Extension and Outreach/Department of Economics Ag Outlook US Bank Ag Conference Ashland, Nebraska Oct. 7, 2015 Chad Hart Associate Professor/Crop Markets Specialist

Extension and Outreach/Department of Economics U.S. Corn Supply and Use Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)12,36010,75513,82914,21613,585 Beg. Stocks(mil. bu.)1, ,2321,731 Imports(mil. bu.) Total Supply(mil. bu.)13,51711,90414,68615,47815,346 Feed & Residual(mil. bu.)4,5574,3155,0345,3025,275 Ethanol(mil. bu.)5,0004,6415,1345,2055,250 Food, Seed, & Other(mil. bu.)1,4281,3971,3691,3651,380 Exports(mil. bu.)1, ,9171,8751,850 Total Use(mil. bu.)12,52811,08313,45413,74713,755 Ending Stocks(mil. bu.) ,2321,7311,591 Season-Average Price($/bu.) Source: USDA-WAOB

Extension and Outreach/Department of Economics U.S. Soybean Supply and Use Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)3,0943,0423,3583,9273,935 Beg. Stocks(mil. bu.) Imports(mil. bu.) Total Supply(mil. bu.)3,3253,2523,5704,0524,156 Crush(mil. bu.)1,7031,6891,7341,870 Seed & Residual(mil. bu.) Exports(mil. bu.)1,3651,3171,6471,8351,725 Total Use(mil. bu.)3,1553,1113,4783,8613,725 Ending Stocks(mil. bu.) Season-Average Price($/bu.) Source: USDA-WAOB

Extension and Outreach/Department of Economics Corn Yield Estimate Top: 2015 Estimated Yields Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS

Extension and Outreach/Department of Economics Soybean Yield Estimate Source: USDA-NASS Top: 2015 Estimated Yields Bottom: Change from last month Units: Bushels/acre

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

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 Crude Oil Prices Sources: EIA and CME

Extension and Outreach/Department of Economics Strength of the U.S. Dollar Source: Federal Reserve

Extension and Outreach/Department of Economics Corn Grind for Ethanol

Extension and Outreach/Department of Economics 2015/16 Crop Margins

Extension and Outreach/Department of Economics 2016/17 Crop Margins

Extension and Outreach/Department of Economics Iowa Corn Prices vs. Costs

Extension and Outreach/Department of Economics Crop Thoughts for 2015 and Beyond  Supply/demand concerns  Rain made grain, but we’re still debating how much  Exports weaken as dollar strengthens and China slows  Negative margins for crops 2014/15 USDA 2015/16 USDA 2015/16 Futures (10/2/15) 2016/17 Futures (10/2/15) Corn$3.70$3.75$3.68$3.88 Soybeans$10.10$9.15$8.32$8.41

Extension and Outreach/Department of Economics  Crops/Feedstuffs – BULLISH for livestock sector  Hog supply – or lack of supply issues in U.S. hog herd  Beef herd rebuilding is under way and accelerating – limiting current supplies BUT currently the fed cattle market purge is on  HPAI in U.S. poultry – HUGE hit on layers/eggs, only meat impact was turkey, chicken was okay---but represents the largest risk  U.S. consumer demand has been GREAT – will it hold?  The U.S. dollar Key factors for 2015 and beyond

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/NASS, tabulations by Lee Schulz

Extension and Outreach/Department of Economics

ChangeAverage ChangeCommercialChange CommercialfromDressedfromBeeffrom YearSlaughterYear AgoWeightYear AgoProductionYear Ago Quarter(1,000 hd)(%)(lbs)(%)(mil lbs)(%) 2015 I 6, , II 7, , III 7, , IV 7, , Year 28, , I 7, , II 7, , III 7, , IV 7, , Year 29, , I 7, , II 7, , III 7, , IV 7, , Year 30, , Quarterly Cattle & Beef Forecasts (LMIC: 10/1/2015)

Extension and Outreach/Department of Economics Live Sltr. Change Steer Price fromFeeder Steer Price Year 5-Mkt Avg Year AgoSouthern Plains Quarter($/cwt)(%)7-800#5-600# 2015 I II III IV Year I II III IV Year I II III IV Year Quarterly Cattle & Beef Forecasts (LMIC: 10/1/2015)

Extension and Outreach/Department of Economics

YearComm’l% Chg.Avg Carcass% Chg.Comm’l Pork% Chg. QuarterSlaughterYear AgoWeightYear AgoProductionYear Ago 2014(1,000 hd)(lbs)(mil lbs) I 27, , II 25, , III 25, , IV 28, , Year 106, , I 28, , II 27, , III 28, , IV 30, , Year 115, , I 29, , II 27, ,867 III 28, , IV 30, , Year 114, , LMIC Pork Production and Price Quarterly Forecasts (9/21/15) Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC

Extension and Outreach/Department of Economics YearNat’l Wtd% Chg.Nat’l Wtd% Chg. QuarterAvg Base PriceYear AgoAvg Base PriceYear Ago 2014 ($/carcass cwt)($/live cwt) I II III IV Year I II III IV Year I II III IV Year LMIC Pork Production and Price Quarterly Forecasts (9/21/15) Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC

Extension and Outreach/Department of Economics Choice All FreshPorkBroilerTurkey Aug-15/Jul %-0.9%1.7%-0.2%-1.4% Aug-15/Aug-141.7%5.1%-8.7%-0.5%-3.6%

Extension and Outreach/Department of Economics Cropland Value by State - Dollars per acre and percent change from 2014

Extension and Outreach/Department of Economics Iowa Average Farmland Values all grades 1950−2014

Extension and Outreach/Department of Economics Who Purchased the Land? Investors, 18%

Extension and Outreach/Department of Economics Who Purchased the Land?

Extension and Outreach/Department of Economics Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: