Extension and Outreach/Department of Economics Risk Environment for Agriculture Ag. Credit School...

Extension and Outreach/Department of Economics

Risk Environment for Agriculture

Ag. Credit SchoolAmes, Iowa

June 4, 2013

Chad HartAssociate Professor/Crop Markets Specialist

[email protected]


Population2013 2020 2050

(billion) (billion) (billion)World 7.095 World 7.628 World 9.383

China 1.350

China 1.385

India 1.657

India 1.221

India 1.326

China 1.304

U.S. 0.317 U.S. 0.337 U.S. 0.423Indonesia 0.251

Indonesia 0.267 Nigeria 0.402

Brazil 0.201

Pakistan 0.214 Indonesia 0.300

Pakistan 0.193

Brazil 0.212

Pakistan 0.291

Nigeria 0.175 Nigeria 0.208 Bangladesh 0.250

Bangladesh 0.164Bangladesh 0.183

Brazil 0.232

Russia 0.143Russia 0.142 Ethiopia 0.228

Japan 0.127

Japan 0.126 Philippines 0.172

Source: U.S. Bureau of the Census


GDP Growth

Source: USDA-ERS


World Meat Consumption

Source: USDA-PSD


World Veg. Oil Consumption

Source: USDA-PSD


Corn Use for the Next Decade

Source: USDA-ERS


Soybean Use for the Next Decade

Source: USDA-ERS


Liquid Fuel Usage2007 2015 2020 2025 2030 2035

(Million Barrels Oil Equivalent per

Day) (Percent of 2007 Value)

United States 20.6 98% 100% 102% 104% 107%

Canada 2.3 96% 96% 96% 100% 104%

Mexico 2.1 105% 110% 114% 129% 138%

Europe 15.3 92% 88% 88% 89% 90%

Japan 5.0 84% 86% 86% 84% 82%

China 7.6 132% 153% 178% 201% 222%

India 2.8 114% 129% 139% 154% 168%

Africa 3.1 113% 116% 126% 135% 148%

Central and South America 6.0 110% 112% 117% 125% 133%

World 86.1 103% 107% 113% 121% 128%

Source: DOE-EIA


U.S. Crude Oil Prices

Source: USDA-ERS


U.S. Blended Gasoline Consumption

Source: DOE-EIA, via USDA-ERS

7.6 bil. gal.

7.4 bil. gal.


Crop Prices for the Next Decade

Source: USDA-ERS


Government Debt

Source: Fed. Res. Bank of StL, FRED


Employment



Real GDP



Budget Projections by TitleTitle 2013-2022 Budget Change ($ million)

Title I – Commodity -17,639

Title II – Conservation -6,374

Title III – Trade 0

Title IV – Nutrition -4,024

Title V – Credit 0

Title VI – Rural Development 0

Title VII – Research 645

Title VIII – Forestry 9

Title IX – Energy 0

Title X – Horticulture 359

Title XI – Crop Insurance 2,748

Title XII – Miscellaneous -466

Total -24,747


Budget Projections by CropCrop 2013-2022 Budget Change ($ million)

Corn -5,752

Soybean 1,459

Wheat -6,409

Cotton -6,077

Rice -2,842

Sorghum -505

Barley -615

Oats -11

Peanuts -314

Dairy -59


Commodity TitleChanges 2013-2022 Budget Change ($ million)

End Direct Payments -44,622

End Countercyclical Payments -1,008

End ACRE -4,615

Adding Popcorn 91

Ag. Risk Coverage 29,240

Marketing Loans 35

Sugar Program 0

Dairy Program -59

Disaster Assistance 3,297

AGI Limits -95

Implementation 100

Total -17,639


Crop Insurance TitleChanges 2013-2022 Budget Change ($ million)

Supplemental Coverage Option 682

CAT Rerating -437

Enterprise Units 506

APH Adjustment 855

Stacked IP for Cotton 3,224

Peanut Rev. Insurance 239

Implementation 85

Index-Based Weather Ins. 50

Beginning Farmer Provisions 192

Ag. Mng. Assistance 6

Crop Prod. on Native Sod -167

Participation Effects from ARC -2,487

Total 2,748


Free Trade Agreements• With South Korea, Colombia, and Panama• Previously, with Israel, Jordan, Singapore,

Chile, Australia, Morocco, El Salvador, Honduras, Nicaragua, Guatemala, Bahrain, Dominican Republic, Costa Rica, Oman, and Peru

• Most famous: NAFTA, with Canada and Mexico


Corn Planting Stats

Source: USDA-NASS


Soybean Planting Stats

Source: USDA-NASS


Input Costs

Source: USDA, Agricultural Prices


Corn


Soy


Iowa Corn Prices vs. Costs


Iowa Soybean Prices vs. Costs


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 Risk Environment for Agriculture Ag. Credit School...

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