1. Department of Economics Feed for Fuel: Coping with the New Reality 2009 Western Canadian Association of Swine Veterinarian’s Annual Conference Saskatoon, Saskatchewan October 16, 2009 Chad Hart Assistant Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

2. Department of Economics Crude Oil Prices Source: EIA

3. Department of Economics Ethanol, “Fuel of the Future” Photo Source: Nebraska Historical Society Famous quote from Henry Ford Many early automobiles ran on ethanol The U.S. has gone through several waves of ethanol experimentation

4. Department of Economics Ethanol Plant Map Source: Ethanol Producer Magazine

5. Department of Economics Ethanol Production Source: F. O. Licht

6. Department of Economics Ethanol Margins Source: ISU, CARD

7. Department of Economics Renewable Fuels Standard (RFS) 60% GHG Emission Reduction 50% GHG Emission Reduction 20% GHG Emission Reduction If construction started after Dec. 2007

8. Department of Economics Outside Influences (Jan. 2007 = 1)

9. Department of Economics Hog Returns vs. Corn Prices Sources: ISU Extension, Farrow-to-Finish; USDA-NASS

10. Department of Economics U.S. Corn Supply and Use Source: USDA 200420052006200720082009 Area Planted mha32.833.131.737.834.835.0 Productionmmt300282267331307331 Feed & Residual mmt156 142150133137 Ethanolmmt3441547793107 Exportsmmt4654 624755 Season- Average Price $U.S. /mt 81.1078.74119.69165.35159.84131.89

11. Department of Economics U.S. Soybean Supply and Use Source: USDA 200420052006200720082009 Area Planted mha30.429.230.626.230.631.4 Productionmmt858487738188 Crushmmt464749 4546 Exportsmmt302630323536 Season- Average Price $U.S. /mt 210.87207.94236.22371.05366.27330.64

12. Department of Economics U.S. Wheat Supply and Use Source: USDA 200420052006200720082009 Area Planted mha24.123.2 24.525.623.9 Productionmmt595749566860 Feed & Residual mmt543075 Food & Other mmt25 26 2526 Exportsmmt292725342824 Season- Average Price $U.S. /mt 124.91125.64156.50238.06249.08178.18

13. Department of Economics Canadian Corn Supply and Use Sources: FAPRI Agriculture and Agri-Food Canada 200420052006200720082009 Area Harvested mha1.071.091.061.371.171.19 Productionmmt8.849.338.9911.6510.5910.18 Feedmmt7.918.558.4310.268.437.96 Food & Other mmt2.412.292.983.573.804.30 Importsmmt2.131.681.792.301.302.20

14. Department of Economics Canadian Soybean Supply and Use 200420052006200720082009 Area Harvested mha1.17 1.201.171.201.39 Productionmmt3.043.163.462.703.343.55 Crushmmt1.551.501.521.381.281.35 Exportsmmt0.740.971.451.471.561.70 Sources: FAPRI Agriculture and Agri-Food Canada

15. Department of Economics Canadian Wheat Supply and Use 200420052006200720082009 Area Harvested mha9.399.409.688.6410.039.56 Productionmmt24.8025.7525.2720.0528.6122.50 Feedmmt4.074.114.842.084.102.75 Food & Other mmt4.174.144.214.233.513.52 Exportsmmt14.6215.7319.1115.7318.1016.30 Sources: FAPRI Agriculture and Agri-Food Canada

16. Department of Economics Factors Leading to Higher Commodity Prices Source: USDA-ERS, Trostle, July 2008

17. Department of Economics Crude Oil Prices Sources: EIA, NYMEX

18. Department of Economics Projected Ethanol Production Source: FAPRI

19. Department of Economics Renewable Fuels Standard (RFS) Crop Year Billion Bushels 20083.57 20094.11 20104.43 20114.64

20. Department of Economics Bio-based Market Opportunities Source: Informa Economics, Biobased Multi-Client Study, March 2006

21. Department of Economics Biobased Pathways Source: USDA, 2008, U.S. Biobased Products: Market Potential and Projections Through 2025

22. Department of Economics Dept. of Energy Projections Source: Energy Information Administration, Annual Energy Outlook 2009

23. Department of Economics Draft Lifecycle GHG Reductions Source: EPA, May 2009

24. Department of Economics Corn 1990 - 2006

25. Department of Economics Corn

26. Department of Economics U.S. Corn Supply and Use Source: FAPRI 201020112012201320142015 Area Planted mha35.535.635.835.936.336.7 Productionmmt323328334339347355 Feed & Residual mmt134132 131132133 Ethanolmmt109117119124130134 Exportsmmt454748505153 Season- Average Price $U.S. /mt 145.37151.52152.77158.43161.22162.90

27. Department of Economics U.S. Soybean Supply and Use Source: FAPRI 201020112012201320142015 Area Planted mha30.530.831.031.1 Productionmmt858788899091 Crushmmt485051525354 Exportsmmt3233 32 Season- Average Price $U.S. /mt 322.72333.40341.50350.76359.32365.05

28. Department of Economics U.S. Wheat Supply and Use Source: FAPRI 201020112012201320142015 Area Planted mha24.324.124.023.923.723.6 Productionmmt61 62 Feed & Residual mmt666666 Food & Other mmt27 28 Exportsmmt2829 Season- Average Price $U.S. /mt 193.06198.87202.49207.51212.25215.15

29. Department of Economics Canadian Corn Supply and Use Source: FAPRI 201020112012201320142015 Area Harvested mha1.291.311.301.29 1.30 Productionmmt11.9412.2112.2412.2512.3712.56 Feedmmt7.387.647.938.048.138.18 Food & Other mmt4.584.714.764.804.844.89 Importsmmt0.060.170.470.600.580.50

30. Department of Economics Canadian Soybean Supply and Use Source: FAPRI 201020112012201320142015 Area Harvested mha1.161.15 1.161.17 Productionmmt3.203.173.193.223.253.29 Crushmmt1.391.401.411.441.471.49 Exportsmmt1.401.421.431.441.461.45

31. Department of Economics Canadian Wheat Supply and Use Source: FAPRI 201020112012201320142015 Area Harvested mha9.349.219.129.058.958.89 Productionmmt25.3525.1625.1125.0925.0125.02 Feedmmt3.523.623.743.813.863.90 Food & Other mmt5.085.165.235.295.345.40 Exportsmmt16.2716.0615.9915.9615.8915.80

32. Department of Economics U.S. Hog Statistics Source: FAPRI 201020112012201320142015 Hog Inventorymil. head 59.8659.7660.2661.2862.3363.59 Live Hog Imports mil. head 7.107.077.257.297.467.50 Productionmmt10.3010.4210.5710.8211.0911.37 Consumptionmmt8.738.778.848.959.099.27 Exportsmmt1.571.641.731.861.992.09 Barrow & Gilt Price $U.S. per cwt. 53.0455.0456.2654.7953.9853.70

33. Department of Economics Canadian Hog Statistics Source: FAPRI 201020112012201320142015 Hog Inventorymil. head 11.3712.3013.1913.5614.1014.18 Live Hog Exports mil. head 7.107.077.257.297.467.50 Productionmmt1.861.952.022.042.062.07 Consumptionmmt0.981.001.011.041.051.06 Exportsmmt0.880.951.01 Pork Farm Price $C per cwt. 66.4163.9564.1361.9162.7664.44

34. Department of Economics Thank you for your time! Any questions? My web site: http://www.econ.iastate.edu/faculty/hart/