Caveat: This page is of an enormous size, graphically intensive. Those without broadband connection will need a lot of patience. Cattle Numbers, Beef and Total Meat Supply -Cattle numbers are expected to bottom out at 96.7 million head on January 1, 2002. The total cattle inventory is expected to grow nearly five million head by 2005-2006. -Beef-cow numbers were at the cycle low in January 2001. The beef-cow factory is expected to increase about 2.0 million head by 2006 to 2007. -Total cattle slaughter peaked in 2000 at 36.25 million head. Annual slaughter is expected to decline about 2.0 million head during the next five years. -Beef production and per-capita consumption peaked in 2000. Annual beef production is expected to decline about 1.4 billion pounds during the next four years. -Cattle-on-feed numbers are expected to decline significantly as a result of sharply reduced feeder-cattle and calf supplies. -Heifer slaughter is expected to decline during the next few years as herd expansion unfolds, and reach the cycle low in 2005 at about 10.3 million head. -Pork production is expected to increase 1% to 2% in 2002, and poultry production should increase 2%. Total meat supplies will be about even for the year. $72.50 fed cattle average 2001 $72 - $74 fed cattle average in 2002 Range $67-$80 Longer-Term 2003 $74-$76 2004 $74-$76 2005 $72-$74 Notes $87.50 feeder cattle average in 2001 $85-$87 2002 Range $82-$90 Longer-Term 2003 $85-$87 2004 $85-$87 2005 $82-$83 Structural Changes & Points to Consider Retailer Consolidation Smaller number of national & international heavy-weights Most efficient to work with a limited number of suppliers Retailer Consolidation-Supermarkets Top Twenty Control 73% - food sales Top Ten Control 59% - food sales Top Five Control 41% - food sales Retailers Are Shifting The Responsibility to the Supplier For: Food safety Inventory Management What does this mean for you? Top 5-7 Retailers may control 70-75 percent of food sales in FIVE YEARS What are the Implications? Single source suppliers Just in time supply management Inventory management Consistency, Quality, Quantity Top 25 Feeding Companies Feed 38% of the Cattle Now! By 2005 45-50% Beef Business Facts: The beef industry is changing rapidly Competition will be tougher and margins will narrow Risk is increasing Approaches to marketing are changing An increased percentage of beef will be sold under a brand name Environmental and food safety issues will increase General observations