1. Associate Professor/Crop Marketing Specialist
Ag Market Outlook
Dec. 4, 2018
Chad Hart
Associate Professor/Crop Marketing Specialist 1 1

2. +12%
+4%
+10%
+16%
+12%
Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center

3. Data Source: USDA-NASS, Compiled & Forecasts by LMIC
Livestock Marketing Information Center

4. +9%
+4%
+11%
+11%
+6%
Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center

5. Data Source: USDA-NASS and USDA-ERS, Compiled & Analysis by LMIC
Livestock Marketing Information Center

7. 2013 = +$ [-$25.60 to +$24.57]
2014 = +$ [+$13.15 to +$107.25]
2015 = +$ [-$18.40 to +$26.25]
2016 = -$ [-$35.52 to +$32.92]
2017 = +$ [-$12.68 to +$47.62]
2018f = -$ [-$40.71 to +$26.66]
2019f = +$ [-$12.68 to +$32.53]

8. LMIC Pork Production and Price Quarterly Forecasts (11/15/18)
Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC

9. Data Source: USDA-NASS, Slaughter capacity by Dr. Steve Meyer

10. Historically large margins in ‘14-’15 drove rapid expansion
Data Source: USDA & LMIC, Compiled by LMIC
Livestock Marketing Information Center

11. Data Source: USDA-AMS
Livestock Marketing Information Center

12. Data Source: USDA-AMS
Livestock Marketing Information Center

13. Data Source: USDA-NASS
Livestock Marketing Information Center

14. 67% of marketings 33% of marketings Data Source: USDA-NASS
Livestock Marketing Information Center

15. Data Source: USDA-NASS
Livestock Marketing Information Center

16. Data Source: USDA-AMS
Livestock Marketing Information Center

17. 2014 = +$197.24 [+$41 to +$269] 2015 = -$225.12 [-$530 to +$43]
2018f = -$ [-$97 to +$103]
2019f = -$ [-$135 to +$64]
Source: Lee Schulz, Iowa State University
Projected with Basis Adjusted Futures

18. LMIC Beef Production and Price Quarterly Forecasts (11/8/18)
Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC

19. Data Source: USDA-ERS & USDA-FAS, Compiled and Forecasts by LMIC
Livestock Marketing Information Center

20. U.S. Pork Exports, Jan-Sep 2018
(Carcass Weight Basis)
Sep-18/Sep-17
Sep-18/Aug-18
Year-to-Date
Country
Percent
1,000 lbs
‘17 Share
‘18 Share
Japan 1%
-13%
-2,129 0%
22%
21%
Mexico
-10%
-7%
21,819 2%
32%
31%
Canada 5%
-3,100
-1% 9%
South Korea
36%
148,873
41%
12%
China (Mainland)
-16% 7%
-21,556
-8% 6%
Hong Kong
-65%
39%
-52,612
-52% 3%
Australia
55%
14,735
10% 4%
Philippines
42%
4,707
Colombia
23%
38%
65,254
52%
China (Taiwan)
202%
40%
6,042
27%
Honduras
33%
-9%
11,426
20%
Dominican Republic
128%
-3%
21,841
30%
Guatemala
-30%
-23%
2,028
Chile
28%
-31%
1,668
Panama
13%
45%
3,187
19%
Other Countries
18,889
15%
Total
241,074
Source: USDA, Economic Research Service calculations using data from U.S. Department of Commerce, Bureau of the Census.

21. Source: USDA, Economic Research Service calculations using data from U
Source: USDA, Economic Research Service calculations using data from U.S. Department of Commerce, Bureau of the Census.

22. Baseline Update for International Livestock Markets
PORK NET TRADE
U.S.
Export Δ
+11.0%
Import Δ
-2.9%
September
Food & Agricultural
Policy Research Institute
University of Missouri

23. U.S. Beef Exports, Jan-Sep 2018
(Carcass Weight Basis)
Sep-18/Sep-17
Sep-18/Aug-18
Year-to-Date
Country
Percent
1,000 lbs
‘17 Share
‘18 Share
Japan
-1%
-19%
40,304 6%
29%
Mexico
-9%
26,760 9%
15%
14%
Canada
-5% 3%
-3,206
11%
10%
South Korea
25%
-24%
145,145
43%
17%
21%
Hong Kong 4%
54%
2,076 1%
12%
China (Taiwan)
-27%
33,499
33% 5%
Vietnam
122%
114%
1,241
Netherlands
57%
177%
-4,765
-17%
Philippines
19%
6,088
26%
Chile
45%
-14%
-1,002
-4%
United Arab Emirates
-3%
901 8%
Dominican Republic
-7%
-401
China (Mainland)
-13%
20%
12,010
357% 0%
Italy
-2%
18%
-2,609
-21%
Indonesia
-30%
94%
786
Other Countries
-6%
-16%
19,268
Total 7%
276,096
Source: USDA, Economic Research Service calculations using data from U.S. Department of Commerce, Bureau of the Census.

25. Baseline Update for International Livestock Markets
BEEF NET TRADE
U.S.
Export Δ
+2.5%
Import Δ
+3.0%
September
Food & Agricultural
Policy Research Institute
University of Missouri

26. Data Source: USDA-NASS
Livestock Marketing Information Center

27. Data Source: USDA-NASS
Livestock Marketing Information Center

28. Data Source: USDA-NASS
Livestock Marketing Information Center

29. Data Source: USDA-AMS & USDA-NASS
Livestock Marketing Information Center

30. 10 yr. Avg. All Milk Price
Data Source: USDA-NASS

31. Trade Remains Critical
Data Source: USDA-FAS, Compiled & Analysis by LMIC

32. Pressure on Dairy Moving Forward
Exports are Good, but…
Shipping at lower prices
Tariffs
Larger Dairies Still Above COP, but…
Regional Differences Exist
Prices expected to be systemically lower for the next 2-3 years

33. LMIC Dairy Production and Price Quarterly Forecasts (10/25/18)
Sources: USDA/NASS; USDA/AMS Livestock Market News; Projections and Forecasts by LMIC

34. U.S. Corn Supply and Use 2015 2016 2017 2018 2019 Area Planted
(mil. acres)
88.0
94.0
90.2
89.1
92.0
Yield
(bu./acre)
168.4
174.6
176.6
178.9
176.5
Production
(mil. bu.)
13,602
15,148
14,604
14,626
14,930
Beg. Stocks
1,731
1,737
2,293
2,140
1,736
Imports 67 57 36 50
Total Supply
15,401
16,942
16,934
16,816
16,716
Feed & Residual
5,120
5,470
5,298
5,500
5,575
Ethanol
5,224
5,432
5,605
5,650
5,700
Food, Seed, & Other
1,422
1,453
1,480
1,490
Exports
1,898
2,294
2,438
2,450
2,425
Total Use
13,664
14,649
14,793
15,080
15,190
Ending Stocks
1,526
Season-Average Price
($/bu.)
3.61
3.36
3.60
3.90
Source: USDA-WAOB, w/ adjustment for Nov. reports 34 34

35. U.S. Soybean Supply and Use
2015
2016
2017
2018
2019
Area Planted
(mil. acres)
82.7
83.4
90.1
89.1
82.5
Yield
(bu./acre)
48.0
52.0
49.3
52.1
50.0
Production
(mil. bu.)
3,926
4,296
4,411
4,600
4,090
Beg. Stocks
191
197
302
438
955
Imports 24 22 25
Total Supply
4,140
4,515
4,734
5,063
5,070
Crush
1,886
1,901
2,055
2,080
2,075
Seed & Residual
122
146
112
128
127
Exports
1,936
2,166
2,129
1,900
Total Use
3,944
4,214
4,107
4,277
Ending Stocks
793
Season-Average Price
($/bu.)
8.95
9.47
9.33
8.60
8.75
Source: USDA-WAOB, w/ adjustment for Nov. reports 35 35

36. Projected Corn Yields Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 36 36

37. Projected Soybean Yields
Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 37 37

38. World Corn Production
Source: USDA-WAOB 38 38

39. World Soybean Production
Source: USDA-WAOB 39 39

41. Arable land

43. U.S. Meat Production & Prices
Source: USDA-WAOB 43 43

44. Corn Export Sales
Source: USDA-FAS

45. Corn Export Shifts
Source: USDA-FAS

46. Soybean Export Sales
Source: USDA-FAS

47. Soybean Export Shifts
Source: USDA-FAS

48. Soybean Market Shares Sales for 2017 crop Sales for 2018 crop
Source: USDA-FAS

49. Soybean Meal Export Shifts
Source: USDA-FAS

50. Ethanol Production
Source: EIA

51. Ethanol Exports
Source: EIA

52. Current Corn Futures
4.02
3.69
Source: CME Group, 11/30/2018

53. Current Soybean Futures
9.29
8.82
Source: CME Group, 11/30/2018

54. 2018/19 Crop Margins
Based on futures prices

55. 2019/20 Crop Margins w/ 2018 Costs
Based on futures prices

56. Iowa Corn Prices vs. Costs
Based on USDA prices and ISU costs

57. Iowa Soybean Prices vs. Costs
Based on USDA prices and ISU costs

58. Want to provide feedback on my presentation. https://www. surveymonkey

59. Thank you for your time. Any questions. My web site: http://www2. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: