1. Economics of Crop & Livestock Production
Agribusiness Showcase & Conference
Des Moines, Iowa
Feb. 10, 2015
Chad Hart
Associate Professor/Crop Markets Specialist 1 1

2. U.S. Corn Supply and Use 2010 2011 2012 2013 2014 Area Planted
(mil. acres)
88.2
91.9
97.3
95.4
90.6
Yield
(bu./acre)
152.8
147.2
123.1
158.1
171.0
Production
(mil. bu.)
12,447
12,360
10,755
13,829
14,216
Beg. Stocks
1,708
1,128
989
821
1,232
Imports 28 29
160 36 25
Total Supply
14,182
13,517
11,904
14,686
15,472
Feed & Residual
4,795
4,557
4,315
5,036
5,250
Ethanol
5,019
5,000
4,641
5,134
Food, Seed, & Other
1,407
1,428
1,397
1,367
1,395
Exports
1,834
1,543
730
1,917
1,750
Total Use
13,055
12,528
11,083
13,454
13,645
Ending Stocks
1,827
Season-Average Price
($/bu.)
5.18
6.22
6.89
4.46
3.65
Source: USDA-WAOB 2 2

3. U.S. Soybean Supply and Use
2010
2011
2012
2013
2014
Area Planted
(mil. acres)
77.4
75.0
77.2
76.8
83.7
Yield
(bu./acre)
43.5
41.9
40.0
44.0
47.8
Production
(mil. bu.)
3,329
3,094
3,042
3,358
3,969
Beg. Stocks
151
215
169
141 92
Imports 14 16 41 72 25
Total Supply
3,495
3,325
3,252
3,570
4,086
Crush
1,648
1,703
1,689
1,734
1,795
Seed & Residual
130 88
105 97
116
Exports
1,501
1,365
1,317
1,647
1,790
Total Use
3,280
3,155
3,111
3,478
3,701
Ending Stocks
385
Season-Average Price
($/bu.)
11.30
12.50
14.40
13.00
10.20
Source: USDA-WAOB 3 3

4. Corn Yields Top: 2014 Yield Bottom: Change from last year
Units: Bu/acre
Source: USDA-NASS

5. World Corn Production
Source: USDA-WAOB 5 5

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

7. U.S. Meat Production & Prices
Source: USDA-WAOB 7 7

8. Corn Export Shifts
Source: USDA-FAS

9. Soybean Export Shifts
Source: USDA-FAS

10. Crude Oil Prices
Sources: EIA and CME

11. Strength of the U.S. Dollar
Source: Federal Reserve

12. Corn Grind for Ethanol

13. Current Corn Futures
4.02
3.75
Source: CME Group, 2/9/2015

14. Current Soybean Futures
9.96
9.32
Source: CME Group, 2/9/2015

15. Corn Prices vs. Costs
Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre
Sources: USDA-NASS for Prices, Duffy for Costs

16. Soybean Prices vs. Costs
Per Bushel Cost calculated as Per Acre Cost from ISU Extension divided by Actual Yield per Acre
Sources: USDA-NASS for Prices, Duffy for Costs

17. Thoughts for 2015 and Beyond
Supply/demand concerns
Record corn and soybean crops, but also record demand
Markets are in a holding pattern, waiting for news
Watching South American crop progress
Projected negative margins for 2014 and 2015 crops
2013/14
USDA
2014/15
Futures
(2/9/15)
2015/16
Corn
$4.46
$3.65
$3.75
$4.02
Soybeans
$13.00
$10.20
$9.96
$9.32

18. 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

19. Quarterly Cattle & Beef Forecasts (LMIC:2/5/2015)

20. Quarterly Cattle & Beef Forecasts (LMIC:2/5/2015)

21. Data Source: USDA-AMS, Compiled and Analysis by LMIC
Livestock Marketing Information Center

22. 2013 Profits = -$100.77 ~2014 Profits = +$197.24
Oct-03 Profit = $378
Total Cost: = $920
ROI = 41%
Oct-14 Profit = $269
Total Cost: = $1,857
ROI = 15%

23. Given LMIC forecast 54.3 lbs/capita) in 2014:
No demand change IF 2014 All Fresh Retail Price
= $517.8/lb (+4.8% from 2013)
Data Source: Bureau of Economic Analysis & USDA-ERS, Compiled and Analysis by LMIC
Livestock Marketing Information Center

24. Data Source: USDA/ERS, BLS

25. 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

26. 2013 = +$ [-$25.60 to +$24.57]
~2014 = +$ [+$13.15 to +$107.25]
~2015 = +$ [-$10.79 to +$38.77]

27. Quarterly Hog & Pork Forecasts (LMIC:2/2/2015)

28. Quarterly Hog & Pork Forecasts (LMIC:02/05/2015)

29. Given LMIC forecast 46.0 lbs/capita) in 2014:
No demand change IF 2014 Pork Price
= $380.0/lb (+1.7% from 2013)
Data Source: Bureau of Economic Analysis & USDA-ERS, Compiled and Analysis by LMIC
Livestock Marketing Information Center

30. 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: