Crop Market Outlook North Central Iowa Crop Land

Crop Market Outlook North Central Iowa Crop & Land Stewardship Clinic Iowa Falls, Iowa Jan. 3, 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate. edu 515 -294 -9911 Extension and Outreach/Department of Economics

U. S. Corn Supply and Use 2009 2010 2011 2012 2013 86. 4 88. 2 91. 9 97. 2 95. 3 Area Planted (mil. acres) 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 30 Total Supply (mil. bu. ) 14, 774 14, 182 13, 517 11, 932 14, 842 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, 950 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, 450 Total Use (mil. bu. ) 13, 066 13, 055 12, 528 11, 108 13, 050 Ending Stocks (mil. bu. ) 1, 708 1, 128 989 824 1, 792 3. 55 5. 18 6. 22 6. 89 4. 40 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

U. S. Soybean Supply and Use 2009 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 25 Total Supply (mil. bu. ) 3, 512 3, 495 3, 325 3, 239 3, 423 Crush (mil. bu. ) 1, 752 1, 648 1, 703 1, 689 1, 690 Seed & Residual (mil. bu. ) 110 130 88 90 109 Exports (mil. bu. ) 1, 499 1, 501 1, 365 1, 320 1, 475 Total Use (mil. bu. ) 3, 361 3, 280 3, 155 3, 098 3, 274 Ending Stocks (mil. bu. ) 151 215 169 141 150 9. 59 11. 30 12. 50 14. 40 12. 50 Season-Average Price ($/bu. ) Source: USDA-WAOB Extension and Outreach/Department of Economics

Projected Corn Yields Top: 2013 Projected Yield Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS Extension and Outreach/Department of Economics

Projected Soybean Yields Top: 2013 Projected Yield Bottom: Change from last month Units: Bushels/acre 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

World Weather Source: USDC and USDA Extension and Outreach/Department of Economics

Hog Crush Margin 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 futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: ISU Extension and Outreach/Department of Economics

Cattle Crush Margin 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 Source: ISU Extension and Outreach/Department of Economics

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

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

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

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

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

Corn Grind for Ethanol Extension and Outreach/Department of Economics

Renewable Fuels Standard (RFS) Extension and Outreach/Department of Economics

Renewable Fuels Standard (RFS) Extension and Outreach/Department of Economics

Source: DOE-EIA, Annual Energy Outlook Extension and Outreach/Department of Economics

Liquid Fuel Usage 2010 (Million Barrels Oil Equivalent per Day) 2015 2020 2025 2030 2035 United States 18. 9 101% 103% 101% 99% 98% Canada 2. 2 103% 100% 98% 99% Mexico 2. 4 105% 110% 117% 127% 138% Europe 14. 8 91% 93% 93% 94% Japan 4. 4 106% 101% 99% 97% 94% China 9. 3 125% 146% 165% 178% 195% India 3. 3 113% 134% 158% 186% 217% Africa 3. 4 105% 107% 112% 119% 126% Central and South America 6. 0 108% 110% 114% 121% 128% World 86. 7 106% 111% 116% 120% 126% (Percent of 2010 Value) Source: DOE-EIA Extension and Outreach/Department of Economics

Current Corn Futures 4. 23 4. 14 4. 12 Source: CME Group, 1/2/2014 Extension and Outreach/Department of Economics

Current Soybean Futures 12. 25 10. 67 10. 52 Source: CME Group, 1/2/2014 Extension and Outreach/Department of Economics

Corn Prices vs. Costs Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre Sources: USDA-NASS for Prices, Duffy for Costs Extension and Outreach/Department of Economics

Soybean Prices vs. Costs Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre Sources: USDA-NASS for Prices, Duffy for Costs Extension and Outreach/Department of Economics

Crop Acreage Source: USDA-NASS Extension and Outreach/Department of Economics

Crop Shifts Source: USDA-NASS Extension and Outreach/Department of Economics

Thoughts for 2014 and Beyond ØSupply/demand concerns ØCorn demand rebounding? Yes, so far, so good ØAcreage allocation for 2014: Where do the extra corn acres go? ØMarkets favoring soybeans in the short term and corn longer term Corn Soybeans 2012/13 USDA 2013/14 USDA $6. 89 $14. 40 $12. 50 Extension and Outreach/Department of Economics 2013/14 Futures (1/2/14) $4. 14 $12. 25

World Corn Markets Source: USDA Extension and Outreach/Department of Economics

Arable Land 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/ Extension and Outreach/Department of Economics