Transcript Slide 1
Taking Dead Aim At The US Cattle Business
AN OVER-VIEW OF THE USA CATTLE MARKET & FUTURE THREATS Global Animal Products, Inc. (US Office) Ken Ridenour, M.S.
TOPICS
The USA Feedlot – Current Cattle Industry Beef Checkoff Program Future Threats Personal Opinion – Direction That The World Cattle Market Could Take In The Future
TOTAL CATTLE IN THE USA 97.1 million head (Jan. ’07) Average cow herd size – 35 head U.S. Cattle & Calves Inventory 106 104 102 100 98 96 94 92 90 '90 '91 '92 '93' '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 Year
97.1 million 3 rd consecutive year of expansion 33.3 million beef cows Heifers held back 5.9 million Calf crop estimated at 37.6 million head
TOTAL CATTLE AND BEEF PRODUCTION IN THE USA
106 12.5
104 102 100 12 11.5
11 98 96 94 10.5
10 92 9.5
90 '90 '91 '92 '93 '94 '95 '96 '97 '98
Year
'99
Cattle
'00 '01 '02 '03
Production
'04 '05 '06 9
USA FEEDLOT MARKET
Cattle on feed February 2007 Cattle slaughtered – Week ending March 10, 2007 Average Live Weight – Week ending March 10, 2007 Average Carcass Weight – Week ending March 10, 2007 11,726,000 632,000 579 kg 348 kg
FEEDER CATTLE (Steers)
Amarillo, Texas
Weight
155kg 205kg 250kg 295kg 340kg Fat cattle on hoof Avg. Carcass price
Price R/kg 10 MARCH 07
23.39
22.81
20.75
17.36
17.36
16.28
24.20
RATION COST MARCH 2007
Corn (Texas Panhandle) Rand/Metric Ton 1,485.00
Alfalfa Hay Finisher Ration (DMB) Cost of Gain with all charges/kg Loss per head 1,408.64
1,774.80
14.05
225.00
ETHANOL
110 Operating Plants 8 of the above are expanding 73 plants are under construction 18.85 billion liters of ethanol were produced in 2006 42.987 billion liters are expected to be produced by 2009 49 to 57 billion liters of ethanol are expected by 2012
ETHANOL
2006 ethanol production required 2.56 million hectares of corn – 20% of the US corn harvest An estimated 4 to 6 million more hectares of corn will be planted in the 2007 crop year For the first time in history over 50% of the corn produced in the USA will be used for something other than animal production
Beef Checkoff Program
Established as part of the 1985 Farm Bill Totally funded by the beef producers and no Government funds are utilized Funding is $1 USD per head on both domestic and imported beef Fifty cents goes to the National Organization Fifty cents goes to the State Organization
Mission Of The Beef Checkoff Program
Check program is dedicated; To improving producer profitability Expanding consumer demands Strengthening Beef position in the market place Research funding for all phases of the Beef Industry
Beef Checkoff Program Funding
Revenue 2006 -- $45,238,376 USD Expenditures: Promotion $24,800,185 Research $6,233,497 Consumer Information $5,637,074 Foreign Marketing $3,997,592 Producer Communications $2,029,143 Industry Information $1,091,269 Program Evaluation $226,538 USDA Oversight $143,722 Program Development $123,661 Administration $1,547,899
Beef Checkoff Program Conclusion
Acts as a catalyst for Change.
Doesn’t own cattle or retail outlets.
Can’t single-handedly turn around a bad market.
Designed to stimulate others to sell more beef.
Stimulate consumers to buy more beef.
Initiatives are accomplished by consumer advertising, marketing partnerships, public relations, education, research, and new product development.
THREATS TO THE CATTLE INDUSTRY (BSE)
B.S.E.
A Closer Look At Mad Cow Disease New vCJD is reported in 200 people world wide United Kingdom France Ireland Netherlands Canada Italy Japan Portugal Saudi Arabia Spain 164 21 4 2 1 1 1 1 1 1
Science & Research
Study presented at Europe’s annual human reproductive conference Study design – 100 men consumed 6 pints of beer in 1hour
Observations made in 100% of subjects
All gained weight Talked excessively without making sense Became overly emotional Could not drive Failed to think rationally Refused to apologize when wrong Could not preform sexually Had to sit down while urinating
Conclusion of Study
There has to be female hormones in beer
Bio – Terrorism
Foot and Mouth Disease
1909 1916 1923 1930 1937 1944 1951 1958 1965 1972 1979 1986 1993 2000 2003 2006 PER CAPITA CONSUMPTION OF RED MEAT AND POULTRY (1909-2006) YEAR U.S. Pop., millions 90.490
101.961
111.947
123.188
128.961
138.397
154.287
174.141
194.303
209.896
225.055
240.651
260.255
282.388
291.049
300.000
BEEF kg 23.2
18.4
18.6
15.3
17.2
20.9
18.7
25.4
31.9
36.5
33.3
33.7
27.7
29.3
28.1
29.76
PORK kg 18.7
19.2
20.7
18.6
15.5
24.3
20.5
20.5
19.8
21.8
22.0
20.5
22.0
21.7
22.0
22.3
LAMB kg 2.0
1.7
1.6
2.0
2.0
2.1
1.0
1.2
1.1
1.0
.45
.45
.45
.36
.36
.45
POULTRY kg 5.1
4.8
5.2
5.6
5.2
8.0
8.4
10.9
13.1
16.1
18.2
21.4
28.1
30.8
32.3
39.7
MATURING FEEDLOT INDUSTRY
3 Major Packers Cargill-Excel Swift (Monfort – ConAgra) Tyson (IBP) Vertical Integration Contract Growing for Packers
USA CATTLE INDUSTRY – LONG TERM Suburban Sprawl Land Price Government Land Environmental Impact and Regulations Government Subsidies
SUMMARY
30% of US feedlot head capacity is held in 10 companies Three beef packers control slaughter and marketing Maturing market for the feedlot industry – cattle business
CRYSTAL BALL PROJECTIONS
Feedlot – Cattle will decrease More imports will be needed Australia South Africa Brazil Consumption – Beef will follow Lamb