Ag Outlook Clear Lake Bank & Trust Meeting Clear Lake, Iowa Feb. 2, 2017 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2013 2014 2015 2016 2017 Area Planted (mil. acres) 95.4 90.6 88.0 94.0 90.0 Yield (bu./acre) 158.1 171.0 168.4 174.6 170.8 Production (mil. bu.) 13,829 14,216 13,602 15,148 14,060 Beg. Stocks 821 1,232 1,731 1,737 2,355 Imports 36 32 67 55 50 Total Supply 14,686 15,479 15,401 16,940 16,465 Feed & Residual 5,040 5,280 5,131 5,600 5,500 Ethanol 5,124 5,200 5,206 5,325 Food, Seed, & Other 1,369 1,401 1,429 1,435 1,440 Exports 1,920 1,867 1,898 2,225 1,950 Total Use 13,454 13,748 13,664 14,585 14,215 Ending Stocks 2,250 Season-Average Price ($/bu.) 4.46 3.70 3.61 3.40 3.30 Source: USDA-WAOB 2013-16, USDA-OCE 2017 2 2

U.S. Soybean Supply and Use 2013 2014 2015 2016 2017 Area Planted (mil. acres) 76.8 83.3 82.7 83.4 85.5 Yield (bu./acre) 44.0 47.5 48.0 52.1 47.9 Production (mil. bu.) 3,358 3,927 3,926 4,307 4,050 Beg. Stocks 141 92 191 197 420 Imports 72 33 24 25 30 Total Supply 3,570 4,052 4,140 4,528 4,500 Crush 1,734 1,873 1,886 1,930 1,935 Seed & Residual 107 146 122 128 130 Exports 1,638 1,842 1,936 2,050 2,100 Total Use 3,478 3,862 3,944 4,108 4,165 Ending Stocks 336 Season-Average Price ($/bu.) 13.00 10.10 8.95 9.50 9.35 Source: USDA-WAOB 2013-16, USDA-OCE 2017 3 3

Corn Yields Top: 2016 Yield Bottom: Change from last year Units: Bushels/acre Source: USDA-NASS

Soy Yields Top: 2016 Yield Bottom: Change from last year Units: Bushels/acre Source: USDA-NASS

Drought Monitor Source: National Drought Mitigation Center 6 6

South American Weather Source: NOAA, Climate Prediction Center 7 7

World Corn Production Source: USDA-WAOB 8 8

World Soybean Production Source: USDA-WAOB 9 9

Hog Crush Margin 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 futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: ISU Extension

Cattle Crush Margin 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 Source: ISU Extension

U.S. Beef Exports, Jan-Nov 2016 (Volume excluding by-products & variety meats) Year-to-Date Country 1,000 lbs Percent Japan 98,130 19% South Korea 110,764 38% Mexico 27,796 8% Canada -18,363 -6% Hong Kong -17,692 China (Taiwan) 23,042 23% Netherlands -4,269 -12% Chile 1,871 Philippines -6,846 -23% Vietnam 4,920 45% Dominican Republic -4,239 -21% United Arab Emirates 1,150 Italy -3,000 -18% Guatemala 3,010 33% Other Countries 9,881 9% Total 226,153 11% WASDE U.S.: 2015: 2,265 mil lbs 2016: 2,484 (+10%) 2017: 2,630 (+6%) Source: USDA/ERS

U.S. Beef Imports, Jan-Nov 2016 (Volume excluding by-products & variety meats) Year-to-Date Country 1,000 lbs Percent Australia -477,829 -40% Canada 85,879 15% New Zealand -42,970 -7% Mexico 84,402 23% Nicaragua 7,903 8% Brazil -6,823 -5% Uruguay -17,579 -14% Costa Rica -12 0% Other Countries -2,509 -21% Total -369,538 -12% WASDE U.S.: 2015: 3,371 mil lbs 2016: 3,021 (-10%) 2017: 2,680 (-11%) Source: USDA/ERS

U.S. Pork Exports, Jan-Nov 2016 (Volume excluding by-products & variety meats) Year-to-Date Country 1,000 lbs Percent Mexico 16,874 1% Japan -55,946 -5% Canada 5,774 China (Mainland) 234,167 100% South Korea -92,915 -21% Australia 9,041 6% Hong Kong 25,740 23% Colombia 32 0% Philippines 3,603 5% Honduras 10,307 18% Dominican Republic 7,538 13% Chile 4,245 11% Guatemala 2,252 Panama 2,728 Other Countries -13,794 -8% Total 159,646 3% WASDE U.S.: 2015: 5,009 mil lbs 2016: 5,179 (+3%) 2017: 5,440 (+5%) Source: USDA/ERS

U.S. Meat Production & Prices Source: USDA-WAOB 15 15

Corn Export Sales Source: USDA-FAS

Change in Corn Export Sales Source: USDA-FAS

Soybean Export Sales Source: USDA-FAS

Change in Soybean Export Sales Source: USDA-FAS

Strength of the U.S. Dollar Source: Federal Reserve

Corn Grind for Ethanol

Crude Oil Prices Sources: EIA and CME

Current Corn Futures 3.97 3.86 3.52 Source: CME Group, 1/31/2017

Current Soybean Futures 9.85 9.80 9.48 Source: CME Group, 1/31/2017

2016/17 Crop Margins @ Actual Yields

2017/18 Crop Margins

Iowa Corn Prices vs. Costs

Iowa Soybean Prices vs. Costs

Thank you for your time. Any questions. My web site: http://www2. econ Thank you for your time! Any questions? My web site: http://www2.econ.iastate.edu/faculty/hart/ Iowa Farm Outlook: http://www2.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/