Jim Dunn Ag Economist Pennsylvania State University Feed Outlook Jim Dunn Ag Economist Pennsylvania State University

Sources of Information USDA http://usda.mannlib.cornell.edu/MannUsda/homepage.do http://usda.mannlib.cornell.edu/MannUsda/viewTaxonomy.do?taxonomyID=3 http://usda.mannlib.cornell.edu/MannUsda/viewTaxonomy.do?taxonomyID=25 http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1273

What these are called USDA Economics, Statistics and Market Information System (ESMIS) Field Crops Outlooks, Yearbooks, and Estimates Feed Outlook WASDE

Other useful links Oil Crops Outlook Livestock, Dairy, and Poultry Outlook Milk Production Feed grains database Livestock, Dairy, and Poultry Outlook: Tables

Issues for Feed Economy Large 2015 & 2016 US crops Brazil & Argentina Falling land prices Expensive dollar Chinese economy Russian Embargo Weather

Ethanol Demand falling because of better fuel economy Not the issue it was in past Smaller portion of corn crop Talk of dropping mandate In election Rep King from Iowa wasn’t pushing it World opposition to fuel from food building

Corn Notes Chinese economy slumping China trying to increase hog production South American crop will be okay

Corn Supply Bil. Bu. Year Beg stocks Production Supply 2012/13 0.99 10.78 11.93 2013/14 0.82 13.92 14.78 2014/15 1.23 14.22 15.48 2015/16 1.73 13.60 15.37 2016/17 1.74 15.15 16.94 Source: USDA

Corn Usage bil. bu Year Feed Food Fuel Exports Total 2012/13 4.33 1.40 4.64 0.73 11.18 2013/14 5.03 1.37 5.13 1.92 13.45 2014/15 5.32 1.36 5.21 1.73 13.48 2015/16 5.30 1.89 13.57 2016/17 5.60 1.43 5.33 2.26 14.58 Source: USDA

Corn Usage Crop 2004 2010 2015 2016 Feed 57.8% 36.7% 39.1% 38.4% Food 12.8% 10.8% 10.1% 9.4% Exports 17.1% 14.2% 12.5% 16.1% Ethanol 12.4% 38.5% 38.3% 36.2%

Other mostly Russia and Ukraine

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Russian Corn Exports

Ukrainian Corn Exports

Soybean Notes South American crop is good – up 4% from last year, esp. Brazil China may be buying again World supply is up 8% US exports will probably struggle

Soybean Supply mil.bu. Year Carry-in Production Total 2012 169 3042 3252 2013 141 3358 3478 2014 92 3969 4094 2015 191 3926 4140 2016 197 4307 4533

Soybean Usage Year Crush Exports Seed Total 2012 1689 1317 105 3111 2013 1734 1638 106 3478 2014 1873 1843 145 3862 2015 1886 1936 122 3944 2016 1930 2050 133 4113

Soybean Carryout & Price Year Carryout mil. bu. Price Days Use of carryout 2012 141 $14.40 16 2013 92 $13.00 9.5 2014 191 $10.10 19.5 2015 197 $8.80 45.1 2016 420 9.50 36.8

Soybean Futures

Corn futures prices 2/7/17 Month Price (cts/bu.) March 17 368 May 17 376 July 17 383 Sept 17 390 Dec 17 396

China Meat consumption grew nearly ten-fold to 71 million metric tons since 1975 Just announced it is scaling back its annual grain production targets to put a greater emphasis on quality rather than quantity Big effect on imports of feed and animal products – already the big player Chinese per capita meat consumption has doubled since 1992 to  52.5 kilograms (114 lbs) US at about 211 lbs.

Soybean futures prices 2/7/17 Month Price (cts/bu.) March 17 1043 May 17 1053 July 17 1061 Sept 17 1038 Nov 17 1019

Cattle Market Prices high through most of 2017 In November, average retail choice-beef prices were a near record $6.31/lb. – demand lower

Hog notes Hog market struggling Grain prices low Dollar is hurting exports Pressure about practices - animal rights Modern facilities better than traditional in my view

Poultry Notes Eggs and Broilers cheapest form of protein Margins better Exports important and weakness in world economy affects price

Concluding Questions Lower feed prices help animal agriculture Will feed prices stay low? Corn & soybean meal will Hay depends on our weather Will we really keep cutting per capita meat consumption?