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ECON 337: Agricultural Marketing

ECON 337: Agricultural Marketing. Chad Hart Assistant Professor chart@iastate.edu 515-294-9911. Lee Schulz Assistant Professor lschulz@iastate.edu 515-294-3356. Today’s Topic. Livestock Marketing Introduction. Livestock and Meat industry. Per capita consumption Demand measures

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ECON 337: Agricultural Marketing

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  1. ECON 337: Agricultural Marketing Chad Hart Assistant Professor chart@iastate.edu 515-294-9911 Lee Schulz Assistant Professor lschulz@iastate.edu 515-294-3356

  2. Today’s Topic Livestock Marketing Introduction

  3. Livestock and Meat industry • Per capita consumption • Demand measures • Trends • Industry segments and structure • Think of implication for supply and demand??????

  4. Livestock & Poultry Markets 2012 Billion Per Cap Price Exp Imp lbs1 lbs2 $/cwt %3 %3 Broilers 37.038 80.4 86.98 19.7 0.3 Beef 25.912 57.3 122.86 9.5 8.6 Pork 23.250 45.7 83.69 23.2 3.4 Turkeys 5.967 16.0 106.35 13.4 0.4 Lamb 0.156 0.86 276.12 6.8 98.4 1/ Billion pounds of US production 2/ Pounds consumed per person per year 3/ As a percent of production

  5. Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC

  6. Livestock Marketing Information Center Data Source: Bureau of Economic Analysis & USDA-ERS, Compiled & Analysis by LMIC

  7. Measuring Consumption • Balance sheet approach Beginning inventories + Production + Imports - Exports - Ending inventory = Disappearance • Per Capita consumption = DisappearancePopulation • A measure of supply rather than demand

  8. Livestock Marketing Information Center Data Source: Bureau of Economic Analysis & USDA-ERS, Compiled & Analysis by LMIC

  9. Year-Over-Year increases in 9 of last 10 quarters (since Q3 of 2010): Q4:2012 = +3.4% / 2012 = +3.5% Actual Quantity & Price Changes: 1990: 67.8 lbs (per capita consumption); $2.00 (real All fresh price) 2012: 57.3 lbs (per capita consumption); $2.04 (real All fresh price) 2012: Per Capita Consumption = -0.002% (Year-over-Year) Real All Fresh Prices = +3.5% IF Real All Fresh Prices +0% = 0% Demand Change

  10. Year-Over-Year increases in 6 of last 9 quarters (since Q4 of 2010): Q4:2012 = +2.59% / 2012 = -0.58% Actual Quantity & Price Changes: 1990: 49.7 lbs (per capita consumption); $1.72 (real price) 2012: 45.7 lbs (per capita consumption); $1.51 (real price) 2012: Per Capita Consumption = +0.42% (Year-over-Year) Real Prices = -1.08% IF Real Prices -0.50% = 0% Demand Change

  11. Livestock Marketing Information Center Data Source: USDA/NASS

  12. One time capacity

  13. United States Iowa Source: USDA-NASS, Cattle on Feed

  14. Estimated Beef Packer Capacity Source: CME DLR

  15. US Hog Operations and Inventory by Size Based on Ownership of Hogs, 2007

  16. Commercial Hog Slaughter Companies

  17. Percent of U.S. Hogs Sold Through Various Pricing Arrangements, 2002-2012

  18. Class web site: http://www.econ.iastate.edu/~chart/Classes/econ337/Spring2013/index.htm

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