Crop & Livestock Market Outlook Jan. 4, 2018 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2014 2015 2016 2017 2018 Area Planted (mil. acres) 90.6 88.0 94.0 90.4 91.0 Yield (bu./acre) 171.0 168.4 174.6 175.4 173.5 Production (mil. bu.) 14,216 13,602 15,148 14,578 14,520 Beg. Stocks 1,232 1,731 1,737 2,295 2,437 Imports 32 67 57 50 Total Supply 15,479 15,401 16,942 16,922 17,007 Feed & Residual 5,280 5,120 5,463 5,575 5,550 Ethanol 5,200 5,224 5,439 5,525 Food, Seed, & Other 1,401 1,422 1,452 1,460 1,475 Exports 1,867 1,898 2,293 1,925 1,900 Total Use 13,748 13,664 14,647 14,485 14,450 Ending Stocks 2,557 Season-Average Price ($/bu.) 3.70 3.61 3.36 3.20 3.30 Source: USDA 2 2

U.S. Soybean Supply and Use 2014 2015 2016 2017 2018 Area Planted (mil. acres) 83.3 82.7 83.4 90.2 91.0 Yield (bu./acre) 47.5 48.0 52.0 49.5 48.4 Production (mil. bu.) 3,927 3,926 4,296 4,425 4,360 Beg. Stocks 92 191 197 301 445 Imports 33 24 22 25 Total Supply 4,052 4,140 4,515 4,752 4,830 Crush 1,873 1,886 1,899 1,940 1,970 Seed & Residual 146 122 141 140 Exports 1,842 1,936 2,174 2,225 2,325 Total Use 3,862 3,944 4,214 4,306 4,435 Ending Stocks 396 Season-Average Price ($/bu.) 10.10 8.95 9.47 9.30 9.40 Source: USDA 3 3

U.S. Meat Production & Prices Source: USDA-WAOB 5 5

Source: USDA/AMS

Backgrounding and Stocker Example December 15th 550 Pound Calves in Iowa @ $171.18/cwt Sale Weight Sale Date Sell Price, $/cwt ADG DOF VOG, $/cwt VOG, $/head 650 1/24/18 $163.33 2.50 41 $120.17 750 3/5/18 $153.94 81 $106.55 $213.10 850 4/14/18 $143.87 121 $93.80 $281.41 Source: USDA/AMS, CME Group

Data Source: USDA/AMS

2014 = +$197.24 [+$41 to +$269] 2015 = -$225.12 [-$530 to +$43] 2016 = -$110.62 [-$359 to +$113] 2017f = +$139.67 [-$74 to +$415] 2018f = -$44.54 [-$135 to +$49]

Source: USDA/AMS

U.S. Beef Exports, Jan-Sep 2017 (Carcass Weight Basis) Sep-17/Aug-17 Sep-17/Sep-16 Year-to-Date Country Percent 1,000 lbs Share Japan -13% 40% 142,497 29% 31% Mexico -11% 8% 20,185 7% 15% Canada -5% 8,634 4% 11% South Korea 3% 26,340 16% Hong Kong -2% -8% 16,641 9% 10% China (Taiwan) 2% 5% 7,904 Vietnam -24% 17% 10,779 98% 1% Netherlands 2,186 Philippines 35% 21% 5,267 Chile -47% 3,868 19% Bahamas -48% -35% -817 0% United Arab Emirates 26% 18% -681 -6% Dominican Republic -41% 1,048 China (Mainland) 83% 3,462 Other Countries 15,396 14% 6% Total 262,710 WASDE U.S.: 2016: 2,556 mil lbs 2017: 2,855 (+12%) 2018: 2,970 (+4%) Source: USDA/ERS

Source: CME Group

2013 = +$6.21 [-$25.60 to +$24.57] 2014 = +$61.85 [+$13.15 to +$107.25] 2015 = +$7.93 [-$18.40 to +$26.25] 2016 = -$1.26 [-$35.52 to +$32.92] 2017f = +$12.77 [-$12.68 to +$47.62] 2018f = +$13.70 [-$10.03 to +$33.79]

Source: Steve Meyer. Published in National Hog Farmer Magazine, July 27, 2017.

Source: USDA/AMS

U.S. Pork Exports, Jan-Sep 2017 (Carcass Wt Basis) Sep-17/Aug-17 Sep-17/Sep-16 Year-to-Date Country Percent 1,000 lbs Share Japan -8% -3% 3,535 0% 22% Mexico -2% 1% 201,425 18% 32% Canada 14% -1,280 10% South Korea 16% 38% 83,831 30% 9% China (Mainland) -31% -117,964 -29% 7% Hong Kong 31% 29% -13,402 -12% 2% Australia -25% 4,223 3% 4% Philippines 43% 14,278 26% China (Taiwan) -18% 55% 8,800 64% Colombia 28% 90% 57,330 84% Honduras -17% 2,194 Dominican Republic -19% 17,228 Guatemala 44% 1,870 Chile -27% -20% 26,520 97% Other Countries 8% 16,773 13% Total 305,360 WASDE U.S.: 2016: 5,239 mil lbs 2017: 5,588 (+7%) 2018: 5,900 (+6%) Source: USDA/ERS

Projected Corn Yields Top: 2017 Yield Estimate Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS 17 17

Corn Export Shifts Source: USDA-FAS

Soybean Export Shifts Source: USDA-FAS

Ethanol Production Sources: EIA, my projection for 2017

Current Corn Futures 4.07 3.88 3.46 Source: CME Group, 1/3/2018

Current Soybean Futures 9.73 9.68 9.43 Source: CME Group, 1/3/2018

2017/18 Crop Margins

2018/19 Margins w/ ‘17 Costs/Basis

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/