1. Kurt M. Guidry Gilbert Durbin Professor LSU AgCenter Department of Agricultural Economics and Agribusiness 2010 LSU AgCenter’s Outlook Conference Outlook For Louisiana’s Row Crop Sector

2. Brief Review Of 2009 Lower Prices For Most Commodities Early Season Rains Delayed Much of Midwest Production Lower Input Costs Lead By Fuel and Fertilizer Early Season Drought Followed By Late Season Rains Impacted Much of the Delta Two Consecutive Years Of Weather Related Production Difficulties Has Severely Impacted Much Of The Louisiana Row Crop Sector

3. Where Have We Been?

4. Source: USDA, National Agricultural Statistics Service

8. Source: USDA, Economics Research Service

9. Fundamental Supply and Demand Situations

10. U.S. Corn Supply and Demand 5 Year2008/092009/10Change AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Planted Acres (Million Ac) 84.186.086.52.84%0.60%0.12% Harvested Acres (Million Ac) 76.978.679.63.52%1.31%0.38% Yield (Bu/Ac) 152.4153.9165.28.41%7.34%1.41% Begin Stocks (Million Bu) 1,5931,6241,6734.99%3.02%-0.06% Production (Million Bu) 11,71712,09213,15112.24%8.76%1.78% Total Supply (Million Bu) 13,32514,834 11.32%0.00%1.57% Feed & Residual (Million Bu) 5,8105,2465,550-4.48%5.79%2.78% FSI (Million Bu) 3,6914,9535,47048.21%10.44%-0.18% Ethanol (Million Bu) 2,3543,6774,20078.44%14.22%0.00% Exports (Million Bu) 2,0771,8582,050-1.30%10.33%0.00% Total Demand (Million Bu) 11,58612,05613,07012.81%8.41%1.08% Ending Stocks (Million Bu) 1,7371,6731,7641.55%5.44%5.31% S-T-U Ratio (Percent) 15.12%13.88%13.50%-10.71%-2.74%4.19% Price ($/Bu) $3.07$4.06$3.7020.44%-8.87%4.23% Source: USDA, World Agriculture Supply and Demand Estimates, January 2010

11. Source: USDA, Foreign Agricultural Service

13. US Cotton Supply and Demand Situation 5 Year2008/092009/10% Chg AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Planted (Million Ac) 12.709.479.15-27.93%-3.39%0.11% Harvested (Million Ac) 11.537.577.69-33.30%1.60%-0.52% Yield (Pounds/Ac) 838813774-7.68%-4.80%-1.02% Begin Stocks (Million Bales) 6.9110.046.34-8.21%-36.85%0.00% Production (Million Bales) 20.1512.8212.40-38.47%-3.28%-1.51% Imports (Million Bales) 0.020.000.01-41.86%N/A0.00% Total Supply (Million Bales) 27.0822.8618.74-30.79%-18.02%-1.00% Domestic Use (Million Bales) 5.143.593.40-33.85%-5.29%0.00% Exports (Million Bales) 14.3913.2811.00-23.53%-17.17%0.00% Total Demand (Million Bales) 19.5216.8614.40-26.24%-14.59%0.00% Ending Stocks (Million Bales) 7.486.344.30-42.52%-32.18%-4.44% S-T-U Ratio (Percent) 39.45%37.60%29.86%-24.30%-20.59%-4.44% Price ($/Lb) $0.490$0.478$0.60523.57%26.57%0.83% Source: USDA, World Agriculture Supply and Demand Estimates, January 2010

15. US Rice Supply and Demand Situation 5 Year2008/092009/10% Chg AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Planted (Million Ac) 3.073.003.142.45%4.84%0.32% Harvested (Million Ac) 3.052.983.101.75%4.17%0.00% Yield (Pounds/Ac) 6,9156,8467,0852.46%3.49%0.67% Begin Stocks (Million Cwt) 34.629.430.4-12.18%3.40%0.00% Production (Million Cwt) 210.3203.7219.94.57%7.95%0.78% Total Supply (Million Cwt) 263.7252.4271.32.87%7.49%0.59% Domestic Use (Million Cwt) 125.0128.4129.53.60%0.86%0.00% Exports (Million Cwt) 102.793.699.0-3.64%5.77%2.06% Total Demand (Million Cwt) 227.8222.0228.50.32%2.93%0.88% Ending Stocks (Million Cwt) 36.030.442.819.02%40.79%-0.93% S-T-U Ratio (Percent) 15.79%13.69%18.73%18.61%36.78%-1.79% Price ($/Cwt) $10.91$16.80$14.1529.72%-15.77%-1.74% Source: USDA, World Agriculture Supply and Demand Estimates, January 2010

17. U.S. Soybean Supply and Demand 5 Year2008/092009/10% Chg AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Planted Acres (Million Ac) 72.675.777.56.68%2.35%0.00% Harvested Acres (Million Ac) 71.774.776.46.51%2.30%-0.26% Yield (Bu/Ac) 41.939.7444.96%10.83%1.62% Begin Stocks (Million Bu) 319205138-56.77%-32.68%0.00% Production (Million Bu) 3,0042,9673,36111.89%13.28%1.27% Total Supply (Million Bu) 3,3313,1853,5075.27%10.11%1.21% Domestic Crush (Million Bu) 1,7411,6621,710-1.79%2.89%0.88% Exports (Million Bu) 1,1211,2831,37522.68%7.17%2.61% Total Demand (Million Bu) 3,0133,0473,2628.28%7.06%1.62% Ending Stocks (Million Bu) 324138245-24.46%77.54%-3.92% S-T-U Ratio (Percent) 10.82%4.53%7.51%-30.59%65.83%-5.45% Price ($/Bu) $7.58$9.97$9.6527.31%-3.21%1.58% Source: USDA, World Agriculture Supply and Demand Estimates, January 2010

18. Source: USDA, Foreign Agricultural Service

19. US Sugar Supply and Demand 5 Year2008/092009/10% Chg AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Beets Harvested Acres (Million Ac) 1.221.001.15-6.19%14.02%0.00% Yield (Tons/Ac) 24.726.825.84.45%-3.73%0.00% Cane Harvested Acres (Million Ac) 0.850.82 -3.08%-0.11%0.00% Yield (Tons/Ac) 31.8 34.68.94%8.81%0.00% Beginning Stocks (1,000 Tons) 1,6771,6601,451-13.49%-12.61%0.00% Production (1,000 Tons) 7,8717,4847,837-0.44%4.72%1.61% Imports (1,000 Tons) 2,6653,0822,377-10.81%-22.87%-2.06% Total Supply (1,000 Tons) 12,21312,22611,665-4.49%-4.59%0.64% Exports (1,000 Tons) 245137150-38.73%9.49%-25.00% Domestic Use (1,000 Tons) 10,38110,63810,375-0.06%-2.47%0.00% Total Demand (1,000 Tons) 10,62610,77510,525-0.95%-2.32%-0.47% Ending Stocks (1,000 Tons) 1,5881,4511,140-28.21%-21.43%12.20% S-T-U Ratio (Percent) 14.96%13.47%10.83%-27.57%-19.57%12.74%

21. U.S. Wheat Supply and Demand 5 Year2008/092009/10Change AverageJan-10 Vs 5 YAVs Last YrVs Last Mth Planted Acres (Million Ac) 59.663.259.1-0.79%-6.48%0.00% Harvested Acres (Million Ac) 50.755.749.9-1.61%-10.41%0.00% Yield (Bu/Ac) 41.844.944.46.27%-1.11%0.00% Begin Stocks (Million Bu) 48430665735.77%114.71%0.00% Production (Million Bu) 2,1252,4992,2164.28%-11.32%0.00% Total Supply (Million Bu) 2,7122,9322,98310.01%1.74%0.00% Food (Million Bu) 927 9401.45%1.40%0.00% Seed (Million Bu) 807572-10.22%-4.00%-7.69% Feed & Residual (Million Bu) 14725817015.33%-34.11%-10.53% Exports (Million Bu) 1,0511,015825-21.52%-18.72%-5.71% Total Demand (Million Bu) 2,2062,2752,007-9.01%-11.78%-3.65% Ending Stocks (Million Bu) 50665797692.88%48.55%8.44% S-T-U Ratio (Percent) 23.00%28.88%48.63%111.40%68.39%12.55% Price ($/Bu) 4.876.784.85-0.37%-28.47%0.00% Source: USDA, World Agriculture Supply and Demand Estimates, January 2010

23. Source: USDA, Foreign Agricultural Service

24. Can’t Forget About The Economy: Significant In Influencing Demand For Commodities But Also For Influencing Investment In Commodity Markets

25. Source: Kansas City Federal Reserve

28. Current and Seasonal Price Trends

29. Commodity Futures Prices, January 20, 2010 Close Price CommodityContract MonthUnitsJan. 20, 2010Last WeekLast Year CornSept 2010Bushel$3.96$4.12$4.16 CornDec 2010Bushel$4.03$4.19$4.30 CottonDec 2010Pound$0.7276$0.7460$0.5226 RiceSept 2010Hundredweight$13.63$13.74$13.09 SoybeansNov 2010Bushel$9.29$9.75$9.54 Sugar (World)Mar 2010Hundredweight$29.11$28.04$12.59 WheatJuly 2010Bushel$5.24$5.61$5.74 Source: DTN Online

31. Where Are We Going? Continued Acreage Shifts Corn - ↑ Soybeans - ↑ Rice - ↔, ↑ Cotton - ↔,↑ Wheat - ↓ Sugarcane - ↔ Short Term – Strong Demand For Many Commodities and Competition For Acres Could Provide Some Support Long Term – Increases In Production (Both Domestically and Internationally) Could Limit Price Potential Wildcard Continues To Be Economic Recovery

32. Input Costs

33. Source: Department of Energy, Energy Information Agency

34. Source: DTN Online

35. Summary Markets Must Deal With Growing Supplies and Uncertain Demand Commodity Prices Still Remain At Historically Strong Levels Despite Increases In Fuel Prices, Year to Year Reductions in Fertilizer and Other Input Prices Project Lower Overall Production Costs Prospects For Profitability Remains With Returns To “Normal” Production Levels

36. Thank You Any Questions?