Cattle Situation and Outlook Washburn September 2004

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Cattle Situation and OutlookWashburnSeptember
2004

• Tim Petry
• Livestock Economist
• NDSU Extension Service

8/31/04
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Web Address

• www.ag.ndsu.nodak.edu/aginfo/lsmkt/livestock.htm
• Click on Cattle Outlook, Washburn, September 04
• Longer version with fundamentals
• Cattle Outlook, September 04

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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 Aug 26,
2004 USDA-ND Ag Market News
Stockmens Livestock Exchange Dickinson, ND
This week 2329
Last week 831 Year ago 2115 Compared to
the last feeder sale here two weeks ago, feeder
steers and heifers sold 2.00 to 5.00 lower.
Steers made up 66 percent of the run heifers 34
percent. Offerings over 600 lbs totaled 11
percent. Next week will be a spring calf,
yearling and Holstein special 1000 head
expected.
Feeder Steer Medium and Large 1 Head
Wt Range Avg Wt Price Range Avg
Price 15 308-339 325
157.00-164.00 161.19 12 368
368 153.00 153.00
146 401-449 417 138.00-147.50
142.71 114 455-495 471
130.00-137.50 134.60 29 467-476
470 142.00-146.00 144.46 Value
Enhanced 61 503-525 516
127.00-133.00 130.99 30 559-591
586 119.00-126.00 120.11
31 609 609 122.50
122.50 58 850-891 884
107.00-110.75 108.86 15 1021
1021 97.50 97.50
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AM_LS753 Amarillo, TX
Mon Aug 23, 2004 USDA-TX Dept of
Ag Market News Superior Video Auction -
Wednesday thru Friday - August 18 - 20,
2004 0fferings 123,300
Trade and demand moderate to good. Supply
includes 38 percent feeder steers and heifers
over 600 lbs, 61 percent of supply steers and 39
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 Jan 2005.

Northcentral States
Colorado, Wyoming, Nebraska
Montana, North and South Dakota and Iowa.

Feeder Steer Medium and Large
1 Head Wt Range Avg Wt Price Range
vg Price Delivery 460 460-485
465 139.50-147.75 145.88 Oct-Nov
1046 500-525 508 130.00-142.00
137.08 Oct-Nov 1462 550-580
564 119.25-130.75 126.60
Oct-Nov 420 600-640 616
114.25-125.75 121.21 Oct-Nov 121
675-690 680 15.50-121.00
118.97 Oct-Nov 85 700
700 115.00 115.00 Oct-Nov
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Livestock Marketing Information Center
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Canadian border closed 2003
Livestock Marketing Information Center
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Breakeven Prices for 750 lb Backgrounded
Steers550 lb to 750 lbADG 2.77 lbs72 Days on
Feed (Example Oct. 30 Jan. 11)
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Breakeven Prices for 1300 lb Fed Steers750 lb to
1300 lbADG 3.5 lbs157 Days on Feed
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2005 Milk Component Prices
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Livestock Risk Protection (LRP)A New Price Risk
Management Tool for Livestock Producers

• Tim PetryLivestock Economist

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LRP - revenue insurance program that is
reinsured and subsidized by the Federal Crop
Insurance Corporation (FCIC)

• 2001 pilot program for swine
• 2003 feeder and fed cattle in selected states
• Oct. 2004 all 3 will be available in North
  Dakota

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LRP Feeder Cattle

• Similar to put options
• Based on Chicago Mercantile Exchange (CME) feeder
  cattle price index
• 13 of premium is subsidized
• Crop insurance agents do not have to offer

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Insurance Period

• Policies available for the following weekly
  lengths 13, 17, 21, 26, 30, 34, 39, 43, 47, 52
• Policy Size
• Any up to 1,000 head per policy
• 2,000 maximum per year (July 1June 30)

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Actuarials

• Coverage prices rates change daily and are
  posted on the USDA Risk Management Agency (RMA)
  web site
• www.rma.usda.gov
• Coverage levels will range from 70-95 of posted
  price

Offsetting positions in futures or options are
prohibited
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Indemnity

• Payment based on difference between COVERAGE
  PRICE (CP) CME CASH SETTLEMENT PRICE (CS)
• CP 105/cwt
• CS 100
• 5/cwt payment