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Crop and Feed Outlook for 2012

Crop and Feed Outlook for 2012. Farmers Elevator Coop Meeting Sioux Falls, South Dakota Dec. 12, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. Livestock Marketing Information Center Data Source: USDA-NASS, Compiled & Analysis by LMIC.

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Crop and Feed Outlook for 2012

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  1. Crop and Feed Outlook for 2012 Farmers Elevator Coop Meeting Sioux Falls, South Dakota Dec. 12, 2011 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

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

  3. U.S. Meat Production & Prices Source: USDA

  4. Cattle and Hog Prices Source: CME Group

  5. 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

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

  7. Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

  8. 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: Shane Ellis, ISU Extension

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

  10. Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

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

  12. Livestock Marketing Information Center Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC

  13. U.S. Meat Trade Source: USDA

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

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

  16. U.S. Milk Production & Prices Source: USDA

  17. Class III Milk Prices Source: CME Group

  18. Thoughts for 2012 and Beyond • Continued economic recovery is a major key for livestock prices • Meat demand is recovering • Meat supplies tightened up with smaller herds/flocks • Feed costs have kept margins tight • The combination implies livestock expansion will take awhile • Poultry is currently backing off, Hogs are expanding slightly, and Cattle will not start expanding for a few years

  19. U.S. Corn Supply and Use Source: USDA-WAOB

  20. U.S. Soybean Supply and Use Source: USDA-WAOB

  21. Projected Corn Yields Source: USDA-NASS

  22. Projected Soybean Yields Source: USDA-NASS

  23. U.S. DDG Supply and Use My estimates, so take with a grain (or pound) of salt

  24. U.S. Soybean Meal Supply and Use Source: USDA-WAOB

  25. World Corn Production Source: USDA-WAOB

  26. World Soybean Production Source: USDA-WAOB

  27. Feed Pricing Source: USDA-AMS

  28. Corn vs. Wheat Source: CME Group, 12/9/2011

  29. Corn Export Shifts Source: USDA-FAS

  30. Soy Export Shifts Source: USDA-FAS

  31. Change of Export Pace

  32. DDG Exports Source: USDA-FAS

  33. Soybean Meal Export Sales Source: USDA-FAS

  34. Renewable Fuels Standard (RFS)

  35. Corn Grind for Ethanol Source: DOE-EIA

  36. Ethanol Margins Source: CARD

  37. Ethanol Blending Advantage

  38. Biodiesel Production Source: DOE-EIA

  39. Biodiesel Margins Source: CARD

  40. Projected 2011 Season-Average Corn Price

  41. Projected 2011 Season-Average Soy Price

  42. Projected 2012 Season-Average Corn Price

  43. Projected 2012 Season-Average Soy Price

  44. Iowa Corn Prices vs. Costs

  45. Iowa Soybean Prices vs. Costs

  46. Principal Crop Area Source: USDA-NASS

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

  48. Iowa Crop Margins

  49. 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 • 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 $6.40; Soy $11.70 • Futures (as of 12/9/11): Corn $5.73; Soy $11.06 • 2012/13: Futures (as of 12/9/11): Corn $5.36; Soy $10.99

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