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Ag Outlook

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  1. Ag Outlook C US Bank Ag Education Seminar Osage, Iowa Feb. 27, 2014 Chad Hart Associate Professor/Crop Markets Specialist chart@iastate.edu 515-294-9911

  2. U.S. Corn Supply and Use Source: USDA-WAOB for 2010-13

  3. U.S. Soybean Supply and Use Source: USDA-WAOB for 2010-13

  4. Soy Export Shifts Source: USDA-FAS

  5. Corn Grind for Ethanol

  6. Crop Thoughts for 2014 and Beyond • Supply/demand concerns • Demand rebounding? Yes, so far, so good • Acreage allocation for 2014: Where do the extra corn acres go? • Markets favoring soybeans in the short term and corn longer term

  7. Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: ISU Extension

  8. U.S. Beef Supply and Use Source: USDA-WAOB

  9. 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: ISU Extension

  10. U.S. Pork Supply and Use Source: USDA-WAOB

  11. Crops Livestock

  12. Source: droughtmonitor.unl.edu

  13. 3-Month Temperature Outlook Source: NOAA-CPC

  14. 3-Month Precipitation Outlook Source: NOAA-CPC

  15. Corn Costs 98% 81% 57%

  16. Net Farm Income

  17. Iowa Land Values Source: Mike Duffy, ISU

  18. Land Values and Income Source: Mike Duffy, ISU

  19. Land Values and Income Source: Mike Duffy, ISU

  20. Farm Bill: Old vs. New Direct Payments (DP) Countercyclical Payments (CCP) Marketing Loans (LDP) Revenue Countercyclical Payments (ACRE) • Countercyclical Payments (PLC) • Marketing Loans (LDP) • Revenue Countercyclical Payments (ARC) New programs, but they have strong similarities to previous programs

  21. Two Waves First wave: Choice on base acreage and yield updating Probably occurs June-July timeframe Second wave: Choice on farm bill programs Probably Sept-Oct Harvest the crop and farm bill at the same time

  22. Producer Choice Have one-time choice between: PLC or ARC (can pick by commodity) If ARC is chosen, pick between county and individual coverage If individual coverage is chosen, must be taken for all covered commodities on the farm 2014-2018 crop years

  23. PLC vs. CCP and DP

  24. Revenue Programs • Think of ARC-County as crop-by-crop • Think of ARC-Individual as whole farm

  25. Supplemental Coverage Option (SCO) • An additional policy to cover “shallow losses” • Shallow loss = part of the deductible on the producer’s underlying crop insurance policy • SCO has a county-level payment trigger • Indemnities are paid when the county experiences losses greater than 14% • Premium subsidy: 65% • Starts in 2015 • Can’t have ARC and SCO together

  26. 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/