Feed Outlook Jim Dunn Ag Economist Pennsylvania State University

Sources of Information USDA /homepage.dohttp://usda.mannlib.cornell.edu/MannUsda /homepage.do /viewTaxonomy.do?taxonomyID=3http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=3 /viewTaxonomy.do?taxonomyID=25http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=25 /viewDocumentInfo.do?documentID=1273

What these are called USDA Economics, Statistics and Market Information System (ESMIS) Field Crops Outlooks, Yearbooks, and Estimates Feed Outlook

Other useful links Oil Crops Outlook Livestock, Dairy, and Poultry Outlook Milk Production Feed grains database Livestock, Dairy, and Poultry Outlook: Tables

Issues for Feed Economy Bio-Fuel Expensive inputs More debt Cheap dollar China and India Banking crisis Weather

Bio-Fuel Ethanol Bio-diesel Both ethanol & bio-diesel subsidies and tariff on ethanol expired this year Does it make sense to use food for fuel?

Source: CME

Prices today Verasun 0 Pacific 1.13 Aventine 3.10 old shares 0

Ethanol 36 of 211 plants are not operating Others are on partial slowdown All of these plants cannot survive Clearfield operating again – present owner has very little capital costs Margins may still be negative Source: Renewable Fuels Association

Corn Supply YearBeg stocksProductionSupply Bil. Bu. 2007/ / / / / /13 est Source: USDA

Corn Usage bil. bu Source: USDA YearFeedFoodFuelExportsTotal 2007/ / / / / /13 est

Food and Industrial Corn Use mil. bu. Crop Year HFCSOther sweeteners StarchFuelLiquorCereal , , , , , , Source: USDA

Corn Usage Crop Feed57.8%46.0%36.7%37.1% Food12.6%10.4%10.8%12.2% Exports17.1%19.0%14.1%10.3% Ethanol12.4%24.7%38.5%40.2%

Corn futures prices 2/7/13 MonthPrice (cts/bu.) March (62 cents more than last year May July Sept Dec 13573

Corn Price History

Soybean Supply mil.bu. YearCarry-inProductionTotal

Soybean Usage YearCrushExportsSeedTotal

Soybean Carryout & Price YearCarryout mil. bu. PriceDays Use of carryout $ $ $ $ $ $ $

Soybean Price History

Soybean futures prices 2/7/13 MonthPrice (cts/bu.) March May July Sept Nov

Low values mean animal producers lose money

Beef notes Feeder cattle numbers were hit hard by drought in Texas Animals put in feed lots early High feeder cattle prices Feed lots returns low Packers can’t pass costs on in this economy – high-valued cuts are not high enough

Hog notes Integrators suffering from feed prices Demand is okay but prices too low to cover costs

Poultry Notes Eggs and Broilers cheapest form of protein Margins bad Exports important and weakness in world economy affects price Demand is okay but feed is too high priced

Concluding Questions How will meat producers deal with feed prices? How will dairy producers deal with feed situation How will consumers adjust consumption in weak economy? Will we really keep cutting per capita meat consumption?