1. Department of Agricultural Economics Purdue University 2012 Animal Outlook Chris Hurt hurtc@purdue.edu Purdue University August 19, 2011@purdue.edu

2. Department of Agricultural Economics Purdue University

3. Department of Agricultural Economics Purdue University

4. Department of Agricultural Economics Purdue University

5. Ethanol - From the 2005 crop, 7.8 million corn acres were needed to meet the ethanol needs (by-product adjusted). That climbed to 23.7 million U.S. corn acres in 2010, an increase of 15.9 million acres. U.S. soybean exports to China required the production from 8.3 million acres of the 2005 crop, but 22.8 million acres of the 2010 crop—an additional 14.5 million acres. Two Big Demand Shocks

6. Department of Agricultural Economics Purdue University

7. Change in World Area of Major Crops 70% from New Land 30% from shifting

8. Department of Agricultural Economics Purdue University

9. Department of Agricultural Economics Purdue University

10. Department of Agricultural Economics Purdue University

11. Department of Agricultural Economics Purdue University 155 Million Bu. Per Year: 2011-14 Trend Yields 0 Million Bu. Per Year: 2015-2022

12. Department of Agricultural Economics Purdue University

13. Department of Agricultural Economics Purdue University

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15. Department of Agricultural Economics Purdue University

16. Why is downsizing of the livestock sector not required today as it was in 2008?

17. Department of Agricultural Economics Purdue University

18. Department of Agricultural Economics Purdue University

19. Department of Agricultural Economics Purdue University

20. Department of Agricultural Economics Purdue University

21. Department of Agricultural Economics Purdue University Forecast Futures 08-08-11 (ECB)07/12/11 2010 Actual/Futures Prediction:USDA CarcassLive Avg 1073.4155.06 2011 I$79.16$58.9759.94 II$91.21$67.9568.80 III$92.30$68.7667-69 IV$81.95$61.0558-62 Avg 11$86.15$64.1963-65 2012 I84.7264.0160-66 II90.5467.4565-71 III86.6464.55 IV76.4356.94 Avg 1284.5863.0262-67

22. Department of Agricultural Economics Purdue University

23. Department of Agricultural Economics Purdue University

24. Department of Agricultural Economics Purdue University

25. Department of Agricultural Economics Purdue University

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28. Department of Agricultural Economics Purdue University

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30. Department of Agricultural Economics Purdue University

31. Department of Agricultural Economics Purdue University Pork Consumption: Average Annual Changes 2000 to 2011 Consumption PopulationPer CapitaGrowth China0.77%2.22%2.99% Japan0.00%1.33% S. Korea0.46%2.12%2.58% Mexico1.58%2.49%4.07% U.S.0.91%-0.81%0.10%

32. Department of Agricultural Economics Purdue University Will High feed prices Persist??

33. Department of Agricultural Economics Purdue University Agricultural policies for surplus vs. shortage? Surplus Most of U.S. History Reduce Supply –Set-asides –Soil Bank –CRP-Conservation Increase Demand –Food Stamps –School Lunch –Export Enhancement –Ethanol mandate/tax credits Shortage Limited History Increase Supply –Release/reduce CRP –Flexible haying/grazing CRP –Research & education –Production incentives Reduce Demand –Limit export incentives –No mandates or tax credits –Establish priorities

34. Department of Agricultural Economics Purdue University