Joseph W. Glauber Chief Economist, USDA USDA 89 th Agricultural Outlook Forum February 21,

US agricultural exports projected at record high Bil $ FY 2013 exports: $142.0 b FY 2013 imports: b Net trade bal: 29.5 b Fiscal year

China remains top destination for US agricultural exports for 2 nd straight year Bil $ Fiscal year

Soybeans and cotton account for two- thirds of US agricultural exports to China Bil $

Export values forecast up in FY 2013 for most commodity categories

But export volumes flat or down for most commodities +7.4% +2.7% -37.5%-4.7% -4.1% -2.0% n/c-0.6% Mil mt

Brazil corn exports to surpass U.S. exports? Source: USDA-FAS monthly trade circular, Grain: World Markets and Trade, February 8, 2013

Global ending stocks tighten for grains Crop 2007/ / / / /122012/13 Days of use Wheat Corn Rice Soybeans Upland Cotton lowest since 1973/74

China builds cotton inventory Million bales

Much of area exiting CRP is located in Plains states Acres Source: Farm Service Agency

Planted acres projected to decline in 2013 Million acres Crop F Percent change Corn Soybeans Wheat Upland cotton Minor feed grains Rice Total 8 crops CRP crops + CRP

Drought persists across much of the United States

Corn and soybean production projected to rebound in 2013 CropUnit Change CornMil bu10,78014, % SoybeansMil bu3,0153, % CottonMil bales % RiceMil cwt % WheatMil bu2,2692, %

Preseason precipitation and Iowa corn yields Corr= 0.059

Weekly ethanol production below RFS caps for conventional biofuels Source: DOE-Energy Information Administration, Weekly Petroleum Status Report.

US corn use for ethanol rebounds, but below 5 billion bushels Percent Mil bushels

Motor gasoline use projected to decline Source: DOE--Energy Information Administration, Annual Energy Outlook Bil gal

Commodity prices fall from record levels Crop2009/102010/112011/122012/132013/14F% Change Wheat % Corn % Soybeans % Rice % Cotton % Source: USDA-NASS and Office of the Chief Economist, February 2013 Wheat, corn and soybeans in dollars per bushel; rice in dollars per hundredweight; cotton in cents per pound. Numbers in red denote record levels.

High feed costs keep feed ratios at low levels Dairy and Broilers Hogs

Livestock, dairy and poultry prices projected to increase in 2013 Animal products F% Change Dollars per cwt Cattle Hogs Broilers Milk Source: Office of the Chief Economist, February Prices in red denote record levels.

Food CPI to rise in 2013 but likely to remain below levels in 2008 and 2011 ERS forecast: % for 2013

Net cash income projected to fall in 2013, but remain high relative to historical levels Bil dollars

Net cash income projected to fall for most crop producers $ thou Source: Economic Research Service

Net cash income for livestock producers expected to decline in 2013 $ thou Source: Economic Research Service