Associate Professor/Crop Marketing Specialist Ag Outlook Hills Bank 2017 Ag Outlook Riverside, Iowa Mar. 9, 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

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 3 3

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

World Corn Production Source: USDA-WAOB 5 5

World Soybean Production Source: USDA-WAOB 6 6

U.S. Meat Production & Prices Source: USDA-WAOB 7 7

Change in Corn Export Sales Source: USDA-FAS

Change in Soybean Export Sales Source: USDA-FAS

Corn Grind for Ethanol

Current Corn Futures 4.03 3.95 3.55 Source: CME Group, 3/7/2017

Current Soybean Futures 10.00 9.68 9.67 Source: CME Group, 3/7/2017

U.S. Meat Production & Prices Source: USDA-WAOB 13 13

Source: CME Group

U.S. Pork Exports, Jan-Dec 2016 (Volume excluding by-products & variety meats) Dec-16/Nov-16 Dec-16/Dec-15 Year-to-Date Country Percent 1,000 lbs Japan -21% -6% -62,218 -5% Mexico 8% 23% 50,480 3% Canada -2% 6% 8,488 2% South Korea 20% 14% -87,182 -18% China (Mainland) -12% 67% 245,965 98% Hong Kong 5% -26% 22,267 18% Australia 21% 10% 10,562 Philippines -16% -1% 3,560 China (Taiwan) 101% -18,565 -49% Colombia 164% 9,820 9% Honduras -41% 12% 10,879 17% Dominican Republic 29% 9,134 Guatemala -44% -3% 2,162 Chile -65% 113% 5,675 Other Countries 28% 13,111 7% Total 15% 224,138 4% Source: USDA/ERS

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

Source: USDA/AMS. * Steve Meyer, EMI.

U.S. Packing Capacity Under Construction New pork packing Fall 2016 Summer/Fall 2017 Summer/Fall 2018 plants Daily Annual Pleasant Hope, MO 2,500 625,000 Windom, MN 4,000 1,000,000 Sioux City, IA 12,000 3,000,000 24,000 6,000,000 Coldwater, MI 10,000 2,500,000 Wright County, IA Total 6,500 1,625,000 28,500 7,125,000 50,500 12,625,000 Head per week 31,250 137,019 242,788 % of '15 avg = 2.195 mil 1.4% 6.2% 11.1% % of '15 max = 2.507 mil 1.2% 5.5% 9.7% Source: Steve Meyer. Published in National Hog Farmer Magazine, July 19, 2016. Source: Seaboard Triumph Foods plans to expand for second shift at Sioux City plant, February 17, 2017

Data Source: USDA/NASS

Data Source: USDA/AMS

Data Source: USDA-AMS Livestock Marketing Information Center

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

U.S. Beef Exports, Jan-Dec 2016 (Volume excluding by-products & variety meats) Year-to-Date Country 1,000 lbs Percent Japan 116,965 22% South Korea 135,937 43% Mexico 31,090 9% Canada -15,332 -5% Hong Kong -21,827 -7% China (Taiwan) 28,220 26% Netherlands -3,890 -10% Chile 1,195 5% Philippines -8,114 -25% Vietnam 6,400 52% Dominican Republic -3,368 -16% United Arab Emirates 1,753 11% Italy -2,720 Guatemala 2,759 27% Other Countries 15,410 12% Total 284,478 13% Source: USDA/ERS

U.S. Meat Trade Source: USDA-WAOB 24 24

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/