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Crop & Biofuel Outlook for 2012

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Presentation on theme: "Crop & Biofuel Outlook for 2012"— Presentation transcript:

1 Crop & Biofuel Outlook for 2012
Integrated Crop Management Conference Ames, Iowa Nov. 30, 2011 Chad Hart Assistant Professor/Grain Markets Specialist 1 1

2 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

3 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

4 Projected Corn Yields Source: USDA-NASS

5 Source: USDA-NASS

6 Projected Soybean Yields
Source: USDA-NASS

7 Source: USDA-NASS

8 World Corn Production Source: USDA-WAOB 8 8

9 World Soybean Production
Source: USDA-WAOB 9 9

10 Corn vs. Wheat Source: CME Group, 11/29/2011

11 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

12 Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: Shane Ellis, ISU Extension

13 Corn Export Shifts Source: USDA-FAS

14 Soy Export Shifts Source: USDA-FAS

15 Change of Export Pace

16 Renewable Fuels Standard (RFS)
Crop Year Billion Bushels 2011 4.64 2012 4.86 2013 5.07 2014 5.29 16 16

17 Corn Grind for Ethanol Source: DOE-EIA

18 Ethanol Margins Source: CARD

19 Ethanol Blending Advantage

20 Biodiesel Production Source: DOE-EIA

21 Biodiesel Margins Source: CARD

22 Projected 2011 Season-Average Corn Price

23 Projected 2011 Season-Average Soy Price

24 Projected 2012 Season-Average Corn Price

25 Projected 2012 Season-Average Soy Price

26 Iowa Corn Prices vs. Costs

27 Iowa Soybean Prices vs. Costs

28 Principal Crop Area Source: USDA-NASS

29 States with Room to Grow
Number is the difference in planted acres between 2008 and 2011

30 Iowa Crop Margins

31

32 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, worries about dry conditions Biofuel growth and energy demand Corn 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 11/29/11): Corn $5.79; Soy $11.16 2012/13: Futures (as of 11/29/11): Corn $5.35; Soy $11.04

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


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