1. Ag Market Outlook for 2012 Iowa Chapter of NAMA Meeting
West Des Moines, Iowa
Dec. 16, 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. Livestock Marketing Information Center
Data Source: USDA-NASS, Compiled & Analysis by LMIC 4

5. Cattle and Hog Prices
Source: CME Group

6. 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

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

8. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC 8

9. 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

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

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

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

13. Livestock Marketing Information Center
Data Source: USDA-ERS & USDA-FAS, Compiled & Analysis by LMIC 13

14. U.S. Meat Trade
Source: USDA

15. 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

16. 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 16 16

17. 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 17 17

18. Projected Corn Yields
Source: USDA-NASS

19. Projected Soybean Yields
Source: USDA-NASS

20. World Corn Production
Source: USDA-WAOB 20 20

21. World Soybean Production
Source: USDA-WAOB 21 21

22. Corn vs. Wheat
Source: CME Group, 12/15/2011

23. Change of Export Pace

24. Renewable Fuels Standard (RFS)
Crop
Year
Billion Bushels
2011
4.64
2012
4.86
2013
5.07
2014
5.29 24 24

25. Ethanol Blending Advantage

26. Projected 2011 Season-Average Corn Price

27. Iowa Corn Prices vs. Costs

28. Iowa Soybean Prices vs. Costs

29. Principal Crop Area
Source: USDA-NASS

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

31. Iowa Crop Margins

33. 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 12/15/11): Corn $5.65; Soy $11.09
2012/13:
Futures (as of 12/15/11): Corn $5.28; Soy $10.94

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: