Ag Outlook Dec 15 2017 Chad Hart Associate

Ag Outlook Dec. 15, 2017 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate. edu 515 -294 -9911 Extension and Outreach/Department of Economics

U. S. Corn Supply and Use 2014 2015 2016 2017 2018 90. 6 88. 0 94. 0 90. 4 91. 0 Area Planted (mil. acres) Yield (bu. /acre) 171. 0 168. 4 174. 6 175. 4 173. 5 Production (mil. bu. ) 14, 216 13, 602 15, 148 14, 578 14, 520 Beg. Stocks (mil. bu. ) 1, 232 1, 731 1, 737 2, 295 2, 437 Imports (mil. bu. ) 32 67 57 50 50 Total Supply (mil. bu. ) 15, 479 15, 401 16, 942 16, 922 17, 007 Feed & Residual (mil. bu. ) 5, 280 5, 120 5, 463 5, 575 5, 550 Ethanol (mil. bu. ) 5, 200 5, 224 5, 439 5, 525 Food, Seed, & Other (mil. bu. ) 1, 401 1, 422 1, 452 1, 460 1, 475 Exports (mil. bu. ) 1, 867 1, 898 2, 293 1, 925 1, 900 Total Use (mil. bu. ) 13, 748 13, 664 14, 647 14, 485 14, 450 Ending Stocks (mil. bu. ) 1, 731 1, 737 2, 295 2, 437 2, 557 3. 70 3. 61 3. 36 3. 20 3. 30 Season-Average Price ($/bu. ) Source: USDA Extension and Outreach/Department of Economics

U. S. Soybean Supply and Use 2014 2015 2016 2017 2018 Area Planted (mil. acres) 83. 3 82. 7 83. 4 90. 2 91. 0 Yield (bu. /acre) 47. 5 48. 0 52. 0 49. 5 48. 4 Production (mil. bu. ) 3, 927 3, 926 4, 296 4, 425 4, 360 Beg. Stocks (mil. bu. ) 92 191 197 301 445 Imports (mil. bu. ) 33 24 22 25 25 Total Supply (mil. bu. ) 4, 052 4, 140 4, 515 4, 752 4, 830 Crush (mil. bu. ) 1, 873 1, 886 1, 899 1, 940 1, 970 Seed & Residual (mil. bu. ) 146 122 141 140 Exports (mil. bu. ) 1, 842 1, 936 2, 174 2, 225 2, 325 Total Use (mil. bu. ) 3, 862 3, 944 4, 214 4, 306 4, 435 Ending Stocks (mil. bu. ) 191 197 301 445 396 Season-Average Price ($/bu. ) 10. 10 8. 95 9. 47 9. 30 9. 40 Source: USDA Extension and Outreach/Department of Economics

Projected Corn Yields Top: 2017 Yield Estimate Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS Extension and Outreach/Department of Economics

Projected Soybean Yields Top: 2017 Yield Estimate Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS Extension and Outreach/Department of Economics

Extension and Outreach/Department of Economics

U. S. Meat Production & Prices Source: USDA-WAOB Extension and Outreach/Department of Economics

Projections for 2017 2018 3/3/17 -$29 -$21 6/7/17 $3 -$24 10/1/17 $19 -$3 Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics 11/13/17 $69 $4

Source: USDA/AMS Extension and Outreach/Department of Economics

Source: USDA/AMS Extension and Outreach/Department of Economics

Backgrounding and Stocker Example December 15 th 550 Pound Calves in Iowa @ $171. 18/cwt Sale Sell Price, Weight Date $/cwt 650 1/24/18 $163. 33 750 3/5/18 $153. 94 850 4/14/18 $143. 87 VOG, ADG DOF $/cwt $/head 2. 50 41 $120. 17 2. 50 81 $106. 55 $213. 10 2. 50 121 $93. 80 $281. 41 Source: USDA/AMS, CME Group Extension and Outreach/Department of Economics

Cattle on Feed― 11/17 report (1, 000+ head capacity feedlots & <1, 000 in Iowa) • Nov 1 On Feed: +6. 3% yr/yr – Vs. +5. 7% pre-report est. (+4. 8%, +7. 0%) § IA: +15. 0% vs last year [1, 000+ Head] § IA: -6. 9% vs last year [<1, 000 Head] • Oct Placements: +10. 2% yr/yr – Vs. +7. 1% pre-report est. (+3. 6%, +13. 1%) § IA: +10. 1% vs last year [1, 000+ Head] § IA: 16. 5% vs last year [<1, 000 Head] • Oct Marketings: +5. 6% yr/yr – Vs. +5. 4% pre-report est. (+5. 0%, +5. 8%) § IA: +3. 1% vs last year [1, 000+ Head] § IA: +29. 6% vs last year [<1, 000 Head] Data Source: USDA/NASS Extension and Outreach/Department of Economics

Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

Data Source: USDA/AMS Extension and Outreach/Department of Economics

2014 = +$197. 24 2015 = -$225. 12 2016 = -$110. 62 2017 f = +$139. 67 2018 f = -$44. 54 [+$41 to +$269] [-$530 to +$43] [-$359 to +$113] [-$74 to +$415] [-$135 to +$49] Extension and Outreach/Department of Economics

Source: USDA/AMS Extension and Outreach/Department of Economics

U. S. Beef Exports, Jan-Sep 2017 Country Japan Mexico Canada South Korea Hong Kong China (Taiwan) Vietnam Netherlands Philippines Chile Bahamas United Arab Emirates Dominican Republic China (Mainland) Other Countries Total Sep-17/Aug-17 Sep-17/Sep-16 Percent WASDE U. S. : 2016: 2, 556 mil lbs -13% -11% -5% -11% -2% 2% -24% 16% 35% -47% -48% 26% -41% 83% 15% -8% 40% 8% 8% 3% -8% 5% 17% 8% 21% -24% -35% 18% -8% 16% 14% (Carcass Weight Basis) Year-to-Date 1, 000 lbs 142, 497 20, 185 8, 634 26, 340 16, 641 7, 904 10, 779 2, 186 5, 267 3, 868 -817 -681 1, 048 3, 462 15, 396 262, 710 2017: 2, 855 (+12%) Percent 29% 7% 4% 8% 98% 8% 29% 19% -11% -6% 8% 14% Share 31% 15% 11% 16% 10% 5% 1% 1% 0% 6% 2018: 2, 970 (+4%) Source: USDA/ERS Extension and Outreach/Department of Economics

Source: CME Group Extension and Outreach/Department of Economics

Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

2013 = +$6. 21 2014 = +$61. 85 2015 = +$7. 93 2016 = -$1. 26 2017 f = +$12. 77 2018 f = +$13. 70 [-$25. 60 to +$24. 57] [+$13. 15 to +$107. 25] [-$18. 40 to +$26. 25] [-$35. 52 to +$32. 92] [-$12. 68 to +$47. 62] [-$10. 03 to +$33. 79] Extension and Outreach/Department of Economics

2013 = +$4. 77 2014 = +$39. 48 2015 = -$14. 32 2016 = -$13. 10 2017 f = +$2. 26 2018 f = +$1. 94 [-$14. 80 to +$22. 07] [+$1. 62 to +$84. 64] [-$30. 32 to +$4. 70] [-$45. 69 to +$17. 05] [-$30. 32 to +$24. 89] [-$18. 40 to +$21. 27] Extension and Outreach/Department of Economics

Source: USDA/AMS. * Steve Meyer, EMI. Extension and Outreach/Department of Economics

Source: Steve Meyer. Published in National Hog Farmer Magazine, July 27, 2017. Extension and Outreach/Department of Economics

2000 to 2017 = +27% Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center Extension and Outreach/Department of Economics

Source: USDA/AMS Extension and Outreach/Department of Economics

U. S. Pork Exports, Jan-Sep 2017 Country Japan Mexico Canada South Korea China (Mainland) Hong Kong Australia Philippines China (Taiwan) Colombia Honduras Dominican Republic Guatemala Chile Other Countries Total Sep-17/Aug-17 Sep-17/Sep-16 Percent -8% -2% 14% 16% 1% 31% -31% 43% -18% 28% -17% 7% 44% -27% 0% 1% WASDE U. S. : 2016: 5, 239 mil lbs -3% 1% 1% 38% -31% 29% -25% 14% 55% 90% 1% -19% 38% -20% 8% 2% 2017: 5, 588 (+7%) (Carcass Wt Basis) Year-to-Date 1, 000 lbs 3, 535 201, 425 -1, 280 83, 831 -117, 964 -13, 402 4, 223 14, 278 8, 800 57, 330 2, 194 17, 228 1, 870 26, 520 16, 773 305, 360 Percent 0% 18% 0% 30% -29% -12% 3% 26% 64% 84% 4% 31% 7% 97% 13% 8% Share 22% 32% 10% 9% 7% 2% 4% 2% 1% 3% 1% 2% 1% 1% 3% 2018: 5, 900 (+6%) Source: USDA/ERS Extension and Outreach/Department of Economics

Corn Export Shifts Source: USDA-FAS Extension and Outreach/Department of Economics

Soybean Export Shifts Source: USDA-FAS Extension and Outreach/Department of Economics

Ethanol Production Sources: EIA, my projection for 2017 Extension and Outreach/Department of Economics

Ethanol Exports Source: EIA Extension and Outreach/Department of Economics

Current Corn Futures 3. 83 3. 45 Source: CME Group, 12/14/2017 Extension and Outreach/Department of Economics

Current Soybean Futures 9. 76 9. 54 Source: CME Group, 12/14/2017 Extension and Outreach/Department of Economics

Margins @ Actual Yields and Basis Extension and Outreach/Department of Economics

Margins w/ 2017 Costs and Basis Extension and Outreach/Department of Economics

Thank you for your time! Any questions? My web site: http: //www 2. econ. iastate. edu/faculty/hart/ Iowa Farm Outlook: http: //www 2. econ. iastate. edu/ifo/ Ag Decision Maker: http: //www. extension. iastate. edu/agdm/ Extension and Outreach/Department of Economics