Cattle Situation and Outlook March 2006

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Cattle Situation and Outlook March 2006

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

03-15-06
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As we know, there are known knowns. There are
thingswe know we know. We also know there are
known unknowns. That is to say we know there are
some things we do not know. But there are also
unknown unknowns, the ones we dont know we
dont know. -- Donald H. Rumsfeld, Secretary of
Defense Department of Defense news
briefing February 12, 2002
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Livestock Marketing Information Center Data
Source USDA/NASS
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Cyclical Rebuilding HAS Started!
200,000 head increase in 2004 2005
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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SF_LS766 Sioux Falls, SD
Thu Mar 16, 2006 USDA-SD Ag Market
News correction second line trend Stockmens
Livestock Exchange Feeder Cattle Weighted Average
Report for 03/16/2006 Receipts 2182 Last
Week 834 Year Ago 806 Compared to a
light test of feeder cattle last week, feeder
steers and heifers sold unevenly steady with
replacement type heifers selling at a 8.00 to
10.00 premium. Steers made up 30 percent of the
run heifers 70 percent. Offerings over 600 lbs
totaled 82 percent. Next Thursday will be a
feeder cattle special along with a regular sale
500 to 1000 expected. Feeder Steers Medium and
Large 1 Head Wt Range Avg Wt Price
Range Avg Price 7 419 419
156.00 156.00 38 455-463
461 144.50-154.00 152.10 22
506-530 525 146.50-147.00 146.61
65 586-598 593 127.50-130.50
128.31 16 601-602 602
125.75-127.50 126.30 99 653-698
667 113.25-116.50 115.47 12
703-711 708 108.00-110.00 109.17
18 758-761 758 101.00-101.75
101.62 70 805-834 812
96.00-99.00 97.81 14 884
884 93.00 93.00 30
960 960 91.50 91.50
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Livestock Marketing Information Center
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Livestock Marketing Information Center
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SF_LS762 Sioux Falls, SD Tue Feb 14, 2006
USDA-ND Ag Market News Resending with
corrections Stockmens West
Dickinson, ND Stock Cow and Bred
Heifer Sale Receipts This week 1285
Year ago 1386 Compared to the last bred
female sale two weeks ago, the bred female sold
firm today. Offerings included dispersions and
smaller groups of native Medium and Large 1
females. February 28, 2006 will be the next sale
at Stockmen's West featuring stock cows. Bred
Heifers 58 Medium Large 1 1137 to 1228
lbs 1335 to 1525 63 Medium Large 12
917 to 998 lbs 1250 to 1260 Young
cows (3 to 6 years old) 319 Medium Large 1
1193 to 1372 lbs 1525 to 1700 64
Large 1 1397 to 1408 lbs 1225
to 1510 Solid Mouth Cows 108 Medium Large 1
1306 to 1387 lbs 1345 to 1425 120
Large 1 1401 to 1561 lbs
1275 to 1425 Short Term 235 Medium Large 1
1151 to 1356 lbs 975 to 1100 111
Large 1 1401 to 1528 lbs
1000 to 1200
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Net Return for Purchased Bred Heifer
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(No Transcript)
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Feeder Cattle Supplies Are Low
2003 37,903 2004 37,625 2005 37,800
Source LMIC
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Livestock Marketing Information Center
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Breakeven Prices for 750 lb Backgrounded
Steers550 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 to
1300 lbADG 3.5 lbs157 Days on Feed
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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 Mar 13, 2006
USDA-TX Dept of Ag Market News Superior Video
Auction - Friday March 10, 2006 0fferings
41,000 Trade and demand moderate. Supply
includes 52 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 72
675 675 110.75
110.75 Current Calves 120 840
840 98.25 98.25 Current
60 825 825 94.00
94.00 Current Fleshy 201 890
890 91.50 91.50 Current
50 975 975 87.50
87.50 Current 150 550 550
155.00 155.00 Mar-Apr 375
650 650 123.00 23.00
Apr Calves 108 900-925 912
91.25-92.50 91.88 Apr 88
570 570 134.50 134.50
Apr-May 68 700 700
112.00 112.00 Nov
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(No Transcript)
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LRP vs. CME Options
Steers 6 to 9 CWT LRP rates are valid until 9
a.m. March 14 Cost Related Sales Endorsemen
t Ending Coverage per Put Strike Put Date Weeks Da
ys Date Price Cwt. (May) Premium -----------------
--------------------------------------------------
--------------------------------------------------
-------- 03/13/06 13 091 06/12/06 99 .95 100 1.10
97 .56 98 .70 95 .40 96
.55 at the money 102 1.50
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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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Questions?