1. Extension and Outreach/Department of Economics Evaluating Economic Impact of Transgenes AFRI SDS Project Meeting Des Moines, Iowa May 8, 2013 Image Source: www.cbt.com.my Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

2. Extension and Outreach/Department of Economics U.S. Soybean Supply and Use 20092010201120122013 Area Planted(mil. acres)77.577.475.077.277.5 Yield(bu./acre)44.043.541.939.644.5 Production(mil. bu.)3,3593,3293,0943,0153,405 Beg. Stocks(mil. bu.)138151215169125 Imports(mil. bu.)1514162015 Total Supply(mil. bu.)3,5123,4953,3253,2043,545 Crush(mil. bu.)1,7521,6481,7031,6151,660 Seed & Residual(mil. bu.)11013091119135 Exports(mil. bu.)1,4991,5011,3621,3451,500 Total Use(mil. bu.)3,3613,2803,1553,0803,295 Ending Stocks(mil. bu.)151215169125250 Season-Average Price($/bu.)9.5911.3012.5014.3010.50 Source: USDA-WAOB

3. Extension and Outreach/Department of Economics World Soybean Production Source: USDA-WAOB

4. Extension and Outreach/Department of Economics Timeline and Milestones As the economic analysis will be heavily dependant on the yield and cost impact from the transgenic soybean lines, the vast majority of the economic analysis must be conducted in the last year of the study.

5. Extension and Outreach/Department of Economics Task i. Establish baseline data 1.Establish baseline data on: a.U.S. and global soybean markets b.SDS losses Utilize USDA World Ag. Supply & Demand data for 1a. Combine USDA data with information from industry and commodity groups for 1b. Example: The 2010 U.S. soybean crop was valued at $37.6 billion. SDS is estimated to have caused $0.82 billion in losses that year.

6. Extension and Outreach/Department of Economics Task i. Establish baseline data Source: USDA-ERS

7. Extension and Outreach/Department of Economics Task ii. Evaluate revenues and production costs 1.Generate historical average and projected prices a.Price premiums/discounts for transgenics b.Revenue impacts from yield changes 2.Generate production cost estimates a.Utilize established costs for standard crop b.Augment cost budget for transgenics

8. Extension and Outreach/Department of Economics Current Soybean Futures Source: CME Group, 4/26/2013 11.52 11.45

9. Extension and Outreach/Department of Economics Soybean Production Costs Source: ISU Extension, A1-20

10. Extension and Outreach/Department of Economics Soy Prices vs. Costs

11. Extension and Outreach/Department of Economics Task iii. Analyze impact of adoption of lines in U.S. 1.Use the outputs from tasks i and ii as inputs for scenario analysis a.Impacts on plantings, supply, demand, etc. b.2 scenarios: Baseline: no transgenic adoption Scenario: 50% adoption rate

12. Extension and Outreach/Department of Economics Task iii. Analyze impact of adoption of lines in U.S. Source: USDA

13. Extension and Outreach/Department of Economics 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/