holding steady but the price of 50 percent trim has eroded sharply since April reflecting both weaker ground beef demand and abundant trim supplies due to heavy carcass weights and increased fat trim on steer and heifer carcasses. The ability of beef to continue holding record price levels relative to pork and poultry will depend, not only on prices of those competing meats, but also continued growth in the U.S. economy, consumer income impacts of things like gasoline prices and the strength of foreign demand for U.S. beef. 

Derrell S. Peel -- Oklahoma State University Extension

.

July 17th: Total Cattle Slaughter Lower

The US beef cow herd is expected to show strong growth in 2015 thanks to strong calf prices and, even more importantly, excellent pasture conditions and declining feed costs. While at the start of the year the assumption was that producers would seek to rebuild their herds given the strong incentives in the market, much of that was dependent on the ability to keep retained heifers in the herd. Too often in the past, producers would retain heifers only to sell them off later due to the lack of available feed. But this year so far has been a continuation of what we saw last year - ample grass supplies and a strong push to retain females rather than send them to the feedlot. The latest USDA crop progress report showed that for week ending July 12, 65% of pastures were in good/excellent condition.

This is a 10 point improvement from the previous year and an almost 20 point improvement from the 10 year average. In 2012, when drought in the Southern Plains forced producers to liquidate a lot of productive cows, the national pasture good/excellent rating was a mere 19%, 46 points lower than today. Conditions in Texas and Oklahoma, which in recent years have been greatly affected by drought, show a dramatic improvement. In the latest report, 77% of pastures and ranges in Texas and 67% in Oklahoma were rated in good/excellent condition.  With plentiful grass, and some of the best calf prices on record, there is little surprise that cow-calf operators are holding on to every cow and heifer they can.

It is normal for the ratio of cows/heifers as % of total slaughter to decline in the summer and be higher in the winter but this year the summer decline has been the biggest seen in the past 15 years. Female slaughter (cows/heifers) in May and June was just 40% of the total, well below the levels seen during the herd rebuilding years in 2005 and 2006. Cattle slaughter is lower compared to a year ago and dramatically lower than what it was in 2012 and 2013 - this has been largely due to fewer females in the mix (herd rebuilding/herd preservation) and to a lesser extent because of a smaller calf crop overall. 

Consider these numbers:

Total cattle slaughter for the period May 3 - June 27 was 4.432 million head, down 358,290 head (-7.5%) compared to the previous year and down 705,782 head (13.7%) compared to the same period in 2013. Female slaughter (cow/calf) during May and June in 2015 was 1.823 million head, 258,198 head (-12.4%) from a year ago and 520,743 head (-22.2%) compared to 2013. So the decline in female slaughter has accounted for a little over 2/3 of the overall reduction in US cattle slaughter in May and June of this year. This is what normally expected during herd rebuilding years -- if anything the reduction this year has been even more dramatic and consistent with the excellent returns cow-calf operators are enjoying at this time. 

Implications: Feedlot placements are expected to be low through the summer, which will continue to limit the supply of cattle coming to market later this year and in early 2016. 

CME Group

.

 May 21st Seasonal Drought Outlook
.

July 2nd: NOAA Precipitation & Temperature Probabilities

.

March 17th - Annual Sales Data for Cattle Farms & Ranches

The USDA’s National Agricultural Statistics Service has compiled data from the 2012 Census of Agriculture Farm Typology report profiling family farms/ranches in the United States.  For farms/ranches raising cattle or calves, the report lists a total of 740,978 operations...

  • Of those, 202,047 are listed as retirement farms, where the operators report they are retired, although they continue to farm on a small scale. 
  • On 266,250 cattle operations, NASS reports the operator has an off-farm occupation. 
  • Of the cattle farms where the operator’s primary occupation is farming, 
    • 130,774 are listed as having annual sales less than $150,000
    • 47,648 have sales of $150,000 to $349,999
    • 51,301 have sales from $350,000 to $999,999
    • 20,142 have sales from $1 million to $4,999,999
    • 2,609 have sales of more than $5 million
  • Non-family farms account for the remaining 20,207 cattle operations.
.

February 27th - Comparison by State of Heifers Retained for Replacements
.
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
710,000
660,000
7.58%
12.29%
2
Montana
425,000
430,000
-1.16%
7.36%
3
Oklahoma
405,000
325,000
24.62%
7.01%
4
Nebraska
390,000
400,000
-2.50%
6.75%
5
South Dakota
380,000
340,000
11.76%
6.58%
6
Missouri
310,000
305,000
1.64%
5.37%
7
Kansas
260,000
240,000
8.33%
4.50%
8
Wyoming
183,000
175,000
4.57%
3.17%
9
Iowa
170,000
160,000
6.25%
2.94%
10
North Dakota
164,000
170,000
-3.53%
2.84%
11
Colorado
160,000
150,000
6.67%
2.77%
12
Arkansas
141,000
137,000
2.92%
2.44%
13/14
Kentucky
135,000
150,000
-10.00%
2.34%
13/14
Tennessee
135,000
130,000
3.85%
2.34%
15
Florida
125,000
115,000
8.70%
2.16%
16
California
120,000
110,000
9.09%
2.08%
17/18
Idaho
110,000
110,000
0.00%
1.90%
17/18
Oregon
110,000
105,000
4.76%
1.90%
19
Alabama
110,000
110,000
0.00%
1.90%
20
Virginia
105,000
115,000
-8.70%
1.82%
21
Mississippi
95,000
91,000
4.40%
1.64%
22
Minnesota
85,000
80,000
6.25%
1.47%
23
Georgia
83,000
82,000
1.22%
1.44%
24
New Mexico
80,000
70,000
14.29%
1.38%
25
Utah
 78,000
70,000
11.43%
 1.35%
26
Wisconsin
75,000
70,000
7.14%
1.30%
27
Louisiana
73,000
84,000
-13.10%
1.26%
28
North Carolina
69,000
72,000
-4.17%
1.19%
29
Illinois
64,000
63,000
1.59%
1.11%
30
Washington
51,000
50,000
2.00%
0.88%
31/32
Ohio
50,000
55,000
-9.09%
0.87%
31/32
Pennsylvania
50,000
50,000
0.00%
0.87%
33
Indiana
45,000
39,000
15.38%
0.78%
34
New York
40,000
45,000
-11.11%
0.69%
35
Nevada
37,000
36,000
2.78%
0.64%
36
Arizona
34,000
30,000
13.33%
0.59%
37
West Virginia
32,000
35,000
-8.57%
0.55%
38
South Carolina
30,000
30,000
0.00%
0.52%
39
Michigan
23,000
29,000
-20.69%
0.40%
40
Hawaii
11,000
9,000
22.22%
0.19%
41
Maryland
8,000
9,500
-15.79%
0.14%
42/43
Vermont
4,000
4,500
-11.11%
0.07%
42/43
Maine
4,000
3,000
33.33%
0.07%
44/45
Connecticut
2,000
1,500
33.33%
0.03%
44/45
Massachusetts
2,000
2,000
0.00%
0.03%
46
New Jersey
1,300
1,000
30.00%
0.02%
47
New Hampshire
1,000
1,000
0.00%
0.02%
48
Alaska
900
800
12.50%
0.02%
49
Delaware
700
500
40.00%
0.01%
50
Rhode Island
500
500
0.00%
0.01%






-
Total
5,777,400
5,551,300
+4.07%
 100.00%
.

February 27th - Beef Cows: State Rankings & Change
.
.January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
. Rank
. State
2015
2014
. % Change
2015 as
% of Total
 
 
 
 
1
Texas
4,180,000
3,910,000
6.91%
14.08%
2
Oklahoma
1,900,000
1,795,000
5.85%
6.40%
3
Missouri
1,881,000
1,820,000
3.35%
6.33%
4
Nebraska
1,786,000
1,807,000
-1.16%
6.01%
5
South Dakota
1,632,000
1,635,000
-0.18%
5.50%
6
Montana
1,506,000
1,476,000
2.03%
5.07%
7
Kansas
1,477,000
1,414,000
4.46%
4.97%
8
Kentucky
1,007,000
992,000
1.51%
3.39%
9
Iowa
920,000
895,000
2.79%
3.10%
10
Florida
916,000
907,000
0.99%
3.08%
11
North Dakota
904,000
923,000
-2.06%
3.04%
12
Tennessee
883,000
864,000
2.20%
2.97%
13
Arkansas
863,000
862,000
0.12%
2.91%
14
Colorado
745,000
710,000
4.93%
2.51%
15
Wyoming
694,000
694,000
0.00%
2.34%
16
Alabama
672,000
681,000
-1.32%
2.26%
17
Virginia
637,000
637,000
0.00%
2.15%
18
California
600,000
600,000
0.00%
2.02%
19
Oregon
525,000
516,000
1.74%
1.77%
20
Georgia
489,000
500,000
-2.20%
1.65%
21
Idaho
481,000
465,000
3.44%
1.62%
22
Mississippi
468,000
477,000
-1.89%
1.58%
23
Louisiana
466,000
450,000
3.56%
1.57%
24
New Mexico
407,000
407,000
0.00%
1.37%
25
Illinois
376,000
355,000
5.92%
1.27%
26
North Carolina
363,000
355,000
2.25%
1.22%
27
Minnesota
350,000
340,000
2.94%
1.18%
28
Utah
324,000
340,000
-4.71%
1.09%
29
Ohio
282,000
293,000
-3.75%
0.95%
30
Wisconsin
275,000
250,000
10.00%
 0.93%
31
Nevada
217,000
231,000
-6.06%
 0.73%
32
Indiana
199,000
187,000
6.42%
 0.67%
33
Washington
198,000
214,000
-7.48%
 0.67%
34
West Virginia
185,000
191,000
-3.14%
 0.62%
35
Arizona
175,000
178,000
-1.69%
 0.59%
36
South Carolina
170,000
169,000
0.59%
 0.57%
37
Pennsylvania
150,000
160,000
-6.25%
 0.51%
38
New York
115,000
105,000
9.52%
0.39%
39
Michigan
112,000
119,000
-5.88%
 0.38%
40
Hawaii
69,800
71,800
-2.79%
0.24%
41
Maryland
41,000
38,000
7.89%
 0.14%
42
Vermont
12,000
12,000
0.00%
 0.040%
43
Maine
11,000
11,000
0.00%
0.037%
44
New Jersey
7,500
7,000
7.14%
0.025%
45
Massachusetts
5,500
6,000
-8.33%
0.019%
46
Connecticut
5,000
4,000
25.00%
0.017%
47
Alaska
4,300
4,300
0.00%
0.014%
48
New Hampshire
3,000
3,000
0.00%
 0.010%
49
Delaware
2,500
2,800
-10.71%
 0.008%
50
Rhode Island
1,500
1,500
0.00%
0.005%






-
Total
29,693,100
29,085,400
+2.09%
100.00%
.

February 27th - All Cattle & Calves: State Rankings & Change
..
January 1, 2015 Inventory vs. 2014 Inventory... Compiled from USDA National Agricultural Statistical Service Data
.
Rank
State
2015
2014
% Change
2015 as
% of Total
.      
 
1
Texas
11,800,000
11,100,000
6.31%
13.14%
2
Nebraska
6,300,000
6,250,000
0.80%
7.02%
3
Kansas
6,000,000
5,800,000
3.45%
6.68%
4
California
5,150,000
5,250,000
-1.90%
-5.73%
5
Oklahoma
4,600,000
4,300,000
6.98%
5.12%
6
Missouri
4,000,000
3,850,000
3.90%
4.45%
7
Iowa
3,900,000
3,800,000
2.63%
4.34%
8
South Dakota
3,700,000
3,700,000
0.00%
4.12%
9
Wisconsin
3,500,000
3,400,000
2.94%
3.90%
10
Colorado
2,600,000
2,550,000
1.96%
2.90%
11
Montana
2,500,000
2,550,000
-1.96%
2.78%
12
Minnesota
2,330,000
2,300,000
1.30%
2.59%
13
Idaho
2,300,000
2,240,000
2.68%
2.56%
14
Kentucky
2,060,000
2,110,000
-2.37%
2.29%
15
Tennessee
1,730,000
1,760,000
-1.70%
1.93%
16
Florida
1,700,000
1,670,000
1.80%
1.89%
17
North Dakota
1,650,000
1,750,000
-5.71%
1.84%
18
Arkansas
1,640,000
1,650,000
-0.61%
1.83%
19
Pennsylvania
1,530,000
1,610,000
-4.97%
1.70%
20
Virginia
1,470,000
1,510,000
-2.65%
1.64%
21
New York
1,450,000
1,450,000
0.00%
1.61%
22
New Mexico
1,340,000
1,310,000
2.29%
1.49%
23
Oregon
1,300,000
1,280,000
1.56%
1.45%
24
Wyoming
1,300,000
1,270,000
2.36%
1.45%
25
Ohio
 1,250,000
1,250,000
0.00%
 1.39%
26
Alabama
1,220,000
1,270,000
-3.94%
1.36%
27
Washington
1,150,000
1,110,000
3.60%
1.28%
28/29
Illinois
1,140,000
1,130,000
0.88%
1.27%
28/29
Michigan
1,140,000
1,130,000
0.88%
1.27%
30
Georgia
1,040,000
1,040,000
0.00%
1.16%
31
Mississippi
910,000
930,000
-2.15%
1.01%
32
Arizona
880,000
920,000
-4.35%
0.98%
33
Indiana
870,000
860,000
1.16%
0.97%
34
North Carolina
800,000
810,000
-1.23%
0.89%
35
Louisiana
790,000
790,000
0.00%
0.88%
36
Utah
780,000
810,000
-3.70%
0.87%
37
Nevada
435,000
460,000
-5.43%
0.48%
38
West Virginia
370,000
385,000
-3.90%
0.41%
39
South Carolina
335,000
335,000
0.00%
0.37%
40
Vermont
260,000
260,000
0.00%
0.29%
41
Maryland
185,000
182,000
1.65%
0.21%
42
Hawaii
135,000
133,000
1.50%
0.15%
43
Maine
85,000
85,000
0.00%
0.095%
44
Connecticut
47,000
47,000
0.00%
0.052%
45
Massachusetts
38,000
39,000
-2.56%
0.042%
46
New Hampshire
30,000
32,000
-6.25%
0.033%
47
New Jersey
28,000
27,000
3.70%
0.031%
48
Delaware
17,000
16,000
6.25%
0.019%
49
Alaska
10,000
10,000
0.00%
0.011%
50
Rhode Island
5,000
5,000
0.00%
0.006%






-
Total
89,800,000
88,526,000
+1.44%
 100.00%
.

January 19th - Mixed Cattle Outlook for 2015

Tight margins and lower grain prices are encouraging cattle feeders to feed to heavier weights, helping offset lower numbers of cattle available for feeding and slaughter, according to the latest Livestock, Dairy and Poultry Outlook report from the USDA. At the same time, improved forage conditions appear to be encouraging ranchers to retain more heifers for breeding, which could further reduce supplies of feeder cattle in the near term.

Milk prices, meanwhile, are dropping, which could result in a pickup in culling of dairy cows. The average all-milk price for 2014 was a record high of $23.97 per hundredweight, up 19.6 percent from the 2013 price of $20.05 per hundredweight. But for 2015, USDA now projects an average all-milk price of  $17.75 to $18.55 per hundredweight, down from last month's forecast of $18.45 to $19.25.

Pork will become more competitively priced as the U.S. industry rebounds from the effects of Porcine Epidemic Diarrhea. USDA reports producers have increased breeding inventory increases express strong farrowing intentions, suggesting higher pork production and lower hog prices in 2015. Hog prices are expected to average $60 to $65 per hundredweight this year, almost 18 percent below prices in 2014.

Other key points in the report include:

  • Drought continues in the Southern Plains and Southwestern United States, although its intensity has abated somewhat. The U.S. Drought Monitor, released December 30, 2014, showed an improved situation for cattle country compared with last month.
  • Despite continuing drought, the limited precipitation has allowed wheat pasture to remain in relatively good condition, providing some opportunity for weight gains in feeder cattle being pastured on Southern Plains wheat.
  • Placements in 1,000-plus-head feedlots during November dropped 4 percent below 2013. November placements were the lowest and marketings were the second lowest for the month since the series began in 1996.
  • Any significant retention of heifers for rebuilding the cow herd would offset increases in beef production due to heavier slaughter weights. However, cow-calf operators face significant incentives to sell heifers as feeder cattle sooner rather than waiting for income from their calves at least two years later.
  • Commercial red meat production for the United States in November 2014 was down 9 percent compared with November 2013. Further, Livestock Slaughter showed a 10-percent drop in commercial beef production through the month of November 2014 compared with this time last year.
  • Average live weights of commercial cattle continue higher than last November, up by 24 pounds. Since September 2014, 5-Area Fed Steer live weights have consistently exceeded 1,420 pounds.
  • November 2014’s All-fresh beef retail value was $5.98 per pound, up nearly a dollar from a year earlier. Estimated average monthly Choice retail beef prices for January 2014 through November 2014 were $5.97 per pound, 13 percent above the same-period average of $5.28 for 2013.
  • For 2015, average annual retail beef prices are expected to be slightly higher than they were in 2014. Recent drops in gas prices have given some indication of additional spending power at the grocery store. Larger supplies of pork and poultry may limit beef price increases this year.
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May 21st - As Fundamental Change Moves an Industry

It doesn't feel any different as you walk around but beneath the surface some large and monumental plates are shifting and the foundations of an industry are undergoing change. The day to day business continues and we wake every morning to new bids and offers, new grain prices, the drought, and other continuing influences but there are some big picture developments that are occurring while we move day to day.

  • Climate: There are major changes occurring in the climate. Extreme weather patterns are more severe and long lasting. Drought in some areas continues. Flooding in other regions is causing its own problems. We can debate whether it is man made or not, but large and serious weather patterns are at work and no one impacted more than agriculture.
  • Geography: Nebraska took over Texas's spot as top feeding state. The image below clearly demonstrates the loss of feeding capacities in Texas and increases else where. Processing plants follow the feeding locations for cattle and the southern plains has lost processing capacity to the northern plains -- but both have suffered plant closings and slow downs as the herd grows smaller.
  • Basis: Cattle and grain are moving towards cash markets trading basis the futures. Cattle cash trading has ceased to be reported in Texas and lightly reported elsewhere. Poor grain basis pricing, south of Amarillo, is pressuring south plains feedyards in competitiveness.
  • Sustainability: This is a term used by everyone and understood by no one. Beef retailers are being pressured to act on assuring the industry is observing best management practices to deliver a sustainable agriculture.
  • Mandatory ID: Whether it is a trading scandal involving phantom cattle or a disease threat that can't be traced, animal ID won't go away. International trade and exports will demand it or penalize our products without it.
Downsizing is no fun and lots of money has been lost in processing and feedings. Downsizing is always painful but it also can build a better and stronger industry through change.


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