1. Assistant Professor/Grain Markets Specialist
2012 Agricultural Outlook
Iowa Corn Crop Fair
Fayette, Iowa
Jan. 25, 2012
Chad Hart
Assistant Professor/Grain Markets Specialist 1 1

2. U.S. Corn Supply and Use 2008 2009 2010 2011 Area Planted (mil. acres)
86.0
86.4
88.2
91.9
Yield
(bu./acre)
153.9
164.7
152.8
147.2
Production
(mil. bu.)
12,092
13,092
12,447
12,358
Beg. Stocks
1,624
1,673
1,708
1,128
Imports 14 8 28 15
Total Supply
13,729
14,774
14,182
13,501
Feed & Residual
5,182
5,125
4,793
4,600
Ethanol
3,709
4,591
5,021
5,000
Food, Seed, & Other
1,316
1,370
1,407
1,405
Exports
1,849
1,980
1,835
1,650
Total Use
12,056
13,066
13,055
12,655
Ending Stocks
846
Season-Average Price
($/bu.)
4.06
3.55
5.18
6.20
Source: USDA-WAOB 2 2

3. U.S. Soybean Supply and Use
2008
2009
2010
2011
Area Planted
(mil. acres)
75.7
77.5
77.4
75.0
Yield
(bu./acre)
39.7
44.0
43.5
41.5
Production
(mil. bu.)
2,967
3,359
3,329
3,056
Beg. Stocks
205
138
151
215
Imports 13 15 14
Total Supply
3,185
3,512
3,495
3,286
Crush
1,662
1,752
1,648
1,615
Seed & Residual
106
110
130
120
Exports
1,279
1,499
1,501
1,275
Total Use
3,047
3,361
3,280
3,011
Ending Stocks
275
Season-Average Price
($/bu.)
9.97
9.59
11.30
11.70
Source: USDA-WAOB 3 3

4. 2011 Corn Yields
Source: USDA-NASS

5. 2011 Soybean Yields
Source: USDA-NASS

6. World Corn Production
Source: USDA-WAOB 6 6

7. World Soybean Production
Source: USDA-WAOB 7 7

8. Iowa Corn Prices vs. Costs

9. Iowa Soybean Prices vs. Costs

10. Principal Crop Area
Source: USDA-NASS

12. Thoughts for 2012 and Beyond
General economic conditions
Continued worldwide economic recovery is a major key for crop prices
US job recovery, European financial concerns
Supply/demand concerns
Smaller than anticipated U.S. crops, worries about dry conditions
Biofuel growth and energy demand
Corn has the upper hand in the acreage competition
Will supply be able to keep pace with demand?
2011/12: USDA: Corn $6.20; Soy $11.70
Futures (as of 1/24/12): Corn $5.86; Soy $11.62
2012/13:
Futures (as of 1/24/12): Corn $5.46; Soy $11.72

13. Crop Insurance Two big changes for 2012
Re-rating for corn and soybeans
Trend adjustment option for APH yields
Both will impact Iowa producers

14. Average Corn Premium Rate Changes
Source: RMA

15. Average Soybean Premium Rate Changes
Source: RMA

16. Trend Adjusted APH Yields
Source: Dr. William Edwards, ISU

17. Farm Bill
With the super committee’s failure, the farm bill returns to its normal timeline and method of deliberation
However, a few nuggets have leaked out about possible farm bill directions
None of these may make it into the final bill, but we know they have been proposed

18. Farm Bill Proposals
Eliminate direct payments, counter-cyclical payments, ACRE, and SURE
Create Ag Risk Coverage (ARC) program to protect against low prices and/or yields
87% of producer’s 5-year Olympic average revenue
Max. payment of 12% of revenue
Has price-only option
Payment limits of $105,000 for ARC and no payments for producers with a AGI over $950,000

19. Farm Bill Proposals Complete overhaul of dairy programs
Gradually reduce CRP to 25 million acres
Tighten requirements on some nutrition programs
Continue many bioenergy programs

20. The following slides are land values and rents are from Dr. Mike Duffy
His slides, my interpretation

34. Land Summary Land values are at record levels
Increases have been strong but will be affected as fundamentals change
Land ownership will become more dispersed and land management will become more concentrated
Odds of farmland experiencing a collapse similar to the 1980s or the urban real estate market are not high
Farmland is a good long term investment and will likely remain that way for the foreseeable future
Farmers are the majority of land purchasers; they buy land to own it, not to sell it

35. 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: