Livestock & Crop Outlook Chad Hart Iowa State University chart@iastate.edu Livestock information from Lee Schulz, Department of Economics, Iowa State University (515) 294-3356; lschulz@iastate.edu

Beef: + 2015.Q4 Pork: + 2015.Q1 Total Poultry: +2012.Q4 Data Source: USDA-NASS, Compiled & Analysis by LMIC Livestock Marketing Information Center

Relative Changes in Beef & Cattle Prices ALL COMPRE HENSIVE FRESH BOXED IA/MN IA RETAIL BEEF DIRECT 550 LB CUTOUT STEER CALF $/lb $/cwt 2008 $3.97 $151.05 $91.39 $122.56 2009 $3.89 $139.53 $82.44 $112.24 2010 $4.02 $154.24 $94.25 $130.02 2011 $4.44 $178.71 $115.02 $150.38 2012 $4.69 $187.95 $122.70 $169.29 2013 $4.94 $193.18 $125.80 $173.53 2014 $5.60 $236.02 $153.84 $253.26 2015 $6.04 $235.25 $147.24 $253.33 2016 $5.73 $202.22 $119.54 $168.56 YR/YR Change (%) -1.9% -7.6% -9.8% -8.4% 3.3% 10.5% 14.3% 15.8% 10.4% 15.9% 22.0% 15.7% 5.7% 5.2% 6.7% 12.6% 2.8% 2.5% 13.4% 22.2% 22.3% 45.9% 7.8% -0.3% -4.3% 0.0% -5.0% -14.0% -18.8% -33.4% Source: USDA/ERS, USDA/AMS

Data Source: USDA/ERS. FAPRI

2017 Beef Cattle Market Situation Cow-calf: Converging toward long-term levels Though tremendous variability across producers Backgrounding: Varies widely across situations Opportunities but risk of owning cattle and managing risk Feedlot: Worst behind us, still some red ink Opportunities to ‘lock-in’ profits Keeping in position is key Cyclical price pendulum will swing back

Data Source: USDA/AMS

Source: National Drought Mitigation Center 7 7

Data Source: USDA/NASS

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

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

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

U.S. Corn Supply and Use 2013 2014 2015 2016 2017 Area Planted (mil. acres) 95.4 90.6 88.0 94.0 90.0 Yield (bu./acre) 158.1 171.0 168.4 174.6 170.7 Production (mil. bu.) 13,829 14,216 13,602 15,148 14,065 Beg. Stocks 821 1,232 1,731 1,737 2,320 Imports 36 32 67 55 50 Total Supply 14,686 15,479 15,401 16,940 16,435 Feed & Residual 5,040 5,280 5,120 5,550 5,450 Ethanol 5,124 5,200 5,224 5,400 Food, Seed, & Other 1,369 1,401 1,422 1,445 1,470 Exports 1,920 1,867 1,898 2,225 1,900 Total Use 13,454 13,748 13,664 14,620 14,220 Ending Stocks 2,215 Season-Average Price ($/bu.) 4.46 3.70 3.61 3.40 3.50 Source: USDA-WAOB 2013-16, USDA-OCE 2017 16 16

U.S. Soybean Supply and Use 2013 2014 2015 2016 2017 Area Planted (mil. acres) 76.8 83.3 82.7 83.4 88.0 Yield (bu./acre) 44.0 47.5 48.0 52.1 Production (mil. bu.) 3,358 3,927 3,926 4,307 4,180 Beg. Stocks 141 92 191 197 435 Imports 72 33 24 25 Total Supply 3,570 4,052 4,140 4,528 4,640 Crush 1,734 1,873 1,886 1,940 1,945 Seed & Residual 107 146 122 128 135 Exports 1,638 1,842 1,936 2,025 2,125 Total Use 3,478 3,862 3,944 4,093 4,205 Ending Stocks Season-Average Price ($/bu.) 13.00 10.10 8.95 9.60 Source: USDA-WAOB 2013-16, USDA-OCE 2017 17 17

Soy Yields Top: 2016 Yield Bottom: Change from last year Units: Bushels/acre Source: USDA-NASS

U.S. Meat Trade Source: USDA-WAOB 19 19

Change in Corn Export Sales Source: USDA-FAS

Change in Soybean Export Sales Source: USDA-FAS

Corn Grind for Ethanol

Current Corn Futures 3.96 3.85 3.48 Source: CME Group, 3/21/2017

Current Soybean Futures 9.85 9.66 9.60 Source: CME Group, 3/21/2017

2016/17 Crop Margins @ Actual Yields

2017/18 Crop Margins

Iowa Corn Prices vs. Costs

Thank You! More information available at: Iowa Farm Outlook & News www.econ.iastate.edu/ifo/ Ag Decision Maker www.extension.iastate.edu/agdm/ ISU Estimated Livestock Returns www.econ.iastate.edu/estimated-returns/ ISU Livestock Crush Margins www.econ.iastate.edu/margins/ http://www.iowabeefcenter.org/ http://www.ipic.iastate.edu/