Current Feed Situation and Outlook Iowa Egg Industry Symposium Ames, Iowa Nov. 7, 2012 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911 1 1

U.S. Corn Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 86.0 86.4 88.2 91.9 96.9 Yield (bu./acre) 153.9 164.7 152.8 147.2 122.0 Production (mil. bu.) 12,092 13,092 12,447 12,358 10,706 Beg. Stocks 1,624 1,673 1,708 1,128 988 Imports 14 8 28 75 Total Supply 13,729 14,774 14,182 13,514 11,769 Feed & Residual 5,182 5,125 4,793 4,562 4,150 Ethanol 3,709 4,591 5,021 5,000 4,500 Food, Seed, & Other 1,316 1,370 1,407 1,421 1,350 Exports 1,849 1,980 1,835 1,543 1,150 Total Use 12,056 13,066 13,055 12,526 11,150 Ending Stocks 619 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.80 These are the latest numbers from USDA. Record production and demand is gone and was replaced by record prices. All sectors of demand took major cuts. Ending stocks are projected to be at pipeline levels. Source: USDA-WAOB 2 2

U.S. Soybean Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 75.7 77.5 77.4 75.0 77.2 Yield (bu./acre) 39.7 44.0 43.5 41.9 37.8 Production (mil. bu.) 2,967 3,359 3,329 3,094 2,860 Beg. Stocks 205 138 151 215 169 Imports 13 15 14 16 20 Total Supply 3,185 3,512 3,495 3,325 3,050 Crush 1,662 1,752 1,648 1,703 1,540 Seed & Residual 106 110 130 92 115 Exports 1,279 1,499 1,501 1,360 1,265 Total Use 3,047 3,361 3,280 3,155 2,920 Ending Stocks Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 15.25 For soybeans, a tight market continues to get tighter. USDA ratcheted down demand for the new crop to hold 2012/13 ending stocks at 115 million bushels. As with corn, all sectors of demand took a big cut. Source: USDA-WAOB 3 3

U.S. Soybean Meal Supply and Use 2009 2010 2011 2012 Production (thou. short tons) 41,707 39,251 41,240 36,700 Beg. Stocks 235 302 350 300 Imports 160 180 210 Total Supply 42,101 39,732 41,800 37,300 Domestic 30,640 30,301 31,900 29,500 Exports 11,160 9,081 9,600 7,500 Total Use 39,382 41,500 37,000 Ending Stocks Season-Average Price ($/short ton) 311.27 345.52 393.53 485.00 Source: USDA-WAOB 4 4

Price Ratios Since May 1

Projected Corn Yields These are based on conditions around Sept. 1.

Objective Corn Yield Data USDA crop adjusters found grain weights well below those for the last 8 years. Source: USDA-NASS

Projected Soybean Yields These are based on conditions around Sept. 1.

Objective Soybean Yield Data USDA crop adjusters found pod numbers well below those for the last 8 years. Source: USDA-NASS

World Corn Production Source: USDA-WAOB Global corn production took a hit last month, with Canada and Europe seeing reductions in potential corn production. Source: USDA-WAOB 10 10

World Soybean Production Soybean prices have spurred on increased soybean plantings worldwide. South America will lead the charge. Source: USDA-WAOB 11 11

U.S. Meat Production & Prices Higher feed costs have led to lower meat production projections. Source: USDA-WAOB 12 12

Corn Export Shifts Source: USDA-FAS

Soy Export Shifts Source: USDA-FAS

Soy Meal Export Shifts Source: USDA-FAS

Corn Grind for Ethanol Negative margins at some ethanol plants have dragged down production.

U.S. Blended Gasoline Consumption 7.6 bil. gal. But the industry still faces blend wall issues as fuel consumption has dropped with the economy and the E-10 market is basically full. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS

Current Corn Futures 6.87 5.99 5.63 Source: CME Group, 11/6/2012

Current Soybean Futures 14.11 12.81 12.38 Source: CME Group, 11/6/2012

Total Acreage Shift Source: USDA-NASS We brought back a lot of acres in 2012. Can we hold them in 2013? Source: USDA-NASS

Acreage Shift by State Top: Planted in 2012 Bottom: Change from 2011 Weather was great for planting in 2012 (just not for producing). To hold acreage we will need great planting weather again. Top: Planted in 2012 Bottom: Change from 2011 Units: 1,000 acres Source: USDA-NASS

Acreage Shift by Crop Acreage change from 2011 Units: 1,000 acres Cotton will likely give up acreage again. But with crop prices strong across the board, the acreage battle could be interesting in 2013. Source: USDA-NASS

Thoughts for 2012 and Beyond Supply/demand concerns Soil moisture issues Biofuel and export strength Worldwide response to drought-induced pricing 2012/13 USDA Futures (11/6/12) 2013/14 Corn $7.80 $6.87 $5.99 Soybeans $15.25 $14.11 $12.81

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