1. Crop and Policy Outlook
Arizona Ag Marketing/QLF Market Outlook Luncheon
Tempe, Arizona
Oct. 16, 2013
Chad Hart
Associate Professor/Crop Markets Specialist 1 1

2. U.S. Corn Supply and Use 2009 2010 2011 2012 2013 Area Planted
(mil. acres)
86.4
88.2
91.9
97.2
97.4
Yield
(bu./acre)
164.7
152.8
147.2
123.4
155.3
Production
(mil. bu.)
13,092
12,447
12,360
10,780
13,843
Beg. Stocks
1,673
1,708
1,128
989
824
Imports 8 28 29
162 25
Total Supply
14,774
14,182
13,517
11,931
14,593
Feed & Residual
5,125
4,795
4,546
4,475
5,100
Ethanol
4,591
5,019
5,011
4,665
4,900
Food, Seed, & Other
1,370
1,407
1,428
1,395
1,450
Exports
1,980
1,834
1,543
735
1,225
Total Use
13,066
13,055
12,528
11,270
12,675
Ending Stocks
2,018
Season-Average Price
($/bu.)
3.55
5.18
6.22
6.90
4.80
Source: USDA-WAOB 2 2

3. U.S. Soybean Supply and Use
2009
2010
2011
2012
2013
Area Planted
(mil. acres)
77.5
77.4
75.0
77.2
Yield
(bu./acre)
44.0
43.5
41.9
39.8
41.2
Production
(mil. bu.)
3,359
3,329
3,094
3,034
3,149
Beg. Stocks
138
151
215
169
141
Imports 15 14 16 40
Total Supply
3,512
3,495
3,325
3,243
3,305
Crush
1,752
1,648
1,703
1,690
1,655
Seed & Residual
110
130 88 97
115
Exports
1,499
1,501
1,365
1,315
1,370
Total Use
3,361
3,280
3,155
3,102
3,140
Ending Stocks
166
Season-Average Price
($/bu.)
9.59
11.30
12.50
14.40
Source: USDA-WAOB 3 3

4. Objective Yield Data
Source: USDA-NASS

5. Projected Corn Yields Top: 2013 Projected Yield
Bottom: Change from last month
Units: Bushels/acre
Source: USDA-NASS

6. Early Reports on Corn Yields
Source: AgWeb.com

7. Projected Soybean Yields
Top: 2013 Projected Yield
Bottom: Change from last month
Units: Bushels/acre
Source: USDA-NASS

8. Early Reports on Soybean Yields
Source: AgWeb.com

9. World Corn Production
Source: USDA-WAOB 9 9

10. World Soybean Production
Source: USDA-WAOB 10 10

11. 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

12. Cattle Crush Margin
The Crush Margin is the return after the feeder steer and corn costs.
Live weight: pounds Feeder weight: 750 pounds
Corn: 50 bushels per head
Source: ISU Extension

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

14. Corn Export Shifts
Source: USDA-FAS

15. Corn Export Sales
Source: USDA-FAS

16. Soy Export Shifts
Source: USDA-FAS

17. Soybean Export Sales
Source: USDA-FAS

18. Corn Grind for Ethanol

19. Source: DOE-EIA, Annual Energy Outlook

20. Current Corn Futures
4.58
4.47
4.13
Source: CME Group, 10/15/2013

21. Current Soybean Futures
12.02
11.00
10.87
Source: CME Group, 10/15/2013

22. New Crop Prices

23. Crop Acreage
Source: USDA-NASS

24. Crop Shifts
Source: USDA-NASS

25. Winter Wheat Progress
Source: USDA-NASS

26. Thoughts for 2014 and Beyond
Supply/demand concerns
A lot of production uncertainty for harvest time
Corn demand rebounding?
Acreage allocation for 2014: Where do the extra corn acres go?
Markets favoring soybeans in the short term and corn longer term
2012/13
USDA
2013/14 USDA
2013/14
Futures
(10/15/13)
Corn
$6.90
$4.80
$4.13
Soybeans
$14.40
$12.50
$12.02

27. Farm Bill Titles Commodities IX. Energy
Conservation X. Hort. & Organic Ag.
Trade XI. Livestock
Nutrition XII. Crop Insurance
Credit XIII. Commodity Futures
Rural Development XIV. Miscellaneous
Research XV. Trade & Taxes
Forestry

28. Ideas on the Next Farm Bill
Let’s look at the common features from the House and Senate bills
Both versions of the farm bill eliminate direct payments, countercyclical payments, ACRE, and SURE
The marketing loan program would continue
Livestock disaster programs would be reestablished

29. Reference Prices Senate: 55% of 5-yr Olympic average MYA price
House: Set by law
Corn $3.70
Wheat $5.50
Soybean $8.40
Corn
$2.95
Wheat
$3.62
Soybean
$6.29

30. ARC or RLC instead of ACRE
Revenue-based support program
Revenues based on 5-year Olympic averages for yields and prices
Yields and prices have cups (T-yields and reference prices)

31. AMP or PLC instead of CCP
Price-based support program
Reference prices establish targets
Works like CCP
Payment rate = Max(0, Reference price – Max(MYA price, Loan rate))

32. Dairy Dairy Producer Margin Protection Program
Voluntary margin coverage, with the opportunity for supplemental coverage
Dairy Market Stabilization Program
Managed supplies when margins fall
Packages are very similar across the House and Senate versions

33. SCO Examples from Last Year’s Bills
Source: Congressional Research Service

34. Thank you for your time. Any questions. My web site: http://www. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: