Post on 01-Jan-2016
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Extension and Outreach/Department of Economics
Markets, Policy, and Outlook
Iowa Corn GrowersCoralville, IowaSept. 7, 2012
Chad HartAssociate Professor/Grain Markets Specialist
chart@iastate.edu515-294-9911
Extension and Outreach/Department of Economics
U.S. Corn Supply and Use2008 2009 2010 2011 2012
Area Planted (mil. acres) 86.0 86.4 88.2 91.9 96.4
Yield (bu./acre) 153.9 164.7 152.8 147.2 123.4
Production (mil. bu.) 12,092 13,092 12,447 12,358 10,779
Beg. Stocks (mil. bu.) 1,624 1,673 1,708 1,128 1,021
Imports (mil. bu.) 14 8 28 25 75
Total Supply (mil. bu.) 13,729 14,774 14,182 13,511 11,875
Feed & Residual (mil. bu.) 5,182 5,125 4,793 4,550 4,075
Ethanol (mil. bu.) 3,709 4,591 5,021 5,000 4,500
Food, Seed, & Other (mil. bu.) 1,316 1,370 1,407 1,390 1,350
Exports (mil. bu.) 1,849 1,980 1,835 1,550 1,300
Total Use (mil. bu.) 12,056 13,066 13,055 12,490 11,225
Ending Stocks (mil. bu.) 1,673 1,708 1,128 1,021 650
Season-Average Price ($/bu.) 4.06 3.55 5.18 6.25 8.20
Source: USDA-WAOB
Extension and Outreach/Department of Economics
U.S. Soybean Supply and Use2008 2009 2010 2011 2012
Area Planted (mil. acres) 75.7 77.5 77.4 75.0 76.1
Yield (bu./acre) 39.7 44.0 43.5 41.5 36.1
Production (mil. bu.) 2,967 3,359 3,329 3,056 2,692
Beg. Stocks (mil. bu.) 205 138 151 215 145
Imports (mil. bu.) 13 15 14 15 20
Total Supply (mil. bu.) 3,185 3,512 3,495 3,286 2,857
Crush (mil. bu.) 1,662 1,752 1,648 1,690 1,515
Seed & Residual (mil. bu.) 106 110 130 101 116
Exports (mil. bu.) 1,279 1,499 1,501 1,350 1,110
Total Use (mil. bu.) 3,047 3,361 3,280 3,141 2,742
Ending Stocks (mil. bu.) 138 151 215 145 115
Season-Average Price ($/bu.) 9.97 9.59 11.30 12.45 16.00
Source: USDA-WAOB
Extension and Outreach/Department of Economics
Prices
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
5/2
1/2
01
2
6/4
/20
12
6/1
8/2
01
2
7/2
/20
12
7/1
6/2
01
2
7/3
0/2
01
2
8/1
3/2
01
2
8/2
7/2
01
2
$ p
er
bu
she
l
11.50
12.25
13.00
13.75
14.50
15.25
16.00
16.75
$ p
er
bu
she
l
Corn Soybeans
Extension and Outreach/Department of Economics
Crop Conditions
Source: USDA-NASS
20253035404550556065707580
% G
oo
d to
Exc
elle
nt
Corn Soybeans
Extension and Outreach/Department of Economics
Corn Harvested Acre Adjustments
Extension and Outreach/Department of Economics
Projected Corn Yields
Extension and Outreach/Department of Economics
Objective Corn Yield Data
Source: USDA-NASS
Extension and Outreach/Department of Economics
World Corn Production
Source: USDA-WAOB
Extension and Outreach/Department of Economics
World Soybean Production
Source: USDA-WAOB
Extension and Outreach/Department of Economics
Hog Crush Margin
Source: ISU Extension
The Crush Margin is the return after the pig, corn and soybean meal costs.Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futuresCorn: 10 bushels per pig Soybean meal: 150 pounds per pig
Extension and Outreach/Department of Economics
Cattle Crush Margin
Source: ISU Extension
The Crush Margin is the return after the feeder steer and corn costs.Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head
Extension and Outreach/Department of Economics
U.S. Meat Production & Prices
Source: USDA-WAOB
Extension and Outreach/Department of Economics
Corn Exports
Source: USDA-FAS
0
500
1,000
1,500
2,000
2,500
9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1
Mill
ion
bu
sh
els
Week
2009 2010 2011
Extension and Outreach/Department of Economics
Soy Exports
Source: USDA-FAS
0
400
800
1,200
1,600
9/1 10/1 11/1 12/1 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1
Mill
ion
bu
sh
els
Week
2009 2010 2011
Extension and Outreach/Department of Economics
Corn Advance Export Sales
Source: USDA-FAS
Japan19%
Mexico28%
South Korea3%
Taiwan1%Egypt
0%
China10%
Unknown33%
Other6%
Extension and Outreach/Department of Economics
Soy Advance Export Sales
Source: USDA-FAS
China64%
EU1%
Japan1%
Mexico3%
Taiwan1%
Indonesia1%
Unknown26%
Other3%
Extension and Outreach/Department of Economics
Corn Grind for Ethanol
84
86
88
90
92
94
96
98
100
102
104
Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12
Mill
ion
bush
els
Extension and Outreach/Department of Economics
Ethanol Stocks
Source: DOE-EIA
650
700
750
800
850
900
950
1000
Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12
Mill
ion
gallo
ns
Extension and Outreach/Department of Economics
U.S. Blended Gasoline Consumption
Source: DOE-EIA, via USDA-ERS
7.6 bil. gal.
7.4 bil. gal.
Extension and Outreach/Department of Economics
Projected 2012 Season-Average Corn Price
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
12
/14
/20
10
2/1
4/2
01
1
4/1
4/2
01
1
6/1
4/2
01
1
8/1
4/2
01
1
10
/14
/20
11
12
/14
/20
11
2/1
4/2
01
2
4/1
4/2
01
2
6/1
4/2
01
2
8/1
4/2
01
2
$ p
er
bu
she
l
Futures USDA
Extension and Outreach/Department of Economics
Projected 2012 Season-Average Soy Price
10.5011.0011.5012.0012.5013.0013.5014.0014.5015.0015.5016.0016.50
12
/14
/20
10
2/1
4/2
01
1
4/1
4/2
01
1
6/1
4/2
01
1
8/1
4/2
01
1
10
/14
/20
11
12
/14
/20
11
2/1
4/2
01
2
4/1
4/2
01
2
6/1
4/2
01
2
8/1
4/2
01
2
$ p
er
bu
she
l
Futures USDA
Extension and Outreach/Department of Economics
Prices
4.50
5.00
5.50
6.00
6.50
7.00
7.50
8.00
5/2
1/2
01
2
6/4
/20
12
6/1
8/2
01
2
7/2
/20
12
7/1
6/2
01
2
7/3
0/2
01
2
8/1
3/2
01
2
8/2
7/2
01
2
$ p
er
bu
she
l
11.50
12.25
13.00
13.75
14.50
15.25
16.00
16.75
$ p
er
bu
she
l
Corn Soybeans
Extension and Outreach/Department of Economics
5.80
6.00
6.20
6.40
6.60
6.80
7.00
7.20
7.40
7.60
7.80
8.00
8.20
Sep
-12
Dec
-12
Mar
-13
Jun-
13
Sep
-13
Dec
-13
Mar
-14
Jun-
14
Sep
-14
Dec
-14
Mar
-15
Jun-
15
Sep
-15
Dec
-15
$ pe
r bu
shel
Current Corn Futures
Source: CME Group, 9/6/2012
7.44
6.24
5.64
Extension and Outreach/Department of Economics
12.50
13.00
13.50
14.00
14.50
15.00
15.50
16.00
16.50
17.00
17.50
Sep
-12
Dec
-12
Mar
-13
Jun-
13
Sep
-13
Dec
-13
Mar
-14
Jun-
14
Sep
-14
Dec
-14
Mar
-15
Jun-
15
Sep
-15
$ pe
r bu
shel
Current Soybean Futures
Source: CME Group, 9/6/2012
16.23
13.1712.44
Extension and Outreach/Department of Economics
Early Prices for 2013 Crops
4.50
5.00
5.50
6.00
6.50
5/1
/20
12
5/1
5/2
01
2
5/2
9/2
01
2
6/1
2/2
01
2
6/2
6/2
01
2
7/1
0/2
01
2
7/2
4/2
01
2
8/7
/20
12
8/2
1/2
01
2
9/4
/20
12
$ p
er
bu
she
l
10.50
11.20
11.90
12.60
13.30
$ p
er
bu
she
l
Corn Soybeans
Extension and Outreach/Department of Economics
Total Acreage Shift
Source: USDA-NASS
Extension and Outreach/Department of Economics
Acreage Shift by State
Source: USDA-NASS
Top: Planted in 2012Bottom: Change from 2011Units: 1,000 acres
Extension and Outreach/Department of Economics
Acreage Shift by Crop
Source: USDA-NASS
Acreage change from 2011Units: 1,000 acres
Extension and Outreach/Department of Economics
Thoughts for 2013 and BeyondSupply/demand concerns
Soil moistureSouth America gets 1st chance to respond to drought pricingWill supply be able to keep pace with demand?
Drought is pulling supply downBut high prices are diminishing demand
General economic conditionsContinued worldwide economic recovery is a key for crop pricesUS job recovery, European financial concerns, China?
2012/13: USDA: Corn $8.20; Soy $16.00Futures (as of 9/6/12): Corn $7.44; Soy $16.23
2013/14: Futures Corn $6.24; Soy $13.172014/15: Futures Corn $5.64; Soy $12.44
Extension and Outreach/Department of Economics
Extension and Outreach/Department of Economics
Extension and Outreach/Department of Economics
Total Cost Expected Yield bu/A Cost Per Bushel
Corn After Corn
Corn After Beans
Beans After Corn
2013 Crop Cost Estimates
$832
$778
$567
165
180
50
$5.04
$4.32
$11.34
Source: ISU Extension Economics, July 2012
Extension and Outreach/Department of Economics
Corn Projections
Source: FAPRI-MO
2013 2014 2015 2016 2017
Area Planted (mil. acres) 96.1 93.1 93.2 92.7 92.8
Yield (bu./acre) 163.2 165.7 167.9 170.2 172.4
Production (mil. bu.) 14,386 14,159 14,354 14,468 14,676
Beg. Stocks (mil. bu.) 645 1,510 1,675 1,766 1,789
Imports (mil. bu.) 25 25 25 25 25
Total Supply (mil. bu.) 15,056 15,695 16,054 16,259 16,490
Feed & Residual (mil. bu.) 4,852 4,855 4,964 5,022 5,082
Ethanol (mil. bu.) 5,386 5,649 5,665 5,643 5,657
Food, Seed, & Other (mil. bu.) 1,435 1,460 1,473 1,472 1,490
Exports (mil. bu.) 1,890 2,055 2,186 2,322 2,445
Total Use (mil. bu.) 13,546 14,020 14,288 14,470 14,675
Ending Stocks (mil. bu.) 1,510 1,675 1,766 1,789 1,815
Season-Average Price ($/bu.) 5.20 4.86 4.74 4.74 4.75
Extension and Outreach/Department of Economics
Soybean Projections
Source: FAPRI-MO
2013 2014 2015 2016 2017
Area Planted (mil. acres) 77.0 76.0 76.4 77.1 77.4
Yield (bu./acre) 43.8 44.5 44.9 45.5 46.0
Production (mil. bu.) 3,326 3,333 3,385 3,459 3,510
Beg. Stocks (mil. bu.) 110 182 186 180 177
Imports (mil. bu.) 15 15 15 15 15
Total Supply (mil. bu.) 3,452 3,530 3,586 3,653 3,702
Crush (mil. bu.) 1,683 1,719 1,740 1,762 1,780
Seed & Residual (mil. bu.) 128 131 133 136 138
Exports (mil. bu.) 1,460 1,494 1,533 1,578 1,609
Total Use (mil. bu.) 3,270 3,344 3,406 3,476 3,526
Ending Stocks (mil. bu.) 182 186 180 177 176
Season-Average Price ($/bu.) 11.28 11.05 11.26 11.41 11.57
Extension and Outreach/Department of Economics
Land Allocation
Source: FAPRI-MO
Extension and Outreach/Department of Economics
U.S. Per-Capita Meat Consumption
Source: FAPRI-MO
Extension and Outreach/Department of Economics
U.S. Pork Projections
Source: FAPRI-MO
Extension and Outreach/Department of Economics
U.S. Beef Projections
Source: FAPRI-MO
Extension and Outreach/Department of Economics
Food Price Projections
Source: FAPRI-MO
Extension and Outreach/Department of Economics
Senate Proposal, 2013-2017
Source: FAPRI-MO
$ per acre
Extension and Outreach/Department of Economics
House Proposal, 2013-2017
Source: FAPRI-MO
$ per acre
Extension and Outreach/Department of Economics
Planted Acres, 2013-2017
Source: FAPRI-MO
Million acres
Extension and Outreach/Department of Economics
Prices, 2013-2017
Source: FAPRI-MO
Extension and Outreach/Department of Economics
Gov. Expenditures, 2013-2017
Source: FAPRI-MO
$ million
Extension and Outreach/Department of Economics
Change in Expenditures, 2013-2017
Source: FAPRI-MO
Extension and Outreach/Department of Economics
Payments as a Share of Receipts
Source: FAPRI-MO
Extension and Outreach/Department of EconomicsSource: Babcock, ISU
Extension and Outreach/Department of Economics
Iowa Corn Yields
Source: USDA-NASS
0
20
40
60
80
100
120
140
160
180
200
Bu
she
ls p
er
acr
e
Extension and Outreach/Department of Economics
Land Value & Cash Rental Rate Trends
Source: ISU Extension Economics
Extension and Outreach/Department of Economics
Positive Factors for Land Values
Extension and Outreach/Department of Economics
Negative Factors for Land Values
Extension and Outreach/Department of Economics
Extension and Outreach/Department of Economics
Grain Transportation
Source: USDA-AMS
Extension and Outreach/Department of Economics
Grain Transportation
Source: USDA-AMS
Extension and Outreach/Department of Economics
Lock Breakdowns
Source: Steven Stockton
Extension and Outreach/Department of Economics
Thank you for your time!
Any questions?
My web site:http://www.econ.iastate.edu/~chart/
Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/