Associate Professor/Crop Marketing Specialist Ag Outlook & Policies I-LEAD Johnston, Iowa Mar. 23, 2017 Chad Hart Associate Professor/Crop Marketing Specialist chart@iastate.edu 515-294-9911 1 1

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 2 2

2016/17 Crop Margins @ Actual Yields

U.S. Meat Production & Prices Source: USDA-WAOB 4 4

U.S. Meat Trade Source: USDA-WAOB 5 5

Corn Export Sales Source: USDA-FAS

Strength of the U.S. Dollar Source: Federal Reserve

Corn Grind for Ethanol

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

Iowa Corn Prices vs. Costs

Farm Incomes Source: USDA

What is a Farm Bill? The farm bill is the primary agricultural and food policy legislation set by the U.S. federal government. It governs commodity programs, trade, food and nutrition programs, rural development, farm credit, conservation, agricultural research, and other programs related to agriculture. Some programs within the farm bill are permanent legislation, whereas other programs have expiration dates.

Farm Bill History Congress passed the 1st farm bill in 1933, the Agriculture Adjustment Act. The 1938 farm bill established a base set of agricultural policies as permanent and set a timeline for updates every 5-7 years. There have been numerous updates to agricultural policy since then, with the latest in 2014.

Farm Bill Titles Commodities IX. Energy Conservation X. Hort. & Organic Ag. Trade XI. Crop Insurance Nutrition XII. Miscellaneous Credit Rural Development Research Forestry

Programs by Title Commodity Income and price support programs for producers Conservation Environmental/conservation programs Trade Trade promotion programs Nutrition Income and price support programs for consumers

Programs by Title Credit Farm loan/Ag credit programs Rural Development Rural infrastructure programs Research Research funding for USDA and higher education Forestry Forestry management programs

Programs by Title Energy Biofuel programs Horticulture and Organic Agriculture Farmers markets Crop Insurance Modifications to crop insurance Miscellaneous Livestock disaster programs and price reporting

Farm Bill Projected Spending 2014-2018 $489 Billion

Expected Spending Source: CBO

PLC pays, ARC does not Neither pay Both pay ARC pays, PLC does not The choice depends on where you expect prices and yields to be over the next 5 years. There are price/yield combinations where PLC pays and ARC does not. There are also price/yield combinations where ARC pays and PLC does not.

Federal Crop Insurance

Renewable Fuels Standard (RFS) 22 22

Corn Export Sales Source: USDA-FAS

Ethanol Exports Source: EIA

DDG Exports Source: USDA

World Corn Markets Source: USDA 26 26

Thank you for your time. Any questions. My web site: http://www2. econ Thank you for your time! Any questions? My web site: http://www2.econ.iastate.edu/faculty/hart/ Iowa Farm Outlook: http://www2.econ.iastate.edu/ifo/ Ag Decision Maker: http://www.extension.iastate.edu/agdm/