LIVESTOCK, DAIRY, AND POULTRY MONTHLY February 19,1998 February 1998, LDP-M-50 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- LIVESTOCK, DAIRY, AND POULTRY is published six times a year by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. Subscriptions to the printed version of this report are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #ERS-LDP-M, $32/year. ERS-NASS accepts MasterCard and Visa. ----------------------------------------------------------------------------- Due to declining resources and the need to place more emphasis on longer term market relationships, the Livestock, Dairy and Poultry Situation and Outlook will be published 6 times in 1998. Subsequent issues are scheduled for May 19, July 16, August 17, and November 17. The release time has been standardized to 3 pm ET. January retail prices were not available at release time, BLS will release retail prices on February 24. Less robust trade prospects due to the Asian economic crisis and a strong dollar will further slow price recovery and may slow the initial expansion in the cattle cycle. Historical cattle inventory statistics have also been revised upwards adding to beef supplies. Stocker-feeder cattle prices have strengthened as grain prices declined and cow slaughter is down sharply, setting the stage for tighter beef supplies and providing stronger economic incentives to begin heifer retention. However, fed cattle supplies are not likely to begin tightening until fall and consequently, both fed and feeder cattle prices will remain under pressure until after many of the breeding decisions are made in late spring early summer. Any indications of a short grain crop or poor forage production conditions could cause more replacement heifers to be forced into feedlots in the second half of the year, further stalling herd expansion. Forage Supplies Remain Tight: Grain Supplies Uncertain Unusually mild winter conditions have held down supplemental feeding needs, but hay stocks remain extremely tight. Stocks of all hay on December 1, 1997, were down 2 percent from a year earlier, and down 6 percent from December 1995. The farm price of all hay in January averaged $98.10 per ton, up slightly from the previous record of $97.90 set a year earlier. Hay stocks will need to be rebuilt in 1998 for producers to be more confident in retaining heifers for herd expansion. Producers will give some indication of hay and crop acreage in the Prospective Plantings report to be released on March 31. Projected 1997/98 ending stocks of corn continue to rise as a sharp reduction in exports more than offsets an increase in domestic use. The farm price of corn is expected to average $2.45 to $2.65 per bushel, down slightly from a year earlier, and well below 1995/96's $3.24.- Although down, grain prices remain relatively high and price prospects in the meat complex remain poor due to large production and declining export expectations. A larger grain crop in 1998 with steady to lower grain prices will be necessary to encourage continued expansion in the meat complex. Cattle Inventory Declines, Feeder Cattle Supplies Adequate Cattle numbers continue to decline without any indication of strong incentives to break this trend in 1998. The January 1, 1998, cattle inventory was down 2 percent from a year earlier, the second year in the liquidation phase of the current cattle cycle that began the expansion phase in 1991. Cows and beef cows were both down 2 percent from a year earlier, while the dairy cow inventory was down 1 percent. More importantly, the number of beef replacement heifers, heifers being retained for possible addition to the breeding herd, was down 5 percent from a year earlier indicating that producers do not yet have a strong incentive to retain breeding stock. Beef cow slaughter is down from the high level of a year ago. Cow-calf producers likely about recovered cash costs in 1997 and will likely see returns move up fairly sharply in 1998. The 1997 calf crop was revised downward slightly from the July 1 estimate. However, the 1996 calf crop was revised upward by nearly 190,000 head. Consequently, the number of calves on January 1, 1997, weighing under 500 pounds, was revised upward by 221,000 head. This has helped to explain the larger number of heavy steers placed on feed in late 1997 and early 1998, and has also led to less of a decline in feeder cattle supplies than was expected. Feeder cattle supplies outside feedlots on January 1, 1998, were down 4 percent from a year earlier. This was a smaller than expected decline which, with an already large fed cattle inventory, will support large fed cattle marketings through mid spring. A much weaker export demand situation is forcing a larger beef supply to compete against large supplies of other meats at relatively low prices. Weak fed cattle prices caused fed cattle marketings to slow, raising slaughter weights and in turn placing even more downward pressure on prices. Feedlots have faced negative margins since August 1997 with escalating losses in December and January. Losses are likely to accelerate in February due to the sharp break in fed cattle prices as the domestic market adjusts to larger supplies of higher quality beef that normally would enter the export market. Breakevens will likely remain negative until midspring as feeding margins decline and fed cattle prices begin to strengthen seasonally. Federally inspected dressed carcasses averaged near 716 pounds in January, up about a pound from the previous record set in 1994 and matched in 1996. Steer weights were slightly below the record 779 pounds in 1996, while heifer weights tied the record 718 pounds set in 1996. A smaller proportion of cows in the slaughter mix this January also helped support the new record figures. However, large numbers of fed cattle have yet to be marketed this winter and more will be carried over and marketed in early spring. Fed Cattle Inventories Large While the number of cattle on feed on February 1 in the 7 monthly reporting States in feedlots with over 1,000 head of capacity was up 4 percent from a year earlier in January, the placement rate continues to decline. Feeder cattle placements have been below the high year-earlier levels since October. Net placements in January were down nearly 12 percent from a year earlier. Placements in 1998 are expected to decline nearly 9 percent from the large 1997 levels. Fed cattle marketings this winter are expected to be nearly 4 percent above a year earlier. Marketings are likely to begin slowing in midspring. Spring quarter marketings are expected to be down about 4 percent from a year earlier. Second-half marketings are likely to decline about 3 to 4 percent below a year earlier. The beginning 1999 fed cattle inventory will likely be down about 10 percent from the beginning 1998 inventory. Beef Production Remains Large Beef production declined only marginally in 1997. Cattle slaughter declined nearly 1 percent, but this was almost offset by a 4-pound gain in dressed slaughter weights. Cow slaughter declined nearly 10 percent, while heifer slaughter rose over 7 percent. Steer slaughter in 1997 was down 1.5 percent, thus, the only reason beef production was not down even more from a year earlier was due to the very large increase in heifer slaughter and increased slaughter weights. Cattle slaughter will decline even more sharply --2 percent-- in 1998, due almost entirely to an expected 15 percent decline in cow slaughter, largely beef cows. Steer and heifer slaughter rose nearly 2 percent in 1997 and will rise another 1 percent in 1998. The largest year-to-year increases in steer and heifer slaughter and beef production, up 4 and 3 percent, respectively, will occur this winter. Compared with a year earlier, beef production is expected to be down about 2 percent this spring, down less than 1 percent this summer, and drop about 3 percent this fall. Fall will mark the beginning of fairly sharp year-to-year declines in beef production that should continue through at least 2000. Cattle and Beef Prices To Be Pressured by Large Meat Supplies Although beef production is expected to decline nearly 1 percent in 1998, per capita beef supplies will rise fairly sharply due to increased imports and declining exports, due largely to the Asian economic crisis and a very strong U.S. dollar. The U.S. market will face tightening processing beef supplies in late winter through the next few years as cow slaughter declines cyclically from the large levels of the past couple of years. Exporting countries are now having difficulty moving beef into Asia, and the strong dollar has made the U.S. a very attractive alternative market for these products. Consequently, U.S. total supplies of beef to move through domestic consumption channels will increase even with a decline in beef production. Per capita beef consumption in 1998 is expected to total about 67.8 pounds, retail weight equivalent, nearly a pound above 1997's level and only slightly below the 68.2 pounds consumed in 1996. Total red meat and poultry consumption is expected to rise nearly 8 pounds to a record 216 pounds. Retail beef prices are expected to remain near to slightly below a year earlier until fall when tighter supplies, expected to continue for several years, will result in retail prices for Choice beef rising into the $2.80's. For the year, however, prices will average near 1997's $2.80 a pound. Very large supplies of competing meats at low prices will hold down beef price increases in the second half as beef supplies tighten. Prices for Choice fed steers will remain under pressure of large marketings until midspring. Prices may average near $63 to $65 this winter as the domestic market is forced to consume beef that normally would have entered the export market. The absorption into a market already saturated with large pork supplies caused prices to move below $60 per cwt in mid- February. If the export market, particularly in Japan, our major market, remains weak or weakens more, prices may remain under pressure of record large total meat supplies. Prices are expected to rise to the upper mid-$60's this spring and summer and into the low $70's this fall. Stocker-feeder cattle prices will begin to strengthen further this spring, particularly as feedlots become more current and as the spring growing season gets underway. Yearling feeder cattle prices are expected to average in the upper $70's this winter, well above a year ago and sharply above 1996's $58. Prices are expected to average $80 to about $82 in the last three quarters, with crop and forage developments being key factors. Very strong heifer retention this spring and summer could cause prices to rise into the mid-$80's this fall, while heifers being forced into feedlots would cause prices to remain in the upper $70's. Larger numbers of heifers are expected to be bred this summer, but increases will likely remain below the first-half 1993 levels. Prices for Utility cows have strengthened this winter even as fed and feeder cattle prices have weakened, due primarily to sharp declines in cow slaughter. Prices rose to over $38 per cwt in January, over $13 above a year earlier. Seasonally declining cow slaughter from already lower winter levels will likely move prices into the mid- to low-$40's for much of 1998. U.S. Beef Exports Increase: But Longer Term Prospects Uncertain U.S. beef exports in 1997 rebounded from a lackluster first-half to rise 13 percent through November but the economic crisis in Asia, which manifested itself in December, casts considerable uncertainty for U.S. beef exports in 1998. Exports to Mexico can be described as nothing short of stellar; increasing at double digit rates in each 1997 quarter and reaching a record for the year. Levels now exceed those before the Mexican economic crisis. Economic growth is expected to continue and as the Mexican cattle herd is being rebuilt, substantial opportunities exist to further expand U.S. exports. However, the economic upheavals in Asia, could lead to export declines that might offset sales gains to Mexico. Key to any outlook for exports in 1998 will be the expectations for demand and U.S. market share in response to a continuously evolving economic situation in Asia. Any declines in income could limit demand for higher-value products, while adverse exchange rate movements could alter the relative prices offered by competing exporters. Foreign currencies appear to have depreciated more slowly vis-a-vis the U.S. dollar in January . If they again start depreciating more rapidly, U.S. market share will come under increasing pressure. The U.S. dollar/Australian dollar exchange rate in the first 2 months of 1998 is at levels comparable with 1993. According to Japan's import statistics, the U.S. share of Japan's imports fell significantly between 1992 and 1993. Pressure may also come from Canada, as the exchange rate between the Canadian dollar and the U.S. dollar is at a record low. If this situation continues through the year, U.S. beef sales in Canada may come under pressure as well. On the other hand, if the currencies of either our major customers or competitors appreciate, the loss of market share may be mitigated and exports may not fall as much as previously anticipated. Although Korea is expected to import its 187,000 metric ton (product weight) minimum access levels for 1998, sales may be slow in the first quarter due to a backlog of product that was contracted for to meet Korea's 1997 minimum access requirements. Compounding this is the potential decline in overall consumption until consumers have been able to fully understand the impact of the financial crisis on their household budgets. As the situation develops, consumers may reallocate spending towards non-beef food items, or towards lower-value cuts of beef, or reduce the quantity of higher-price high-quality beef purchased. These decisions could alter the market shares of competitors in the beef market. Still it is important to remember that although the collapse of the Korean won has made imports from all sources more costly, the weakness in the Australian dollar vis-a-vis the U.S. dollar will favor Australia. To some extent this has been offset by U.S. credit guarantees through the GSM program. Although the two allocations were fully subscribed and so benefited U.S. beef exports, it is uncertain how much more will be available for beef. Therefore, U.S. exports will most likely decline, but the degree to which the U.S. loses sales to Australia will depend on the exchange rate situation over the coming year. Exports to Canada declined about 5 percent through November and are likely to fall further during 1998. Canada is still liquidating herds and is faced with diminished prospects for exports to the Pacific Rim. The export sector could be aided by continued weakness in the Canadian dollar but some of the beef from western Canada, originally destined for trans-Pacific movement, may move in the opposite direction, to the population centers of eastern Canada. Eastern Canada is a traditional export market for the U.S. and increased domestic supplies and a weak Canadian dollar could reduce U.S. exports to Canada. Beef Imports To Rise After 2 years of reductions, U.S. imports of beef for processing began increasing in 1997 as U.S. cow slaughter declined and Australia and New Zealand began shipping increasing quantities. Although increases didn't pick up until the second quarter, through November 1997 imports from Australia and New Zealand were 20 and 15 percent higher than in 1996. Imports from Canada climbed as herd liquidation provided abundant supplies for export and Canada remained the largest U.S. supplier of beef for the second year. However, in 1998, as imports from Australia increase more rapidly than those from Canada, Australia is expected to regain its position as the top supplier. Imports from Argentina declined 12 percent in 1997 although Argentina can now ship fresh, chilled, and frozen product to the United States. In 1998, imports from Argentina will likely rise as lower cow slaughter firms prices for processing meat. Cattle Trade Total cattle imports declined 5 percent in 1997 as declining imports of slaughter animals from Canada more than offset increased imports of feeder cattle from Mexico. In Canada, slaughter at federal and provincially inspected plants was about 5 percent higher leading to lower available supplies. Slaughter through the first week of February was about 3 percent above 1997. However, some increase in imports was noted in the fourth quarter as the Canadian dollar depreciated. Imports from Mexico increased slightly despite herd rebuilding activities there. However, Mexico exported fewer female animals for finishing and slaughter in the United States. U.S. cattle imports are expected to decline about 4 percent in 1998 as Canadian inventories decline further and herd rebuilding continues in Mexico. Neither U.S. slaughter cattle prices nor feeder cattle prices are expected to increase sufficiently to increase the flow of cattle into the United States. U.S. cattle exports rose about 65 percent in 1997 on the strength of strong slaughter cattle sales to Mexico. Exports to Canada remained weak and producers in Mexico who wanted to import breeding animals faced continued credit obstacles. Despite the development of the Northwest Pilot Project to encourage the feeding of U.S. cattle in Canada, only slight growth is anticipated in 1998 cattle exports. However, new attempts to direct GSM credit to Mexico for importing U.S. breeding animals could stimulate increased sales. Hog Prices Remain Weak Weekly hog slaughter is averaging about 13 percent higher than in first-quarter 1997 and prices are remaining in the mid $30's. Based on the June-August pig crop, hog slaughter is expected to rise around 9 percent this quarter. In addition to larger pork supplies, hog prices are pressured by large supplies of beef and broilers and lackluster export prospects. Little Change Seen for 1998 Dairy Nothing very dramatic is expected to happen to either the supply or demand for milk and dairy products in 1998, following a year more notable for what did not happen than for what did. In 1998, milk production is expected to be near the 1997 level, while dairy demand grows moderately. With no clear sense of market direction, dairy prices may well stay volatile but are projected to average only slightly higher than in 1997. Prices of concentrate feeds and forages may ease in 1998 but will stay relatively high through most, if not all, of the year. Expected returns are not likely to upset the balanced trend and structural adjustments that have held milk output fundamentally stable in recent years. Sluggish growth in milk per cow is expected to only barely outweigh a 1-percent decline in milk cow numbers. Continued economic growth is expected to sustain the good, but not spectacular, dairy demand of recent years. However, reactions to prices above those of earlier in the nineties will pare away some of the potential growth in commercial use. In addition, large stocks of nonfat dry milk and the probable spring lapse in exports under the Dairy Export Incentive Program (DEIP) will weaken price rises. Milk Production Stagnant In 1997, milk producers handled very tight supplies of dairy-quality forage better, avoiding a repeat of 1996's spring collapse in milk per cow, and their cows benefited from relatively favorable summer weather. Other than these two factors, milk production in 1997 was very similar to 1995 and 1996. The almost 157 billion pounds produced last year were less than 1 percent more than in 1995, although more than 1 percent larger than in 1996. Milk-feed price relationships help explain some of this stability in milk output. The milk-feed ratio has spent most of recent years in the range normally associated with below-trend growth in milk per cow. Correspondingly, milk per cow, except for the direct and indirect effects of weather, has grown quite modestly. Although the milk-feed ratio will be more favorable during part of 1998, the 1998 average is projected to be a moderately unfavorable 1.6--not much incentive to boost grain feeding and milk per cow. Returns over concentrate costs in 1997 were higher than in the early nineties but fell about 11 percent from the strong 1996 returns. The stronger returns of 1996-97 did not do much to slow declines in milk cow numbers. The increases were insufficient to significantly alter the position of those dairy farms under long-term income stress and many of them continued to leave dairying. Similarly, the higher returns have not yet unleashed much expansion by stronger producers, as forage supplies and other factors have deterred growth. Returns over concentrate costs are expected to rise slightly in 1998. The cumulative effects of three years of higher returns may start to slow cow number declines by yearend. Despite fairly large alfalfa production in recent years, supplies of dairy-quality hay have been very tight. Quality problems have been widespread in each of the last three crops, leaving only minimal stocks of good hay. Alfalfa prices reached record highs in 1997, even compared with the relatively high milk or concentrate feed prices, and had a substantial impact on the returns of those producers buying hay--if they were able to find acceptable hay. Many more farmers were affected by the spotty quality of their homegrown alfalfa. Overall, lack of enough good forage trimmed growth in milk per cow and disrupted expansion plans. Conditions would have been much worse if the last two silage crops had not been good. Even a bumper 1998 alfalfa harvest cannot greatly ease the dairy forage problem until late 1998, although the drop in Asian alfalfa demand and the relatively mild winter have eroded prices recently. Firm Use Seen Dairy demand continues to benefit from the strong economy. Commercial use comparisons were strongly affected by much different pipeline stock changes in 1996 and 1997, particularly in the middle quarters. On a milkfat basis, commercial use rose almost 1 percent in 1997. Sales of dairy products on a skim solids basis were a little sluggish, slipping fractionally. Skim solids sales appeared to be more affected by delayed reactions to the high prices of 1996, and aggressive use of the DEIP pulled supplies away from domestic users. Continued economic growth and little or no increase in retail dairy prices in 1998 should boost commercial use of dairy products. Sales of skim solids are projected to rise about 2 percent, while milkfat sales are expected to increase 1 percent again. The brisk apparent demand for milkfat during the second half of 1997 and early 1998 implies that the rise in milkfat sales would be considerably larger if supplies were large enough to avoid substantially higher milkfat prices. Commercial stocks at the start of 1998 were close to a year earlier. Comparisons of recent butter and (particularly) cheese data with earlier years are not straightforward because they include warehouses that did not report in earlier years--a difference of 0.5-1.0 billion pounds milk equivalent. On January 1, holdings of butter and American varieties of cheese were moderate and inventories of most other products were tight. The only exception was continued burdensome stocks of nonfat dry milk. International Dairy Markets Softening International butter prices rose during most of 1997. Demand for imports was fairly brisk, while consumption increases in some exporting countries trimmed export supplies. Demand for nonfat dry milk was somewhat weaker, in part because Mexico and Algeria were importing less. Although prices generally trended downward during 1997, a modest reversal occurred during the second half. Large importers were again active and offerings were seasonally smaller. Since November however, prices of both products began to slide. Asian demand has weakened dramatically and even some deals completed before the crisis probably will be canceled. The strength of the U. S. dollar also has trimmed prices. Lastly, New Zealand and Australia have been more aggressively selling products. During the first half of their season, these countries were conservative about making commitments because of the uncertain effects of El Nio weather. Although conditions have been dry, there is no longer the same potential for sharp production drops. There probably will be enough international market demand to push DEIP exports to amounts allowed under the WTO, but reaching the limits for all products is not certain. Weakness in Asia may give buyers the upper hand in negotiations, slowing the sales pace. Domestic supply commitments may not be easy to obtain, particularly for products containing milkfat. Contract activity under the DEIP slowed substantially in early 1998 after being brisk during the second half of 1997. The only allocation for nonfat dry milk that remains unfilled for the July 1997-June 1998 contract year is for less than 10,000 tons going to Latin America. The WTO limit may well be reached by this spring, with no new contracts negotiated until after the flush milk production season. Exports of butter and milkfat under the DEIP probably will not be filled because of the lack of domestic supplies. Contract activity during the second half of 1998 probably will be at a pace roughly corresponding to the WTO limits for most products, unless domestic markets are tighter than expected. Price Volatility To Remain Without a clearcut sense of the direction of production and use changes, milk and dairy product prices likely will continue to be pushed around by small changes in market fundamentals or pipeline stocking. If milk output stays near or above a year earlier as expected, the seasonal buildup in production should overcome the current price strength and drop spring and summer prices of cheese and milk significantly below current levels. However, strong butter prices (which may not weaken) have effectively isolated cheese prices from the nonfat dry milk market--the major weak spot in dairy markets. Even if the seasonal drop in cheese prices is fairly sharp, farm milk prices probably will stay above a year earlier during the first half of 1998. For all of 1998, farm milk prices are projected to average only slightly above 1997's $13.38 per cwt. However, odds probably are greater that prices will average above the projection than below. Production faltering because of forage problems or too few farms expanding and stronger-than-expected demand represent two quite plausible scenarios that would generate much higher milk prices. Broiler Production Increasing More Slowly The wholesale broiler price collapse in December that brought net returns to near break-even and severe weather in early January in broiler production areas have led to a lower production forecast. Production is now expected to increase about 4 percent in the first half of the year with stronger increases coming in the second half as beef production begins to decline. Production for the year is expected to increase between 4 and 5 percent. Average broiler weights during January were about 2 percent below a year ago. A 1-percent increase in weights is typical and appears to have returned with the early February slaughter. The lighter weights in January may have been due to power outages and transportation problems caused by storms in early January. Turkey Price Forecast Lowered Sharply higher stocks of turkey meat at the end of 1997 and large increases in pork production are pressuring turkey prices. Stocks of whole turkeys were 21 percent above a year ago on December 31 while stocks of other turkey were 32 percent higher. Slightly lower production and slightly higher exports and consumption are expected to bring cold storage stocks lower by the end of this year. Turkey production for the first quarter is forecast to be 2 percent lower than a year ago. Lower net returns over the last 2 years should be leading to lower production. Poult placements have been reported to be 3 percent below a year ago for the September- December 1997 period that supplies the majority of birds for first-quarter slaughter. A 1-percent increase in slaughter weights is expected to offset some of the bird number declines. Egg Prices Lower First-quarter 1998 table egg production is expected to be 1-2 percent higher than a year ago which has pressured prices lower. Prices are expected to average about 7 percent lower for the quarter with February prices the weakest at more than 10 percent below last year. Egg prices are expected to recover as demand increases prior to Easter. Net returns to egg producer-marketers have remained strong but will be below 5 cents per dozen in February. Net returns are expected to be lower than in 1997 but sufficient to encourage increases in flock size and production in 1998. Cattle Cycles Introduction While most livestock producers are aware of cycles in animal inventories, especially for cattle and hogs, producers appear unwilling to formulate or are not aware of strategies that might allow them to take advantage of these cycles, or at least reduce the negative effects associated with cyclical inventory peaks. However, livestock producers' reluctance to develop or adopt strategies is somewhat understandable in the context of livestock cycle research results. Inconsistencies in these research results cloud the situation. The biological basis for the cyclical pattern of livestock inventories is relatively well known. That is, the time required for herd expansion, that is, the decision to expand is made, an animal to be conceived, calved, raised, bred, calve, raise its calf, have its calf fed to slaughter weight, slaughtered, and sold at retail can take as long as 4 years. In contrast, the decision to reduce the herd can require as little as loading extra cull cows onto the semi:--inventories shrink and next year's calf crop will likely be smaller. Research at ERS and elsewhere has shown some general trends in the cyclical behavior of cattle inventories. Cycles appear to be getting shorter. Early in the twentieth century, cattle cycles were as long as 16 years. More recently, cycles have been as short as 9 years (the cycles that began in 1950 and in 1959). Also, rates at which cattle and calf inventories increase and decline are slowing. Two general categories of factors affect livestock producers' inventory decisions--random events and systematic factors. Random events include things like droughts, floods, blizzards, disease outbreaks, and other things that happen unexpectedly. Because their occurrence is unpredictable, adjustments to these factors are made after their occurrence. Decision makers react to them. Systematic factors include factors that are somewhat known ahead of time, like last year's calf crop, the year before's inventory of cattle and calves, the number of females kept for breeding, grain stocks, and other factors known at a given time. For purposes of exposition, we refer to "this year," "last year," and "next year" generically, not as "this year" meaning 1998. Cattle Cycle Research at ERS Knowledge of the effects of systematic factors on cattle inventories provides a basis for projecting future inventory behavior in the case where there are no random shocks to distort the projection. Adjustments to cow herds can then be made that will affect this base inventory--the decision to expand inventories generally leads to lower prices and vice versa. Knowing at what stage we are within a cattle cycle and what to expect next might provide some basis for strategies and decisions to take advantage of cattle cycles. Research on cattle cycles at ERS is currently aimed at two areas. Current research is directed at determining which direction--looking back or looking forward--for which factors generates the greatest influence on cattle inventories. A second area of research focuses on what happens to heifer calves and breeding females during each cattle cycle. A break appears in cattle cycle research literature as to which direction, forward (expectations) or backward (lagged), values of factors have the most influence on cattle inventory cycles. The break occurs with the cattle cycle of the 1970s. Studies pertaining to cycles before the 1970s obtained results using lagged values of factors. Studies pertaining to cycles since then have found expectations to exert the most influence on cycles. Events in Taiwan (foot and mouth disease), Britain (Mad Cow disease), and other places that import beef and other meats from the U.S. affect our domestic supplies almost instantly and in a very unpredictable, random manner. While the effect of grain exports on cycles has been studied, not much research has been directed at the effects of livestock and beef exports on the cattle cycle, largely because NAFTA has not been in effect long enough to generate the data series needed to examine such an effect. Preliminary results of a regression analysis of the cattle cycle of the 1990s and previous cattle cycles lead us to think that both last year's actual and next year's expected inventories of cattle and calves have a lot to do with this year's inventory. Not terribly surprisingly, the greater was last year's inventory and the greater next year's inventory is expected to be, the greater will be this year's inventory. Also important are this year's and next year's expected cattle price per hundredweight . As one might expect, the higher this year's price, the lower is this year's inventory, and the higher next year's price is expected to be, the higher will be this year's inventory. The expected price of corn next year has a negative effect on this year's cattle and calf inventory. One factor that was expected to have at least some effect on this year's cattle and calf inventory was the last 2 years' calf crops. Surprisingly, the calf crops aren't factors that have an important effect, perhaps because what's done with the heifer calves from each calf crop is more important than the size of the previous calf crop or two. The current year's replacement heifer inventory does appear to be relatively more important to the size of this year's cattle and calf inventory than previous or current calf crops. This disposition of breeding aged and pre-breeding aged females is one of the things we are continuing to examine. What Has Happened Most Recently Severe drought in some cattle raising areas forced many cow-calf and stocker producers to reduce cattle inventories as forage supplies declined in late 1995 and early 1996. The liquidation brought on by the drought may have cut short the consolidation phase, typically a 1- or 2-year period of relatively stable cattle inventories, of the current cattle cycle that began in 1991. In addition, the current cattle cycle coincided with a record high spike in grain prices that motivated cattle feeders to temporarily lower bids for feeder cattle. The U.S. farm price of corn, which averaged $2.26 a bushel in 1994/95, rose to a peak of over $5.00 in July 1996. The liquidation phase of the current cattle cycle will likely last until 1999 or 2000, more or less, depending on export growth, expectations of profits in the cow/calf, stocker, and cattle feeding sectors, longterm effects of current Federal (non)policies for feed grains, additional droughts in major cattle-producing areas, and other factors. The current cattle cycle could end with a relatively nondescript liquidation phase in terms of moderate inventory reductions. This reduction is largely due to two reasons: liquidation during the drought of 1995-96 and the long term downtrend in cattle numbers that began in 1976. Cattle numbers are reaching a point where per capita beef consumption will decline more slowly than exports and population growth will create higher demand for beef. Summary Cycles are getting shorter over time. Replacement heifer disposition is more important than calf crop. Cattle inventories take increasing and declining at slower rates over time. Cattle inventories take longer to grow than to shrink. Current and expected grain prices have more of an effect than past grain prices. Copies of the Livestock, Dairy and Poultry Situation and Outlook are available through the ERS Autofax System. Using a telephone attached to a fax machine, call 202-694-5700 and request Document Number 11515. Principal Contributors - (202) 694-5180 Leland Southard, (Coordinator), Milton Madison (Poultry), David Harvey (Poultry Trade), Ron Gustafson, (Cattle), Shayle Shagam (Beef Trade), Mildred Haley (Pork Trade), Jim Miller (Dairy), Laverne Williams (Statistics) Federally inspected cattle slaughter Week Cattle Steers and heifers ended 1997 1998 % Chg 1997 1998 % Chg ------------------------------------------------------ Thousands Jan. 3 584 553.8 -5 451.1 441.4 -2 10 723.2 704.4 -3 549.2 549.5 0 17 729.7 701.7 -4 584.1 563.7 -3 24 730.5 691.2 -5 567.2 552.4 -3 31 699.6 670.8 -4 553.9 533.4 -4 Feb. 7 685.4 541 14 666.6 532.5 21 667.3 533.3 28 672.3 534 Mar. 7 671.1 540.3 14 664.7 521 21 660.1 524.5 28 648 512.8 Apr. 4 661.4 529.8 11 670.1 541 18 700.9 566.8 25 696.3 557.9 May. 2 710.4 582.1 9 739 606.9 16 711.7 586.8 23 728.1 601.2 30 627.7 516.8 June 6 710.6 594.9 13 695.4 580.9 20 733.4 607.1 27 731.9 603.3 July 4 596.6 495 11 711.7 582 18 719 589.3 25 729.4 594.9 Aug. 1 712 585.8 8 708.7 577.1 15 696.8 562 22 721.8 588.9 29 712.9 581.8 Sept. 5 606 498 12 716.1 577.1 19 678 540.2 26 658.7 523.8 Oct. 3 671 535.4 10 698.8 563 17 691.6 548.9 24 696 535.9 31 686.3 525.2 Nov. 7 695.8 532.5 14 686.4 525.9 21 664.7 504.2 28 613.4 484.7 Dec. 5 665.5 504.2 12 648.1 498.5 19 648 499.9 26 503.6 401.3 Federally inspected cattle slaughter Week All cows Beef cows ended 1997 1998 % Chg 1997 1998 % Chg ------------------------------------------------------ Jan. 3 125.1 105 -16 69.4 55 -21 10 161.8 143.7 -11 89.1 76 -15 17 135.2 127 -6 74.1 67 -10 24 150.9 127.6 -15 83.5 65 -22 31 133.4 126 -6 70.7 65 -9 Feb. 7 133.3 70.9 14 122.3 61.4 21 122 59 28 126.2 62.1 Mar. 7 118.8 58.3 14 129.6 67.8 21 122.2 66.4 28 122.1 64 Apr. 4 118.2 63.9 11 116.5 61.7 18 120.1 64.2 25 123.9 69.4 May. 2 114.2 63.1 9 117.5 65 16 111.3 61.3 23 112.9 62.2 30 98.6 54.2 June 6 101.7 56.6 13 101 56 20 111.3 60.8 27 113.4 63.8 July 4 90.4 49.6 11 116 64 18 114.6 64.5 25 119.9 67.1 Aug. 1 112.5 61.3 8 117.3 64.2 15 119.9 65.1 22 117.8 61.8 29 116 61.7 Sept. 5 96.5 49.2 12 124.1 67.2 19 123.1 67.3 26 121.3 63.5 Oct. 3 122.3 67.9 10 122.4 67.4 17 129 70 24 146.2 83.3 31 146.9 84.1 Nov. 7 149.2 86.4 14 147.5 83.3 21 146.7 84 28 118.7 66.7 Dec. 5 149.1 81.4 12 137.5 71.9 19 135.8 74.8 26 95.1 52.2 Feeder cattle supply outside feedlots -------------------------------------------------------------------------- Change from Item 1993 1994 1995 1996 1997 /3 Prev. yr -------------------------------------------------------------------------- 1,000 head Percent On farms Jan 1: Calves < 500 lbs 17884 18369 18488 17909 17418 -2.7 Steers over 500 l 17042 17463 17732 17320 17197 -0.7 Heifers over 500 9068 9275 9949 10199 10018 -1.8 Total 43994 45107 46169 45428 44633 -1.8 On feed Jan 1 1/: 12931.55 12374 12862 13102 13546 3.4 Feeder cattle outsid feedlots on Jan 1 31062.45 32733 33307 32326 31087 -3.8 Slaughter Jan-Mar Calves 311.9 350.5 431.8 403.1 Steers & heifers 6495 6662 7085 7037 Total 6806.9 7012.5 7516.8 7440.1 On feed Apr 1 1/: 12441.44 12596 12245 12924 Feeder cattle outsid feedlots on Apr 1 24745.66 25498.5 26407.2 25063.9 On farms July 1: Calves < 500 lbs 31300 32000 31700 30800 Steers over 500 l 15200 15400 15100 14800 Heifers over 500 7500 8000 8100 8200 Total 54000 55400 54900 53800 On feed July 1 1/ 10577.61 11140 9741 10839 Feeder cattle outsid feedlots on Jly 1 43422.39 44260 45159 42961 Slaughter Jul-Sep Calves 312.4 360.9 468.9 395.8 Steers & heife 7269 7657 7169 7532 Total 7581.4 8017.9 7637.9 7927.8 On feed Oct 1 1/: 10728.95 10946 11001 12083 Feeder cattle outsid feedlots on Oct 1 35689.65 36436.1 36261.1 33789.2 -------------------------------------------------------------------------- 1/ Estimated U.S. steers and heifers. 2/ Not including heifers for cow herd replacement3/ 1995-1997 data revised to incorporate July 1 U.S., and 12 State on feed data. Commercial calf slaughter and production ----------------------------------------------- Year Dressed Slaughter weight Production ----------------------------------------------- 1,000 Million head Pounds pounds 1994 I 312 228 71 II 288 236 68 III 312 218 68 IV 357 213 76 Year 1269 223 283 1995 I 350 223 78 II 333 222 74 III 361 211 76 IV 386 207 80 Year 1430 215 308 1996 I 432 208 90 II 405 215 87 III 470 202 95 IV 463 205 95 Year 1770 207 367 1997 I 404 213 86 II 364 220 80 III 396 202 80 IV 411 190 78 Year 1575 206 324 1998 ----------------------------------------------- Calf slaughter by class under Federal inspection ----------------------------------------------------------------- Bob veal Fed Other Year 150 lb & 150 to 400 lb over Total below Formula Nonformula 400 lb ----------------------------------------------------------------- 1,000 head 1991 466 790 66 86 1408 1992 423 760 62 82 1328 1993 324 725 45 66 1159 1994 416 730 37 54 1237 1995 564 740 35 54 1393 1996 867 747 32 71 1718 1997 757 709 25 43 1534 I 198 175 8 11 392 II 163 175 6 11 355 III 193 179 5 10 387 IV 203 180 6 10 400 7-State cattle on feed, net placements, marketings, and other disappearance in feedlots with capacity of 1,000 or more head ------------------------------------------------------------------------------ Year On Other dis- feed Placement Marketing appearance ------------------------------------------------------------------------------ 1,000 % 1,000 % 1,000 % 1,000 % head Chg head Chg head Chg head Chg 1995 Jan. 8,031 -2.7 1,631 15.2 1,484 0.2 59 13.5 Feb. 8,119 -0.2 1,532 22.0 1,372 1.1 52 -8.8 Mar. 8,227 3.1 1,681 10.7 1,513 3.1 67 -6.9 1st Qtr 4,844 4,369 178 Apr. 8,328 4.6 1,403 7.1 1,437 0.5 61 -10.3 May 8,233 5.9 1,673 23.1 1,667 8.1 57 -26.9 June 8,182 8.9 1,356 21.8 1,754 7.5 50 -39.0 2nd Qtr 4,432 4,858 168 July 7,734 11.9 1,404 -7.6 1,698 9.5 49 25.6 Aug. 7,391 8.0 1,653 -6.1 1,815 13.3 40 -21.6 Sept. 7,189 3.5 2,173 13.5 1,594 4.5 46 4.5 3rd Qtr 5,230 5,107 135 Oct. 7,722 5.9 2,278 1.5 1,529 1.7 51 8.5 Nov. 8,420 5.4 1,804 9.9 1,478 7.9 61 -1.6 Dec. 8,685 5.9 1,446 7.5 1,412 -1.4 52 -35.0 4th Qtr 5,528 4,419 164 Annual 20,034 18,753 645 1996 Jan. 8,667 7.9 1,312 -19.6 1,626 9.6 49 -16.9 Feb. 8,304 2.3 1,441 -5.9 1,541 12.3 52 Mar. 8,152 -0.9 1,666 -0.9 1,476 -2.4 56 -16.4 1st Qtr 4,419 4,643 157 Apr. 8,286 -0.5 1,150 -18.0 1,613 12.2 65 6.6 May 7,758 -5.8 1,300 -22.3 1,747 4.8 58 1.8 June 7,253 -11.4 1,068 -21.2 1,696 -3.3 47 -6.0 2nd Qtr 3,518 5,056 170 July 6,578 -14.9 1,483 5.6 1,678 -1.2 46 -6.1 Aug. 6,337 -14.3 1,965 18.9 1,653 -8.9 37 -7.5 Sept. 6,612 -8.0 2,267 4.3 1,342 -15.8 51 10.9 3rd Qtr 5,715 4,673 134 Oct. 7,486 -3.1 2,536 11.3 1,431 -6.4 57 11.8 Nov. 8,534 1.4 1,953 8.3 1,418 -4.1 66 8.2 Dec. 9,003 3.7 1,423 -1.6 1,415 0.2 68 30.8 4th Qtr 5,912 4,264 191 Annual 19,564 18,636 652 1997 Jan. 8,943 3.2 1,663 26.8 1,728 6.3 65 32.7 Feb. 8,813 6.1 1,552 7.7 1,554 0.8 42 -19.2 Mar. 8,769 7.6 1,694 1.7 1,497 1.4 62 10.7 1st Qtr 4,909 4,779 169 Apr. 8,904 7.5 1,296 12.7 1,648 2.2 68 4.6 May 8,484 9.4 1,612 24.0 1,785 2.2 80 37.9 June 8,231 13.5 1,224 14.6 1,732 2.1 44 -6.4 2nd Qtr 4,132 5,165 192 July 7,679 16.7 1,751 18.1 1,852 10.4 42 -8.7 Aug. 7,536 18.9 2,111 7.4 1,755 6.2 42 13.5 Sept. 7,850 18.7 2,278 0.5 1,528 13.9 42 -17.6 3rd Qtr 6,140 5,135 126 Oct. 8,558 14.3 2,454 -3.2 1,545 8.0 77 35.1 Nov. 9,390 10.0 1,826 -6.5 1,429 0.8 69 4.5 Dec. 9,718 7.9 1,304 -8.4 1,499 5.9 68 4th Qtr 5,584 4,473 214 Annual 20,765 19,552 701 1998 Jan. 9,455 5.7 1,492 -10.3 1,689 -2.3 78 20.0 Feb. 9,180 4.2 Total heifers entering cow herd January-June and July-December Jan 1 Intended Total 1/ July 1 Heifers Percent cow herd re- disap- cow in- entering enter- Year inven- placements pearance ventory the herd ing tory Jan 1 Jan-Jun Jan-Jun - - 1,000 head- - Percent 1986 44,869 9,874 4,340 45,000 4,471 45.3 1987 44,412 9,519 3,699 44,400 3,687 38.7 1988 43,494 9,371 3,468 43,900 3,874 41.3 1989 42,625 9,442 3,517 43,000 3,892 41.2 1990 42,469 9,454 3,347 42,900 3,778 40.0 1991 42,485 9,536 3,229 43,200 3,944 41.4 1992 42,735 9,774 3,271 43,600 4,136 42.3 1993 43,023 10,268 3,395 44,600 4,972 48.4 1994 44,178 10,509 3,294 45,100 4,216 40.1 1995 44,643 10,616 3,460 45,600 4,417 41.6 1996 44,644 10,283 3,911 45,000 4,267 41.5 1997 43,580 10,113 3,639 44,000 4,059 40.1 1998 42,874 9,727 Intended Total 2/ entering Heifers Percent herd re- disap- cow in- entering enter- Year placements pearance ventory the herd ing July 1 Jul-Dec following Jul-Dec year - - 1,000 head - Percent 1986 9,500 4,294 44,412 3,706 39 1987 9,400 3,577 43,494 2,671 28 1988 9,200 3,522 42,625 2,247 24 1989 9,200 3,438 42,469 2,907 32 1990 9,100 3,210 42,485 2,795 31 1991 9,300 3,031 42,735 2,566 28 1992 9,700 3,216 43,023 2,639 27 1993 9,700 3,336 44,178 2,914 30 1994 9,900 3,310 44,643 2,853 29 1995 9,600 3,490 44,644 2,534 26 1996 9,200 4,032 43,580 2,612 28 1997 8,900 3,578 42,874 2,452 28 1998 1/ Death loss calculated as 1 percent of January 1 cow inventory plus estimated cow slaughter. 2/ Death loss calculated as 1/2 percent of January 1 cow inventory plus estimated commmercial cow slaughter. Beef heifers entering cow herd January-June and July-December Jan 1 Intended Total 1/ July 1 Heifers Percent cow herd re- disap- cow in- entering enter- Year inven- placements pearance ventory the herd ing tory Jan 1 Jan-Jun Jan-Jun - - 1,000 head- - Percent 1992 33,007 5,643 1,695 33,900 2,588 45.9 1993 33,365 6,092 1,767 34,900 3,302 54.2 1994 34,650 6,365 1,744 35,600 2,694 42.3 1995 35,156 6,475 1,907 36,100 2,851 44.0 1996 35,228 6,179 2,302 35,600 2,674 43.3 1997 34,271 6,056 2,072 34,700 2,501 41.3 1998 33,683 5,745 1/ Death loss calculated as 1 percent of January 1 cow inventory plus estimated cow slaughter. 2/ Death loss calculated as 1/2 percent of January 1 cow inventory plus estimated commmercial cow slaughter. Jan 1 Heifers Intended Total 2/ entering entering Percent herd re- disap- cow in- the herd enter- Year placements pearance ventory Jul-Dec ing July 1 Jul-Dec following year - - 1,000 head - Percent 1992 5,600 1,681 33,365 1,146 20.5 1993 5,700 1,759 34,650 1,509 26.5 1994 5,900 1,797 35,156 1,353 22.9 1995 5,700 1,976 35,228 1,104 19.4 1996 5,500 2,391 34,271 1,062 19.3 1997 2,015 33,683 998 18.8 1998 1/ Death loss calculated as 1 percent of January 1 cow inventory plus estimated cow slaughter. 2/ Death loss calculated as 1/2 percent of January 1 cow inventory plus estimated commmercial cow slaughter. January 1 cattle inventory Class 1990 1991 1992 1993 1994 1,000 head Cattle and calves 95,816 96,393 97,556 99,176 100,988 Cows and heifers that have calved 42,469 42,485 42,735 43,023 44,178 Beef cows 32,454 32,520 33,007 33,365 34,650 Milk cows 10,015 9,966 9,728 9,658 9,528 Heifers 500 lb+ 17,257 17,638 17,822 18,818 19,577 For beef cow replacement 5,283 5,443 5,643 6,092 6,365 For milk cow replacement 4,171 4,093 4,131 4,176 4,144 Other heifers 7,803 8,102 8,048 8,550 9,068 Steers 500 lb+ 15,512 15,967 16,424 16,940 17,042 Bulls 500 lb+ 2,160 2,196 2,239 2,278 2,307 Calves under 500 l 18,418 18,107 18,336 18,117 17,884 Calf crop: Jan-June 28,200 28,400 28,500 28,800 29,800 Jul 10,413 10,183 10,433 10,648 10,759 Class 1995 1996 1997 1998 Cattle and calves 102,755 103,487 101,460 99,501 Cows and heifers that have calved 44,643 44,644 43,580 42,874 Beef cows 35,156 35,228 34,271 33,683 Milk cows 9,487 9,416 9,309 9,191 Heifers 500 lb+ 19,891 20,232 20,311 19,746 For beef cow replacement 6,475 6,179 6,056 5,745 For milk cow replacement 4,141 4,104 4,057 3,982 Other heifers 9,275 9,949 10,199 10,018 Steers 500 lb+ 17,463 17,732 17,320 17,197 Bulls 500 lb+ 2,390 2,392 2,339 2,266 Calves under 500 l 18,369 18,488 17,688 17,418 Calf crop: Jan-June 29,500 29,400 28,500 Jul 10,711 10,376 10,218 U.S. LIVESTOCK & MEAT IMPORTS & EXPORTS Document No. 11505 Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Beef & Veal Imports Carcass wt.,thousand lb. Australi 49503 23136 39538 67168 75746 63411 56069 New Zeal 43849 37876 62474 51820 81119 88463 59673 Canada 57569 58149 59252 64265 56738 57249 44449 Brazil 8252 7132 9260 7414 8715 8664 8878 Argentin 10146 9886 10552 11441 15021 12272 12614 Central A 8578 8498 7726 7093 10218 4732 4031 Other 8183 7063 9577 6587 8525 9103 6793 Total 186081 151740 198378 215788 256082 243894 192509 Beef & Veal Export Japan 74217 76807 82765 97352 92346 81243 91224 Canada 20586 21530 21330 19941 21844 21445 37274 Mexico 17533 19654 15815 20577 24486 27618 28905 Korea, R 29088 21304 12141 21033 15120 19561 26064 Caribbean 880 1211 1285 1206 810 1018 1072 Other 13267 12762 12982 15584 14265 17179 16643 Total 155570 153268 146317 175692 168872 168064 201182 Cattle Imports Mexico 54192 65802 42826 61134 41681 28243 20543 Canada 104863 100298 126649 144819 130464 93711 108286 Ove 95472 87697 105122 116645 111381 87540 103471 440 6290 9240 16123 21298 13324 2371 1744 Total 159056 166100 169481 205953 172145 121954 128829 Cattle Exports Mexico 19008 19162 13550 17785 13934 16839 22479 Canada 3612 2798 3932 2255 3124 2009 3296 Total 22687 22296 18234 20709 17697 19747 25937 Lamb Imports Australi 2656 2339 3524 3272 3345 3092 2288 New Zeal 2393 2366 3581 2548 2415 2505 1711 Total 5050 4738 7250 5882 5884 5768 4074 Mutton Imports Total 3073 2023 2524 2633 2004 1630 1470 Lamb and mutton exports Total 580 336 741 597 447 298 457 U.S. LIVESTOCK & MEAT IMPORTS & EXPORTS Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Beef & Veal Imports Australi 70247 63361 44285 52782 34175 New Zeal 44385 27339 22765 21041 35241 Canada 54741 59755 65991 67072 66223 Brazil 7425 6621 7042 6518 8845 Argentin 11558 8382 11253 12501 21031 Central A 8364 11650 7480 6994 7863 Other 4211 5090 3184 4692 8362 Total 200930 182197 161999 171600 181739 Beef & Veal Exports Japan 93797 94633 90304 99523 79340 Canada 27703 21781 22569 23627 23095 Mexico 29393 30499 34068 28555 35481 Korea, R 28472 25413 25716 26133 11628 Caribbean 811 790 1476 1710 712 Other 22301 23201 19564 22071 22347 Total 202476 196318 193697 201619 172604 Cattle Imports Mexico 23149 26681 72261 145208 87689 Canada 99663 145505 141029 101258 80269 Ove 91782 126593 119850 83585 71504 440 3635 9197 11433 9001 3994 Total 122823 172186 213401 246466 167958 Cattle Exports Mexico 25874 22130 26853 17522 19985 Canada 3224 3244 3290 3698 6707 Total 29330 25828 31053 21745 27081 Lamb Imports Australi 1860 2075 2484 2468 3566 New Zeal 1899 1536 2017 1339 2106 Total 3784 3670 4609 4010 5710 Mutton Imports Total 1293 1080 1528 1207 2142 Lamb and mutton exports Total 545 489 240 478 580 High Plains cattle feeding simulator Purchased During Nov-96 Dec-96 Jan-97 Feb-97 Marketed During Mar-97 Apr-97 May-97 Jun-97 Expenses: ($/head) 750 lb. feeder steer 514.43 513.60 533.40 531.45 Total feed, handling, and management charge 153.73 153.42 154.17 154.83 Interest on feeder and 1/2 feed 30.66 30.61 31.99 31.90 Death loss (1% of purchase) 5.14 5.14 5.33 5.31 Marketing 1/ f.o.b. f.o.b. f.o.b. f.o.b. Total expenses 703.95 702.76 724.89 723.50 Selling price required to cover: ($/cwt) Feed and feeder cost 58.31 57.92 59.26 58.20 All costs 61.44 61.02 62.47 61.36 Selling price 2/ 67.44 67.66 67.00 63.53 Net margin 6.00 6.64 4.53 2.17 Cost per 100 lb. gain: Variable cost less interest $/cwt 40.13 39.48 38.87 37.31 Feed costs $/cwt 38.83 38.20 37.57 36.07 Total costs $/cwt 47.88 47.10 46.67 44.75 Prices: ($/cwt) Choice feeder steer 750-800 lb. Ok City 67.19 67.08 69.72 69.46 Feed, Prices, High Plains Milo $/cwt 4.25 4.23 4.18 4.29 Corn $/cwt 5.07 5.00 5.02 5.03 Wheat $/cwt 6.85 7.13 6.92 6.72 Cottonseed Meal (41%) $/cwt. 9.42 9.52 10.47 9.50 Alfalfa hay $/ton 133.65 141.00 153.00 154.00 Interest, annual rate 3/ 10.37 10.37 10.48 10.48 1/ Cattle sold f.o.b., 4% shrink. 2/ Steers, 1100-1300 lb, Tx-Okl direct. 3/ Variable interest rate, 11th District Federal Reserve. Historical data is available by autofax. Dial 202-694-5700 Document number 11520. Purchased During Mar-97 Apr-97 May-97 Jun-97 Marketed During Jul-97 Aug-97 Sep-97 Oct-97 Expenses: ($/head) 750 lb. feeder steer 529.05 549.38 565.50 601.50 Total feed, handling, and management charge 161.42 192.82 189.17 180.07 Interest on feeder and 1/2 feed 31.95 33.77 34.52 36.17 Death loss (1% of purchase) 5.29 5.49 5.66 6.02 Marketing 1/ f.o.b. f.o.b. f.o.b. f.o.b. Total expenses 727.71 781.46 794.85 823.75 Selling price required to cover: ($/cwt) Feed and feeder cost 58.20 62.56 63.61 66.12 All costs 61.34 65.87 66.99 69.69 Selling price 2/ 63.80 65.19 66.04 66.93 Net margin 2.46 -0.68 -0.95 -2.76 Cost per 100 lb. gain: Variable cost less interest $/cwt 38.20 45.44 44.64 43.06 Feed costs $/cwt 36.99 44.18 43.34 41.67 Total costs $/cwt 45.52 53.18 52.55 51.43 Prices: ($/cwt) Choice feeder steer 750-800 lb. Ok City 69.14 71.85 74.00 78.80 Feed, Prices, High Plains Milo $/cwt 4.54 4.51 4.50 4.15 Corn $/cwt 5.16 5.11 5.10 4.89 Wheat $/cwt 6.99 7.30 7.71 5.67 Cottonseed Meal (41%) $/cwt. 9.63 10.23 10.09 9.59 Alfalfa hay $/ton 150.00 145.00 135.00 135.00 Interest, annual rate 3/ 10.48 10.46 10.46 10.46 1/ Cattle sold f.o.b., 4% shrink. 2/ Steers, 1100-1300 lb, Tx-Okl direct. 3/ Variable interest rate, 11th District Federal Reserve. Historical data is available by autofax. Dial 202-694-5700 Document number 11520. Purchased During Jul-97 Aug-97 Sep-97 Marketed During Nov-97 Dec-97 Jan-98 Expenses: ($/head) 750 lb. feeder steer 627.08 614.48 599.78 Total feed, handling, and management charge 141.78 148.06 147.58 Interest on feeder and 1/2 feed 36.82 36.32 35.53 Death loss (1% of purchase) 6.27 6.14 6.00 Marketing 1/ f.o.b. f.o.b. f.o.b. Total expenses 811.94 805.00 788.89 Selling price required to cover: ($/cwt) Feed and feeder cost 65.36 65.47 64.81 All costs 69.03 69.12 68.41 Selling price 2/ 67.66 65.91 64.50 Net margin -1.37 -3.21 -3.91 Cost per 100 lb. gain: Variable cost less interest $/cwt 34.73 37.18 38.10 Feed costs $/cwt 33.26 35.70 36.61 Total costs $/cwt 43.37 45.94 46.91 Prices: ($/cwt) Choice feeder steer 750-800 lb. Ok City 82.21 80.53 78.57 Feed, Prices, High Plains Milo $/cwt 4.01 4.27 4.18 Corn $/cwt 4.73 5.02 4.79 Wheat $/cwt 5.20 5.52 5.44 Cottonseed Meal (41%) $/cwt. 8.75 8.66 9.58 Alfalfa hay $/ton 130.00 130.00 128.00 Interest, annual rate 3/ 10.55 10.55 10.55 1/ Cattle sold f.o.b., 4% shrink. 2/ Steers, 1100-1300 lb, Tx-Okl direct. 3/ Variable interest rate, 11th District Federal Reserve. Historical data is available by autofax. Dial 202-694-5700 Document number 11520. PRODUCTION INDICATORS Jan-97 Nov-97 Dec-97 Jan-98 Cattle: On feed - 7 States, 1,000+ Hd 8,943 9,390 9,718 9,455 Net placements 1,598 1,757 1,236 1,414 Marketings 1,728 1,429 1,499 1,689 Broilers: Eggs in incubators(000) /1 582,618 550,530 593,985 590,889 Chicks hatched (000)/2 700,467 648,120 711,579 710,000 Hatching egg layers/1 50,935 52,609 52,901 53,788 Pullets placed (000) 6,393 6,347 6,252 NA Hvy-type hen slaughter 5,173 3,926 4,416 4,400 Turkeys: Eggs in incubators(000) /1 34,111 30,964 32,074 32,748 Poults placed (000) 27,121 23,281 25,711 26,202 Eggs: Table egg prod. (mil. doz.)/2 466 463 482 475 Table egg layers, (000)/1 251,372 251,200 255,641 253,971 Table eggs/100 layers/1 72.9 72.6 73.3 72.9 Chicks hatched (000) 33,331 27,803 35,604 35,000 Lt.-type hen slaughter 9,787 7,189 9,205 8,750 ESTIMATED RETURNS Feb-97 Dec-97 Jan-98 Feb-98 /* Great Plains cattle feedlot Breakeven price /3 60.05 69.12 68.41 67.99 Selling price 65.35 65.91 64.57 62.00 Net margin 5.30 -3.21 -3.84 -5.99 N. Central hog farrow to finish Breakeven price /3 49.50 43.46 43.64 44.83 Selling price 51.44 39.85 35.60 35.00 Net margin 1.94 -3.61 -8.04 -9.83 Broiler Wholesale cost 52.08 51.57 52.15 51.15 Wholesale price 59.53 52.25 54.66 56.00 Net margin 7.45 0.68 2.51 4.85 Turkey Wholesale cost 67.25 68.50 66.07 67.08 Wholesale price 57.00 62.34 55.63 54.00 Net margin -10.25 -6.16 -10.44 -13.08 Egg Wholesale cost 70.95 71.16 69.81 69.19 Wholesale price 87.26 93.92 85.73 76.00 Net margin 16.31 22.76 15.92 6.81 /1 First of month /2 Last month estimated /3 Does not include capital replacement cost /* estimate LIVESTOCK PRICES Feb-97 Dec-97 Jan-98 Feb-98 /* Cattle prices $/cwt. Steers, Choice, 11-13 cwt. Texas Panhandle 65.35 65.91 64.57 62.00 Nebraska Direct 65.48 65.53 63.57 61.60 Cows - Sioux Falls Utility breaking 34.06 35.91 39.60 40.25 Utility boning 32.50 34.50 38.14 38.75 Feeder Cattle - Oklahoma City Steers: Med. #1 500-550 lb. 81.46 90.72 89.96 93.75 600-650 lb. 74.02 83.28 81.54 86.65 750-800 lb. 69.46 81.00 77.23 76.90 Heifers: Med. #1 450-500 lb. 70.43 80.64 79.98 81.00 700-750 lb. 64.89 74.07 72.12 72.25 Hog prices Barrows and gilts 6 Markets 51.49 40.50 38.82 35.25 Iowa/S. Minn No. 1-3 51.44 39.85 35.60 35.00 Sows 6 Markets 48.68 34.08 27.52 28.75 Feeder pigs - No. 1&2 So. Mo. 40-50 lb. (per hd.) Sheep & lamb prices San Angelo TX Slaughter lambs, Choice 100.81 83.52 74.38 74.00 Ewes, Good 52.38 48.42 49.75 49.00 Feeder lambs, Choice 115.44 97.17 95.31 89.00 GRAIN AND FEED PRICES Feb-97 Dec-97 Jan-98 Feb-98 /* $/bu Corn, #2 Yellow, Cen. Ill 2.71 2.60 2.60 2.58 Wheat, HRW Ord., K.C. 4.46 3.64 3.52 3.54 $/ton SBM, 48% Solvent, Decatur 262.42 225.52 202.84 194.00 Alfalfa Hay, U.S. Avg 113.00 106.00 105.00 Grass Hay, U.S. Avg 102.00 97.70 98.10 /* Estimates MEAT STATISTICS Jan. - Jan. - Feb-97 Feb-98 Dec-97 Jan-98 Feb-98 /* Commercial production Million pounds Beef 4,144 4,163 2,025 2,165 1,998 Veal 58 46 26 24 22 Pork 2,770 3,094 1,641 1,639 1,455 Lamb 41 43 23 21 22 Total red meat 7,013 7,346 3,715 3,849 3,497 Broilers 4,456 4,400 2,253 2,200 2,200 Other chicken 82 82 41 42 40 Turkeys 834 795 456 410 385 Total poultry 5,372 5,277 2,750 2,652 2,625 Total meat & poultry 12,385 12,623 6,465 6,501 6,122 Commercial slaughter Thousand head Cattle 6,045 5,869 2,880 3,048 2,821 Steers 2,813 2,797 1,349 1,446 1,351 Heifers 1,945 1,903 875 975 928 Beef Cows 632 540 326 300 240 Dairy Cows 554 532 280 278 254 Bulls and stags 101 97 50 49 48 Calves 272 250 145 131 119 Sheep 632 646 349 321 325 Hogs 14,730 16,259 8,621 8,609 7,650 Barrows & gilts 14,147 15,632 8,287 8,287 7,345 Sows 481 535 287 275 260 Broilers 1,250,169 1,225,000 633,429 615,000 610,000 Turkeys 43,562 41,350 23,372 21,250 20,100 Feb-97 Nov-97 Dec-97 Jan-98 Feb-98 /* F.I. dressed weight Pounds Cattle 694 707 711 716 716 Calves 214 190 184 186 186 Sheep 66 66 67 68 69 Hogs 189 191 191 191 191 Beginning cold storage stocks Million pounds Beef 290.3 351.6 378.2 350.8 NA Pork 344.5 354.2 334.1 344.5 NA Bellies 38.0 14.4 25.4 44.8 NA Hams 49.8 88.8 61.3 44.8 NA Total chicken 676.2 587.3 609.9 614.1 NA Turkey 401.0 736.6 438.6 417.2 NA Frozen eggs 11.0 10.9 10.3 9.6 NA /* Estimates WHOLESALE PRICES Feb-97 Dec-97 Jan-98 Feb-98 /* Beef, Central U.S. $/cwt Boxed beef cutout Choice 1-3 550-700# 98.98 101.50 100.26 97.50 Choice 1-3 700-850# 98.17 100.43 99.16 96.00 Select 1-3 700-850# 94.55 93.39 96.76 93.75 Cutter Cow 59.73 62.13 62.00 63.00 Bnls beef, 90% fresh 89.84 90.12 98.34 98.75 Imported Bnls beef, 90% frz 93.19 91.30 88.00 NA Hide & offal value 9.52 8.23 6.76 7.05 Vealers, Choice, 150-250# 171.13 166.70 167.50 162.50 Pork, Central U.S. Pork Cutout, #2 70.00 57.76 51.75 52.30 Loins, 14-18 lb. 109.50 79.44 76.50 77.75 Bellies, 12-14 lb. 68.42 47.52 43.00 43.00 Hams, 20-26 lb. 64.30 55.66 45.75 47.25 Trimmings, 72% fresh 56.00 45.24 36.25 32.75 Lamb, East Coast 55 lb. down, Choice 188.75 166.25 154.50 NA 55-65 lb., Choice 188.75 164.25 152.50 NA Broilers 12 City Avg. 59.53 52.25 54.66 56.00 Georgia dock 61.13 54.58 54.34 54.00 Northeast Breast, boneless 168.45 144.58 152.41 166.00 Breast, Ribs on 87.58 68.99 73.03 85.00 Legs, whole 50.80 45.45 44.57 45.00 Leg quarters 34.36 28.93 28.60 30.00 Turkey Eastern Region Toms, 14-22 lb. 57.28 62.73 56.55 55.00 Hens, 8-16 lb. 57.84 62.18 55.65 54.00 Drumsticks 35.81 25.41 23.20 27.00 Wings, full cut 39.13 35.93 29.77 28.00 Eggs, grd A, lg, doz 12 City Metro 87.26 93.92 85.73 76.00 New York 82.03 90.26 83.15 72.00 /* Estimate RETAIL PRICES & SPREADS Dec-96 Oct-97 Nov-97 Dec-97 Retail prices Cents/lb. Beef - Choice 287.3 279.0 278.0 280.9 Beef - All Fresh 256.3 254.0 253.5 255.3 Ground Beef 142.4 140.6 140.9 139.2 Rib roast 509.1 523.2 519.0 520.7 T-bone steak 587.4 591.5 589.1 607.3 Pork 231.2 234.9 231.3 226.8 Bacon 264.2 273.0 266.5 260.7 Chops 344.1 348.7 347.7 339.4 Picnic 131.3 127.4 127.8 128.5 Chicken - Composite 154.2 148.8 151.7 148.2 Whole, fresh 100.2 98.4 101.8 100.1 Breast - bone in 209.3 198.2 203.5 198.7 Leg quarter 125.6 123.6 124.6 121.7 Turkey; whole frozen 102.0 106.2 97.6 98.2 Eggs, Grade A, Large 130.8 101.8 109.0 117.2 Price indexes 1982-84=100 CPI - All 158.6 161.6 161.5 161.3 All food 156.3 158.2 158.5 158.7 All meat 144.4 145.2 144.6 143.4 Beef & veal 137.8 137.1 137.0 136.9 Pork 155.4 157.4 155.5 153.0 Poultry 157.8 155.6 157.4 155.2 Dairy Products 148.6 145.7 147.0 147.8 Fluid milk & cream 149.9 145.3 147.0 147.0 Manufactured products 147.9 146.8 147.6 149.3 Price Spreads Cents/lb. Beef Farm to wholesale 26.6 20.5 20.7 19.1 Wholesale to retail 122.0 120.3 117.8 125.3 Farmers share (%) 48.0 50.0 50.0 49.0 Pork Farm to wholesale 39.1 37.3 38.0 39.4 Wholesale to retail 105.0 124.4 123.4 125.3 Farmers share (%) 38.0 31.0 30.0 27.0 Poultry and eggs Wholesale to retail Broilers 92.1 92.3 95.6 95.5 Retail to consumer Turkey 26.6 31.9 20.0 26.9 Eggs 25.4 23.3 10.5 24.3 U.S. LIVESTOCK & MEAT IMPORTS & EXPORTS Nov-97 Dec-97 Jan - Jan - Dec-96 Dec-97 Beef & Veal Imports Carcass wt.,thousand lb. Australia 52,782 34,175 544,996 639,420 New Zealand 21,041 35,241 503,657 576,044 Canada 67,072 66,223 585,751 711,454 Brazil 6,518 8,845 86,901 94,766 Argentina 12,501 21,031 153,398 146,657 Central America 6,994 7,863 111,107 93,227 Other 4,692 8,362 86,363 81,371 Total 171,600 181,739 2,072,173 2,342,939 Beef & Veal Exports Japan 99,523 79,340 1,015,778 1,053,553 Canada 23,627 23,095 295,424 282,725 Mexico 28,555 35,481 172,246 312,583 Korea, Rep. 26,133 11,628 203,796 261,673 Caribbean 1,710 712 12,924 12,979 Other 22,071 22,347 178,046 212,165 Total 201,619 172,604 1,878,214 2,135,677 Cattle Imports Mexico 145,208 87,689 456,246 669,409 Canada 101,258 80,269 1,509,136 1,376,814 Over 700 lbs. 83,585 71,504 1,374,583 1,200,642 500-700 lbs. 9,001 3,994 74,293 107,650 Total 246,466 167,958 1,965,448 2,046,352 Cattle Exports Mexico 17,522 19,985 115,249 235,121 Canada 3,698 6,707 40,722 41,189 Total 21,745 27,081 174,307 282,344 Lamb Imports Australia 2,468 3,566 26,423 32,968 New Zealand 1,339 2,106 23,970 26,417 Total 4,010 5,710 50,701 60,428 Mutton Imports 1,207 2,142 21,751 22,607 ------------------------------------------------------------------------ Customs Service Product wt., metric t YTD imports under WTO Quota 2/08/98 % of Quota Canada No Limit 33,405 NA TRQ Countries Australia 378,214 11,269 3.0 New Zealand 213,402 15,648 7.3 Argentina 20,000 818 4.1 Uruguay 20,000 825 4.1 Other 65,005 1,923 3.0 ------------------------------------------------------------------------ Nov-97 Dec-97 Jan - Jan - Dec-96 Dec-97 Pork Imports Carcass wt., thousand lb. Canada 37,544 38,163 437,397 434,228 Denmark 9,606 10,144 122,211 123,839 Poland 1,243 2,192 10,525 15,002 Hungary 265 783 8,761 8,702 Netherlands 504 1,021 8,479 8,118 Other 3,395 4,614 31,511 42,206 Total 52,557 56,917 618,884 632,095 Pork Exports Japan 44,315 35,554 500,518 461,946 Canada 13,017 11,450 94,374 125,325 Mexico 7,848 10,403 69,820 86,988 Caribbean 1,284 1,383 11,934 12,200 Other 34,809 33,323 293,259 357,154 Total 101,272 92,113 969,905 1,043,613 Hog Imports Head Canada 282,203 361,135 2,778,741 3,178,260 Under 110 lb 74,177 79,412 766,974 987,359 Total 282,203 361,197 2,779,175 3,179,578 Hog Exports Total 4,451 4,322 55,883 54,647 Broiler Exports RTC, thousand lb. Japan 21,336 12,591 243,015 202,925 Mexico 18,952 24,134 218,203 248,332 Hong Kong 70,991 77,908 962,882 874,883 Singapore 2,189 2,886 49,655 34,845 Canada 11,375 8,106 74,813 119,397 Former USSR 181,826 176,455 1,881,273 2,058,882 Total 402,079 401,604 4,420,144 4,664,204 Turkey Exports Mexico 20,706 24,477 167,694 196,678 S. Korea 1,255 100 22,665 24,722 Hong Kong 9,143 12,173 25,487 125,625 Total 48,899 57,134 437,793 598,427 Shell thousand dz. Egg Exports 8,896 8,657 113,837 99,544 U.S. dairy situation at a glance Unit 1995 1996 1997 Milk production: Production (20 States) Mil. lb. 131780 131909 133861 Milk cow (20 States) Thou. 7862 7860 7759 Milk per cow (20 States) Lb. 16762 16784 17254 Production (U.S. est.) Mil. lb. 155424 154825 156603 Milk prices: All milk Dol./cwt 12.74 14.88 13.38 Milk eligible for fluid use Dol./cwt 12.78 14.95 13.41 Manufacturing grade milk Dol./cwt 11.78 13.38 12.16 Minnesota-Wisconsin (3.5% fat) Dol./cwt 11.83 13.39 12.05 Slaughter Cow, Wisc: Dol./cwt 38.11 33.00 36.93 Wholesale prices: Grade A butter Ct/lb 75.59 100.35 107.06 American cheese, WI assembly pt. 40-pound blocks Ct/lb 132.77 149.14 132.40 Barrels Ct/lb NA 141.72 125.23 Nonfat dry milk, Central States Ct/lb 108.58 122.16 110.01 Retail prices (BLS): Consumer Price Index 1982-84=100 152.4 156.9 160.5 All food 1982-84=100 148.4 153.3 157.3 Dairy products 1982-84=100 132.8 142.1 145.5 Fluid milk and cream 1982-84=100 132.3 142.4 144.9 Manufactured products 1982-84=100 134.0 142.4 146.8 Dairy product output: Butter Mil. lb 1264 1174 1159 American cheese Mil. lb 3131 3281 3283 Other-than-American cheese Mil. lb 3786 3937 4069 Frozen products 1/ Mil. gal. 1230 1241 1231 All products (milkfat basis 2/) Mil. lb 95633 95013 96253 Nonfat dry milk Mil. lb 1233 1062 1208 Beginning stocks: Commercial butter Mil. lb 12 16 13 Commercial American cheese Mil. lb 309 307 380 Other cheese Mil. lb 127 105 107 Manufacturers' nonfat dry milk Mil. lb 103 71 71 All commercial (milkfat basis) Mil. lb 4263 4099 4704 All commercial (skim solids basis) Mil. lb 5712 5037 5753 All Government (milkfat basis) Mil. lb 1497 69 10 All Government (skim solids basis) Mil. lb 341 172 7 Commercial disappearance: Butter Mil. lb 1186 1180 NA American cheese Mil. lb 3149 3230 NA Other-than-American cheese Mil. lb 4126 4243 NA Nonfat dry milk Mil. lb 923 1009 NA All products (milkfat basis 2/) Mil. lb 154835 155558 NA USDA net removals: Butter Mil. lb 78 0 47 Cheese Mil. lb 6 5 11 Nonfat dry milk Mil. lb 344 57 297 All products (milkfat basis 2/) Mil. lb 2106 87 1278 All products (skim solids basis 2/) Mil. lb 4374 747 3674 Imports (milkfat basis 2/) Mil. lb 2936 2911 NA International market prices: Butter $/metric ton 2250.54 1836.59 1861.40 Nonfat dry milk $/metric ton 2143.32 1979.36 1737.91 1/ Hard ice cream, ice milk, and sherber 2/ Milk equivalent. NA = Not Available. Unit Nov-96 Dec-96 Jan-97 Milk production: Production (22 States) Mil. lb. 10535 11046 11158 Milk cow (22 States) Thou. 7855 7853 7787 Milk per cow (22 States) Lb. 1341 1407 1433 Production (U.S. est.) Mil. lb. 12364 12958 13131 Milk prices: All milk Dol./cwt 15.20 14.30 13.40 Milk eligible for fluid use Dol./cwt 15.30 14.40 13.40 Manufacturing grade milk Dol./cwt 12.40 11.80 12.10 Minnesota-Wisconsin (3.5% fat) Dol./cwt 11.61 11.34 11.94 Slaughter Cow, Wisc: Dol./cwt 29.81 29.63 32.80 Wholesale prices: Grade A butter Ct/lb 74.12 71.85 81.89 American cheese, WI assembly pt. 40-pound blocks Ct/lb 133.93 125.98 127.90 Barrels Ct/lb 121.55 115.63 123.66 Nonfat dry milk, Central States Ct/lb 126.59 120.55 113.94 Retail prices (BLS): Consumer Price Index 1982-84=100 158.6 158.6 159.1 All food 1982-84=100 155.9 156.3 156.5 Dairy products 1982-84=100 149.3 148.6 147.8 Fluid milk and cream 1982-84=100 150.5 149.9 148.9 Manufactured products 1982-84=100 148.8 147.9 147.4 Dairy product output: Butter Mil. lb 95 111 124 American cheese Mil. lb 262 280 279 Other-than-American cheese Mil. lb 333 344 317 Frozen products 1/ Mil. gal. 77 78 85 All products (milkfat basis 2/) Mil. lb 7371 7960 8099 Nonfat dry milk Mil. lb 77 102 97 Beginning stocks: Commercial butter Mil. lb 20 17 13 Commercial American cheese Mil. lb 379 370 380 Other cheese Mil. lb 115 111 107 Manufacturers' nonfat dry milk Mil. lb 47 49 71 All commercial (milkfat basis) Mil. lb 4890 4684 4704 All commercial (skim solids basis) Mil. lb 5535 5395 5753 All Government (milkfat basis) Mil. lb 11 9 10 All Government (skim solids basis) Mil. lb 9 9 7 Commercial disappearance: Butter Mil. lb 98 115 117 American cheese Mil. lb 275 274 278 Other-than-American cheese Mil. lb 373 385 322 Nonfat dry milk Mil. lb 70 74 85 All products (milkfat basis 2/) Mil. lb 12777 13165 12886 USDA net removals: Butter Mil. lb 0 0 1 Cheese Mil. lb 0 0 1 Nonfat dry milk Mil. lb 5 6 9 All products (milkfat basis 2/) Mil. lb 5 10 29 All products (skim solids basis 2/) Mil. lb 63 75 117 Imports (milkfat basis 2/) Mil. lb 334 363 172 International market prices: Butter $/metric ton 1545 1676 1643 Nonfat dry milk $/metric ton 1930 1963 1897 1/ Hard ice cream, ice milk, and sherber 2/ Milk equivalent. NA = Not Available. Unit Feb-97 Mar-97 Apr-97 Milk production: Production (22 States) Mil. lb. 10321 11641 11446 Milk cow (22 States) Thou. 7774 7763 7763 Milk per cow (22 States) Lb. 1328 1500 1474 Production (U.S. est.) Mil. lb. 12141 13689 13411 Milk prices: All milk Dol./cwt 13.50 13.50 13.40 Milk eligible for fluid use Dol./cwt 13.50 13.60 13.40 Manufacturing grade milk Dol./cwt 12.40 12.40 11.70 Minnesota-Wisconsin (3.5% fat) Dol./cwt 12.46 12.49 11.44 Slaughter Cow, Wisc: Dol./cwt 35.06 38.94 40.60 Wholesale prices: Grade A butter Ct/lb 98.38 106.25 95.58 American cheese, WI assembly pt. 40-pound blocks Ct/lb 132.25 133.95 125.61 Barrels Ct/lb 127.54 126.52 121.30 Nonfat dry milk, Central States Ct/lb 114.91 115.78 114.40 Retail prices (BLS): Consumer Price Index 1982-84=100 159.6 160.0 160.2 All food 1982-84=100 156.5 156.6 156.6 Dairy products 1982-84=100 146.2 146.1 145.7 Fluid milk and cream 1982-84=100 146.1 145.8 144.7 Manufactured products 1982-84=100 147.0 147.0 147.2 Dairy product output: Butter Mil. lb 108 104 117 American cheese Mil. lb 267 285 279 Other-than-American cheese Mil. lb 308 353 323 Frozen products 1/ Mil. gal. 90 108 110 All products (milkfat basis 2/) Mil. lb 7706 8342 8493 Nonfat dry milk Mil. lb 92 109 127 Beginning stocks: Commercial butter Mil. lb 21 24 26 Commercial American cheese Mil. lb 381 378 392 Other cheese Mil. lb 117 115 125 Manufacturers' nonfat dry milk Mil. lb 75 72 81 All commercial (milkfat basis) Mil. lb 4975 4970 5243 All commercial (skim solids basis) Mil. lb 5929 5815 6180 All Government (milkfat basis) Mil. lb 8 13 17 All Government (skim solids basis) Mil. lb 8 8 12 Commercial disappearance: Butter Mil. lb 105 101 99 American cheese Mil. lb 271 273 242 Other-than-American cheese Mil. lb 327 368 339 Nonfat dry milk Mil. lb 81 82 67 All products (milkfat basis 2/) Mil. lb 12174 13495 12703 USDA net removals: Butter Mil. lb 1 1 2 Cheese Mil. lb 1 1 1 Nonfat dry milk Mil. lb 14 17 20 All products (milkfat basis 2/) Mil. lb 37 33 55 All products (skim solids basis 2/) Mil. lb 185 213 240 Imports (milkfat basis 2/) Mil. lb 171 229 179 International market prices: Butter $/metric ton 1775 1725 1645 Nonfat dry milk $/metric ton 1888 1824 1740 1/ Hard ice cream, ice milk, and sherber 2/ Milk equivalent. NA = Not Available. Unit May-97 Jun-97 Jul-97 Milk production: Production (22 States) Mil. lb. 11869 11419 11437 Milk cow (22 States) Thou. 7765 7765 7765 Milk per cow (22 States) Lb. 1529 1471 1473 Production (U.S. est.) Mil. lb. 13902 13370 13324 Milk prices: All milk Dol./cwt 13.00 12.40 12.20 Milk eligible for fluid use Dol./cwt 13.10 12.40 12.30 Manufacturing grade milk Dol./cwt 10.90 10.70 10.80 Minnesota-Wisconsin (3.5% fat) Dol./cwt 10.70 10.74 10.86 Slaughter Cow, Wisc: Dol./cwt 40.50 38.50 40.35 Wholesale prices: Grade A butter Ct/lb 86.11 105.50 102.71 American cheese, WI assembly pt. 40-pound blocks Ct/lb 116.48 117.89 123.32 Barrels Ct/lb 114.33 112.55 113.32 Nonfat dry milk, Central States Ct/lb 109.83 107.88 107.65 Retail prices (BLS): Consumer Price Index 1982-84=100 160.1 160.3 160.5 All food 1982-84=100 156.6 156.6 157.0 Dairy products 1982-84=100 145.4 144.1 143.3 Fluid milk and cream 1982-84=100 144.9 143.6 142.0 Manufactured products 1982-84=100 146.6 145.2 145.4 Dairy product output: Butter Mil. lb 103 82 82 American cheese Mil. lb 295 286 284 Other-than-American cheese Mil. lb 346 341 331 Frozen products 1/ Mil. gal. 117 126 127 All products (milkfat basis 2/) Mil. lb 8664 8310 8298 Nonfat dry milk Mil. lb 133 120 112 Beginning stocks: Commercial butter Mil. lb 42 62 59 Commercial American cheese Mil. lb 430 445 463 Other cheese Mil. lb 127 139 140 Manufacturers' nonfat dry milk Mil. lb 121 151 173 All commercial (milkfat basis) Mil. lb 5962 6650 6779 All commercial (skim solids basis) Mil. lb 7037 7687 8146 All Government (milkfat basis) Mil. lb 43 54 21 All Government (skim solids basis) Mil. lb 13 12 8 Commercial disappearance: Butter Mil. lb 81 80 74 American cheese Mil. lb 281 269 278 Other-than-American cheese Mil. lb 354 361 359 Nonfat dry milk Mil. lb 82 66 102 All products (milkfat basis 2/) Mil. lb 13202 13194 13200 USDA net removals: Butter Mil. lb 3 5 5 Cheese Mil. lb 1 2 2 Nonfat dry milk Mil. lb 22 33 23 All products (milkfat basis 2/) Mil. lb 91 139 134 All products (skim solids basis 2/) Mil. lb 271 408 289 Imports (milkfat basis 2/) Mil. lb 196 205 206 International market prices: Butter $/metric ton 1725 1713 1715 Nonfat dry milk $/metric ton 1725 1711 1650 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Unit Aug-97 Sep-97 Oct-97 Milk production: Production (22 States) Mil. lb. 11213 10671 10977 Milk cow (22 States) Thou. 7757 7752 7750 Milk per cow (22 States) Lb. 1446 1377 1416 Production (U.S. est.) Mil. lb. 13058 12423 12818 Milk prices: All milk Dol./cwt 12.70 13.20 14.00 Milk eligible for fluid use Dol./cwt 12.70 13.20 14.00 Manufacturing grade milk Dol./cwt 11.90 12.70 13.20 Minnesota-Wisconsin (3.5% fat) Dol./cwt 12.07 12.79 12.83 Slaughter Cow, Wisc: Dol./cwt 37.00 36.25 35.40 Wholesale prices: Grade A butter Ct/lb 102.50 101.58 135.29 American cheese, WI assembly pt. 40-pound blocks Ct/lb 137.64 141.40 142.40 Barrels Ct/lb 129.40 133.62 136.33 Nonfat dry milk, Central States Ct/lb 107.18 107.11 106.91 Retail prices (BLS): Consumer Price Index 1982-84=100 160.8 161.2 161.6 All food 1982-84=100 157.6 157.9 158.2 Dairy products 1982-84=100 143.4 143.5 145.7 Fluid milk and cream 1982-84=100 141.7 141.4 145.3 Manufactured products 1982-84=100 145.8 146.4 146.8 Dairy product output: Butter Mil. lb 70 80 83 American cheese Mil. lb 259 261 260 Other-than-American cheese Mil. lb 342 345 360 Frozen products 1/ Mil. gal. 113 100 97 All products (milkfat basis 2/) Mil. lb 7692 7687 7643 Nonfat dry milk Mil. lb 91 77 73 Beginning stocks: Commercial butter Mil. lb 62 48 43 Commercial American cheese Mil. lb 469 459 421 Other cheese Mil. lb 136 123 110 Manufacturers' nonfat dry milk Mil. lb 161 156 134 All commercial (milkfat basis) Mil. lb 6858 6361 5799 All commercial (skim solids basis) Mil. lb 8004 7720 6948 All Government (milkfat basis) Mil. lb 31 32 19 All Government (skim solids basis) Mil. lb 55 84 99 Commercial disappearance: Butter Mil. lb 80 79 95 American cheese Mil. lb 271 300 282 Other-than-American cheese Mil. lb 379 384 408 Nonfat dry milk Mil. lb 61 65 71 All products (milkfat basis 2/) Mil. lb 13544 12971 13565 USDA net removals: Butter Mil. lb 5 5 5 Cheese Mil. lb 1 0 1 Nonfat dry milk Mil. lb 35 35 25 All products (milkfat basis 2/) Mil. lb 122 129 141 All products (skim solids basis 2/) Mil. lb 425 417 312 Imports (milkfat basis 2/) Mil. lb 228 228 266 International market prices: Butter $/metric ton 1844 2008 2165 Nonfat dry milk $/metric ton 1620 1694 1729 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Unit Nov-97 Dec-97 Jan-98 Milk production: Production (22 States) Mil. lb. 10591 11118 11386 Milk cow (22 States) Thou. 7737 7732 7729 Milk per cow (22 States) Lb. 1369 1438 1473 Production (U.S. est.) Mil. lb. 12363 12973 13339 Milk prices: All milk Dol./cwt 14.60 14.60 14.60 Milk eligible for fluid use Dol./cwt 14.60 14.70 14.70 Manufacturing grade milk Dol./cwt 13.60 13.50 13.50 Minnesota-Wisconsin (3.5% fat) Dol./cwt 12.96 13.29 13.25 Slaughter Cow, Wisc: Dol./cwt 33.06 34.75 36.31 Wholesale prices: Grade A butter Ct/lb 148.75 120.14 109.19 American cheese, WI assembly pt. 40-pound blocks Ct/lb 143.83 146.09 144.50 Barrels Ct/lb 134.94 129.19 134.73 Nonfat dry milk, Central States Ct/lb 107.13 107.40 105.93 Retail prices (BLS): Consumer Price Index 1982-84=100 161.5 161.3 NA All food 1982-84=100 158.5 158.7 NA Dairy products 1982-84=100 147.0 147.8 NA Fluid milk and cream 1982-84=100 147.0 147.0 NA Manufactured products 1982-84=100 147.6 149.3 NA Dairy product output: Butter Mil. lb 89 116 NA American cheese Mil. lb 252 277 NA Other-than-American cheese Mil. lb 351 352 NA Frozen products 1/ Mil. gal. 78 79 NA All products (milkfat basis 2/) Mil. lb 7258 8061 NA Nonfat dry milk Mil. lb 75 102 NA Beginning stocks: Commercial butter Mil. lb 26 15 18 Commercial American cheese Mil. lb 399 408 414 Other cheese Mil. lb 90 68 63 Manufacturers' nonfat dry milk Mil. lb 111 95 103 All commercial (milkfat basis) Mil. lb 5058 4694 4795 All commercial (skim solids basis) Mil. lb 6251 5904 6024 All Government (milkfat basis) Mil. lb 16 19 18 All Government (skim solids basis) Mil. lb 171 257 258 Commercial disappearance: Butter Mil. lb 93 NA NA American cheese Mil. lb 245 NA NA Other-than-American cheese Mil. lb 401 NA NA Nonfat dry milk Mil. lb 59 NA NA All products (milkfat basis 2/) Mil. lb 12707 NA NA USDA net removals: Butter Mil. lb 7 7 4 Cheese Mil. lb 1 1 1 Nonfat dry milk Mil. lb 32 32 36 All products (milkfat basis 2/) Mil. lb 183 183 128 All products (skim solids basis 2/) Mil. lb 396 400 455 Imports (milkfat basis 2/) Mil. lb 275 NA NA International market prices: Butter $/metric ton 2194 2187 2091 Nonfat dry milk $/metric ton 1731 1649 1560 1/ Hard ice cream, ice milk, and sherbert. 2/ Milk equivalent. NA = Not Available. Annual Forecasts 1995 1996 1997 1998 Economic Indicators /1 Real GDP, Billions '87$ 6,743 6,928 7,166 7,343 CPI-U, Annual % Change 2.7 3.2 2.0 2.6 Unemployment rate, % 5.6 5.4 5.0 4.9 3-Month T Bill,% 5.5 5.0 5.1 5.2 10-Year Bond,% 6.6 6.4 6.4 6.2 Production, million lb. Beef 25,115 25,419 25,401 25,250 Pork 17,811 17,085 17,246 18,775 Broilers 25,021 26,336 27,196 28,500 Turkeys 5,129 5,466 5,474 5,410 Total Red Meat & Poultry 74,070 75,303 76,269 78,810 Eggs, mil doz. 5,269 5,407 5,456 5,575 Milk 155,425 154,331 156,686 157,100 Commercial use (mf basis) 154,857 155,063 156,630 158,500 Net removals (mf basis) 2,102 86 1,275 500 Per capita consumption, Retail Beef 67.5 68.2 66.9 67.8 Pork 52.4 49.1 48.7 52.7 Broilers 68.8 70.8 72.4 75.4 Turkeys 17.9 18.5 17.6 17.7 Total Red Meat & Poultry 210.3 209.6 208.3 215.9 Eggs, number 236 238 240 242 Market Prices Choice steers, Neb., $/cwt. 66.24 65.06 66.32 65-70 Feeder steers,Ok City,$/cwt 68.03 61.08 76.19 77-83 Bng Ut Cows,S. Falls,$/cwt. 35.58 30.33 34.27 40-43 Barrows & gilts,Ia/Mn.,$/cw 42.35 53.39 51.36 38-41 Broilers, 12 City, cents/lb 56.38 61.24 58.78 54-58 Turkeys, Eastern, cents/lb. 66.35 66.50 64.93 59-63 Eggs, New York, cents/doz. 72.85 88.18 81.23 74-79 Milk, all at plant, $/cwt. 12.74 14.74 13.01 13.1-14.1 Milk, M-W, $/cwt. 11.83 13.39 11.53 12.0-12.9 U.S. Trade, million lb. Beef & veal exports 1,821 1,877 2,118 1,985 Beef & veal imports 2,103 2,073 2,338 2,700 Pork exports 787 970 1,040 990 Pork imports 664 618 627 575 Broiler exports 3,894 4,420 4,671 4,750 Turkey exports 348 438 589 610 /1 Macro economic forecasts: Survey of Professional Forecasters Philadelphia Federal Reserve, November 1997. Quarterly 1996/98 Forecasts QI'96 QII'96 QIII'96 QIV'96 Economic Indicators /1 Real GDP, Billions '87$ 6,814 6,885 6,930 7,009 CPI-U, Annual % Change 2.8 3.8 2.3 3.2 Unemployment rate, % 5.6 5.4 5.2 5.3 3-Month T Bill,% 5.0 5.0 5.1 5.0 10-Year Bond,% 5.9 6.7 6.8 6.3 Production, million lb. Beef 6,303 6,642 6,390 6,084 Pork 4,389 4,104 4,143 4,449 Broilers 6,610 6,571 6,628 6,527 Turkeys 1,270 1,378 1,415 1,403 Total Red Meat & Poultry 18,847 18,931 18,807 18,717 Eggs, mil doz. 1,332 1,324 1,355 1,396 Milk 39,053 39,638 37,674 37,966 Commercial use (mf basis) 37,671 39,833 38,749 38,810 Net removals (mf basis) 19 29 19 19 Per capita consumption, Retail Beef 17.1 17.7 17.2 16.3 Pork 12.6 11.6 12.0 12.9 Broilers 17.6 18.0 18.1 17.1 Turkeys 3.7 3.9 4.6 6.2 Total Red Meat & Poultry 51.9 52.0 52.6 53.1 Eggs, number 58.9 58.2 59.3 61.4 Market Prices Choice steers, Neb., $/cwt. 63.06 60.26 66.51 70.39 Feeder steers,Ok City,$/cwt 58.11 56.87 63.20 66.15 Bng Ut Cows,S. Falls,$/cwt. 32.52 30.37 31.74 26.68 Barrows & gilts,Ia/Mn.,$/cw 46.23 54.82 57.75 54.75 Broilers, 12 City, cents/lb 56.22 61.07 64.22 63.46 Turkeys, Eastern, cents/lb. 64.80 65.40 64.90 70.90 Eggs, New York, cents/doz. 89.60 80.50 85.90 96.70 Milk, all at plant, $/cwt. 13.83 14.27 15.80 15.07 Milk, M-W, $/cwt. 12.67 13.59 14.93 12.36 U.S. Trade, million lb. Beef & veal exports 452 544 436 445 Beef & veal imports 508 526 555 484 Pork exports 225 321 184 240 Pork imports 144 155 154 165 Broiler exports 1,075 1,057 1,121 1,167 Turkey exports 96 93 124 125 /1 Macro economic forecasts: Survey of Professional Forecasters Philadelphia Federal Reserve, November 1997. QI'97 QII'97 QIII'97 QIV'97 Economic Indicators /1 Real GDP, Billions '87$ 7,089 7,140 7,222 7,269 CPI-U, Annual % Change 2.4 1.1 2.0 2.5 Unemployment rate, % 5.3 4.9 4.9 4.8 3-Month T Bill,% 5.1 5.1 5.1 5.1 10-Year Bond,% 6.6 6.7 6.2 6.0 Production, million lb. Beef 6,112 6,419 6,607 6,263 Pork 4,194 4,091 4,194 4,767 Broilers 6,628 6,948 6,861 6,760 Turkeys 1,235 1,404 1,411 1,423 Total Red Meat & Poultry 18,426 19,100 19,290 19,452 Eggs, mil doz. 1,349 1,341 1,354 1,412 Milk 38,922 40,648 38,897 38,219 Commercial use (mf basis) 38,517 39,064 39,789 39,260 Net removals (mf basis) 99 285 385 506 Per capita consumption, Retail Beef 16.3 17.3 17.1 16.3 Pork 11.8 11.6 12.0 13.3 Broilers 17.6 18.8 18.6 17.4 Turkeys 3.5 4.0 4.2 6.0 Total Red Meat & Poultry 49.8 52.3 52.5 53.6 Eggs, number 59.0 59.2 59.5 61.9 Market Prices Choice steers, Neb., $/cwt. 66.40 66.63 65.65 66.61 Feeder steers,Ok City,$/cwt 69.44 75.88 80.44 78.98 Bng Ut Cows,S. Falls,$/cwt. 32.02 37.05 35.20 32.80 Barrows & gilts,Ia/Mn.,$/cw 51.06 56.41 54.45 43.53 Broilers, 12 City, cents/lb 60.00 59.10 62.00 54.00 Turkeys, Eastern, cents/lb. 58.90 66.10 68.20 66.50 Eggs, New York, cents/doz. 84.90 72.10 79.70 88.20 Milk, all at plant, $/cwt. 13.47 12.70 12.93 12.93 Milk, M-W, $/cwt. 12.30 11.91 10.96 10.96 U.S. Trade, million lb. Beef & veal exports 455 513 600 550 Beef & veal imports 536 716 576 510 Pork exports 195 273 272 300 Pork imports 158 150 157 162 Broiler exports 1,090 1,098 1,223 1,260 Turkey exports 128 149 162 150 /1 Macro economic forecasts: Survey of Professional Forecasters Philadelphia Federal Reserve, November 1997. QI'98 QII'98 QIII'98 QIV'98 Economic Indicators /1 Real GDP, Billions '87$ 7,314 7,358 7,400 7,440 CPI-U, Annual % Change 2.5 2.6 2.7 2.6 Unemployment rate, % 4.8 4.9 4.9 4.9 3-Month T Bill,% 5.3 5.3 5.3 5.2 10-Year Bond,% 6.8 6.3 6.2 6.1 Production, million lb. Beef 6,300 6,300 6,575 6,075 Pork 4,650 4,525 4,650 4,950 Broilers 6,900 7,250 7,200 7,150 Turkeys 1,210 1,375 1,425 1,400 Total Red Meat & Poultry 19,303 19,664 20,047 19,796 Eggs, mil doz. 1,375 1,375 1,400 1,425 Milk 39,200 40,800 38,700 38,400 Commercial use (mf basi 38,700 39,700 40,300 39,800 Net removals (mf basis) 200 100 100 100 Per capita consumption, Retail Beef 17.1 17.1 17.6 16.0 Pork 13.0 12.6 13.2 13.8 Broilers 18.5 19.6 18.9 18.4 Turkeys 3.5 4.0 4.3 5.9 Total Red Meat & Poultry 52.9 54.0 54.5 54.6 Eggs, number 59.6 59.9 60.9 61.9 Market Prices Choice steers, Neb., $/cwt. 63-65 65-69 64-70 69-75 Feeder steers,Ok City,$/cwt 75-79 77-83 78-84 79-85 Bng Ut Cows,S. Falls,$/cwt. 36-38 42-46 41-45 40-44 Barrows & gilts,Ia/Mn.,$/cw 36-38 39-41 41-45 36-40 Broilers, 12 City, cents/lb 53-55 55-59 57-61 52-56 Turkeys, Eastern, cents/lb. 55-57 58-62 60-66 63-69 Eggs, New York, cents/doz. 77-81 68-72 72-78 80-86 Milk, all at plant, $/cwt. 14.1-14.7 12.6-13.5 12.2-13.3 13.6-14.8 Milk, M-W, $/cwt. 12.7-13.3 11.2-12.1 11.4-12.4 12.7-13.8 U.S. Trade, million lb. Beef & veal exports 450 515 515 505 Beef & veal imports 685 730 700 585 Pork exports 220 250 250 270 Pork imports 140 140 140 155 Broiler exports 1,100 1,100 1,225 1,325 Turkey exports 140 158 151 161 /1 Macro economic forecasts: Survey of Professional Forecasters Philadelphia Federal Reserve, November 1997. END_OF_FILE