Welcome toANR at Noon

November 22, 2013

Crop Market Outlook and the Farm Bill

Chad Hart

chart@iastate.edu

U.S. Corn Supply and Use2009 2010 2011 2012 2013

Area Planted (mil. acres) 86.4 88.2 91.9 97.2 95.3

Yield (bu./acre) 164.7 152.8 147.2 123.4 160.4

Production (mil. bu.) 13,092 12,447 12,360 10,780 13,989

Beg. Stocks (mil. bu.) 1,673 1,708 1,128 989 824

Imports (mil. bu.) 8 28 29 162 25

Total Supply (mil. bu.) 14,774 14,182 13,517 11,932 14,837

Feed & Residual (mil. bu.) 5,125 4,795 4,557 4,333 5,200

Ethanol (mil. bu.) 4,591 5,019 5,000 4,648 4,900

Food, Seed, & Other (mil. bu.) 1,370 1,407 1,428 1,396 1,450

Exports (mil. bu.) 1,980 1,834 1,543 731 1,400

Total Use (mil. bu.) 13,066 13,055 12,528 11,108 12,950

Ending Stocks (mil. bu.) 1,708 1,128 989 824 1,887

Season-Average Price ($/bu.) 3.55 5.18 6.22 6.89 4.50

Source: USDA-WAOB

U.S. Soybean Supply and Use2009 2010 2011 2012 2013

Area Planted (mil. acres) 77.5 77.4 75.0 77.2 76.5

Yield (bu./acre) 44.0 43.5 41.9 39.8 43.0

Production (mil. bu.) 3,359 3,329 3,094 3,034 3,258

Beg. Stocks (mil. bu.) 138 151 215 169 141

Imports (mil. bu.) 15 14 16 36 15

Total Supply (mil. bu.) 3,512 3,495 3,325 3,239 3,413

Crush (mil. bu.) 1,752 1,648 1,703 1,689 1,685

Seed & Residual (mil. bu.) 110 130 88 90 109

Exports (mil. bu.) 1,499 1,501 1,365 1,320 1,450

Total Use (mil. bu.) 3,361 3,280 3,155 3,098 3,243

Ending Stocks (mil. bu.) 151 215 169 141 170

Season-Average Price ($/bu.) 9.59 11.30 12.50 14.40 12.15

Source: USDA-WAOB

Projected Corn Yields

Source: USDA-NASS

Top: 2013 Projected YieldBottom: Change from last monthUnits: Bushels/acre

Projected Soybean Yields

Source: USDA-NASS

Top: 2013 Projected YieldBottom: Change from last monthUnits: Bushels/acre

U.S. Meat Production & Prices

Source: USDA-WAOB

Corn Export Shifts

Source: USDA-FAS

Soy Export Shifts

Source: USDA-FAS

Corn Grind for Ethanol

Current Corn Futures

Source: CME Group, 11/15/2013

4.07

4.23

4.36

Current Soybean Futures

Source: CME Group, 11/15/2013

12.14

10.9210.75

Thoughts for 2014 and BeyondSupply/demand concernsCorn demand rebounding? Yes, so far, so goodAcreage allocation for 2014: Where do the extra corn acres go?Markets favoring soybeans in the short term and corn longer term

2012/13USDA

2013/14 USDA

2013/14Futures

(11/15/13)

Corn $6.89 $4.50 $4.07

Soybeans $14.40 $12.15 $12.14

Farm Bill TitlesI. Commodities IX. EnergyII. Conservation X. Hort. & Organic Ag.III. Trade XI. LivestockIV. Nutrition XII. Crop InsuranceV. Credit XIII. Commodity

FuturesVI. Rural Development XIV. MiscellaneousVII. Research XV. Trade & TaxesVIII. Forestry

Ideas on the Next Farm BillLet’s look at the common features from the House

and Senate bills

Both versions of the farm bill eliminate direct payments, countercyclical payments, ACRE, and SURE

The marketing loan program would continue

Livestock disaster programs would be reestablished

Reference PricesSenate: 55% of 5-yr Olympic average MYA

price

House: Set by lawCorn $3.70Wheat $5.50Soybean $8.40

Corn $2.95

Wheat $3.62

Soybean $6.29

ARC or RLC instead of ACRERevenue-based support program

Revenues based on 5-year Olympic averages for yields and prices

Yields and prices have cups (T-yields and reference prices)

AMP or PLC instead of CCPPrice-based support program

Reference prices establish targets

Works like CCP

Payment rate = Max(0, Reference price – Max(MYA price, Loan rate))

Dairy

Dairy Producer Margin Protection Program Voluntary margin coverage, with the

opportunity for supplemental coverage

Dairy Market Stabilization Program Managed supplies when margins fall

SCO Examples from Last Year’s Bills

Source: Congressional Research Service

Thank you for joining us todayWe invite your feedback and suggestions for future ANR @ Noon webinars:

John Lawrence – jdlaw@iastate.edu

Chris Mondak- cmondak@iastate.edu

Next date: Dec 13, 2013

Windbreak Management

Jesse RandallISUEO Forestry Extension

Natural Resource Ecology and Management