News Update
December 31, 2014
Office Closed
In observance of the New Year’s holiday, the American Angus Association and Angus Production Inc. offices will be closed Jan. 1, 2015, and will resume normal office hours Jan. 2.
The Daily Livestock Report
As we contemplate the new year, we thought it would be good to list the factors that we believe will be most important. Whether our crystal ball turns out to be clear or clouded depends on a lot of factors, some of which are completely unpredictable. Yet 2015 livestock and meat markets will almost undoubtedly be influenced by the following factors:
The state of meat and poultry demand. Amid all the talk of pig losses, heifer retention, cow herd rebuilding, chicken productivity challenges, lower turkey numbers — i.e. supply, supply, supply — meat and poultry demands have been the unsung hero of these markets in 2013 and, especially, 2014. U.S. consumers have revealed an almost unprecedented willingness to pay for meat/poultry proteins. While all of those supply challenges certainly drove higher prices, retail meat/poultry prices would still have been substantially lower had it not been for demand. The questions for 2015: Will the newfound comfort (or just lack of so much fear!) with animal fats continue? Will desire for dietary protein stay strong? Will LeBron’s celebrated low-carb, high-protein look ever translate into consistent wins for the Cavaliers?
The U.S. economy. This is a demand factor, too, but a different one from the preference issues discussed above. What is remarkable is that the preference issues apparently trumped income in the demand formula for all of 2013 and at least the first part of 2014. The macro factors simply weren’t that good until mid-year, but are now improving. The most recent estimate of third quarter (Q3) gross domestic product (GDP) growth at 5% is huge. Real personal disposable income per capita has grown at a solid 1.6%, on average, through October. That’s nothing to ballyhoo, but it is a far cry better than 2013’s zero! Lower oil and gasoline prices will leave substantial amounts of consumers’ cash available for other purposes in 2015. If preferences stay strong, the income component of demand could be very good in 2015.
Pasture and range conditions. You can put all of the profit incentives you want in place and still not get beef cow herd expansion if you don’t have grass. Grazing conditions were much better this year in the vast majority of the country and that has led to a substantial amount of heifer retention. Whether that continues depends on spring rains. Most of the cows still reside in semi–arid or arid regions in which drought is always just a few months or even weeks away. The heifers retained so far will, for the most part, calve this spring, so we should see more calves available in the fall. The question is whether retention will continue in 2015, thus continuing to remove animals from the market flow and building the cow herd even more. The answer will come only with the year’s weather patterns.
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For more information, please view the full release here.
Agriculture Industry Group Releases 2015 Safety Fact Sheet
A snapshot of the agriculture workforce, the economic toll of worker injuries and the benefits of investing in safety are included in a new graphics-driven fact sheet released by the Agricultural Safety and Health Council of America (ASHCA).
The annual cost of occupational injuries in agriculture is $8.3 billion in medical costs and lost productivity, according to, “Facts 2015 — Be Safe. Be Profitable.” The typical cost of one tractor overturn is $1 million.
An effective safety program, however, saves $4 to $6 for every $1 invested, according to ASHCA, a not-for-profit coalition of agribusinesses, producer organizations and safety professionals.
Other facts:
Although 87% of farms are operated by individuals or families, hired workers perform 60% of the work on U.S. farms. Eighty percent of those employees are foreign-born.
The agriculture/forestry/fishing sector charts the highest rate of occupational deaths across all industries, 22.2 per 100,000 workers (480 total deaths).
An estimated 115 children die in the farm workplace each year. Eighty percent of them were merely present — not working.
The world will need 70% more food by 2050 for the predicted 9.5 billion people. Productive, efficient agriculture includes the preservation and well-being of agricultural workers at every level.
To learn more about ASHCA, the organizations behind it and the ASHCA safety-grants program, visit www.ashca.org.
December Farm Prices Received Index Up 1 Point
The preliminary December Prices Received Index (Agricultural Production), at 102%, based on 2011=100, increased 1 point (1.0%) from November. At 82, the December Crop Production Index is up 2 points (2.5%). At 129, the Livestock Production Index decreased 5 points (3.7%). Producers received higher prices for corn, market eggs, wheat and cattle, but lower prices for milk, broilers, lettuce and oranges. In addition to prices, the five-year average monthly mix of commodities producers market impacts the monthly indexes. Increased monthly movement of wheat, oranges, broilers and milk offset the decreased marketing of corn, calves, soybeans and grapes.
Prices-paid index unchanged
The preliminary December Index of Prices Paid for Commodities and Services, Interest, Taxes and Farm Wage Rates (PPITW), at 111% (2011=100), is unchanged from November but is 5 points (4.7%) above December 2013. Lower prices in December for feeder cattle, LP gas, diesel and gasoline offset higher prices for concentrates, feed grains, feeder pigs and supplements.
Prices received by farmers
The December Prices Received Index for agricultural production is 102% of its 2011 base, up 1.0% from the November index and 2.0% higher than the December 2013 index.
Food grains: At 92, the index for December is 4.5% above the previous month but 6.1% below a year ago. The December price for all wheat, at $6.53 per bushel, is up 48¢ from November but is 20¢ below December 2013.
Feed grains: The December index, at 64, is up 6.7% from last month but 14% below a year ago. The corn price, at $3.77 per bushel, is up 19¢ from last month but is 64¢ below December 2013. At $7.49 per hundredweight (cwt.), sorghum grain is 90¢ above November but is unchanged from December last year.
Livestock and products: The index for December, at 129, is 3.7% below last month but is up 15% from December 2013. Compared with a year ago, the price for milk is down from last year. Prices are higher for cattle, market eggs, calves, hogs, broilers and turkeys.
Meat animals: At 137, the December index is down 2.1% from last month but is 27% higher than last year. At $66.50 per hundredweight (cwt.), the December hog price is down 20¢ from November, but is $5 higher than a year ago. The December beef cattle price of $168 per cwt. is up $1 from last month and $38 higher than December 2013.
For more information, please view the full release here.
CattleFax Webinar Helps Producers in High-Price Environment
Cow-calf producers are at a fork in the road, according to CattleFax, the global leader in beef industry research, analysis and information. The current expansion environment has produced record profitability and exposed the segment to more financial and production risk than any other time in recent history. CattleFax will address this challenge during its next Trends+ Cow-Calf Webinar at 5:30 p.m. MST, Jan. 21, 2015.
Calf prices are nearly $100 per cwt. higher than last year at this time, and bred cow values have increased nearly $1,000 per head in the last year. The dynamic market shift occurring in 2014 has motivated cow-calf expansion and created indecision at the same time.
During the one-hour session, CattleFax analysts Mike Murphy and Lance Zimmerman will discuss how producers can navigate marketing decisions and business plans for the next five to 10 years. To participate in the webinar and access program details, producers and industry leaders simply need to register online at www.cattlefax.com/meetings.aspx.
Elanco Animal Health is sponsoring the webinar — making it free for all cattle and beef producers to benefit from CattleFax’s analysis and perspective on factors influencing the cow-calf, stocker and backgrounding businesses. The webinar will include:
- A winter and spring 2015 market outlook for breeding cattle, calf, feeder cattle and feedstuff markets,
- Advice on high-return cow herd and bull purchasing decisions, and
- Considerations on the long-term implications of U.S. beef cow herd expansion
For more information, please view the Angus Journal Virtual Library calendar of upcoming events here.
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