November 18 2014 U.S. Grain Outlook Chris Hurt Purdue Extension Service August 2013, hurtc@purdue.edu Department of Agricultural Economics Purdue University
$8.50 $8 $7.50 $4 $2 to $3 ’10 = 153 bu./ac ‘11 = 147 bu./ac Department of Agricultural Economics Purdue University
Moderation to What. Base Today: $5. 00 corn $12. 00 beans 2 Moderation to What? Base Today: $5.00 corn $12.00 beans 2.0% 10-Year Treasury
1.1M acre/year 5.8M acre/year 1.5M acre/year Department of Agricultural Economics Purdue University
243 Million acres added in 9 years
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Corn: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Corn: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Carry in 1,673 1,708 1,128 989 719 Production 13,110 12,447 12,358 10,780 13,763 Total Supply 14,791 14,182 13,514 11,934 14,512 Feed & Residual 5,166 4,792 4,547 4,450 5,100 FSI Non-Fuel 1,370 1,406 1,426 1,400 1,450 FSI Fuel (Ethanol) 4,560 5,021 5,011 4,650 4,900 Export 1,987 1,835 1,541 715 1,225 Total Use 13,083 13,054 12,525 11,215 12,675 Ending Stocks 1,837 US Farm Price $3.55 $5.18 $6.22 $6.95 $4.90 $6.75-$7.15 $4.50 - $5.30 Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
$4.46 Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
August 23 to 29 Precip Moisture Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Soybeans: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Soybeans: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Carry in 138 151 215 169 125 Production 3,359 3,329 3,094 3,015 3,255 Total Supply 3,512 3,495 3,325 3,219 3,395 Seed & Residual 108 132 88 94 115 Crush 1,752 1,648 1,703 1,685 1,675 Exports 1,501 1,500 1,365 1,315 1,385 Total Use 3,361 3,280 3,156 3,175 Ending Stock 220 Farm Price $9.59 $11.30 $12.50 $14.40 $11.35 $10.35-$12.35 Department of Agricultural Economics Purdue University
$11.62 Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Wheat: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Wheat: USDA 8/12/13 09/10 10/11 11/12 12/13 13/14 Million Bushels Carry in 657 976 862 743 718 Production 2,218 2,207 1,999 2,269 2,114 Total Supply 2,993 3,279 2,974 3,135 2,962 Feed & Residual 148 133 164 388 280 Other Domestic 988 995 1,017 1,020 1,031 Exports 881 1,289 1,050 1,009 1,100 Total Use 2,017 2,417 2,231 2,411 End Stocks 551 Farm Price $4.87 $5.70 $7.24 $7.80 $7.00 $6.40-$7.60 Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Department of Agricultural Economics Purdue University
Tea Leaves 2013-2016 Moderation-with a Downward Slope?? Next 4 Years: Time to be cautious for some and aggressive for others? Department of Agricultural Economics Purdue University
Weaker tone for Crop Producers Who’s Vulnerable? -High % of Hi cash rent -Weak financial position -High costs for whatever reason -Recent large land purchases? Strategies: -Turn more cautious -Focus on driving costs down -Delay pricing inputs -No multiple year locking in inputs -Forward price product more aggressively -Earn storage returns Weaker tone for Input Suppliers -Lower fertilizer prices/volume -Lower seed prices & more competition -Lower cash rents -Lower machinery demand -Lenders: Declining loan volumes in $ -Reduce inventories -Caution about ordering -No new capital investments -Collect accounts payable Improved tone: Margins and Volume -Grain Handlers -Grain & Soybean Processors -Animal product producers & suppliers -Food consumers: Slower food price inflation -Foreign buyers -Rejoice! -Improve financial position -Become more aggressive -Consider expansion Department of Agricultural Economics Purdue University