NPB Pork Management Conference - 2013. Livestock and Meat Outlook. Key issues for 2013-2014 profitability . . . . Input prices and production costs Demand Domestic economic conditions World economy, competition and demand Exports and a resolution to challenges
Livestock and Meat Outlook
. . . Assumes “normal” weather, corn, hay
. . . and flattened in ‘12 – what about ‘13 & ‘14?
Severe drought area is down to 25%
High Plaines 45%, South 34%, MW 0.0%,
. . . But LITTLE HINT of what was to come!
“Normal” weather from here on out
Corn yields in the mid- to upper-140 range
SB yields in the mid-40s
Current futures are fairly priced for corn, a bit high for SBM – weather premium in SB
F-F hog costs near $80/cwt carcass
Fed cattle BE’s >$130 thru year end, $120s in 2014 as feeders increase
Chicken BE’s near $90 RTC weight
. . . But EU is still a wreck – and now Japan
Real moved big in ‘11-’12, stable recently
Peso has improved but is still weaker than in ’11, ditto for the won
Rapidly falling yen – due to gov’t policy
. . . Q1 GDP +2.4% - Still slowed by uncertainty
. . . Jan was -0.4%, April was only +0.3%
. . . What about ‘13 or ’14?
. . . Would not be if demand was, in fact, lower
. . . Chicken, beef and pork: Up for past 12 mos.
. . . And another record expected in 2013
. . . Pork is -14.5%, beef is -3%, chicken up
. . . On 8/21: 77% drought, 44% severe or worse
. . . In October ‘12 - last crop condition report
. . . Still at the same level as last year
. . . Smallest January 1 U.S. beef cow herd since ’46
. . . Smallest calf crop since 1949 is forecast for ‘13
. . . But are still near record low at 25.56 mil.
. . . Until +6% & +15% in March and April
. . . Lower near-term supplies, closer in fall
. . . But we are now back to yr-ago weights
. . . Per-cap: -3% in ‘13 and -5.5%+ in ’14 @ 52.6
. . . But will Mother Nature allow it to do so?
. . . Still there but falling from $210 peak
Cattle are still big but will run close to ‘12
Lower cattle numbers thru Q3 and thus lower beef supplies
Producers are keeping heifers but have some already moved to lots? Grass!!!!
Longer term: Tighter per cap supplies thru 2014 (‘15?) and higher prices
Will beef cease to be a habit for anyone below the middle class?
. . . Flock has been up 1-2% yr/yr since Jan.
. . . Are even with last year – so far
Sets were virtually even with ‘11 levels the entire second half of 2012 – now +1%
Chick placements YTD are unchanged from 2012
Broiler slaughter is up 0.9%YTD vs. 2012 – and more to come!
Broiler production is now +2.2% YTD vs. 2012 – and more to come!
. . . A mixed bag so far in ‘13 – but still high
. . . Down 16% thru April, Feb-Apr down 14.4%
. . Mexico came back, China on LT trend
. . . And yet Q4 production was record large!
. . . But feed costs have slowed them!
. . . Risk issue for ‘14: MCOOL retaliation
. . .’13 will likely be higher -- new crop help?
. . . Large losses for 2013 – but profits in ‘14
. . . But lower than “normal” ALL YEAR
. . . But pattern will be different – summer???
218 positive samples
199 premises, up 44 from 6/3 – 47 sow farms, 130 growing pigs sites, 20 unknown
Positive in 19 states
102 in Iowa, 19 in Minnesota and 38 in Oklahoma – up 20 from 6/3
Earliest confirmed case is still mid-April
Number of animals impacted is unknown
Death losses, 7-10 days of slow/no growth
. . . An exceptional rally – that is likely OVER
. . . Unlikely to see much more this summer
. . . But margins are likely to widen soon
. . . Now look too big -- book Q3 and Q4?
. . . Potential trouble if we return to growth!
Beef industry is still being impacted by ‘11 drought – and output will be effected through 2014 and into 2015 – high prices
Chicken slowed in ‘11 but has begun to grow again – and could grow QUICKLY
Pork industry: Huge equity hit but has “maintained” pending good ‘13 crops and a return to “normal” costs
Cornbelt rains have been good – need some warm, dry days now