Extension and Outreach/Department of Economics Ethanol, Grain Marketing, and Risk Management 25 th Annual Tri-State Agricultural Lender’s Seminar Dubuque, Iowa Oct. 26, 2011 Chad Hart Assistant Professor/Grain Markets Specialist
Extension and Outreach/Department of Economics Oil Prices Source: EIA for history, NYMEX for future
Extension and Outreach/Department of Economics Population (billion) World6.946World8.323World9.441 China1.337India1.461India1.657 India1.189China1.391China1.304 U.S.0.311U.S.0.366U.S Indonesia0.246Indonesia0.289Nigeria0.402 Brazil0.203Nigeria0.264Indonesia0.313 Pakistan0.187Pakistan0.243Pakistan0.291 Nigeria0.166Brazil0.240Ethiopia0.278 Bangladesh0.159Bangladesh0.211Brazil0.261 Russia0.139Ethiopia0.162Bangladesh0.250 Japan0.127Philippines0.138Philippines0.172 Source: U.S. Bureau of the Census, International Data Base
Extension and Outreach/Department of Economics Liquid Fuel Usage (Million Barrels Oil Equivalent per Day)(Percent of 2007 Value) United States20.698%100%102%104%107% Canada2.396% 100%104% Mexico2.1105%110%114%129%138% Europe15.392%88% 89%90% Japan5.084%86% 84%82% China7.6132%153%178%201%222% India2.8114%129%139%154%168% Africa3.1113%116%126%135%148% Central and South America6.0110%112%117%125%133% World %107%113%121%128% Source: Energy Information Administration
Extension and Outreach/Department of Economics Ethanol Production Source: EIA, 2011 Projection by Hart
Extension and Outreach/Department of Economics Nearby Futures (Jan. 3, 2011 = 1)
Extension and Outreach/Department of Economics Corn Grind for Ethanol Source: DOE-EIA
Extension and Outreach/Department of Economics Ethanol Margins Source: CARD
Extension and Outreach/Department of Economics Ethanol Margins Source: CARD
Extension and Outreach/Department of Economics Ethanol Blending Advantage
Extension and Outreach/Department of Economics RFS Coverage
Extension and Outreach/Department of Economics Gasoline Consumption Source: EIA, Annual Energy Outlook
Extension and Outreach/Department of Economics U.S. Corn Supply and Use Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)12,09213,09212,44712,433 Beg. Stocks(mil. bu.)1,6241,6731,7081,128 Imports(mil. bu.) Total Supply(mil. bu.)13,72914,77414,18213,576 Feed & Residual(mil. bu.)5,1825,1254,8034,700 Ethanol(mil. bu.)3,7094,5915,0205,000 Food, Seed, & Other(mil. bu.)1,3161,3701,3951,410 Exports(mil. bu.)1,8491,9801,8351,600 Total Use(mil. bu.)12,05613,06613,05312,710 Ending Stocks(mil. bu.)1,6731,7081, Season-Average Price($/bu.) Source: USDA-WAOB
Extension and Outreach/Department of Economics U.S. Soybean Supply and Use Area Planted(mil. acres) Yield(bu./acre) Production(mil. bu.)2,9673,3593,3293,060 Beg. Stocks(mil. bu.) Imports(mil. bu.)1315 Total Supply(mil. bu.)3,1853,5123,4953,290 Crush(mil. bu.)1,6621,7521,6481,635 Seed & Residual(mil. bu.) Exports(mil. bu.)1,2791,4991,5001,375 Total Use(mil. bu.)3,0473,3613,2803,130 Ending Stocks(mil. bu.) Season-Average Price($/bu.) Source: USDA-WAOB
Extension and Outreach/Department of Economics Projected Corn Yields Source: USDA-NASS
Extension and Outreach/Department of Economics Projected Soybean Yields 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 Corn vs. Wheat Source: CME Group, 10/25/2011
Extension and Outreach/Department of Economics Hog Crush Margin Source: Shane Ellis, ISU Extension The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 poundsPig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pigSoybean meal: 150 pounds per pig
Extension and Outreach/Department of Economics Corn Export Sales Source: USDA-FAS
Extension and Outreach/Department of Economics Corn Export Shifts 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 Projected 2011 Season-Average Corn Price
Extension and Outreach/Department of Economics Projected 2011 Season-Average Soy Price
Extension and Outreach/Department of Economics Projected 2012 Season-Average Corn Price
Extension and Outreach/Department of Economics Projected 2012 Season-Average Soy Price
Extension and Outreach/Department of Economics Iowa Corn Prices vs. Costs
Extension and Outreach/Department of Economics Iowa Soybean Prices vs. Costs
Extension and Outreach/Department of Economics Iowa Crop Margins
Extension and Outreach/Department of Economics Thoughts for 2012 and Beyond General economic conditions Continued worldwide economic recovery is a major key for crop prices US job recovery, European financial concerns, Chinese inflation Supply/demand concerns Smaller than anticipated U.S. crops Biofuel growth and energy demand Corn still has the upper hand in the acreage competition Will supply be able to keep pace with demand? 2011/12:USDA:Corn $6.70; Soy $13.15 Futures (as of 10/25/11):Corn $6.32; Soy $11.97 2012/13: Futures (as of 10/25/11):Corn $5.90; Soy $11.92
Extension and Outreach/Department of Economics Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: