1. Feed Outlook Jim Dunn Ag Economist Pennsylvania State University

2. Sources of Information USDA http://usda.mannlib.cornell.edu/MannUsda /homepage.dohttp://usda.mannlib.cornell.edu/MannUsda /homepage.do http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=3http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=3 http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=25http://usda.mannlib.cornell.edu/MannUsda /viewTaxonomy.do?taxonomyID=25 http://usda.mannlib.cornell.edu/MannUsda /viewDocumentInfo.do?documentID=1273

3. What these are called USDA Economics, Statistics and Market Information System (ESMIS) Field Crops Outlooks, Yearbooks, and Estimates Feed Outlook

4. Other useful links Oil Crops Outlook Livestock, Dairy, and Poultry Outlook Milk Production Feed grains database Livestock, Dairy, and Poultry Outlook: Tables

5. Issues for Feed Economy Bio-Fuel Expensive inputs More debt Cheap dollar China and India Banking crisis Weather

6. Bio-Fuel Ethanol Bio-diesel Both ethanol & bio-diesel subsidies and tariff on ethanol expired this year Does it make sense to use food for fuel?

7. Source: CME

8. Prices today Verasun 0 Pacific 1.13 Aventine 3.10 old shares 0

9. Ethanol 36 of 211 plants are not operating Others are on partial slowdown All of these plants cannot survive Clearfield operating again – present owner has very little capital costs Margins may still be negative Source: Renewable Fuels Association

10. Corn Supply YearBeg stocksProductionSupply Bil. Bu. 2007/081.3013.0714.36 2008/091.6212.0913.73 2009/101.6713.1014.77 2010/111.7112.4514.18 2011/121.1312.3613.51 2012/13 est0.9910.7311.81 Source: USDA

11. Corn Usage bil. bu Source: USDA YearFeedFoodFuelExportsTotal 2007/085.861.323.052.4412.74 2008/095.181.323.711.8512.06 2009/105.131.354.591.9813.07 2010/114.791.415.021.8413.05 2011/124.551.435.011.5412.53 2012/13 est4.151.374.500.9011.17

12. Food and Industrial Corn Use mil. bu. Crop Year HFCSOther sweeteners StarchFuelLiquorCereal 20074902362623,049135192 20084892452343,709134192 20095132572504,568134194 20105212722585,021135197 20115142942545,011135203 20124852802404,500135202 Source: USDA

13. Corn Usage Crop2004200720102012 Feed57.8%46.0%36.7%37.1% Food12.6%10.4%10.8%12.2% Exports17.1%19.0%14.1%10.3% Ethanol12.4%24.7%38.5%40.2%

15. Corn futures prices 2/7/13 MonthPrice (cts/bu.) March 13718 (62 cents more than last year May 13719 July 13710 Sept 13597 Dec 13573

16. Corn Price History

18. Soybean Supply mil.bu. YearCarry-inProductionTotal 200757426773261 200820529673185 200913833593512 201015133293495 201121530563286 201217532053395

19. Soybean Usage YearCrushExportsSeedTotal 200718031159943056 2008166212791063047 2009175215011083361 2010164815011303280 2011166013351163111 2012164514851253255

20. Soybean Carryout & Price YearCarryout mil. bu. PriceDays Use of carryout 2006574$6.4367 2007140$10.1024 2008138$9.9716 2009151$9.5916 2010215$11.3019 2011175$12.5023 2012140$14.5515

22. Soybean Price History

24. Soybean futures prices 2/7/13 MonthPrice (cts/bu.) March 131490 May 131479 July 131468 Sept 131380 Nov 131329

25. Low values mean animal producers lose money

32. Beef notes Feeder cattle numbers were hit hard by drought in Texas Animals put in feed lots early High feeder cattle prices Feed lots returns low Packers can’t pass costs on in this economy – high-valued cuts are not high enough

34. Hog notes Integrators suffering from feed prices Demand is okay but prices too low to cover costs

35. Poultry Notes Eggs and Broilers cheapest form of protein Margins bad Exports important and weakness in world economy affects price Demand is okay but feed is too high priced

42. Concluding Questions How will meat producers deal with feed prices? How will dairy producers deal with feed situation How will consumers adjust consumption in weak economy? Will we really keep cutting per capita meat consumption?