Market Outlook ISU Extension Swine In-Service Ames, Iowa Mar. 29, 2012 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 2012 Area Planted (mil. acres) 86.0 86.4 88.2 91.9 94.0 Yield (bu./acre) 153.9 164.7 152.8 147.2 164.0 Production (mil. bu.) 12,092 13,092 12,447 12,358 14,270 Beg. Stocks 1,624 1,673 1,708 1,128 801 Imports 14 8 28 20 15 Total Supply 13,729 14,774 14,182 13,506 15,086 Feed & Residual 5,182 5,125 4,793 4,600 5,200 Ethanol 3,709 4,591 5,021 5,000 4,950 Food, Seed, & Other 1,316 1,370 1,407 1,405 1,420 Exports 1,849 1,980 1,835 1,700 1,900 Total Use 12,056 13,066 13,055 12,705 13,470 Ending Stocks 1,616 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.20 5.00 Source: USDA-WAOB, 2012 Unofficial Projections 2 2
U.S. Soybean Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 Yield (bu./acre) 39.7 44.0 43.5 41.5 43.9 Production (mil. bu.) 2,967 3,359 3,329 3,056 3,250 Beg. Stocks 205 138 151 215 275 Imports 13 15 14 Total Supply 3,185 3,512 3,495 3,286 3,540 Crush 1,662 1,752 1,648 1,615 1,660 Seed & Residual 106 110 130 120 126 Exports 1,279 1,499 1,501 1,275 1,550 Total Use 3,047 3,361 3,280 3,011 3,335 Ending Stocks Season-Average Price ($/bu.) 9.97 9.59 11.30 12.00 11.50 Source: USDA-WAOB, 2012 Unofficial Projections 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 58.0 Yield (bu./acre) 44.9 44.5 46.3 43.7 Production (mil. bu.) 2,499 2,218 2,207 1,999 2,165 Beg. Stocks 306 657 976 862 825 Imports 127 119 97 120 Total Supply 2,932 2,993 3,279 2,982 3,110 Food 927 919 926 930 935 Seed 78 69 71 82 83 Feed & Residual 255 150 132 145 180 Exports 1,015 879 1,289 1,000 975 Total Use 2,275 2,018 2,417 2,157 2,173 Ending Stocks 937 Season-Average Price ($/bu.) 6.78 4.87 5.70 7.30 6.30 Source: USDA-WAOB, 2012 Unofficial Projections 4 4
World Corn Production Source: USDA-WAOB 5 5
World Soybean Production Source: USDA-WAOB 6 6
World Wheat Production Source: USDA 7 7
Corn vs. Wheat Source: CME Group, 3/28/2012
Change of Export Pace
U.S. Blended Gasoline Consumption 7.6 bil. gal. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS
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
Situation Facing Hog Producers in 2012 Higher feed prices for most of year Corn: $5.80-$6.60/bu in 2011/12 $5.18 in 2010/2011 Soybean meal: $290-$320/ton in 2011/12 $345 in 2010/2011 Feed prices should moderate moving into 2012/13 crop year Source: USDA-ERS
Projected 2012 Season-Average Corn Price
Projected 2012 Season-Average Soy Price
Pork Production Will Increase Billion Pounds * Forecast Source: USDA-ERS
Hog Inventory Increased Million Head * Forecast Source: USDA-ERS
Only Modest Growth in Sows Farrowing Million Head * Quarters 1-2 NASS Reported , Quarters 3-4 Forecast Source: USDA-ERS
Growth in Pigs per Litter Continues 1.8 % 1.9 % 1.7 % Head 2.2 % 2.1 % 1.5 % *Forecast Source: USDA-ERS
Canada’s Hog Inventory & Weak Dollar Will Limit Imports Million Head Million Head * Slaughter and Imports Forecast Source: USDA-ERS
2011 Pork Exports Were A Record * Forecast Source: USDA-ERS 20
Hog Prices Dollars per cwt * Forecast Source: USDA-ERS
Planted Area for the 8 Majors Source: USDA-ERS
Corn Use for the Next Decade Source: USDA-ERS
Crop Prices for the Next Decade Source: USDA-ERS
Current Futures Source: CME Group, 3/26/2012
Livestock Production for the Next Decade Source: USDA-ERS
Per Capita Consumption Source: USDA-ERS
Prices Source: USDA-ERS
Returns Over Cash Costs Source: USDA-ERS
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/