Crop Outlook Beginning Farmer Network Meeting Ames, Iowa Oct. 4, 2010 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1

U.S. Corn Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 93.5 86.0 86.5 87.9 Yield (bu./acre) 150.7 153.9 164.7 162.5 Production (mil. bu.) 13,038 12,092 13,110 13,160 Beg. Stocks 1,304 1,624 1,673 1,386 Imports 20 14 8 10 Total Supply 14,362 13,729 14,791 14,556 Feed & Residual 5,913 5,182 5,525 5,250 Ethanol 3,049 3,709 4,535 4,700 Food, Seed, & Other 1,338 1,316 1,365 1,390 Exports 2,437 1,849 1,980 2,100 Total Use 12,737 12,056 13,405 13,440 Ending Stocks 1,116 Season-Average Price ($/bu.) 4.20 4.06 3.55 4.40 1,708 1,708 Source: USDA 2 2

U.S. Soybean Supply and Use 2007 2008 2009 2010 Area Planted (mil. acres) 64.7 75.7 77.5 78.9 Yield (bu./acre) 41.7 39.7 44.0 44.7 Production (mil. bu.) 2,677 2,967 3,359 3,483 Beg. Stocks 574 205 138 150 Imports 10 13 15 Total Supply 3,261 3,185 3,512 3,643 Crush 1,803 1,662 1,750 1,650 Seed & Residual 93 106 118 158 Exports 1,159 1,279 1,495 1,485 Total Use 3,056 3,047 3,363 3,293 Ending Stocks 350 Season-Average Price ($/bu.) 10.10 9.97 9.60 9.90 Source: USDA 4 4

Source: USDA-NASS 5 5

U.S. Soybean Oil Supply and Use 2008 2009 2010 Production (mil. lb.) 18,745 19,535 18,810 Beg. Stocks 2,485 2,861 3,206 Imports 90 110 115 Total Supply 21,319 22,506 22,131 Domestic 16,265 15,950 17,400 Methyl Ester 2,013 1,700 2,900 Exports 2,193 3,350 2,100 Total Use 18,459 19,300 19,500 Ending Stocks 2,631 Season-Average Price (¢/lb.) 32.16 35.75 39.50 Source: USDA 6 6

U.S. Soybean Meal Supply and Use 2008 2009 2010 Production (thou. short tons) 39,102 41,525 39,235 Beg. Stocks 294 235 300 Imports 88 140 165 Total Supply 39,484 41,900 39,700 Domestic 30,752 30,200 30,300 Exports 8,497 11,400 9,100 Total Use 39,249 41,600 39,400 Ending Stocks Season-Average Price ($/short ton) 331.17 310.00 290.00 Source: USDA 7 7

World Corn Production Source: USDA 8 8

World Soybean Production Source: USDA 9 9

La Niña Winter 10 10

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: Shane Ellis, 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: Shane Ellis, ISU Extension

Corn Export Shifts Source: USDA, FAS

Soy Export Shifts Source: USDA, FAS

Historical Export Levels Week 4 of marketing year Source: USDA, FAS

Renewable Fuels Standard (RFS) Crop Year Billion Bushels 2009 4.11 2010 4.43 2011 4.64 2012 4.86 16 16

Ethanol Blending Advantage

Iowa Corn Prices vs. Costs Right now, futures are in $4.40-4.50 range for 2010 and 2011 corn

Iowa Soybean Prices vs. Costs Futures are north of $10 for 2010 and 2011 beans

This Year

Thoughts for 2010 and Beyond General economic conditions Continued economic recovery is a major key for crop prices Long-term oil price remain in the $90 range Supply/demand concerns Yield and production effects of Midwestern moisture Stocks: 2009 vs. 2010 crop South America: La Niña impacts Biofuels: E10, E12, or E15; Do the tax credits get extended/renewed? Will demand be able to keep pace with supply? 2010/11: USDA: Corn $4.40, Soy $9.90 Futures: Corn $4.50, Soy $10.22 2011/12: Futures: Corn $4.43, Soy $10.03

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/faculty/hart/ Iowa Farm Outlook: http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/