Beef and Cattle --- Market Situation and Outlook Midwest, Great Plains and Western Outlook Conference A August t 14 14-15, 15 2007

James Robb Director – LMIC 655 Parfet Street Suite E310 Lakewood, CO 80215-5517

www lmic info www.lmic.info

Livestock Marketing g Information Center

BOXED BEEF CUTOUT VALUE Choice 600-900 Lbs. Carcass, Weekly $ Per Cwt. 180 Avg. 2001-05

170 160

2006

150 140 130

2007

120 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

STEER HIDE AND OFFAL VALUE Live Animal Basis, Weekly $ Per Cwt. 10.60 Avg. 2001-05

10.10 9.60 9.10

2006

8.60 8.10

2007

7.60 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

LIVE TO CUTOUT BEEF PRICE SPREAD Monthly

$ Per Head 250 230

Avg. 2001-05

210 190

2006

170 150 130

2007

110 90 JAN

MAR

MAY

Livestock Marketing g Information Center

JUL

SEP

NOV

SLAUGHTER STEER PRICES 5 Market Weighted Average, Weekly $ Per Cwt. 105 Avg. 2001-05

100 95 90

2006 85 80 2007

75 70 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

MED. & LRG. #1 STEER CALF PRICES 400-500 Pounds, Southern Plains, Weekly $ Per Cwt. 160 Avg. 2001-05

150 140

2006

130 120 110

2007

100 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

MED. & LRG. #1 STEER CALF PRICES 500-600 Pounds, Southern Plains, Weekly $ Per Cwt. 140 135

Avg. 2001-05

130 125 120

2006

115 110 105

2007

100 95 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

MED. & LRG. #1 FEEDER STEER PRICES 700-800 Pounds, Southern Plains, Weekly $ Per Cwt. 125 120

Avg. 2001-05

115 110

2006

105 100 95

2007

90 85 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

FEEDER STEER vs FED STEER PRICES 700-800 Lbs. Minus Slaughter Steer, S. Plains, Weekly $ Per Cwt. 45 40

Avg. 2001-05

35 30 25

2006

20 15 2007

10 5 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

SLAUGHTER COW PRICES Southern Plains, 85-90% Lean, Weekly $ Per Cwt. 58 56

Avg. 2001-05

54 52 50

2006

48 46 44 2007

42 40 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

COMMERCIAL BEEF PRODUCTION Quarterly Bil. Pounds 7.0

6.6

Avg. 2001/05

6.2

2006

5.8

2007

5.4

2008 JAN-MAR

APR-JUN

Livestock Marketing g Information Center

JUL-SEP

OCT-DEC

U S BEEF AND VEAL EXPORTS Carcass Weight, Annual Bil. Pounds 3.0 2.5 2.0 1.5 1.0 0.5 0.0 1983

1986

1989

1992

Livestock Marketing g Information Center

1995

1998

2001

2004

2007

U S BEEF CONSUMPTION Per Capita, Retail Weight, Annual Pounds 80 75 70 65 60 55 1983

1986

1989

1992

Livestock Marketing g Information Center

1995

1998

2001

2004

2007

ANNUAL AVERAGE CATTLE PRICES $ Per Cwt 135 500-600lb Steer Calves

125 115 105

700-800lb Feeder Steers

95 85 75

Fed Steers

65 55 45 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

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Livestock Marketing g Information Center

OMAHA CORN PRICES Weekly $ Per Bu. 4.50 Avg. 2001-05

4.00 3.50

2006

3.00 2 50 2.50 2.00

2007

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

1 50 1.50

U S TOTAL CORN SUPPLY AND PRICE Crop Year Bil. Bushels Bil 15

$ Per Bushel 3.50

14

3.25

13

3.00

12

2.75

11

2.50

10

2.25

9

2.00

8

1.75

7

1.50

6

1 25 1.25 1983

1986

1989

1992

Livestock Marketing g Information Center

1995

1998

2001

2004

2007

Supply Price

KANSAS FEEDLOT CLOSEOUTS Feeding Costs per Cwt, Steers $ Per Cwt. 83 Avg. 2001/05

78 73 68

2006

63 58 2007

53 48 Jan

Feb

Mar

Apr

May

Livestock Marketing g Information Center

Jun

Jul

Aug

Sep

Oct

Nov

Dec

WHOLESALE CHICKEN BREAST PRICES Skinless/Boneless, Northeast, Truckload, Weekly Cents Per Pound 180 170

Avg. 2001-05

160 150 140

2006

130 120 110 2007

100

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

90

BROILER EGGS SET Weekly Mil. Eggs 225 220 Avg. 2001 05 2001-05

215 210 205 200

2006

195 190 185

2007

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

180

COMMERCIAL MEAT & POULTRY PRODUCTION Byy Type yp of Meat,, Annual

Bil. Pounds 100 90

Turkey

80 70

Chicken

60 50 40

Lamb & Veal

30

Pork

20 10

Beef

0 1983

1985

1987

1989

1991

1993

Livestock Marketing g Information Center

1995

1997

1999

2001

2003

2005

2007

Livestock Marketing g Information Center

COW-CALF RETURNS AND CATTLE INVENTORY $ Per Cow

U.S., Annual

Mil. Head

150

115

100

110

50

105

0

100

-50

95

-100

90 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Livestock Marketing g Information Center

Cow-Calf Returns

Cattle Inventory Jan 1

HEIFERS HELD AS BEEF COW REPLACEMENTS Mil. Head

July y 1, U.S.

7

6 -6 %

5

4

3 1977

1980

1983

1986

1989

Livestock Marketing g Information Center

1992

1995

1998

2001

2004

2007

MAJOR U S BEEF IMPORT SOURCES Carcass Weight, Annual Mil. Pounds Mil 1200 1000

Avg. 2000/04

800 2005

600 400

2006

200 0 Australia

New Zealand

Livestock Marketing g Information Center

Canada

Argentina

CHANGE IN BEEF COW NUMBERS JANUARY 1 1, 1998 TO JANUARY 1 1, 2007 Canada, 1000 Head

-0 0 16

209

391

-14

103 -52

Canada

646

Livestock Marketing g Information Center

Prince Ed. Isl.

Nova Scotia

103 to 391 (2) -2 to 103 (4) -52 to -2 (3)

-2

-3

CHANGE IN BEEF COW NUMBERS JANUARY 1 1, 2006 TO JANUARY 1 1, 2007 Canada, 1000 Head

0 0 -35

-63

-51 -76

Canada

-263

Livestock Marketing g Information Center

-12 -29

Prince Ed. Isl.

Nova Scotia

0.1 to 0.9 (2) -29 to 0.1 (4) -75.5 to -29 (4)

1

0

U S BEEF IMPORTS FROM CANADA Carcass Weight, Monthly Mil. Pounds

100 Avg. 2001-05

90

2006

80

70 2007 60 JAN

FEB

MAR

APR

MAY

Livestock Marketing g Information Center

JUN

JUL

AUG

SEP

OCT

NOV

DEC

U.S. EXPORTS OF BEEF MUSCLE CUTS Weekly 1000 MT 9 8 7

Canada

6 5

Japan

4

Mexico

3

Korean Rep.

2 1 0 Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Livestock Marketing g Information Center

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

U S BEEF INDUSTRY NET EXPORT VALUES Annual Bil. $ 3

Live Cattle

2 Beef & Veal

1

Hides & Skins

0 -1

Tallow, Grease & Var Meat

-2

Total

-3 1981

1984

1987

1990

Livestock Marketing g Information Center

1993

1996

1999

2002

2005

TOTAL COW SLAUGHTER Federally Inspected, Weekly Thou. Head 130 Avg. 2001-05

120 110

2006

100 90 80

2007

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

70

HEIFER SLAUGHTER Federally Inspected, Weekly Thou. Head 240 230

Avg. 2001-05

220 210 200

2006

190 180 170 2007

160

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

150

LIVE WEIGHT -- STEER AND HEIFER Texas/Oklahoma Panhandle Area, Weekly Pounds 1280 Avg. 2001-05

1260 1240 1220

2006 1200 1180 2007

1160

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

1140

Livestock Marketing g Information Center

QTRLY GROSS DOMESTIC PRODUCT (GDP) Real Dollar (2000) Change from Previous Quarter Percent Change 2.0

1.5

1.0

05 0.5

0.0

-0.5 1992

1994

1996

1998

Livestock Marketing g Information Center

2000

2002

2004

2006

RETAIL CHOICE BEEF DEMAND INDEX Annual, Using CPI 1980=100

Index Value 120 100

100

94 88 86

80

83

79 76 70 69

66 65 63

60

59 58 56 55 56 55 59 53 53 51 50 52

63 61

57

40 20 0 1980

1982

1984

1986

1988

1990

Livestock Marketing g Information Center

1992 1994

1996

1998

2000

2002

2004

2006

RETAIL CHOICE BEEF DEMAND INDEX Second Quarter, Using CPI 1980=100

Index Value 120 100

100 80

93 90 90

86 85

82 74 74

70 70 68

60

64 61 60 60 62 60 58 57 54 53 55 57

67 67 61 62

40 20 0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Livestock Marketing g Information Center

Livestock Marketing g Information Center

CHOICE MINUS SELECT BEEF PRICES Carcass Cutout Value 600-900 Lbs., Weekly $ Per Cwt. 25 Avg. 2001-05

20 15

2006 10 5

2007

0 JAN

APR

Livestock Marketing g Information Center

JUL

OCT

BEEF GRADED CHOICE As a Percent of Beef Graded, Weekly Percent 57 56

Avg. 2001-05

55 54 53

2006

52 51 50

2007

49

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

48

CUTOUT VALUE Monthly $/Cwt 200 Prime

190 180

Branded

170 160

Choice

150 140

Select

130 120

Ungraded g

110 Aug-06

Oct-06

Dec-06

Livestock Marketing g Information Center

Feb-07

Apr-07

Jun-07

PRIMAL LOIN VALUE Monthly $/Cwt 370

Prime

320

Branded

270

Choice

220 Select 170 Ungraded g 120 Aug-06

Oct-06

Dec-06

Livestock Marketing g Information Center

Feb-07

Apr-07

Jun-07

PRIMAL CHUCK VALUE Monthly $/Cwt 120 Prime 115 Branded

110

Choice

105 100

Select

95 Ungraded g 90 Aug-06

Oct-06

Dec-06

Livestock Marketing g Information Center

Feb-07

Apr-07

Jun-07

LOIN VALUE COMPARISON Monthly $/Cwt 375 355

Prime

335 315 295

Branded

275 255 Choice

235 215 195

Select

175 Jan-06

Mar-06

May-06

Jul-06

Sep-06

Livestock Marketing g Information Center

Nov-06

Jan-07

Mar-07

May-07

Jul-07

WHOLESALE BEEF RIB ROLL PRICES 2 In.-Lip On, Weekly $ Per Cwt. 770 Avg. 2001-05

720 670 620

2006

570 520 2007

470

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

420

WHOLESALE BEEF CHUCK PRICES Boneless 2 Piece, Weekly $ Per Cwt. 170 Avg. 2001-05

160 150

2006

140 130 120

2007

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

110

WHOLESALE BONELESS BEEF PRICES Fresh, 90% Lean, Weekly $ Per Cwt. 160 155

Avg. 2001-05

150 145 140

2006

135 130 125 120

2007

115

Livestock Marketing g Information Center

T O C

L JU

R AP

JA

N

110

CHOICE STEER PRICE vs BREAKEVEN Cattle Feeding, S. Plains, Monthly

$ Per Cwt 105 100

Latest Data: July 2007

95

Steer Price

90 85 80

Breakeven

75 70 65

Projected Breakeven

60 55 1999

2000

2001

2002

2003

Livestock Marketing g Information Center

2004

2005

2006

2007

LIVESTOCK MARKET ISSUES • • • • • • •

Ethanol – Corn Domestic Economy E Export t Demand D d (B (Beef, f Pork, P k Chicken) Chi k ) Mandatory COOL and Animal ID Swift Assets Farm Bills and Other Legislation Again Watch Poultry!

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Thank You Livestock Marketing g Information Center