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Current Issues and Policies “The Times They are a Changing” or “The Times Already Changed”

Current Issues and Policies “The Times They are a Changing” or “The Times Already Changed” Spring Livestock Conference 2013 Douglas County, Oregon April 13, 2013. James G. Robb Director james.robb@lmic.info. Topics: Perspective on Status and Future…. Some Background Do We Eat Beef?

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Current Issues and Policies “The Times They are a Changing” or “The Times Already Changed”

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  1. Current Issues and Policies “The Times They are a Changing” or “The Times Already Changed” Spring Livestock Conference 2013 Douglas County, Oregon April 13, 2013 James G. Robb Director james.robb@lmic.info

  2. Topics: Perspective on Status and Future… • Some Background • Do We Eat Beef? • Wholesale Markets • Choice versus Select • Packer Margins • Plant Efficiency is Important • LMIC’s Margins • Cattle Feeding Industry and Returns • Issues, Issues, Issues … • What Will Be the Drivers? • USDA Data Sources – NASS, AMS, FAS, and ERS

  3. Data Source: USDA-NASS and ERS, Forecasts by LMIC

  4. Data Source: USDA-AMS

  5. Data Source: USDA-AMS

  6. Data Source: USDA-AMS

  7. Data Source: USDA-AMS

  8. Data Source: USDA-AMS

  9. Data Source: USDA-AMS

  10. Data Source: USDA-AMS

  11. Data Source: USDA-AMS

  12. Packer Margins

  13. AVERAGE SLAUGHTER AND FABRICATION COSTSPer Head for the “Representative Plants” 1.7 million head per year plant is 5% more efficient than a 1.3 million head plant and 12% more efficient than a 950 thousand head plant. This is why the beefpacking industry – and a lot of agribusiness & farming – is highly concentrated. Big firms are more efficient. Source: Dr. Koontz, Colorado State University

  14. Data Source: USDA-AMS & USDA-ERS, Compiled & Analysis by LMIC

  15. Cattle Feeding

  16. Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC

  17. Data Source: KSU Focus on Feedlots

  18. Data Source: KSU Focus on Feedlots

  19. Issues, Issues, Issues…. QE II TSC – The Sustainability Consortium Farm Bill LRP Price Discovery RFS LFTB natural Imports CWT organic MPR Animal Rights Traceability CAFO Phytosanitary CFTC BEV GE Animals NAIS Free Trade Agreements FMD FSIS OIE BSE H1N1 Check-off COOL Grades & Standards CRP Formula Pricing Packer Ban WTO Taxes AMA’s i-rate Dentition Captive Supply Oil Price GMO Seed Food Safety Health Care APA QSA Immigration Legislation Food Prices Risk Mgmt Regionalization Horse Harvesting ABF (Antibiotic Free) Cost of Production Crop Insurance AI EPA Rules Ethanol Cap & Trade Financial Regulation ACRE Exchange Rate GIPSA- Rule QUALITY Excess Capacity Beta-agonists

  20. Data Source: Pacific Exchange Rate Service, Univ. of B.C.

  21. Trade Issues… • COOL – Trade Issue • Traceability – Niche and High Value vs Commodity Beef • Phytosanitary (BSE, H1N1) – Trade Barriers Of Choice • Beta-agonists (currently Russia and China) • Many Foreign Consumers are Evolving Quickly • Building Foreign Demand Takes Effort (often country specific knowledge) • Exports Require Infrastructure and Credit (guarantees, letters of credit, and other things often taken for granted) • Trade Agreements are Important

  22. Some Cattle/Beef Industry Topics • Technology • Capital • Effective Markets • Market Segmentation Accelerating • Pricing by Formula on What Basis? • Custom Feeding Model • Data Management (“X-ing out”, Feed Efficiency) • Meat Quality • 1000-pound and Heavier Placement Weights

  23. Data Source: USDA-AMS

  24. www.lmic.info Thank You!

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