2013 Crop Market Outlook Coleman Research Group Presentation Feb. 15, 2013 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 97.2 Yield (bu./acre) 153.9 164.7 152.8 147.2 123.4 Production (mil. bu.) 12,092 13,092 12,447 12,360 10,780 Beg. Stocks 1,624 1,673 1,708 1,128 989 Imports 14 8 28 29 100 Total Supply 13,729 14,774 14,182 13,516 11,869 Feed & Residual 5,182 5,125 4,795 4,548 4,450 Ethanol 3,709 4,591 5,019 5,011 4,500 Food, Seed, & Other 1,316 1,370 1,407 1,426 1,387 Exports 1,849 1,980 1,834 1,543 900 Total Use 12,056 13,066 13,055 12,527 11,237 Ending Stocks 632 Season-Average Price ($/bu.) 4.06 3.55 5.18 6.22 7.20 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 39.6 Production (mil. bu.) 2,967 3,359 3,329 3,094 3,015 Beg. Stocks 205 138 151 215 169 Imports 13 15 14 16 20 Total Supply 3,185 3,512 3,495 3,325 3,204 Crush 1,662 1,752 1,648 1,703 1,615 Seed & Residual 106 110 130 91 120 Exports 1,279 1,499 1,501 1,362 1,345 Total Use 3,047 3,361 3,280 3,155 3,080 Ending Stocks 125 Season-Average Price ($/bu.) 9.97 9.59 11.30 12.50 14.30 Source: USDA-WAOB 3 3

U.S. Wheat Supply and Use 2008 2009 2010 2011 2012 Area Planted (mil. acres) 63.2 59.2 53.6 54.4 55.7 Yield (bu./acre) 44.9 44.5 46.3 43.7 Production (mil. bu.) 2,499 2,218 2,207 1,999 2,269 Beg. Stocks 306 657 976 862 743 Imports 127 119 97 112 130 Total Supply 2,932 2,993 3,279 2,974 3,142 Food 927 919 926 941 950 Seed 78 69 71 76 75 Feed & Residual 255 150 132 164 375 Exports 1,015 879 1,289 1,050 Total Use 2,275 2,018 2,417 2,231 2,450 Ending Stocks 691 Season-Average Price ($/bu.) 6.78 4.87 5.70 7.24 7.90 Source: USDA-WAOB 4 4

Price Ratios Since June 1

Corn Yields Top: 2012 Yield Bottom: Change from 2011 Units: Bushels/acre

Soybean Yields Top: 2012 Yield Bottom: Change from 2011 Units: Bushels/acre

Winter Wheat Acreage Top: 2013 Planted Acreage Bottom: % Change from 2012 Units: 1,000 acres Source: USDA-NASS

Snow Cover Source: USDA-WAOB and NOAA

World Corn Production Source: USDA-WAOB 10 10

World Soybean Production Source: USDA-WAOB 11 11

World Wheat Production Source: USDA-WAOB 12 12

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

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. Meat Production & Prices Source: USDA-WAOB 15 15

Corn Export Shifts Source: USDA-FAS

Soy Export Shifts Source: USDA-FAS

Wheat Export Shifts Source: USDA-FAS

Corn Grind for Ethanol

Ethanol Stocks

Current Corn Futures 6.62 5.29 5.13 Source: CME Group, 2/12/2013

Current Soybean Futures 13.91 12.11 11.83 Source: CME Group, 2/12/2013

Current Wheat Futures 7.92 7.84 Source: KCBOT, 2/12/2013

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

Thoughts for 2012 and Beyond Supply/demand concerns Soil moisture issues, key for all 3 crops Export strength/weakness, competition among feed grains Worldwide response to drought-induced pricing 2012/13 USDA Futures (2/12/13) 2013/14 Corn $7.20 $6.62 $5.29 Soybeans $14.30 $13.91 $12.11 Wheat $7.90 $7.84 $7.92

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/