1. Associate Professor/Crop Marketing Specialist
Ag Market Outlook
Oct. 31, 2018
Chad Hart
Associate Professor/Crop Marketing Specialist 1 1

2. Net Farm Income
Source: USDA

3. Farm Debt
Source: Federal Reserve

4. Ag Economic Summary
Agricultural production and consumption has grown rapidly over the past several years.
But when production exceeds consumption, prices fall.
Crop revenues peaked in , while livestock revenues crested in , leading to record farm incomes.
Since then net farm income has been cut in half.
While the percentage loss in substantial, net farm income remains above levels from the early 2000’s.
Farmers and ranchers have partially compensated for the loss in income by taking on higher debt loads.
Farm and ranch balance sheets are eroding and financial stress is building for some producers, but the financial issues are not as severe as during the 1980’s.
The squeeze is on farm finances and for some producers, the squeeze may be too much.

5. Iowa’s Economy as an Example

6. Links to Manufacturing
Farm Machinery

7. Links to Government
Dept. of Ag.

8. Links to Real Estate
Farm Leases

9. Links to Finance and Insurance
Crop Insurance

10. Links to the Rest of the Economy

11. Why do U.S. farmers need export markets?
That’s where the customers are
That’s where the economic growth is
That’s where the consumption growth is
We produce surpluses
We only eat high on the hog
Exports are crucial to farm income

12. 96% of the world’s population lives outside the US
Source: CIA World Factbook

13. Population growth 2017 to 2050
Source: World Bank

14. Economic growth rates
Source: CIA World Factbook

17. Top ten US ag export markets, 2016
Source: US Census Bureau, Foreign Trade Statistics, FATUS export aggregations

18. Top 10 ag exporting states, 2016
Source: USDA Economic Research Service, “State Export Data”

19. Soybean Market Shares Sales for 2017 crop Sales for 2018 crop
Source: USDA-FAS

20. Beef Export Shifts
Source: USDA-FAS

21. Pork Export Shifts
Source: USDA-FAS

22. Sorghum Export Shifts
Source: USDA-FAS

23. Soybean Export Shifts
Source: USDA-FAS

24. Corn Export Shifts
Source: USDA-FAS

25. Wheat Export Shifts
Source: USDA-FAS

26. Rice Export Shifts
Source: USDA-FAS

27. Cotton Export Shifts
Source: USDA-FAS

28. Ethanol Exports
Source: EIA

29. Population vs. arable land
Share of global Share of global
population arable land
China 19% 5%
India 17% 10%
US 4% 13%

30. Arable land

31. U.S. Corn Supply and Use 2015 2016 2017 2018 Δ2018 Area Planted
(mil. acres)
88.0
94.0
90.2
89.1
0.0
Yield
(bu./acre)
168.4
174.6
176.6
180.7
-0.6
Production
(mil. bu.)
13,602
15,148
14,604
14,778
-49
Beg. Stocks
1,731
1,737
2,293
2,140
138
Imports 67 57 36 50
Total Supply
15,401
16,942
16,934
16,968 89
Feed & Residual
5,120
5,470
5,302
5,550
-25
Ethanol
5,224
5,432
5,601
5,650
Food, Seed, & Other
1,422
1,453
1,480
Exports
1,898
2,294
2,438
2,475 75
Total Use
13,664
14,649
14,793
15,155
Ending Stocks
1,813 39
Season-Average Price
($/bu.)
3.61
3.36
3.50
0.00
Source: USDA-WAOB 31 31

32. U.S. Soybean Supply and Use
2015
2016
2017
2018
Δ2018
Area Planted
(mil. acres)
82.7
83.4
90.1
89.1
-0.4
Yield
(bu./acre)
48.0
52.0
49.3
53.1
0.3
Production
(mil. bu.)
3,926
4,296
4,411
4,690 -4
Beg. Stocks
191
197
302
438 44
Imports 24 22 25
Total Supply
4,140
4,515
4,734
5,153 40
Crush
1,886
1,901
2,055
2,070
Seed & Residual
122
146
112
138
Exports
1,936
2,166
2,129
2,060
Total Use
3,944
4,214
4,268
Ending Stocks
885
Season-Average Price
($/bu.)
8.95
9.47
9.33
8.60
0.00
Source: USDA-WAOB 32 32

33. U.S. Wheat Supply and Use
Source: USDA-WAOB 33 33

34. U.S. Cotton Supply and Use
Source: USDA-WAOB 34 34

35. Projected Corn Yields Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 35 35

36. Projected Soybean Yields
Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Bushels per acre
Source: USDA-NASS 36 36

37. Projected Cotton Yields
Top: 2018 Yield Estimate
Bottom: Change from last month
Units: Pounds per acre
Source: USDA-NASS

38. World Corn Production
Source: USDA-WAOB 38 38

39. World Soybean Production
Source: USDA-WAOB 39 39

40. World Wheat Production
Source: USDA-WAOB 40 40

41. World Cotton Production
Source: USDA-WAOB 41 41

42. U.S. Meat Production & Prices
Source: USDA-WAOB 42 42

43. Pork Production
Source: USDA-NASS

44. Beef Production
Source: USDA-NASS

45. Ethanol Production
Source: EIA

46. Current Corn Futures
Source: CME Group, 10/30/2018

47. Current Soybean Futures
Source: CME Group, 10/30/2018

48. Current Wheat Futures
Source: CME Group, 10/30/2018

49. Current Cotton Futures
Source: NYMEX, 10/30/2018

50. 2018/19 Crop Margins
Based on futures prices

51. Iowa Corn Revenues vs. Costs
Based on USDA prices

52. Want to provide feedback on my presentation. https://www. surveymonkey

53. Thank you for your time. Any questions. My web site: http://www2. econ
Thank you for your time! Any questions? My web site: Iowa Farm Outlook: Ag Decision Maker: