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Agricultural Economics

10-2010

Beef, Dairy, Equine, Poultry, Hogs, Sheep, and Goats Kenneth H. Burdine University of Kentucky, [email protected]

A. Lee Meyer University of Kentucky, [email protected]

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Follow this and additional works at: https://uknowledge.uky.edu/agecon_present Part of the Agricultural Economics Commons, and the Animal Sciences Commons Repository Citation Burdine, Kenneth H. and Meyer, A. Lee, "Beef, Dairy, Equine, Poultry, Hogs, Sheep, and Goats" (2010). Agricultural Economics Presentations. 5. https://uknowledge.uky.edu/agecon_present/5

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Beef, Dairy, Equine, Poultry, Hogs, Sheep, and Goats Kenny Burdine and Lee Meyer UK Ag Economics

Agricultural Economics

Overview of Equine Industry  Fell 

behind poultry in 2009 cash receipts

Will stay there in 2010

 T-bred

sales make up nearly ¾ of equine receipts, balance is stud fees  Majority of horses used recreationally, fewer dollars, more producers 

Still challenges with recreation demand and lack of slaughter market

Agricultural Economics

Racing: Receipts and Sales $6,000,000 $5,000,000

($1,000)

$4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 KY Cash Receipts

Agricultural Economics

Equine Receipts

Poultry

Agricultural Economics

BROILER PRODUCTION Federally Inspected, Ready-to-Cook Weight, Monthly Bil. Pounds 3.3 Avg. 2004-08

3.2 3.1 3.0

2009

2.9 2.8 2010

2.7 2.6 JAN

MAR

MAY

Livestock Marketing Information Center Data Source: USDA/NASS

Agricultural Economics

JUL

SEP

NOV P-S-12 09/27/10

BROILER PRICES 12-City Composite, Weekly Cents Per Pound 93 Avg. 2004-08

88 83

2009 78 73 2010

Data Source: USDA-AMS, Compiled by LMIC

Agricultural Economics

T O C

L JU

AP R

JA N

68 P-P-01 09/20/10

Broiler Market Summary     

Largest gross farm income source in Ky. Ag. Production up 3%, per person consumption continues to increase Exports are very important (about 20% of production) Prices are up, and are expected to be higher again in 2011, averaging in the $.83 - .88 range Profits will be hurt by higher feed costs

Agricultural Economics

Hogs

Agricultural Economics

BARROW AND GILT PRICES Iowa - So. Minnesota, Carcass Base Price, Weekly $ Per Cwt. 90 85

Avg. 2004-08

80 75 70 65

2009

60 55 50 2010

45

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

Agricultural Economics

T O C

L JU

AP R

JA N

40

H-P-09 09/20/10

SEPTEMBER 1 ALL HOGS AND PIGS U.S. Inventory (Prior to 1988 Estimated) Mil. Head 72 69 66 63 60 57 54 51 48 45 1984

1987 1990 1993 Livestock Marketing Information Center

1996

Data Source: USDA/NASS

Agricultural Economics

1999

2002

2005

2008 H-N-14 06/25/10

IOWA MARKET HOG PROFIT Farrow/Finish, Monthly $/Head 50 40 30 20 10 0 -10 -20 -30 -40

Latest Data: August 2010

-50 2006

2007

2008

2009

2010

Livestock Marketing Information Center Data Source: Iowa State University

Agricultural Economics

09/17/10

Hog Market Summary Remarkable recovery in prices – up 60% from year ago (Oct.), and 2010 will average 35% higher than 2009;  Price gains are from lower production, and stronger demand – at home and exports;  Sow numbers down about 2%, but even production for 2011 with better efficiency;  Futures markets for 2011 in the $80 to $85 range, about same as 2010  Profits hurt by increasing feeding costs. 

Agricultural Economics

Sheep and Goats

Agricultural Economics

SLAUGHTER LAMB PRICES Wooled, 110-130 lbs, Sioux Falls, Weekly $ Per Cwt. 145 Avg. 2004-08

135 125

2009

115 105 95

2010

85 JAN

APR Data Source: USDA-AMS, Compiled by LMIC

Agricultural Economics

JUL

OCT S-P-05 09/22/10

Meat Goat Prices New Holland, PA Sel. #2, 40-60 lbs. $ per head 90.00 80.00 70.00 2008 2009 2010

60.00 50.00 40.00 30.00 20.00

10.00 0.00 J

F

M

A

M

Agricultural Economics

J

J

A

S

O

N

D

Lamb and Goat Summary • Ky sheep numbers down 7% to 37,000 • Lamb prices up about 20% from last year, selling for $1.40 – 1.50/lb. • Ky goat numbers are unchanged at 79,000 • Goat prices up 20%, with Selection #2 40-60 lb. kids selling for $1.35/lb. • Both goat and lamb prices likely to continue at these high levels (stronger economy, weak $ compared to NZ) Agricultural Economics

Dairy

Agricultural Economics

US Milk Production (billion lbs) 50 48 46

2008 2009 2010

44 42 40 1st Qtr

2nd Qtr

Agricultural Economics

3rd Qtr

4th Qtr

BUTTER PRICES US, Weekly $ Per Pound 2.40 Avg. 2004-08

2.20 2.00 1.80

2009

1.60 1.40 2010

1.20

Agricultural Economics

T O C

L JU

AP R

JA N

1.00

US All Milk Price $25

$ per cwt

$20 $15 $10 $5 $0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004-2008

Agricultural Economics

2009

2010

2010 Dairy Outlook  Milk 

production likely to increase again

Primarily milk per cow

 World

production was down in 2009, good chance for increase in 2010  USDA projecting $17-20  I’m seeing $15-18

Agricultural Economics

Agricultural Economics

2010

2008

2006

2004

2002

2000

1998

1996

1994

1992

1990

1988

1986

1984

1982

1980

KY Dairy Cow Inventory

300

250

200

150

100

50

0

Beef Cattle

Agricultural Economics

Cattle Market Summary  Cattle

numbers low, and likely dropping  Weather  Large corn crop, but a lot of difficulty getting a feel for size  Feedlots saw some black ink this spring 

Fed market has improved

 Questionable

wheat grazing conditions and expensive wheat

Agricultural Economics

JANUARY 1 TOTAL CATTLE INVENTORY U.S., Annual Mil. Head 140 130 120 110 100 90 80 70 1950

1955

1960

1965

1970

1975

Agricultural Economics

1980

1985

1990

1995

2000

2005

2010

Livestock Marketing Information Center Data Source: USDA/NASS

Agricultural Economics

SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly $ Per Cwt. 102 Avg. 2004-08

97 92

2009 87 82

2010

77 JAN

APR

Agricultural Economics

JUL

OCT

Livestock Marketing Information Center Data Source: USDA/NASS

December Corn Futures

Agricultural Economics

Market Expectations 

Calves likely have more downside 





Heavy feeders   



I look for 5wt steers in $90’s by November / December I expect rally into spring, to put calves above $110 again Price slides will tighten with higher corn prices Spring futures hovering around $110 5wt steers average $105 in KY

Spring board upper $110’s, calf prices in midupper $90’s Agricultural Economics

Med / Large Frame #1 Steers 500 to 600 lbs. 120

80 60

2008

Agricultural Economics

1995-2007

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

40

Jan

$ / cwt.

100

2009

Med / Large Frame #1 Steers 700 to 800 lbs. 110

90 80 70

1995-2007

Agricultural Economics

2008

2009

Dec

Nov

Oct

Sept

Aug

July

June

May

Apr

Mar

Feb

60

Jan

$ / cwt.

100

Agricultural Economics

20 08

20 06

20 04

20 02

20 00

19 98

19 96

6000 5000 4000 3000 2000 1000 0

19 94

1,000 tons

KY Hay Production

Wholesale Commodity Feeds (last 36 months) 180 160 140 120 100

SB Hulls

80 60 40

DDG

Agricultural Economics

Se p O ct No v De c

Ju l Au g

Ju n

Ja n Fe b M ar Ap r M ay

20 0

KY Cull Cow Prices Boning 80-85%

Agricultural Economics

Medium / Large Frame #1 Steers 500 to 600 lbs 120 110 100 90 80 70 Jan

Feb

Mar

Apr May June July 2005-2009

Agricultural Economics

Aug Sept Oct 1995-2004

Nov Dec

Timing of Post-weaning Sales (2004 to 2009)  Wean  

530# in October, sell 650# in Dec

$61.72 gross margin to put on 120 lbs must put gain on for $0.51 per lb

 From

650# in December to 770# in Feb



$87.87 gross margin to put on 120 lbs Must put gain on for $0.73



(NOTE: This assumes no price premium)



Agricultural Economics

12 /0 3/ 12 0 4 /3 1/ 01 0 4 /2 8/ 02 0 5 /2 5/ 03 0 5 /2 5/ 04 0 5 /2 2/ 05 0 5 /2 0/ 06 0 5 /1 7/ 07 0 5 /1 5/ 08 0 5 /1 2/ 09 0 5 /0 9/ 10 0 5 /0 7/ 05

October 2005-2009

114.00 112.00 110.00 108.00 106.00 104.00 102.00 100.00 98.00 96.00

Agricultural Economics

November CME Group Futures 2005 - 2009

Agricultural Economics

11/3/2005

10/3/2005

9/3/2005

8/3/2005

7/3/2005

6/3/2005

5/3/2005

4/3/2005

3/3/2005

2/3/2005

1/3/2005

12/3/2004

114.00 112.00 110.00 108.00 106.00 104.00 102.00 100.00 98.00 96.00

03 /0 4/ 04 0 5 /0 1/ 04 0 5 /2 9/ 05 0 5 /2 7/ 06 0 5 /2 4/ 07 0 5 /2 2/ 08 0 5 /1 9/ 09 0 5 /1 6/ 10 0 5 /1 4/ 11 0 5 /1 1/ 12 0 5 /0 9/ 01 0 5 /0 6/ 06

January 2006 - 2010

112.00 110.00 108.00 106.00 104.00 102.00 100.00 98.00 96.00 94.00 92.00

Agricultural Economics

Basic Backgrounding Budget (October to March) 550# steers @ $1.07 Hay (12 lbs @ $75 / ton) Hulls / Gluten (7 lbs @ $160) Mineral (.25 lbs at $20 / bag) Vet / Med Interest (6%) Death Loss (2%)

$588.50 $67.50 $84.00 $15.00 $20.00 $19.11 $17.00 $811.11

BE Price = $95 on 850 steers

March / April Futures at $110-112 Agricultural Economics