The Cattle Range Home Page
Cattle Industry News...
The Cattle Range Mercantile


.

.

.
.

January 23rd - National Feeder & Stocker Cattle Summary
USDA-MO Dept of Ag Market News

RECEIPTS:   Auctions   Direct   Video/Internet  Total
This Week     302,500     29,700        75,100        407,300 
Last Week     302,000     30,100        47,900        380,000 
Last Year       328,100     57,300          7,600        393,000

Compared to last week, the downtrend continues in the feeder cattle markets as feeder cattle and calves traded 5.00-15.00 lower this week.   CME cattle futures over the last couple of weeks have latched onto a lead balloon and have weighed heavily on the feeder cattle markets.  The wide spread massive long liquidation selling has just swamped cattle futures.  Overall demand remains good for lightweight stockers under 550 lbs to make yearlings of, but the overall availability of these lightweight feeders normally gets tighter as we roll into spring; with thoughts that these lightweight calves can achieve cheap gains when pasture develops.  Heavier weight feeders, of which the supply is more readily available, felt the full pressure of price declines this week. 

Many major salebarns in the Northern and Southern Plains are seeing some of their heaviest receipts of the year with the unfortunate timing of the volatile feeder cattle and futures market.  Cattle buyers have paid high premiums for feeder cattle and now break evens are much higher than the futures with the June Live Cattle board closing near 143.00 as contacts continued their free-fall on Friday.  Cattle contracts closed limit down on Friday finding only bearish friends.  Keep in mind that the record highs in the cattle future prices last year were supported from fund buying and now the funds are pulling back looking like they have had their belly full of the cattle markets.  At some point this break will be deemed overdone, but when is the question.  However, there were some impressive sales of hardened winter proof feeders around the auction circuit, in Bassett, NE on Wednesday feeder steers under 650 lbs sold with very good demand for summer grazing.  Near 550 head of steers averaging 577 lbs sold with an weighted average prices of 299.22 and over 200 head of thin steers averaging 624 lbs sold with a weighted average prices of 291.35.  Summer grazing will likely take these kinds of cattle to unprecedentedly large weights on pasture to avoid any kind high feed costs. 

Beef demand has worries over rising meat supplies of pork and chicken and at this time is taking presence over tight cattle supplies.  The feeder and fed cattle markets along with the futures seem to be tiring of news about tight supplies.  Friday’s afternoon Cattle on Feed Report had January 1 inventory at 101 percent; placements at 92 percent; marketing’s came in at 95 percent.  Inventory was slightly lighter than expected, with marketing’s slightly smaller than expected.  This week’s auction volume consisted of 58 percent over 600 lbs and 38 percent heifers.

.

January 23rd - Closing Futures Summary 

Fund liquidation seemed to scuttle the livestock markets. Concerns about commodity deflation and sinking export prospects seemed to spur fresh commodity fund liquidation Friday. The relatively elevated levels recently reached by the livestock markets, particularly those in the cattle sector, seemingly exaggerated the reaction. Thursday’s spot market losses probably encouraged bears as well. February and April live cattle futures plunged the 3.00-cent daily limit to 150.50 and 148.80 cents/pound, respectively, at Friday’s CME settlement. January feeder cattle futures fell 2.27 cents to 213.70, and March feeders plummeted 4.50 to 201.82. 

Big export sales boosted the corn market Friday. Despite the negative export implications of the ongoing U.S. dollar surge, corn futures rallied in response to today’s weekly USDA Export Sales report. The 2.185 million-tonne total was the largest result since early January 2008, which highlights its sheer size and says good things about export demand. March corn bounced 3.0 cents to $3.8675/bushel late Friday afternoon, while July rose 3.5 to $4.0275. 

Soymeal diverged from general ag market weakness. As one might have expected, recent news of canceled bean sales to China crunched the weekly export sales total. Meal sales were good, while oil movement was moderate. Meanwhile, financial and energy market shifts, along with fund activity seemed to sink the soyoil market. One has to suspect talk of vigorous demand is supporting meal prices. March soybean futures slid 4.0 cents to $9.7275/bushel in late Friday trading, while March soyoil fell 0.37 to 31.60 cents/pound, and March meal climbed $1.4 to $331.5/ton. 

Wheat futures ended Friday on a mixed note. With the wheat markets seemingly balanced between dollar-driven selling and buying on concerns about the Black Sea situation, the Export Sales figure favored the bulls. The 458,400-tonne result topped the forecast range and apparently limited losses in the winter wheat markets. Those losses may have reflected improved moisture in the southern Plains. March CBOT wheat sank 3.75 cents to $5.30/bushel at their Friday close, while March KC wheat slipped 0.75 cent to $5.64/bushel, but March MWE wheat gained 0.5 to $5.76. 

CME hogs extended Thursday’s big bearish move. Persistent early-January losses in the cash hog and pork markets were not particularly severe. However, the downtrend seemed to accelerate Thursday, thereby sparking a big CME breakdown. Moreover, the drop rendered the swine market vulnerable to selling related to deflation concerns. February hog futures closed 2.30 cents lower at 69.30 cents/pound Friday, while June hogs dove 2.95 cents to 80.20. 

.

January 23rd - January Cattle on Feed Report

United States Cattle on Feed Up 1 Percent

  • Cattle and calves on feed for slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.7 million head on January 1, 2015. The inventory was 1 percent above January 1, 2014. The inventory included6.94 million steers and steer calves, up 2 percent from the previous year. This group accounted for 65 percent of the totalinventory. Heifers and heifer calves accounted for 3.67 million head, down 2 percent from 2014.
  • Placements in feedlots during December totaled 1.54 million, 8 percent below 2013. Net placements were 1.47 million head. During December, placements of cattle and calves weighing less than 600 pounds were 435,000, 600-699 pounds were 375,000, 700-799 pounds were 339,000, and 800 pounds and greater were 395,000.
  • Marketings of fed cattle during December totaled 1.66 million, 5 percent below 2013.
  • Other disappearance totaled 72,000 during December, 6 percent below 2013.

Cattle on Feed Inventory in 1,000+ Capacity Feedlots as of January 1st
Millions of Head
.

.
Number of Cattle Placed on Feed in 1,000+ Capacity Feedlots in December
Millions of Head
.

.
Number of Cattle Marketed from 1,000+ Capacity Feedlots in December
Millions of Head
.

.
Cattle on Feed by State as of January 1st
.
.
.

January 23rd - Canadian Weekly Cattle Report

U.S. market falls

  • Chicago cattle futures fell sharply last week as investment funds, which still had substantial long positions in cattle at the start of the year, sold heavily.
  • Funds rebalance their portfolios at the start of the year and having made good profits on the year-long rally in cattle futures, believed the rally has mostly run it course and it was time to scale back their positions.
  • Nearby live cattle futures fell 3.8 percent over the week and feeders fell 3.6 percent.
  • Cash cattle also fell. In the southern U.S. Plains, cash trade developed at US$164-$164.50 per hundredweight, up to $6 lower than the previous week.
  • Packers are running their kill lines fairly slow.
  • U.S. steers in the week ending Jan. 3 averaged 897 pounds, 21 lb. heavier than a year ago.
Canadian market strong
  • The Canfax weighted average for steers was a record C$191.05 per cwt.
  • Fed cattle were trading at $130-$133 last year at this time.
  • The Canadian market ignored the futures market selloff, and packers bid aggressively to acquire cattle.
  • It was the first time in 10 years that cash trade was at a premium over the futures market during January.
  • Volume of market-ready cattle was tight because feedlots had sold heavily the previous week. Dressed sales developed at the top end of the previous week’s trade.
  • Some producers have started to pull February cattle forward.
  • It is unclear whether the futures will rise to the cash market level or the cash will fall to the futures.
  • In Canada, cattle bought over the past couple of weeks were scheduled for slaughter within seven to 10 days, indicating that packer-owned supply is tight. However, market-ready supplies usually increase going into February. The fed market may be near its top.
Cows rally
  • D1, D2 cows ranged $125-$143 to average $134.90, up $3.75 and a new record, while D3s ranged $110-$128 to average $118.88, up almost $2.75.
  • Butcher bulls rose to average $144.15.
  • Federally inspected western Canadian non-fed slaughter for 2014 was 334,032 head, down 10 percent from 2013.
  • Total Canadian non-fed slaughter was down 8.5 percent for a 2014 total of 422,096. Non-fed exports to the United States for 2014 were down eight percent at 351,718 head.
  • Prices were expected to be steady this week.
Feeders jump higher
  • Volatile cattle futures had little impact on the western Canadian feeder market.
  • Average feeder steer prices were almost $10.75 per cwt. higher. Heifers rallied almost $14.50.
  • Stockers 300-400 pounds rose more than $17.50 on an increased offering and improved quality, but prices were still well below the 2014 fall highs. However, feeders 500-800 lb. set new records.
  • The steer-heifer spread narrowed.
  • There was a broad base of buyers, including those from Eastern Canada and Americans.
  • Auction volumes have been brisk this year. The unsettled futures market has some producers marketing feeders earlier than planned.
  • Feeder exports to the U.S. were up 40 percent in 2014 at 441,942 head.
  • Producers who fatten cattle on grass are worried about the availability of supply and may try to buy earlier than normal, which will add to market competition. However, if the weakness in the cattle futures markets continues, it could weigh on the Canadian cash market.


This cattle market information is selected from the weekly report from CanFax, a division of the Canadian Cattlemen’s Association.

.

January 23rd - Shootin' the Bull Weely Analysis
.
In my opinion, there is anticipated to be an increase of inventory of both fats and feeders, at heavier weights, this spring.  The futures markets have already taken this into consideration as we can see by the wide basis and already $27.00 decline in price from contract high basis March, with further downside pressure to $195.67 March anticipated. This is one of the reasons I anticipate the creation of a sideways trading range to develop to allow for the marking of time until the physical sales are complete this spring.  I perceive that packers have a firm grip on the kill and are manipulating it in a manner to keep boxes higher and fats backing up.  Back grounding operations are anticipated to have more inventory on hand and as choices this spring come to either buying more commodity feed or letting them go, I anticipate producers to let them go. 

Now we have both the price flush and the physical flush.  After that, I would anticipate normalcy coming back into the market, if there is such a thing anymore.  This would lead me to anticipate prices to firm again going into the late spring and early summer.  The extent of the decline, and pattern formed, lead me to anticipate the bottom of this decline to be near.  Near, in this environment, could be $5.00 to $10.00 lower.  With a $4.50 limit range, that could be accomplished in just two days.  So, while the futures markets are moving fast, the physical markets are not.  Therefore, some time to get them back in line is perceived needed. Hence the anticipation of a sideways trading range developing from some where around this price area. 

Corn has been able to hold its own incredibly well considering the sharp rally in the US dollar and weakness in the bean market.  This leads me to anticipate corn moving higher. I would like December closer to the $4.00 level to be a buyer, but know that I am on the hunt to be long December corn. 

In my opinion, the European Central Bank announced this week another stimulus program to the tune of 50 billion Euro's a month until the end of 2016.  After all of the worlds central banks, including our Federal Reserve, have stimulated their economies a multitude of times, to the tune of trillions of dollars, over a 6 year time frame, how much more stimulation can world economies take before moving on their own or we find out they have been dead for a couple of years and the stimulations masked the death?  Something to think about. 

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.

.

January 23rd - New Lows as Cattle Futures Rout Continues

CME cattle futures have only bearish friends. Those that played for a corrective rally yesterday saw it fade well before the close. Setting aside the steep discounts to cash held by futures and the thought process of how much bearish news is being priced into this market, the bearish rhetoric is as follows.

The Bearish Run-Down

First up is yesterday’s USDA Cold Storage report was deemed bearish, showing an increase in December frozen boneless beef stocks ballooning 41% from November, although up only 0.7% from a year ago. This is certainly an indication that the grinding community didn’t want to begin January 2015 with less beef in the freezers than they did a year ago, though they weren’t able to start the year with substantially more either. Chicken stocks were up 2% from a year ago and though frozen pork was down 10.3%, the overall spin from the report is negative.

Next is today’s USDA Cattle-on-Feed report, which analysts estimate will show 1.4% more cattle on feed than a year ago, even with placements below December 2013 by 4%, leading to the conclusion that front-end fed cattle supplies have become uncurrent over the last several weeks.

USDA released its most recent actual weight data yesterday too and though fed cattle weights are declining seasonally at a good clip (down 8 pounds in a week) weights are still 13 pounds above a year ago adding an extra 2% to beef production, which as of last Friday, was still down 14% YTD.

Another bearish factor mentioned frequently this week is the increase in dairy cow slaughter relative to a year ago, though beef cow slaughter continues sharply below a year ago. Economic pressures in the dairy sector are expected to stimulate herd reduction for months to come and dairy slaughter is expected to exceed last year as a trend.

Relying on USDA data, *MP Agrilytics reported yesterday that the dairy cow kill is down only 1.9% YTD while the total non-fed slaughter is down 9.4% YTD. While on the subject, fed steer and heifer slaughter is down 9.1% YTD since until this week, packers have been red. This week’s kill, by the way, is still expected to come in possibly as high as 563k, buoyed by improved boxed beef sales and profitable packers. Though there have been plenty of bearish antidotes about backlogged boxed beef floating around this week but in reality, it is not widespread other than beef bound out of west coast ports for export. Issues related to work slowdowns in the U.S. and crackdowns in Asia are impacting the flow of product.

To round out this bearish round up: chart formations, open interest continues to decline to another new low, the U.S. dollar is the highest level since 2003 and global commodity deflation is a net that cattle especially seem to be caught under.

Until the Selling Exhausts Itself

There’s an old saying, the news follows the market, which couldn’t be truer today. There’s another old saying that at some point the selling will exhaust itself. Astute bottom pickers will keep their hands in their pockets while aggressive “take no prisoners” bears push this market as far as possible.

The Beef

.

January 23rd - Beef Production Lower for December

Commercial red meat production for the United States totaled 4.14 billion pounds in December, up slightly from the 4.14 billion pounds produced in December 2013.

  • Beef production, at 2.00 billion pounds, was 2 percent below the previous year. Cattle slaughter totaled 2.44 million head, down 5 percent from December 2013. The average live weight was up 29 pounds from the previous year, at1,363 pounds.
  • Veal production totaled 7.6 million pounds, 22 percent below December a year ago. Calf slaughter totaled 43,000 head,down 35 percent from December 2013. The average live weight was up 51 pounds from last year, at 302 pounds.
  • Pork production totaled 2.11 billion pounds, up 2 percent from the previous year. Hog slaughter totaled 9.85 million head, up 1 percent from December 2013. The average live weight was up 3 pounds from the previous year, at 286 pounds.
  • Lamb and mutton production, at 13.4 million pounds, was up 3 percent from December 2013. Sheep slaughter totaled200,000 head, slightly above last year. The average live weight was 134 pounds, up 3 pounds from December a year ago.
January to December 2014 commercial red meat production was 47.3 billion pounds, down 4 percent from 2013. Accumulated beef production was down 6 percent from last year, veal was down 16 percent, pork was down 1 percent from last year, and lamb and mutton production was down slightly.
.

January 23rd - Cold Storage Report
  • Total red meat supplies in freezers were up 6 percent from the previous month but down 4 percent from last year. 
    • Total pounds of beef in freezers were up 11 percent from the previous month and up slightly from last year. 
    • Frozen porksupplies were up 2 percent from the previous month but down 10 percent from last year. 
    • Stocks of pork bellies were up 37 percent from last month but down 42 percent from last year.
  • Total frozen poultry supplies on December 31, 2014 were up 2 percent from the previous month but down 3 percent from a year ago. 
    • Total stocks of chicken were up 2 percent from the previous month and up 2 percent from last year. 
    • Total pounds of turkey in freezers were up 3 percent from last month but down 19 percent from December 31, 2013.
.

"Click Here" to view a Slide Show of Drought Monitor maps for the last 12 weeks
.

January 20th -  Now Comes Deflation

Ignoring broader economic forces and big picture issues is always a mistake. Whether the forces originate in our own domestic economy or on the global stage, the direct impact on ag commodities is beyond question. Few people are alive today for comparisons with the depression of the 1930s but all of us were around for 2008-2009 and few will forget it. The crisis was monumental and the impacts are still felt today.

Some of the forces affecting beef demand are fairly apparent. Wages have stagnated and the earning picture of most American workers is little changed from 10 years ago. This in turn shorts discretionary spending in many family budgets. High priced beef is frequently foregone and replaced by cheaper meats. While this is a negative for the household budget, it doesn't mean the consumer has forsaken beef. In fact last year, Americans spent more money per capita on beef meaning instead of abandoning beef, they continued to eat beef.

A global slow down has a general debilitating effect on all businesses. They buy less which naturally means less demand for those commodities used when businesses thrive -- oil, and the metals but then demand slows for all commodities including the ag commodities. 

Currency prices, the relative value of each country's monetary unit to the trade partner's currency, can be as important as the absolute value of the commodity. The dollar is at a 14 year high relative to our beef trading partners and that is not good for our domestic beef market. Imports are cheaper and exports for expensive for foreign beef purchasers.

A general deflationary bet by hedge funds can easily be overdone. Hedge funds tend to develop similar theories of investment strategies at the same time. The execution also is frequently similarly timed. Selling has simply overwhelmed the cattle futures market. Selling short contracts involving hundreds of millions of dollars can move markets and there may not be sufficient balance to restore those markets when they oversell. But in time the industry does react and prices can recover if the price is sustainable.

The markets will always move back to fundamentals.

Ag Center Cattle Report

.

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.
.

January 16th - US Beef Packers Back to Profitability

US beef packer margins have turned positive for "the first time in months", helped by a downturn in cattle prices – which has pushed margin pressure further up the production chain to feedlots.

US beef packers on Friday earned $3.50 per head for processing cattle, as a trend of reducing losses finally smashed through the breakeven mark.

Even on Thursday, packers were losing $18.30 per head, and a week ago the loss was $71.75 per head, according to HedgersEdge, which estimates the loss a month ago at $102.40 per head.

"Packer margins are in the black for the first time in months," broker US Commodities said, while adding that processors remain $35 per head in the red for the week.

'Packers sandwiched'

The improved fortunes of packers, a sector which includes the likes of Cargill, JBS and Tyson, reflects a slide in prices of "live", or fattened, cattle which have already tumbled in price by nearly 7% on Chicago's futures market so far in 2015.

The cattle price decline has been attributed largely to technical factors - selling by funds spurred both by the index fund rebalancing process, which sees top commodity performers of 2014 sold to get portfolio weightings back to mandated levels, and by a regular process of investors shifting cash from spot contracts to further-ahead lots.

And it has eased pressure on packers which have proven unable to pass on all their extra costs in terms of higher beef prices.

Indeed, the US Department of Agriculture on Friday said that "for the near-term, packers remain sandwiched between relatively high fed cattle price and near-record retail beef prices – but beef prices not quite high enough for positive gross margins".

'Imports have been especially high'

Although beef prices have hit record levels - and at the retail level broke the 600.0-cents-a-pound mark last month, USDA data on Friday showed, up 19.1% year on year – surging imports to the US have kept a lid on values.

US beef imports in November hit 258m pounds, a 55% jump year on year, and are expected to have risen 30% to 2.928m pounds over the October-to-December period as a whole, the USDA said.

"Imports have been especially high due to rising shipments from Australia," whose exports last year rose 17% to a record 1.29m tonnes, boosted by high slaughter rates, as dryness in eastern parts of the country for much of the year encouraged ranchers to downsize herds.

Australian exports to the US soared 87% to 397,890 tonnes, according to Meat and Livestock Australia.

Back into the red

However, the drop in live cattle futures bodes less well for feedlots, who have not seen the same fall in costs of the unfattened cattle they buy in.

While live cattle for January have fallen by 5.6% so far this year, feed cattle for January have dropped by just 2.2%, although the trend is diminished in further-ahead contracts.

"Cattle feeders could again experience negative returns, beginning in December 2014," the USDA said.

The breakeven price of $165 per hundredweight for finished cattle is "likely to move higher over the next several months, due primarily to higher feeder cattle prices".

A return to the red would follow a period of positive margins which reached $20.16 per hundredweight for a typical high Plains feedlots on live cattle sold in March, before declining to $5.10 per head by November, according to USDA estimates.

.

January 16th - New Antibiotic Discovered

A new antibiotic has been discovered that has been found to treat many common bacterial infections. Incredibly,no resistance has been detected so far. The research was published this week in the journal Nature. Antibiotics are discovered in a variety of places. Penicillin came from moldy bread. But this is something derived from soil that has hit “paydirt.” A novel new antibiotic called Teixobactin, was isolated from soil. Dr. Josh Bloom, a former researcher in the antibiotic area says, “Wow. This looks almost too good to be true. The potency of Teixobactin against a panel of different bacteria is amazing.”

.

January 15th - Mandatory Price Reporting

USDA released a summary of a 10 year history of changes in types and methods of marketing of cattle by producers. The report reflects what most people operating in this arena already know. Price reporting, or at least in a recognizable form, is narrowly limited to the cash markets and the cash markets are in decline as a percentage of total markets. Cash markets in three of the five areas reported are less than 15% of the cattle traded and, in Texas, the cash markets have all but disappeared.

Price discovery is alive and well. In an effort to circumvent reporting practices under the current mandatory price reporting law, many and various methods of trading have developed from basis trades off futures to $ over tops. The evolution of price discovery tools will likely continue to change in the future.

The most likely change to future practices will be realigning the base price for formula sellers with cattle committed to a particular plant. Formula cattle currently are in two groups, sellers offering cattle to all plants and selling to the best offer and yards already committed to one plant but unpriced. More of the plant committed formula sellers will set base prices off the futures.

Mandatory price reporting is up for renewal this year and if it is reauthorized, major changes can be expected in the rules. Short of a law, there is no right of the public to know of private treaty transactions between willing sellers and willing buyers. If the intent of the law is transparency of the markets, then major revisions in the rules will be necessary. 

Ag Center Cattle Report

.

 January 15th Seasonal Drought Outlook

.

January 12th - Beef Imports Up & Exports Down in November

Year-over-year beef imports were up 55% in November with nearly all major suppliers shipping more beef to the U.S. During the first 11 months of 2014, U.S. beef imports are up 27.7%. 

U.S. beef exports were down 5.6% in November compared to 12 months earlier with a decline in shipments to Mexico, Hong Kong and Canada, but increases in exports to Japan and South Korea. January-November beef exports were down a slight 0.05%.

Cattle imports from Canada were up 42% in November. Cattle imports from Mexico were up 5.8% compared to November 2013.

.

January 12th - WASDE: Meat Production Forecast Raised

The forecast for total meat production for 2015 is raised from last month on increased beef and pork production. 

Poultry production forecasts are unchanged. Beef production is raised on higher carcass weights.

USDA’s Quarterly Hogs and Pigs report indicated farrowings increased 3 per cent in September-November 2014 and that producers intend to expand farrowings by 4 percent during December-May 2015.  The report also showed that pigs per litter was record high for the September-November period; continued growth in pigs per litter is expected during 2015, resulting in greater availability of hogs for slaughter. However, the increase in the number of slaughter hogs may be partly offset by lower weights as hogs are marketed more rapidly. For 2014, the total meat production estimate is raised on higher pork and broiler production.

Beef production is reduced on a slightly slower pace of slaughter. The forecasts for 2014 and 2015 beef imports are raised, but the export forecast is reduced for 2014. Pork exports for 2014 are reduced on the pace of shipments, but the forecast is unchanged for 2015. No change is made to imports.

Broiler exports are reduced slightly for 2015. No change is made to the turkey export forecasts. The cattle price forecasts for 2015 are reduced from last month. The hog price forecast for 2015 is lowered on larger supplies. Broiler prices are lowered for 2015 as supplies of competing meats pressure prices. No change is made to turkey or egg prices. Prices for 2014 are adjusted to incorporate December data.

.

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.


The Cattle Report

.

May 5th - 2012 Census of Agriculture Reveals Trends

There are now 3.2 million farmers operating 2.1 million farms on 914.5 million acres of farmland across the United States, according to the 2012 Census of Agriculture, released today by the U.S. Department of Agriculture. The agriculture census presents more than 6 million pieces of information, which provide a detailed look at the U.S. farm sector at the national, state and county levels.

"Once every five years, farmers, ranchers and growers have the unique opportunity to let the world know how U.S. agriculture is changing, what is staying the same, what's working and what we can do differently," said Dr. Cynthia Clark, the retiring head of USDA's National Agricultural Statistics Service, which administered the survey. "Today, we can start to delve into the details." 

Census data provide valuable insight into the U.S. farmer demographics, economics and production practices. Some of the key findings include:
 

  • Both sales and production expenses reached record highs in 2012. U.S. producers sold $394.6 billion worth of agricultural products, but it cost them $328.9 billion to produce these products. 
  • Three quarters of all farms had sales of less than $50,000, producing only 3 percent of the total value of farm products sold while those with sales of more than $1 million - 4 percent of all farms - produced 66 percent. 
  • Much of the increased farm income was concentrated geographically or by farm categories. 
  • California led the nation with 9 of the 10 top counties for value of sales. Fresno County was number one in the United States with nearly $5 billion in sales in 2012, which is greater than that of 23 states. Weld County, Colorado ranked 9th in the top 10 U.S. counties. 
    • The top 5 states for agricultural sales were California ($42.6 billion); Iowa ($30.8 billion); Texas ($25.4 billion); Nebraska ($23.1 billion); and Minnesota ($21.3 billion). 
  • Eighty-seven percent of all U.S. farms are operated by families or individuals. 
  • Principal operators were on average 58.3 years old and were predominantly male; second operators were slightly younger and most likely to be female; and third operators were younger still. 
  • Young, beginning principal operators who reported their primary occupation as farming increased 11.3 percent from 36,396 to 40,499 between 2007 and 2012. 
  • All categories of minority-operated farms increased between 2007 and 2012; the Hispanic-operated farms had a significant 21 percent increase. 
  • 144,530 farm operators reported selling products directly to consumers. In 2012, these sales totaled more than $1.3 billion (up 8.1 percent from 2007). 
  • Organic sales were growing, but accounted for just 0.8 percent of the total value of U.S. agricultural production. Organic farmers reported $3.12 billion in sales in 2012, up from $1.7 billion in 2007. 
  • Farms with Internet access rose from 56.5 percent in 2007 to 69.6 percent in 2012. 
  • 57,299 farms produced on-farm renewable energy, more than double the 23,451 in 2007. 
  • 474,028 farms covering 173.1 million acres were farmed with conservation tillage or no-till practices. 
  • Corn and soybean acres topped 50 percent of all harvested acres for the first time. 
  • The largest category of operations was beef cattle with 619,172 or 29 percent of all farms and ranches in 2012 specializing in cattle. 
Conducted since 1840, the Census of Agriculture accounts for all U.S. farms and ranches and the people who operate them. The Census tells a story of how American agriculture is changing and lays the groundwork for new programs and policies that will invest in rural America; promote innovation and productivity; build the rural economy; and support our next generation of farmers and ranchers.
.

February 14th - USDA Long-Term Projections

Despite lower prices for many agricultural products in the near future, USDA is projecting U.S. farm income to remain historically high through 2023. Analysis for the report was conducted prior to completion of the Agricultural Act of 2014, and was based on the assumption of continuation of policies in the 2008 Farm Bill. Projections range from long-term economic growth, global production and consumption trends, global trade trends, commodity prices, farm income and more.

USDA projects global economic growth to average 3.2 percent annually over the next decade, with stronger growth projected in developing countries, including China, India, and countries in Africa and Latin America. The U.S. economic growth is projected to average 2.6 percent over the next decade. “Steady global economic growth supports longer term gains in world food demand, global agricultural trade, and U.S. agricultural exports,” according to the report.

While prices for many of the major crops are projected to decline in the next few years, long-term growth in global demand, a low-valued U.S. dollar, and demand for biofuel, will hold prices for corn, oilseeds and other major crops above pre-2007 levels, according to the report.

As a result of recovering from high feed prices in recent years and drought, USDA is projecting livestock production and per capital red meat consumption to increase through 2023.
While beef production is projected to decline through 2016 as producers retain heifers to grow the overall herd, production is expected to begin increasing in 2016. USDA is projecting that beef cow numbers will increase from 29 million today to more than 33 million in 2022-2023. The total cattle inventory is projected to expand to approximately 96 million in 2023, and increasing slaughter weights add to increased beef production projections. USDA is projecting beef cattle prices to increase through 2017, then fall but increase again through 2023.

With regard to global beef trade, USDA is projecting world meat consumption to increase by about 1.9 percent annually from 2014-2023 and world meat trade to increase by 22 percent during that same period. Stagnate beef export projections from Australia resulted in the top four beef exporting nations, according to USDA, to be Brazil, India, the United States and Australia. On the import side, China and Hong Kong are projected to increase beef imports by 55 percent in the next decade as China’s middle class grows from 300 million today to an expected 640 million by 2020.

.

February 13th - USDA Projects Net Farm Income to Fall in 2014

While USDA’s latest farm income projections indicate an overall decline in net farm income of around 26.6 percent in 2014, there are some positive projections in the report, especially for livestock producers.

“Livestock receipts are up marginally,” said USDA Chief Economist Joe Glauber. “They’re up at $183.4 billion. It’s the first time in a long while that we’ve seen livestock and crop receipts at around roughly the same magnitude.”

Crop receipts are projected at $189.4 billion in 2014, down more than 12 percent and back to pre-2011 levels. According to the report, declines in cash receipts are expected for almost all major crop categories, including food grain, feed, oil, fruits/tree nuts, and vegetables/melons. Large anticipated declines in the 2014 price for corn are impacting farmers’ decisions regarding other major crops. According to the report, use of corn for ethanol is expected to rise in 2014. Additionally, USDA is projecting declines in hay, wheat and soybeans receipts as well.

USDA is projecting a 0.7 percent increase in livestock receipts in 2014. For cattle and calves, steady receipts are projected due to lower production levels. Additionally, USDA is forecasting a decline in beef and veal export quantities in 2014.

Overall, net farm income, earnings only from current year production, is forecast to be $95.8 billion in 2014, down 26.6 percent from 2013 and projected to be the lowest since 2010. Net cash income, which includes income from carryover stocks from 2013, is forecast at $101.9 billion, down 22 percent from 2013.

For just the second time in the last 10 years and the first time since 2009, USDA is projecting a decline in production expenses, with an expected $3.9 billion decrease in 2014.

“Expenses are down,” Glauber said. “We’re forecasting them at $310 billion. That’s down almost $5 billion from last year, and that’s largely lower feed costs.”

Feed expenses are expected to decline by $6.6 billion, 11.3 percent, but livestock and poultry purchases are projected to increase, driven by an expected double-digit increase in the price of feeder steers due to tight supplies and strong beef demand. The overall expenses for the two major livestock-related expenses, however, are projected to fall by 6.1 percent, or $5.1 billion.

Other farm expense projections include a 4.7 percent decline for the three major crop-related expenses – seed, fertilizer and pesticides; a 9.6 percent decline in net rent to non-operators; a 4.6 percent increase in total labor; and a 3.2 percent increase for miscellaneous expenses, including things like animal health and breeding expenses, contract production fees, irrigation water, and general production and management decisions.

.

All Cattle & Calves... State Rankings & Change
.
January 1, 2014 Inventory vs. 2013 Inventory... Compiled from USDA National Agricultural Statistical Service Data
Rank
State
2014
2013
% Change
2014 as
% of Total
 
1
Texas
10,900,000
11,300,000
-3.54%
12.42%
2
Nebraska
6,150,000
6,300,000
-2.38%
7.01%
3
Kansas
5,800,000
5,850,000
-0.85%
6.61%
4
California
5,250,000
5,300,000
-0.94%
5.98%
5
Oklahoma
4,300,000
4,200,000
+2.38%
4.90%
6
Missouri
3,800,000
3,650,000
+4.11%
4.33%
7
Iowa
3,700,000
3,850,000
-3.90%
4.22%
8
South Dakota
3,650,000
3,850,000
-5.19%
4.16%
9
Wisconsin
3,350,000
3,450,000
-2.90%
3.82%
10
Montana
2,550,000
2,600,000
-1.92%
2.91%
11
Colorado
2,480,000
2,600,000
-4.62%
2.83%
12
Minnesota
2,280,000
2,390,000
-4.60%
2.60%
13
Idaho
2,190,000
2,370,000
-7.59%
2.50%
14
Kentucky
2,090,000
2,240,000
-6.70%
2.38%
15
North Dakota
1,770,000
1,790,000
-1.12%
2.02%
16
Tennessee
1,760,000
1,830,000
-3.83%
2.01%
17
Arkansas
1,660,000
1,600,000
+3.75%
1.89%
18/19
Florida
1,620,000
1,660,000
-2.41%
1.85%
18/19
Pennsylvania
1,620,000
1,610,000
+0.62%
1.85%
20
Virginia
1,530,000
1,610,000
-4.97%
1.74%
21
New York
1,450,000
1,400,000
+3.57%
1.65%
22
New Mexico
1,290,000
1,340,000
-3.73%
1.47%
23
Oregon
1,280,000
1,280,000
+0.00%
1.46%
24
Wyoming
1,270,000
1,290,000
-1.55%
1.45%
25
Ohio
1,250,000
1,230,000
+1.63%
1.42%
26
Alabama
1,240,000
1,220,000
+1.64%
1.41%
27
Illinois
1,130,000
1,120,000
+0.89%
1.29%
28
Michigan
1,120,000
1,120,000
+0.00%
1.28%
29
Washington
1,100,000
1,150,000
-4.35%
1.25%
30
Georgia
1,000,000
1,020,000
-1.96%
1.14%
31
Mississippi
930,000
910,000
+2.20%
1.06%
32
Arizona
920,000
900,000
+2.22%
1.05%
33
Indiana
870,000
810,000
+7.41%
0.99%
34
North Carolina
810,000
820,000
-1.22%
0.92%
35
Utah
800,000
770,000
+3.90%
0.91%
36
Louisiana
790,000
780,000
+1.28%
0.90%
37
Nevada
455,000
460,000
-1.09%
0.52%
38
West Virginia
380,000
410,000
-7.32%
0.43%
39
South Carolina
360,000
355,000
+1.41%
0.41%
40
Vermont
260,000
270,000
-3.70%
0.30%
41
Maryland
182,000
192,000
-5.21%
0.21%
42
Hawaii
130,000
132,000
-1.52%
0.15%
43
Maine
85,000
85,000
+0.00%
0.097%
44
Connecticut
47,000
48,000
-2.08%
0.054%
45
Massachusetts
39,000
39,000
+0.00%
0.044%
46
New Hampshire
32,000
33,000
-3.03%
0.036%
47
New Jersey
29,000
31,000
-6.45%
0.033%
48
Delaware
16,000
18,000
-11.11%
0.018%
49
Alaska
10,000
12,000
-16.67%
0.011%
50
Rhode Island
5,000
4,600
+8.70%
0.006%






-
Total
87,730,000
89,299,600
-1.76%
 100.00%
.

Beef Cows... State Rankings & Change
.
January 1, 2014 Inventory vs. 2013 Inventory... Compiled from USDA National Agricultural Statistical Service Data
. Rank
. State
2014
2013
. % Change
2014 as
% of Total
 
 
 
 
1
Texas
3,910,000
4,015,000
-2.62%
13.46%
2
Missouri
1,820,000
1,757,000
+3.59%
6.27%
3
Oklahoma
1,805,000
1,754,000
+2.91%
6.22%
4
Nebraska
1,797,000
1,805,000
-0.44%
6.19%
5
South Dakota
1,635,000
1,688,000
-3.14%
5.63%
6
Montana
1,476,000
1,506,000
-1.99%
5.08%
7
Kansas
1,414,000
1,328,000
+6.48%
4.87%
8
Kentucky
1,012,000
1,028,000
-1.56%
3.48%
9
North Dakota
943,000
922,000
+2.28%
3.25%
10
Iowa
885,000
925,000
-4.32%
3.05%
11
Arkansas
882,000
851,000
+3.64%
3.04%
12
Florida
877,000
908,000
-3.41%
3.02%
13
Tennessee
864,000
912,000
-5.26%
2.97%
14
Colorado
700,000
715,000
-2.10%
2.41%
15
Wyoming
694,000
694,000
+0.00%
2.39%
16
Alabama
671,000
651,000
+3.07%
2.31%
17
Virginia
657,000
686,000
-4.23%
2.26%
18
California
600,000
610,000
-1.64%
2.07%
19
Oregon
516,000
527,000
-2.09%
1.78%
20
Georgia
480,000
490,000
-2.04%
1.65%
21
Mississippi
477,000
486,000
-1.85%
1.64%
22
Louisiana
450,000
454,000
-0.88%
1.55%
23
Idaho
445,000
510,000
-12.75%
1.53%
24
New Mexico
387,000
390,000
-0.77%
1.33%
25
North Carolina
360,000
364,000
-1.10%
1.24%
26
Illinois
359,000
360,000
-0.28%
1.24%
27
Minnesota
350,000
375,000
-6.67%
1.21%
28
Utah
325,000
315,000
+3.17%
1.12%
29
Ohio
293,000
290,000
+1.03%
1.01%
30
Wisconsin
240,000
260,000
-7.69%
 0.83%
31
Nevada
226,000
231,000
-2.16%
 0.78%
32
Washington
209,000
221,000
-5.43%
 0.72%
33
Indiana
192,000
191,000
+0.52%
 0.66%
34
West Virginia
191,000
200,000
-4.50%
 0.66%
35
Arizona
178,000
175,000
+1.71%
 0.61%
36
South Carolina
174,000
174,000
+0.00%
 0.60%
37
Pennsylvania
170,000
155,000
+9.68%
 0.59%
38
Michigan
114,000
113,000
+0.88%
0.39%
39
New York
105,000
90,000
+16.67%
 0.36%
40
Hawaii
68,800
69,900
-1.57%
0.24%
41
Maryland
38,000
41,000
-7.32%
 0.13%
42
Vermont
12,000
12,000
+0.00%
 0.041%
43
Maine
11,000
11,000
+0.00%
0.038%
44
New Jersey
8,000
9,000
-11.11%
0.028%
45
Massachusetts
6,000
6,500
-7.69%
0.021%
46
Alaska
4,300
4,900
-12.24%
0.015%
47
Connecticut
4,000
6,000
-33.33%
0.014%
48
New Hampshire
3,000
3,500
-14.29%
 0.010%
49
Delaware
2,800
4,000
-30.00%
 0.010%
50
Rhode Island
1,500
1,500
+0.00%
0.005%






-
Total
29,042,400
29,295,300
-0.86%
100.00%
.

February 4th - Rabobank Report: Structural Changes Needed to Keep U.S. Beef Industry Competitive

Consumption shift requires better cost control as U.S. becomes a “Ground Beef Nation”

Rabobank has published a new report on the U.S. cattle industry, calling for changes in the way beef is produced in order for the industry to remain competitive. In the new report, “Ground Beef Nation,”, Rabobank says that changing consumer preferences and a production model tailored to production of top-shelf steaks has put the U.S. cattle industry in a position of losing market share to competitive proteins.

“Under the existing business model, the U.S. cattle industry manages all fed beef as if it were destined for the center of the plate at a white table cloth restaurant,” notes Rabobank cattle economist Don Close. “The industry is, essentially, producing an extraordinarily high-grade product for consumers who desire to purchase a commodity. More than 60% of U.S. beef consumption is ground product. If the U.S. cattle industry continues to produce ground beef in a structure better suited to high-end cuts, the result will be continued erosion of market share.”

The report goes on to explore the trend of changing consumer preferences and the role pricing plays in the notable decline in beef consumption. The industries that produce competitive proteins such as pork and chicken have grown and become more efficient, making the products more readily available at competitive prices.

“The industry must change to a production model that determines the best end use of an animal as early as possible, in order to compete in a ‘ground beef nation’,” notes Close. “A new system for end-use categorization that influences calf selection, cattle management, production costs, and feeding regimen throughout the life of the animal is vital to keeping beef competitive with other choices at the meat counter.”

.

USDA Cattle Inventory Report... January 1 Cattle Inventory Down 2 Percent

All cattle and calves in the United States as of January 1, 2014 totaled 87.7 million head, 2 percent below the 89.3 million on January 1, 2013. This is the lowest January 1 inventory of all cattle and calves since the 82.1 million on hand in 1951.

All cows and heifers that have calved, at 38.3 million, were down 1 percent from the 38.5 million on January 1, 2013. This is the lowest January 1 inventory of all cows and heifers that have calved since the 36.8 million head in 1941.

  • Beef cows, at 29.0 million, were down 1 percent from January 1, 2013. 
  • Milk cows, at 9.2 million, unchanged from January 1, 2013. 
Other class estimates on January 1, 2014 and the change from January 1, 2013, are as follows:
  • All heifers 500 pounds and over, 18.8 million, down 2 percent. 
  • Beef replacement heifers, 5.5 million, up 2 percent. 
  • Milk replacement heifers, 4.5 million, unchanged. 
  • Other heifers, 8.7 million, down 5 percent. 
  • Steers weighing 500 pounds and over, 15.4 million, down 3 percent.
  • Bulls weighing 500 pounds and over, 2.0 million, down 1 percent. 
  • Calves under 500 pounds, 13.3 million, down 4 percent. 
  • Cattle and calves on feed for slaughter in all feedlots, 12.7 million, down 5 percent. 
  • The combined total of calves under 500 pounds, and other heifers and steers over 500 pounds outside of feedlots was 24.7 million, down 3 percent. 
 Calf Crop Down 1 Percent

The 2013 calf crop was estimated at 33.9 million head, down 1 percent from 2012. This is the smallest calf crop since the 33.7 million born during 1949. Calves born during the first half of 2013 are estimated at 24.7 million, down 1 percent from 2012.


.
Home| Recent Listings | Cattle | Real Estate |.TCR Mercantile.|Classified Ads | Markets | Auctions| Weather.| Field Reps.| List On-Line | FAQ's |Terms & Conditions | Contact TCR
.
.
Copyright © TM - The Cattle Range - All Rights Reserved


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

January 2

C

.