1. Department of Economics Feed Price Outlook Mandatory Country of Origin Labeling Webcast Ames, Iowa August 25, 2008 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. Department of Economics Corn Supply and Use Source: USDA-WAOB, Aug. 2008 -0.3 +0.4 +6.6 +573 +100 +150 +300 -0.60 $6.00$5.40

3. Department of Economics Soybean Meal Supply and Use -350 -250 -100 -25 Source: USDA-WAOB, Aug. 2008

4. Department of Economics Source: USDA-NASS & USDA-ERS, Aug. 2008 Hay Data Harvested AcresYieldProduction 200720082007200820072008 (million acres)(tons/acre)(million tons) Alfalfa Iowa1.141.104.204.304.794.73 U.S.21.6720.783.353.4172.5870.94 Other Iowa0.340.352.302.500.780.88 U.S.39.9639.661.951.9477.7377.01 2007 Prices: Alfalfa $138/ton Other $120/ton 2008 Alfalfa Prices: May $177/ton June $172/ton

5. Department of Economics Source: USDA-NASS, Aug. 2008

6. Department of Economics Source: CARD, Iowa State Crop Basis Patterns

7. Department of Economics Renewable Fuels Standard (RFS) Calendar Year Billion Bushels 20093.75 20104.29 20114.50 Crop Year Billion Bushels 20083.57 20094.11 20104.43

8. Department of Economics Exchange Rate Ratios (Jan. 2007 = 1) Source: CME futures

9. Department of Economics Corn & Soybean Area Growth rate of 1.5 million acres per year

10. Department of Economics Input Costs Source: USDA, Agricultural Prices, July 2008

11. Department of Economics Stocks-to-Use Ratios

12. Department of Economics Thoughts for 2008  Looking for a later than average frost  Wet spring/flooding impacts will likely show up in yields  Markets are primed to move higher on weather concerns  How about the dollar?  Weaker dollar has helped hold up crop and livestock exports  Strengthening dollar could help lower feed costs  Most important ag. statistic: Crude oil price

13. Department of Economics Thoughts for 2009 and Beyond  Many of the storylines from the past few years will continue  Tight stocks for both corn and soybeans  The competition for acreage  Ethanol’s buildout & livestock’s adjustment  Energy price & general economy concerns  Market volatility will remain high  Link to the energy markets  More market players with different trading objectives  Given current factors, the 2009 outlook is for feed prices to be in the neighborhood of 2008 prices