Crop Outlook & Marketing Considerations NW Iowa Farm Business Association Annual Meeting Sheldon, Iowa Mar. 25, 2013 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2009 2010 2011 2012 2013 Area Planted (mil. acres) 86.4 88.2 91.9 97.2 96.5 Yield (bu./acre) 164.7 152.8 147.2 123.4 163.6 Production (mil. bu.) 13,092 12,447 12,360 10,780 14,530 Beg. Stocks 1,673 1,708 1,128 989 632 Imports 8 28 29 125 25 Total Supply 14,774 14,182 13,516 11,894 15,187 Feed & Residual 5,125 4,795 4,548 4,550 5,400 Ethanol 4,591 5,019 5,011 4,500 4,675 Food, Seed, & Other 1,370 1,407 1,426 1,387 1,435 Exports 1,980 1,834 1,543 825 1,500 Total Use 13,066 13,055 12,527 11,262 13,010 Ending Stocks 2,177 Season-Average Price ($/bu.) 3.55 5.18 6.22 7.10 4.80 Source: USDA-WAOB 2 2

U.S. Soybean Supply and Use 2009 2010 2011 2012 2013 Area Planted (mil. acres) 77.5 77.4 75.0 77.2 Yield (bu./acre) 44.0 43.5 41.9 39.6 44.5 Production (mil. bu.) 3,359 3,329 3,094 3,015 3,405 Beg. Stocks 138 151 215 169 125 Imports 15 14 16 20 Total Supply 3,512 3,495 3,325 3,204 3,545 Crush 1,752 1,648 1,703 1,615 1,660 Seed & Residual 110 130 91 119 135 Exports 1,499 1,501 1,362 1,345 1,500 Total Use 3,361 3,280 3,155 3,080 3,295 Ending Stocks 250 Season-Average Price ($/bu.) 9.59 11.30 12.50 14.30 10.50 Source: USDA-WAOB 3 3

World Corn Production Source: USDA-WAOB 4 4

World Soybean Production Source: USDA-WAOB 5 5

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 7 7

Corn Export Shifts Source: USDA-FAS

Soy Export Shifts Source: USDA-FAS

Advance Corn Sales Source: USDA-FAS

Corn Grind for Ethanol

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 5.32 5.15 Source: CME Group, 3/22/2013

Current Soybean Futures 12.00 11.75 Source: CME Group, 3/22/2013

Corn Prices vs. Costs

Soy Prices vs. Costs

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 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 or lack thereof Worldwide response to drought-induced pricing 2012/13 USDA 2013/14 Futures (3/22/13) Corn $7.10 $5.32 Soybeans $14.30 $12.00 Risk management Crop insurance Price protection

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/