Cattle Outlook Ron Plain and Scott Brown Ag Economics, MU April 15, 2016

Cattle Outlook

Ron Plain and Scott Brown

Ag Economics, MU

April 15, 2016

USDA has raised their estimate of 2016 U.S. beef production to 24.825 billion pounds. That is up 1.2% from their previous estimate and up 4.8% compared to last year's production. They expect 2016 slaughter steers prices to average somewhere around $134/cwt of live weight. That is $3.50 lower than their previous forecast and $14 lower than the 2015 average.

More beef and lower prices should be positive for U.S. international trade. USDA looks for U.S. beef exports to increase 8% in 2016 and is predicting a 14% decrease in U.S. beef imports. The U.S. was the fourth largest beef exporter in 2015 after Australia, India, and Brazil.

China has been steadily increasing their beef imports and USDA expects them to pass Japan this year to become the world's number two beef importing country, behind the U.S.

Beef cutout values are sharply higher this week. This morning the choice boxed beef cutout value was $225.03/cwt, up $9.85 from the previous Friday, but down $32.66 from a year ago. The select carcass cutout this morning was $216.30/cwt, up $10.68 from last week, but down $35.15 from a year ago.

Fed cattle prices held steady this week in moderate volume. Through Thursday, the 5-area average price for slaughter steers sold on a live weight basis was $133.97/cwt, up 15 cents from last week's average, but down $28.74 from a year ago. The 5-area dressed steer price averaged $214.33/cwt, down 14 cents from the week before and down $41.63 from a year ago.

This week's cattle slaughter totaled 548,000 head, up 2.4% from last week and up 2.0% from a year ago.

The average steer dressed weight for the week ending on April 2 was 884 pounds, down 3 pounds from the week before, but up 15 pounds from a year ago. This was the 94th consecutive week with steer weights above the year-ago level.

Year-to-date cattle slaughter is up 0.7% and, because of heavier weights, beef production is up 2.5%.

Prices at the Oklahoma City Stockyards this week were steady on feeder cattle and $2 to $4 lower on calves compared to last week. Prices for medium and large frame #1 steers by weight group were: 400-450# $198-$209.50, 450-500# $191-$203.50, 500-550# $181-$194, 550-600# $178-$187.50, 600-650# $160-$187.50, 650-700# $155-$169, 700-750# $153-$166, 750-800# $143-$159, 800-900# $138-$154 and 900-1000# $138-$143.75/cwt.

Cattle futures were lower and corn futures higher this week. Today, the April live cattle futures contract settled at $131.47/cwt, down $2.90 for the week. June fed cattle settled at $122.17/cwt, down $1.85 from the previous week. The August contract ended the week at $118.02/cwt, down $1.55 from the previous Friday.

April feeder cattle ended the week at $155.07/cwt, down 83 cents from a week earlier. May futures lost $2.30 this week to close at $150.55/cwt. August feeder cattle settled at $151.62/cwt.

COW/CALF CORNER The Newsletter From the Oklahoma Cooperative Extension Service April 18 2016

COW/CALF CORNER

The Newsletter

From the Oklahoma Cooperative Extension Service

April 18 2016

Global meat market overview

Derrell S. Peel, Oklahoma State University Extension Livestock Marketing Specialist

The Foreign Agricultural Service of USDA recently released the latest Livestock and Poultry: World Markets and Trade publication.  This provides an opportunity to review meat production, consumption and trade among major countries.  Pork production is the number one meat with 2016 production forecast at 109.3 million metric tons (MMT), 42 percent of global meat production.  Broiler meat ranks second with 2016 production forecast at 89.7 MMT, 34 percent of the global meat total.  Beef production is forecast at 59.0 MMT in 2016, 23 percent of total meat production.  Total meat production in 2016 is forecast to increase slightly year over year with a 1.0 percent increase in beef and a 1.1 percent increase in broiler production offsetting a 0.9 percent decrease in world pork production.  Total meat exports are forecast to increase 3.6 percent with pork exports up 5.7 percent; broiler exports up 4.7 percent; and beef exports up 0.8 percent.

China is by far the largest pork producer and consumer with 2016 production forecast at 53.5 MMT, 49 percent of total global pork production.  The European Union is second (21 percent) with the U.S. third in pork production (10 percent) with Brazil and Russia rounding out the top five pork producing countries. The same countries are the top five pork consuming countries with Russia in fourth place, slightly ahead of Brazil.  The European Union is the largest pork exporting country, slightly ahead of the U.S., followed by Canada, Brazil and China in the top five.  Total pork exports represent 7 percent of total world pork production. Japan is the largest pork importing country, slightly ahead of China in second place and Mexico in third followed by South Korea and the U.S. 

The U.S. at is forecast in 2016 to be the largest broiler producer at 18.8 MMT (21 percent of world total), followed by Brazil (15 percent), China (14 percent), the European Union (12 percent), and India (5 percent). The same five countries are the top broiler consuming nations in the following order: U.S., China, European Union, Brazil and India.  Brazil is the largest broiler exporter, followed by the U.S., the European Union, Thailand and China.  Total exports among major broiler countries represent 12 percent of total production. The five largest broiler importing countries are Japan, Saudi Arabia, Mexico, European Union and Iraq.

In the 2016 forecast, the U.S. is the largest beef producing country at 11.3 MMT (19 percent of the global total), followed by Brazil (16 percent), the European Union (13 percent), China (12 percent) and India (7 percent).  India includes meat from water buffalo (carabeef).  The U.S. is also the largest beef consuming nation, followed by Brazil, the European Union, China and Argentina. For the third consecutive year, India is forecast to be the largest beef exporter in 2016 with Brazil, Australia, the U.S. and New Zealand rounding out the top five beef exporters.  Total beef exports represent 16 percent of total production. The U.S. is the largest beef importer, followed by rapidly growing beef imports in China.  Japan, Russia and South Korea are the remaining top five beef importers.

India has the largest cattle inventory, forecast at 302.6 million head in 2016 followed by Brazil (219.2 million head), China (100.3 million head), the U.S. (92 million head) and the European Union (88.8 million head). 

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