Livestock Situation and Outlook Washburn InService September 2005

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Livestock Situation and OutlookWashburn
In-Service September 2005

• Tim Petry
• Livestock Economist
• www.ag.ndsu.edu/aginfo/lsmkt/livestock.htm

09-06-05
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• As we know, there are known knowns. There are
  things we know we know. We also know there are
  known unknowns. That is to say we know there are
  some things we do not know. But there are also
  unknown unknowns, the ones we dont know we dont
  know.
• -- Donald H. Rumsfeld, Secretary of Defense
• Department of Defense news briefing
• February 12, 2002

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Livestock Marketing Information Center Data
Source USDA/NASS
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Cyclical Rebuilding HAS Started!
200,000 head increase in 2004 2005
Livestock Marketing Information Center Data
Source USDA/NASS
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Source LMIC
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CHANGE IN BEEF COW NUMBERSJANUARY 1, 2004
TO JANUARY 1, 2005(1000 Head)
Alaska Hawaii US Total
Livestock Marketing Information Center Data
Source USDA/NASS
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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SF_LS763 Sioux Falls, SD
Wed Aug 31, 2005 USDA-SD Ag Market
News Kist Livestock Auction Mandan, ND This
week 884 Last week 553 Year
ago 700 Compared to last week, feeder steers
and heifers sold steady to 1.00 higher. Slaughter
cows, steady to 1.00 lower. Yearling and Holstein
steer special today. Consignments of number one
muscle score in greater supply this week, though
mostly in smaller lots. Demand good. Feeder
cattle comprised 74 percent of supply, slaughter
cows 21 percent and slaughter bulls 4 percent.
Steers comprised 51 percent of the feeder supply
heifers 49 percent. Eighty-nine percent over
600 lbs. Feeder Steer Medium and Large
1 Head Wt Range Avg Wt Price Range Avg
Price 13 346 346 154.00 154.00 6
655-665 662 122.50-128.50
126.24 6 765-787 783
116.50-119.00 116.91 29 929
929 103.00 103.00
8 1074 1074 95.00
95.00 19 1123 1123
91.00 91.00
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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Cattle prices aren't the only thing going down!
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Feeder Cattle Supplies Are Low
2003 39,163 2004 38.911 2005 38,975
2003 37,903 2004 37,625 2005 37,800
Source LMIC
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Important Feeder Cattle Fundamentals

• Corn crop and resulting prices
• Southern Plains wheat grazing prospects
• Canadian Imports
• Fall and spring heifer retention
• Fed steer prices

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Livestock Marketing Information Center
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What Will a 550 lb Steer Be Worth This Fall?/cwt
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Breakeven Prices for 750 lb Background Steers550
to 750 lbADG 2.77 lbs72 Days on Feed
(Example Oct 30 Jan 11)
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Livestock Marketing Information Center
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Weekly Feeder Cattle Imports from Canada2000 to
2002 Avg vs 2005
Weekly Fed Cattle Imports from Canada2000 to
2002 Avg vs 2005
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Price Risk Management Tools

• Cash forward contract
• Video and internet auctions
• CME futures
• CME options
• LRP
• Which one or combination fits your marketing plan?

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AM_LS753 Amarillo, TX
Thu Aug 22, 2005 USDA-TX Dept of Ag
Market News Superior Video Auction - Wednesday -
Friday August 17-19, 2005 Offerings 128,600
head
Northcentral States
Colorado, Wyoming, Nebraska Montana, North and
South Dakota and Iowa
Feeder Steers
Medium and Large 1 Head Wt Range Avg
Wt Price Range Avg Price Delivery 70
500 500 124.00
124.00 Oct 120 560-580 573
116.50-121.00 117.97 Oct 2835
600-640 621 114.00-125.50
119.97 Oct 712 650-690 657
115.00-128.50 120.20 Oct 717
700-730 711 114.00-117.75
115.57 Oct 66 750 750
118.25 118.25 Oct 85
580 580 121.00
121.00 Oct-Nov 648 600-625
611 115.00-123.00 120.02 Oct-Nov
152 675-680 678 105.00-116.50
110.85 Oct-Nov 76 700
700 112.75 112.75
Oct-Nov 207 570-580 575
116.00-125.50 120.09 Nov 1348
600-640 613 113.25-122.75
116.79 Nov 628 650-675 662
112.00-124.75 118.25 Nov 269
700-725 706 114.50-119.25
118.00 Nov
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Steers 6 to 9 CWT 8/31 Livestock Risk
Protection (LRP) Feeder Cattle (Steers 6 to 9
cwt.) LRP rates are valid until 9 a.m. August
31. Expected Cost Related Sales Endorsement
Ending Ending Coverage per Put Put Date Weeks Day
s Date Value Price Cwt. Strike Premium -----------
--------------------------------------------------
--------------------------------------------------
-------------- 08/31/05 21 147 01/25/06 105.375 10
0 1.09 100 1.20 105.375 98 .73 98
.90 105.375 96 .60 96
.65 105.375 94 .42 94
.45 105.375 92 .40 92
.45 105.375 90 .33 90
.32 105.375 88 .28 88
.27 105.375 86 .23 86 .22
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Premiums Likely (but not consistent) For

• Verified shots (ND VIP)
• Natural (no shots or implants)
• Source/age verified
• Weaned
• BQA
• Replacement quality heifers
• Check with your market before selling

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SF_LS766 Sioux Falls, SD
Thu Dec 9, 2004
USDA-ND Ag
Market News Stockmens Livestock Exchange
Dickinson, ND Feeder Cattle Weighted Average
Report for 12/9/2004 Feeder Heifers Medium and
Large 1 Head Wt Range Avg Wt
Price Range Avg Price 32 407-447
426 138.00-145.50 142.22 68
460-496 473 134.50-137.50
136.14 133 519-547 540
121.75-127.75 123.47 30 501-510
502 129.00-130.00 129.90
Value Enhanced 207 553-593 571
107.00-115.00 111.46 70
560-570 564 120.50-121.00
120.81 Value Enhanced 158 601-648
628 104.00-112.50 108.69 105
614-646 635 114.25-116.75
115.43 Value Enhanced 358 650-695
668 105.50-112.50 109.73 29
660 660 114.25
114.25 Value Enhanced 345 703-743
722 101.00-108.75 104.98
SF_LS763Sioux Fall, SD
Wed Apr 20, 2005
USDA-SD Ag
Market News Kist Livestock Auction Mandan, ND
Feeder Heifers Medium and Large 1 Head
Wt Range Avg Wt Price Range Avg
Price 27 709-737 722
105.00-108.50 106.53 81 760-799
786 98.75-105.00 100.94
83 760-789 763 107.00-107.50
107.45 Replacement 21 838-839
838 99.00-100.00 99.50 64
824 824 102.75
102.75 Replacement 15 885
885 97.75 97.75 27
873 873 103.00
103.00 Replacement 5 969
969 95.00 95.00
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Source Chris Hurt, Ag Econ Purdue
Livestock Marketing Information Center
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Livestock Marketing Information Center
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Now That's MEAT Demand