Daily livestock report apr 17 2013
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    Daily livestock report apr 17 2013 Daily livestock report apr 17 2013 Document Transcript

    • Sponsored by Vol. 11, No. 72 / April 17, 2013  USDA’s monthly Cattle on Feed report for April will be Pre-Report Estimates -- USDA Cattle On Feedreleased this Friday afternoon and the eleven market analysts sur- Friday, April 19, 2013veyed by Dow Jones Newswires expect lower placements, lowermarketings and lower inventories. Those are all three familiar stories Average of Range of Estimatesfor the feedlot sector of late. The ranges and averages of the survey Estimatesresponses appear at right. Should these estimates prove accurate, they (Percent of year ago)would imply an increase of 39,000 head in the number of cattle in U.S. On Feed, April 1 92.7 - 95.35 93.9feedlots with capacities of 1000 head and more during March, pushing Placed in March 92.1 - 103.2 99.1that number to 10.896 million. The 93.5% estimate for marketings Marketed in March 92.4 - 95.1 93.5would put them at 1.793 million head, a figure lower than the lowest Source: DowJonesMarch of the last 5 years. Placements at 99.1% would put that figure at1.776 million head, an increase of nearly 300,000 head over the Febru-ary placement level. RETAIL MEAT PRICES, USDA USDA released its estimates of retail meat prices for All-Fresh Beef Choice Beef Pork Composite Broiler TurkeyMarch yesterday. In spite of the well-documented struggles of whole- Cents/lb.sale prices, every retail price except the composite broiler value in- 550creased during the month. Choice beef led the way in March gains at 5001.5% while the whole broiler price increased 1.1%. All-Fresh beef, pork 450and turkey all gained less than 1% in March while the composite retail 400broiler prices fell by 2.5%. 350 Relative to one year ago, beef prices and whole broilers 300showed large gains in March. The Choice beef price was record-high at$5.30/retail pound, 4.9% higher than last year. All-Fresh beef was also 250record high at $4.918/retail pound, up 5.3% from March 2012. Whole 200broilers, at $1.471/pound, were 7.2% higher than last year. 150 Pork, composite broiler and turkey prices were lower than last 100year. The average turkey price in March was $1.593/pound, down over 5012% from last year. But remember that the March ‘12 turkey value was 0far and away the record high at $1.812/pound. Pork prices were 0.7% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015lower than one year ago while composite broilers were down only 0.2%. There is growing concern that retail prices are not mirror- out of line with wholesale and farm values. Is that bad? Yes from aing wholesale values in a manner that will keep product moving to fairness — to both suppliers and consumers — standpoint but maybeconsumers. The charts on page 2 show USDA’s data for retail price, not from a long-term business view as long as product is moving andwholesale value and net farm value. There is no farm value for chicken not backing up either in cold storage or in feedlots. “Value space” cansince there is no significant farm-level trade in the sector due to vertical allow upstream prices to move quickly where having to lift the entireintegration. All of these values are adjusted to a retail weight basis and price structure can be an arduous task.are thus comparable from level to level. The same net situation is true in the pork complex even It is easy to see where concerns are rising in the beef and pork though the drivers are different. Retail pork prices have not risen butsectors. Retail beef prices have risen by nearly 8% since September have in fact remained high even as wholesale values have struggled.2012 while the average wholesale and net farm values have increased This is a situation where there is more product available on domesticby only 1%. We believe much of this discrepancy is, to a great degree, markets due to export challenges and keeping it moving may indeedhappenstance in which we and other analysts have played no small require lower prices at retail. Having some “value space” to support arole. Virtually everyone has expected wholesale beef prices would wholesale pork or hog price rally is good but keeping product moving isclimb to new records due to drought– and cost-impacted placement paramount, we think, in this situation.patterns of the past two years. That expectation has been ubiquitous to And that brings us to the curious case of chicken where retailsay the least and has led retailers to prepare for the cost shock by prices have been stable in spite of a rapid increase in wholesale values.pushing retail values higher. Consumers never like price increases but Are retailers swallowing margin to keep chicken attractive as a trafficthey like abrupt increases even less so easing into the higher price sce- driver? Some of the recent increase in wholesale chicken value is duenario was a good strategy. $200-plus wholesale choice beef, though, to a change from 12-city to national composite values. But the 12-cityhas proven an elusive creature and now it appears that retail prices are price was rising rapidly before being eliminated by USDA in January. The Daily Livestock Report is made possible with support from readers like you. If you enjoy this report, find if valuable and would like to sustain it going forward, consider becoming a contributor. Just go to www.DailyLivestockReport.com to contribute by credit card or send your check to The Daily Livestock Report, P.O. Box 2, Adel, IA 50003. The Daily Livestock Report is published by Steve Meyer & Len Steiner, Inc., Adel, IA and Merrimack, NH.   To subscribe, support or unsubscribe visit www.dailylivestockreport.com. Copyright © 2013  Steve Meyer and Len Steiner, Inc.  All rights reserved.  The Daily Livestock Report is not owned, controlled, endorsed or sold by CME Group Inc. or its affiliates and CME Group Inc. and its affiliates disclaim any and all responsibility for the informa on  contained herein.   CME Group®, CME® and the Globe logo are trademarks of Chicago Mercan le Exchange, Inc.   Disclaimer: The Daily Livestock Report is intended solely for informa on purposes and is not to be construed, under any circumstances, by implica on or otherwise, as an offer to sell or a solicita‐ on to buy or trade any commodi es or securi es whatsoever. Informa on is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or  possible where projec ons of future condi ons are a empted. Futures trading is not suitable for all investors, and involves the risk of loss. Past results are no indica on of future performance.  Futures are a leveraged investment, and because only a percentage of a contract’s value is require to trade, it is possible to lose more than the amount of money ini ally deposited for a futures  posi on. Therefore, traders should only use funds that they can afford to lose without affec ng their lifestyle. And only a por on of those funds should be devoted to any one trade because a  trader cannot expect to profit on every trade.  
    • Sponsored by Vol. 11, No. 72 / April 17, 2013  RETAIL, WHOLESALE & FARM LEVEL BEEF PRICES, USDACents/lb. Retail600 Net Farm Value500 Wholesale Value Retail Value400300200100 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 RETAIL, WHOLESALE & FARM LEVEL PORK PRICES, USDA Cents/lb. retail 400 Net Farm Value 350 Wholesale Value Retail Pork Price 300 250 200 150 100 50 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 COMPOSITE RETAIL & WHOLESALE BROILER PRICES, USDACents/lb., Retail250 Composite Retail Price Composite Wholesale Broilers200150100 50 0 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13