Livestock Marketing Annies Project March 2006

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Livestock MarketingAnnies Project March 2006

• Tim Petry
• Livestock Economist
• www.ag.ndsu.edu/aginfo/lsmkt/livestock.htm

02-27-06
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Review From George Flaskerud

• Marketing Plan
• Fundamentals and Technicals
• Cost of Production
• Breakeven Prices
• Seasonal Price Patterns
• Basis
• Futures
• Options

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Differences in Livestock vs. Crop Marketing

• CYCLES production and price
• Livestock Risk Protection (LRP)
• Price Discovery
• Storage
• Basis

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USDA Web Sites

• www.ers.usda.gov
• Livestock, Dairy, Poultry Outlook
• www.nass.usda.gov
• Cattle Inventory (Jan Jul)
• Cattle-on-Feed
• www.ams.usda.gov
• Market Reports (auctions, terminal, direct,
  internet, video)
• www.rma.usda.gov
• LRP, LGM

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Other Web Sites

• www.ag.ndsu.nodak.edu/aginfo/lsmkt/livestock.htm
• Powerpoint presentations, Budgets, Market
  Advisor, Links
• www.cme.com (Chicago Mercantile Exchange)
• Futures and Options
• www.lmic.info (Livestock Marketing Information
  Center)
• Fundamentals, charts, Quarterly Livestock
  Roundup, Managing for Todays Cattle Market and
  Beyond
• Many publications (handouts)

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Livestock Marketing Information Center Data
Source USDA/NASS
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Source LMIC
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U.S. Drought Monitor
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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SF_LS766 Sioux Falls, SD
Thu Feb 23, 2006 USDA-ND Ag Market
News Stockmens Livestock Exchange Dickinson,
ND Feeder Cattle Weighted Average Report for
2/23/2006 Receipts This week 1848
Last week 2580 Year ago 1968 With a
lighter number of feeder cattle on hand today,
feeder steers and heifers sold firm to 2.00
lower. Steer made up 66 percent heifers 34
percent. Offerings over 600 lbs totaled 86
percent. Next week will be a feeder cattle
special along with the regular sale 1500 head
expected. Feeder Steer Medium and Large 1
Head Wt Range Avg Wt Price Range
Avg Price 29 505-510 507
149.00-156.75 152.76 17 584
584 136.75 136.75
46 620-637 631 126.25-130.00
127.86 Calves 32 650-669
660 119.25-122.50 121.35 Calves
71 700-730 718 112.25-115.75
113.64 Calves 176 753-788
774 107.25-111.75 109.86 28
806-807 806 104.75-107.00
106.68 19 848 848
98.75 98.75 Full 104
875-885 880 98.50-98.75
98.64
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Premiums likely (but not consistent) for

• Verified shots (ND VIP)
• Natural (no antibiotics or implants)
• Source/age verified
• Weaned
• BQA
• Replacement quality heifers
• Check with your market before selling

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Livestock Marketing Information Center
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Livestock Marketing Information Center
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Price Risk Management Tools

• Cash forward contract
• Video and internet auctions
• CME futures
• CME options
• LRP
• Livestock Gross Margin (LGM) coming soon
• Which one or combination fits your marketing plan?

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AM_LS753 Amarillo, TX Mon Feb 27, 2006
USDA-TX Dept of Ag Market News Superior Video
Auction - Thursday and Friday February 23 24,
2006 0fferings 45,500 Trade and demand
moderate. Supply includes 47 percent feeder
steers and heifers over 600 lbs, 59 percent of
supply steers and 41 percent heifers. Prices FOB
based on net weights after a 2-3 percent pencil
shrink or equivalent, with a 3-6 cent slide on
yearlings and 4-10 on calves. Deliveries current
through October 2006.
Northcentral
States Colorado, Wyoming, Nebraska Montana,
North and South Dakota and Iowa

Feeder Steers Medium and Large 1 Head Wt
Range Avg Wt Price Range Avg Price
Delivery 75 560 560
135.50 135.50 Current 112
650 650 120.50-123.00 122.15
Current Calves 236 830 830
102.75 102.75 Current 142
850 850 98.00-100.00 99.58
Current 46 915 915
89.50 89.50 Current 86
550 550 134.00 134.00
Mar 70 730 730
119.50 119.50 Mar 500
800-820 808 102.75-113.75 108.26
Mar 88 565 565
137.00 137.00 Apr-May 230
800 800 102.75 102.75
Apr-May
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Feeder Cattle Contract

• 50,000 lbs, 500 cwt
• 650-849 lbs (77-60 hd)
• USDA Medium and Large Frame, 1 (2)
• Jan, Mar, Apr, May, Aug, Sep, Oct, and Nov
• Cash settlement
• Daily limits?

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N.D. Feeder Cattle BasisRule of Thumb

• E to W along I-94
• Highway 2 deduct 1 to 2
• 700 850 par -4 to 4
• 600 700 5
• 500 600 10
• 400 500 15
• 850 950 -5

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Live Cattle Contract

• 40,000 lbs, 400 cwt.
• 1100 1350 lbs (35 30 hd)
• USDA Y.G.3, 55 Choice 45 Select
• Feb, Apr, Jun, Aug, Oct, and Dec
• (Jan, Mar, May, Jul, Sep, Nov?)
• Delivery to stockyards or packing plant
• Daily limits

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LRP

• Feeder Cattle
• Under 600 lbs
• Steers or heifers
• 600-900 lbs
• Steers or heifers
• Fed Cattle
• Hogs

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LRP for Fall Calves
Steers under 600 lbs LRP rates are valid until 9
a.m. February 25
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Questions?