2013 Crop Outlook 2013 American Farm Bureau Federation Annual Meeting Nashville, Tennessee Jan. 13, 2013 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 86.0 86.4 88.2 91.9 97.2 Yield (bu./acre) 153.9 164.7 152.8 147.2 123.4 Production (mil. bu.) 12,092 13,092 12,447 12,360 10,780 Beg. Stocks 1,624 1,673 1,708 1,128 989 Imports 14 8 28 29 100 Total Supply 13,729 14,774 14,182 13,516 11,869 Feed & Residual 5,182 5,125 4,795 4,548 4,450 Ethanol 3,709 4,591 5,019 5,011 4,500 Food, Seed, & Other 1,316 1,370 1,407 1,426 1,367 Exports 1,849 1,980 1,834 1,543 950 Total Use 12,056 13,066 13,055 12,527 11,267 Ending Stocks 602 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.40 Source: USDA-WAOB 2 2

U.S. Soybean Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2 Yield (bu./acre) 39.7 44.0 43.5 41.9 39.6 Production (mil. bu.) 2,967 3,359 3,329 3,094 3,015 Beg. Stocks 205 138 151 215 169 Imports 13 15 14 16 20 Total Supply 3,185 3,512 3,495 3,325 3,204 Crush 1,662 1,752 1,648 1,703 1,605 Seed & Residual 106 110 130 91 119 Exports 1,279 1,499 1,501 1,362 1,345 Total Use 3,047 3,361 3,280 3,155 3,070 Ending Stocks 135 Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.25 Source: USDA-WAOB 3 3

U.S. Wheat Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 63.2 59.2 53.6 54.4 55.7 Yield (bu./acre) 44.9 44.5 46.3 43.7 Production (mil. bu.) 2,499 2,218 2,207 1,999 2,269 Beg. Stocks 306 657 976 862 743 Imports 127 119 97 112 130 Total Supply 2,932 2,993 3,279 2,974 3,142 Food 927 919 926 941 950 Seed 78 69 71 76 75 Feed & Residual 255 150 132 164 350 Exports 1,015 879 1,289 1,050 Total Use 2,275 2,018 2,417 2,231 2,425 Ending Stocks 716 Season-Average Price ($/bu.) 6.78 4.87 5.70 7.24 7.90 Source: USDA-WAOB 4 4

U.S. Cotton Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 9.47 9.15 10.97 14.74 12.32 Yield (lb./acre) 813 777 812 790 866 Production (mil. bales) 12.82 12.19 18.10 15.57 17.01 Beg. Stocks 10.05 6.34 2.95 2.60 3.35 Imports 0.00 0.01 0.02 Total Supply 22.87 18.53 21.06 18.19 20.37 Domestic Use 3.59 3.55 3.90 3.30 3.40 Exports 13.26 12.04 14.38 11.71 12.20 Total Use 16.85 15.59 18.28 15.01 15.60 Ending Stocks 4.80 Average Farm Price ($/lb.) 0.478 0.629 0.815 0.883 0.685 Source: USDA-WAOB 5 5

Price Ratios Since May 1

Projected Corn Yields Top: 2012 Yield Bottom: Change from 2011 Units: Bushels/acre

Projected Soybean Yields Top: 2012 Yield Bottom: Change from 2011 Units: Bushels/acre

Winter Wheat Acreage Top: 2013 Planted Acreage Bottom: % Change from 2012 Units: 1,000 acres Source: USDA-NASS

Projected Cotton Yields Top: 2012 Yield Bottom: Change from 2011 Units: Pounds/acre Source: USDA-NASS

World Corn Production Source: USDA-WAOB 11 11

World Soybean Production Source: USDA-WAOB 12 12

World Wheat Production Source: USDA-WAOB 13 13

World Cotton Production Source: USDA-WAOB 14 14

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

U.S. Meat Production & Prices Source: USDA-WAOB 16 16

Corn Export Shifts Source: USDA-FAS

Soy Export Shifts Source: USDA-FAS

Wheat Export Shifts Source: USDA-FAS

Cotton Export Shifts Source: USDA-FAS

Source: USDA-WAOB

Corn Grind for Ethanol Negative margins at some ethanol plants have dragged down production.

U.S. Blended Gasoline Consumption 7.6 bil. gal. But the industry still faces blend wall issues as fuel consumption has dropped with the economy and the E-10 market is basically full. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS

Current Corn Futures Source: CME Group, 1/11/2013

Current Soybean Futures Source: CME Group, 1/11/2013

Current Wheat Futures Source: KCBOT, 1/11/2013

Current Cotton Futures Source: ICE, 1/11/2013

Total Acreage Shift Source: USDA-NASS We brought back a lot of acres in 2012. Can we hold them in 2013? Source: USDA-NASS

Acreage Shift by Crop Acreage change from 2011 Units: 1,000 acres Source: USDA-NASS

Acreage Shift by State Top: Planted in 2012 Bottom: Change from 2011 Weather was great for planting in 2012 (just not for producing). To hold acreage we will need great planting weather again. Top: Planted in 2012 Bottom: Change from 2011 Units: 1,000 acres Source: USDA-NASS

Thoughts for 2013 and Beyond Supply/demand concerns Soil moisture issues Biofuel and export strength Worldwide response to drought-induced pricing 2012/13 USDA Futures (1/11/13) 2013/14 Corn $7.40 $6.63 $5.44 Soybeans $14.25 $13.60 $12.06 Wheat $7.90 $7.84 $7.71 Cotton $0.685 ~$0.72 ~$0.78

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