1. Crop and Feed Outlook for 2012
Farmers Elevator Coop Meeting
Sioux Falls, South Dakota
Dec. 12, 2011
Chad Hart
Assistant Professor/Grain Markets Specialist 1 1

2. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 2

3. U.S. Meat Production & Prices
Source: USDA

4. Cattle and Hog Prices
Source: CME Group

5. 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: Shane Ellis, ISU Extension

6. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 6

7. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC 7

8. 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: Shane Ellis, ISU Extension

9. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 9

10. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC 10

11. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 11

12. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC 12

13. U.S. Meat Trade
Source: USDA

14. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 14

15. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 15

16. U.S. Milk Production & Prices
Source: USDA

17. Class III Milk Prices
Source: CME Group

18. Thoughts for 2012 and Beyond
Continued economic recovery is a major key for livestock prices
Meat demand is recovering
Meat supplies tightened up with smaller herds/flocks
Feed costs have kept margins tight
The combination implies livestock expansion will take awhile
Poultry is currently backing off, Hogs are expanding slightly, and Cattle will not start expanding for a few years

19. 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
146.7
Production
(mil. bu.)
12,092
13,092
12,447
12,310
Beg. Stocks
1,624
1,673
1,708
1,128
Imports 14 8 28 15
Total Supply
13,729
14,774
14,182
13,453
Feed & Residual
5,182
5,125
4,792
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
1,600
Total Use
12,056
13,066
13,054
12,605
Ending Stocks
848
Season-Average Price
($/bu.)
4.06
3.55
5.18
6.40
Source: USDA-WAOB 19 19

20. 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
41.3
Production
(mil. bu.)
2,967
3,359
3,329
3,046
Beg. Stocks
205
138
151
215
Imports 13 15 14
Total Supply
3,185
3,512
3,495
3,275
Crush
1,662
1,752
1,648
1,625
Seed & Residual
106
110
130
120
Exports
1,279
1,499
1,501
1,300
Total Use
3,047
3,361
3,280
3,045
Ending Stocks
230
Season-Average Price
($/bu.)
9.97
9.59
11.30
11.70
Source: USDA-WAOB 20 20

21. Projected Corn Yields
Source: USDA-NASS

22. Projected Soybean Yields
Source: USDA-NASS

23. U.S. DDG Supply and Use
2008
2009
2010
2011
Production
(mil. metric tons)
28.6
35.4
38.7
38.6
Imports
0.3
0.4
Total Supply
28.9
35.8
39.2
38.9
Domestic
23.9
27.5
30.9
32.1
Exports
5.0
8.3
6.8
Total Use
39.1
Average Price
($/ton)
122
113
179
207
My estimates, so take with a grain (or pound) of salt 23 23

24. U.S. Soybean Meal Supply and Use
2009
2010
2011
Production
(thou. short tons)
41,707
39,251
38,685
Beg. Stocks
235
302
350
Imports
160
179
165
Total Supply
42,101
39,731
39,200
Domestic
30,640
30,277
30,100
Exports
11,160
9,104
8,800
Total Use
41,800
39,381
38,900
Ending Stocks
300
Season-Average Price
($/short ton)
311.27
345.52
295.00
Source: USDA-WAOB 24 24

25. World Corn Production
Source: USDA-WAOB 25 25

26. World Soybean Production
Source: USDA-WAOB 26 26

27. Feed Pricing
Source: USDA-AMS

28. Corn vs. Wheat
Source: CME Group, 12/9/2011

29. Corn Export Shifts
Source: USDA-FAS

30. Soy Export Shifts
Source: USDA-FAS

31. Change of Export Pace

32. DDG Exports
Source: USDA-FAS

33. Soybean Meal Export Sales
Source: USDA-FAS

34. Renewable Fuels Standard (RFS)
Crop
Year
Billion Bushels
2011
4.64
2012
4.86
2013
5.07
2014
5.29 34 34

35. Corn Grind for Ethanol
Source: DOE-EIA

36. Ethanol Margins
Source: CARD

37. Ethanol Blending Advantage

38. Biodiesel Production
Source: DOE-EIA

39. Biodiesel Margins
Source: CARD

40. Projected 2011 Season-Average Corn Price

41. Projected 2011 Season-Average Soy Price

42. Projected 2012 Season-Average Corn Price

43. Projected 2012 Season-Average Soy Price

44. Iowa Corn Prices vs. Costs

45. Iowa Soybean Prices vs. Costs

46. Principal Crop Area
Source: USDA-NASS

47. States with Room to Grow
Number is the difference in planted acres between 2008 and 2011

48. Iowa Crop Margins

50. 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 $6.40; Soy $11.70
Futures (as of 12/9/11): Corn $5.73; Soy $11.06
2012/13:
Futures (as of 12/9/11): Corn $5.36; Soy $10.99

51. 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: