Crop Outlook Iowa Institute for Coops Annual Meeting Ames, Iowa Nov. 22, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 86.0 86.4 88.2 91.9 Yield (bu./acre) 153.9 164.7 152.8 146.7 Production (mil. bu.) 12,092 13,092 12,447 12,310 Beg. Stocks 1,624 1,673 1,708 1,128 Imports 14 8 28 15 Total Supply 13,729 14,774 14,182 13,453 Feed & Residual 5,182 5,125 4,792 4,600 Ethanol 3,709 4,591 5,021 5,000 Food, Seed, & Other 1,316 1,370 1,407 1,410 Exports 1,849 1,980 1,835 1,600 Total Use 12,056 13,066 13,054 12,610 Ending Stocks 843 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.70 Source: USDA-WAOB 2 2

U.S. Soybean Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 Yield (bu./acre) 39.7 44.0 43.5 41.3 Production (mil. bu.) 2,967 3,359 3,329 3,046 Beg. Stocks 205 138 151 215 Imports 13 15 14 Total Supply 3,185 3,512 3,495 3,275 Crush 1,662 1,752 1,648 1,635 Seed & Residual 106 110 130 120 Exports 1,279 1,499 1,501 1,325 Total Use 3,047 3,361 3,280 3,080 Ending Stocks 195 Season-Average Price ($/bu.) 9.97 9.59 11.30 12.60 Source: USDA-WAOB 3 3

Corn vs. Wheat Source: CME Group, 11/21/2011 In feed markets, corn has become a high-priced feed product. Wheat and other feed materials have filled in some of corn’s traditional role in feeds as they are competitively priced. This affects not only domestic feed markets, but also international demand for corn. Source: CME Group, 11/21/2011

Change of Export Pace With China heading to South America for new supplies, export demand has been very soft.

Corn Grind for Ethanol Source: DOE-EIA Corn grind for ethanol has been fairly steady over the past year and expectations are that it will remain in the 5 billion bushel range. Source: DOE-EIA

Iowa Corn Prices vs. Costs While costs are increasing, margins are still strongly positive for corn.

Iowa Soybean Prices vs. Costs The gap is much smaller for soybeans.

Principal Crop Area Source: USDA-NASS Both crops would like additional area, and it is available if Mother Nature allows. Source: USDA-NASS

States with Room to Grow The Dakotas, the lower Mississippi, and the Southern Plains have the room to grow, but that is also where the floods and drought hit. So while the land is available, it may not be assessable. Number is the difference in planted acres between 2008 and 2011

The near-term weather outlook shows some improvement in NW Iowa, but dry conditions holding in central and SE Iowa.

Thoughts for 2012 and Beyond General economic conditions Continued worldwide economic recovery is a major key for crop prices US job recovery, European financial concerns, Chinese inflation Supply/demand concerns Smaller than anticipated U.S. crops Biofuel growth and energy demand Corn still has the upper hand in the acreage competition Will supply be able to keep pace with demand? 2011/12: USDA: Corn $6.70; Soy $12.60 Futures (as of 11/21/11): Corn $5.78; Soy $11.32 2012/13: Futures (as of 11/21/11): Corn $5.34; Soy $11.26

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/