Associate Professor/Crop Marketing Specialist Ag Outlook Oct. 5, 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 90.9 Yield (bu./acre) 158.1 171.0 168.4 174.6 169.9 Production (mil. bu.) 13,829 14,216 13,602 15,148 14,184 Beg. Stocks 821 1,232 1,731 1,737 2,295 Imports 36 32 67 55 50 Total Supply 14,686 15,479 15,401 16,940 16,530 Feed & Residual 5,040 5,280 5,120 5,480 5,475 Ethanol 5,124 5,200 5,224 5,435 Food, Seed, & Other 1,369 1,401 1,422 1,435 1,450 Exports 1,920 1,867 1,898 1,850 Total Use 13,454 13,748 13,664 14,645 14,250 Ending Stocks 2,280 Season-Average Price ($/bu.) 4.46 3.70 3.61 3.35 3.20 Source: USDA-WAOB, my adj. for ‘16 end stocks 2 2
U.S. Soybean Supply and Use 2013 2014 2015 2016 2017 Area Planted (mil. acres) 76.8 83.3 82.7 83.4 89.5 Yield (bu./acre) 44.0 47.5 48.0 52.1 49.9 Production (mil. bu.) 3,358 3,927 3,926 4,296 4,431 Beg. Stocks 141 92 191 197 301 Imports 72 33 24 25 Total Supply 3,570 4,052 4,140 4,518 4,757 Crush 1,734 1,873 1,886 1,895 1,940 Seed & Residual 107 146 122 152 136 Exports 1,638 1,842 1,936 2,170 2,250 Total Use 3,478 3,862 3,944 4,217 4,326 Ending Stocks 431 Season-Average Price ($/bu.) 13.00 10.10 8.95 9.50 9.20 Source: USDA-WAOB, my adj. for ‘16 end stocks 3 3
Projected Corn Yields Top: 2017 Yield Estimate Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS 4 4
Corn Yield Data Source: USDA-NASS 5 5
Corn Stocks Source: USDA-NASS 6 6
Projected Soybean Yields Top: 2017 Yield Estimate Bottom: Change from last month Units: Bushels/acre Source: USDA-NASS 7 7
Soybean Yield Data Source: USDA-NASS 8 8
Soybean Stocks Source: USDA-NASS 9 9
World Corn Production Source: USDA-WAOB 10 10
World Soybean Production Source: USDA-WAOB 11 11
U.S. Meat Production & Prices Source: USDA-WAOB 12 12
U.S. Meat Trade Million pounds Source: USDA-WAOB 13 13
Key factors for 2017 and beyond Crops/Feedstuffs – BULLISH for livestock sector. Supply – Growing and competing animal protein supplies. Domestic Demand – Increasingly competitive environment, battle for market share. Trade – Stabilizing factor. Strong exports and declining imports. Producers resiliently charging ahead.
+8.1% (‘15 vs ‘14) +2.4% (‘16 vs ‘15) +3.2% (’17YTD vs ’16YTD) Source: USDA/AMS. * Steve Meyer, EMI.
Source: Steve Meyer. Published in National Hog Farmer Magazine, July 27, 2017.
Source: USDA/AMS
Source: USDA/ERS
U.S. Pork Exports, Jan-Jul 2017 (Carcass Wt Basis) Jul-17/Jun-17 Jul-17/Jul-16 Year-to-Date Country Percent 1,000 lbs Mexico -9% 10% 188,655 23% Japan -7% -11% 17,130 2% Canada 14% 1% -2,011 -1% South Korea -36% 19% 76,054 32% China (Mainland) -45% -57% -100,902 -29% Hong Kong -38% -39% -16,835 -17% Australia -3% 7,028 6% Philippines -30% 59% 11,921 31% China (Taiwan) -26% 7,675 71% Colombia -10% 46% 41,480 81% Honduras 25% 1,383 3% Dominican Republic -33% 20,431 47% Guatemala 16% 33% 565 Chile 128% 27,592 174% Other Countries -23% 0% 15,209 Total -13% -4% 295,376 WASDE U.S.: 2016: 5,239 mil lbs 2017: 5,753 (+10%) 2018: 5,965 (+4%) Source: USDA/ERS
LMIC Pork Production Quarterly Forecasts (10/2/17) Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC
Year-over-Year Prices: Lean Hogs
Year-over-Year Prices: Corn
Year-over-Year Prices: Soy Meal
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 = +$11.45 [-$9.57 to +$47.62] 2018f = +$5.99 [-$13.33 to +$25.33]
Data Source: USDA-NASS; Forecasts by LMIC
Data Source: USDA-NASS, Forecasts by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS, Compiled and Forecasts by LMIC Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled by LMIC Livestock Marketing Information Center
Data Source: USDA & LMIC, Compiled by LMIC Livestock Marketing Information Center
Data Source: USDA-AMS & USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center
Year-over-Year Prices: Live Cattle
Corn Export Sales Source: USDA-FAS
Corn Export Shifts Source: USDA-FAS
Soybean Export Sales Source: USDA-FAS
Soybean Export Shifts Source: USDA-FAS
Ethanol Production Sources: EIA, my projection for 2017
Ethanol Exports Source: EIA
Current Corn Futures 3.95 3.55 Source: CME Group, 10/4/2017
Current Soybean Futures 9.69 9.54 Source: CME Group, 10/4/2017
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/