1. Outlook and Market Update for 2012 Corn Short Course and Georgia Corn Growers Annual Meeting January 17, 2012 Dr. Nathan B. Smith Extension Economist

2. What’s Happened to Markets? Drought and Excessive Heat in the South –Costly crops, Hurt quality Peanuts in short supply Corn, cotton and soybean domestic demand “destruction” Wheat production hurt in southern Great Plains, Soft Red Winter wheat supply up. Europe in economic turmoil, US dollar up.

3. US Dollar Index

4. Georgia Corn Acreage fluctuates year to year. Corn is #3 Georgia row crop in value ($170 mil.) followed by soybeans ($70 mil.) and then wheat ($60 mil.). Nearly 70% of corn is irrigated in GA. Corn deficit state, feed about 6 times more than produce.

7. GA & US Corn Crops, 2009 -2011 U.S. planted acreage up 4.2% in 2011, GA up 17% Harvested up 3% for U.S., GA up 10% U.S. production down 1%, GA up 24% Planted AcresHarvested AcresYield (bu/acre) 200920102011200920102011200920102011 GA (1,000) 420295345379245270140145158 US (million) 86.488.291.979.581.4583.94164.7152.8147.2

8. U.S. Corn Supply and Demand Mil bu

9. More Corn Used for Ethanol as Energy Act Mandates Million bushels Source: USDA WASDE Report, 11/9/2011

10. Hit the 10% Blend Wall in the past year. Ethanol exports growing.

11. Ethanol Futures

13. Corn Futures – December 2012 Source: Barchart.com

14. Corn Futures – September 2012 Source: Barchart.com

17. Corn Considerations Increased competition from South America. Ethanol 10% blend wall appears to been reached. Blender’s credit expired in January ‘12 Soybean/Corn price ratio favors corn (MidWest). Seasonal low? Potential to plant 94-95 million acres in 2012. Global economic turmoil, tight stocks, ethanol uncertainties mean continued volatile prices.

18. 2012 Budgeting Considerations Yield Expectation – raised budgets to 200 bu/ac Fuel prices expected to increase. Gone up more than expected to date. Fertilizer prices for 2012 –More corn and wheat acres likely to lead to higher fertilizer prices. Cost of technology, –Seed prices up for newest technology. –Most chemical prices expected to increase 3% –Price of Corn continue to be volatile.

19. 2012 Corn Cost Analysis PracticeDrylandIrrigated Yield85 bu200 bu Per AcrePer BuPer AcrePer Bu Variable Costs$328$3.86$664$3.32 Fixed Costs$71$0.84$197$0.99 Management$16$0.19$33$0.17 Total Costs$415$4.89$894$4.47 Price $5$5.5$6$5$5.5$6 Breakeven Yield bu/ac Variable Costs 666055 133121111 Breakeven Yield bu/ac Total Costs 837669179163149

20. Corn Cost Estimates

22. Budgets http://www.caes.uga.edu/?tiny=WERQYW http://www.caes.uga.edu/?tiny=ZRH78W Crop Comparison Tool

23. Any Questions?