Extension and Outreach/Department of Economics

Ag Markets & Economic Outlook

2014 MVTL Agronomy Update MeetingAmes, Iowa

Feb. 27, 2014

Chad HartAssociate Professor/Crop Markets Specialist

chart@iastate.edu515-294-9911

Extension and Outreach/Department of Economics

U.S. Corn Supply and Use2010 2011 2012 2013 2014

Area Planted (mil. acres) 88.2 91.9 97.2 95.4 92.0

Yield (bu./acre) 152.8 147.2 123.4 158.8 165.3

Production (mil. bu.) 12,447 12,360 10,780 13,925 13,985

Beg. Stocks (mil. bu.) 1,708 1,128 989 821 1,481

Imports (mil. bu.) 28 29 162 35 25

Total Supply (mil. bu.) 14,182 13,517 11,932 14,781 15,491

Feed & Residual (mil. bu.) 4,795 4,557 4,335 5,300 5,400

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

Food, Seed, & Other (mil. bu.) 1,407 1,428 1,396 1,400 1,430

Exports (mil. bu.) 1,834 1,543 731 1,600 1,550

Total Use (mil. bu.) 13,055 12,528 11,111 13,300 13,380

Ending Stocks (mil. bu.) 1,128 989 821 1,481 2,111

Season-Average Price ($/bu.) 5.18 6.22 6.89 4.50 3.90

Source: USDA-WAOB for 2010-13

Extension and Outreach/Department of Economics

U.S. Soybean Supply and Use2010 2011 2012 2013 2014

Area Planted (mil. acres) 77.4 75.0 77.2 76.5 79.5

Yield (bu./acre) 43.5 41.9 39.8 43.3 45.2

Production (mil. bu.) 3,329 3,094 3,034 3,289 3,550

Beg. Stocks (mil. bu.) 151 215 169 141 150

Imports (mil. bu.) 14 16 36 30 15

Total Supply (mil. bu.) 3,495 3,325 3,239 3,459 3,715

Crush (mil. bu.) 1,648 1,703 1,689 1,700 1,725

Seed & Residual (mil. bu.) 130 88 90 99 105

Exports (mil. bu.) 1,501 1,365 1,320 1,510 1,600

Total Use (mil. bu.) 3,280 3,155 3,099 3,309 3,430

Ending Stocks (mil. bu.) 215 169 141 150 285

Season-Average Price ($/bu.) 11.30 12.50 14.40 12.70 9.65

Source: USDA-WAOB for 2010-13

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

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

Soy Export Shifts

Source: USDA-FAS

Extension and Outreach/Department of Economics

Corn Grind for Ethanol

Extension and Outreach/Department of Economics

2013/14 Crop Prices

Extension and Outreach/Department of Economics

2014/15 Crop Margins

Extension and Outreach/Department of Economics

Crop Thoughts for 2014 and BeyondSupply/demand concerns

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

2013/14

USDA

2014/15

USDA

Unofficial

2013/14

Futures

(2/26/14)

2014/15

Futures

(2/26/14)

Corn $4.50 $3.90 $4.54 $4.48

Soybeans $12.70 $9.65 $13.05 $11.35

Extension and Outreach/Department of EconomicsSource: USDA-NASS

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. Beef Supply and Use2010 2011 2012 2013 2014

Beg. Stocks (mil. lb.) 565 585 600 608 582

Production (mil. lb.) 26,414 26,292 25,996 25,800 24,433

Imports (mil. lb.) 2,297 2,057 2,220 2,250 2,285

Exports (mil. lb.) 2,299 2,785 2,453 2,583 2,335

Domestic Use (mil. lb.) 26,392 25,548 25,755 25,493 24,440

Ending Stocks (mil. lb.) 585 600 608 582 525

Price, Steers ($/cwt.) 95.38 114.73 122.86 125.89 136.00

Price, All Fresh Beef ($/lb.) 4.02 4.44 4.69 4.94

Source: USDA-WAOB

Extension and Outreach/Department of EconomicsSource: USDA-NASS

Extension and Outreach/Department of EconomicsSource: aasv.org

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

U.S. Pork Supply and Use2010 2011 2012 2013 2014

Beg. Stocks (mil. lb.) 525 541 542 625 620

Production (mil. lb.) 22,456 22,775 23,270 23,215 23,437

Imports (mil. lb.) 859 803 802 879 880

Exports (mil. lb.) 4,224 5,189 5,381 4,992 5,140

Domestic Use (mil. lb.) 19,075 18.388 18,608 19,107 19,177

Ending Stocks (mil. lb.) 541 542 625 620 620

Price, Barrows & Gilts ($/cwt.) 55.06 66.11 60.88 64.05 63.00

Retail Value ($/lb.) 3.11 3.43 3.47 3.64

Source: USDA-WAOB

Extension and Outreach/Department of Economics

LivestockCrops

Extension and Outreach/Department of Economics

National GDP

Source: BEA

Extension and Outreach/Department of Economics

Interest Rates

Source: FRED

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/