2015 Market Outlook - - Overviewamarillo.tamu.edu/files/2010/11/2015-Market-Outlook... · 2015. 8. 26. · • Feed grain outlook ... Source: Feed Yearbook, USDA/ERS, WASDE, USDA

Hansford County Producers MeetingSpearman, TexasJanuary 26, 2015Presented By:

Dr. Steve AmossonRegents FellowProfessor and Extension Economist

2015 Market Outlook - -Overview

Presentation Outline

• Input Prices

• Cost of Production & Breakeven Prices

• Feed grain outlook

• Wheat outlook

• Cattle fundamentals

• Outlook Summary and Closing Comments

• Farm Program update

2015 Feed Grains Projected Profitability

$0$10$20$30$40$50$60$70$80$90

$100$110$120$130$140$150$160$170$180$190$200$210

Irrigated Corn Costs of Production 2010-2015 (estimated)

Seed(per acre)

Fertilizer(per acre)

Insecticide(per acre)

Herbicide(per acre)

IrrigationLabor

Cash Rent& Leases

Crop Profitability:What will work in 2015?

• Making the Decision• Returns over Variable Cost• Variable Cost – Out-of-Pocket Expenses

Directly Related to Producing a Crop• Seed• Fertilizer• Chemicals• Irrigation

• Returns over Total Cost• Return on Investment

Estimated Costs and Returns for 2015 Primary Irrigated Crops in Texas High Plains

Corn Cotton Sorghum Wheat SoybeanCorn

SilageSorghum

Silage

Prod/Ac 225 bu 1100 lbs 75 cwt 65 bu 60 bu 27 ton 21 ton

Price $4.37$0.58/ 160 $7.00 $6.02 $9.00 $40.30 $36.30

GrazingIncome - - - $68 - - -GrossReturns $983 $771 $525 $459 $540 $1088 $762Ac-In Applied* 22 12 14 15 14 20 13VariableCosts $718 $624 $409 $369 $385 $868 $527ReturnsOver VC $265 $147 $116 $91 $155 $220 $235

*Ac-In Priced at $4.30/mcf assuming 1 mcf = 1 ac-in

Estimated 2015 Corn returns over variable cost for various yields & prices

Yield: 170 200 225 240 260

Price$/bu

bushels

Returns over Variable Costs ($)

3.50 (99.29) (7.49) 69.01 114.91 176.11

4.00 (14.29) 92.51 181.51 234.91 306.11

4.37 48.61 166.51 264.76 323.71 402.31

4.85 130.21 262.51 372.76 438.91 527.11

5.35 215.21 362.51 485.26 558.91 657.11

Estimated 2015 Sorghum returns over variable cost for various yields & prices

Yield: 45 60 75 90 105

Price$/cwt

cwtReturns over Variable Costs ($)

5.60 (133.82) (61.37) 11.08 83.53 155.98

6.40 (97.82) (13.37) 71.08 155.53 239.98

7.00 (70.82) 22.63 116.08 209.53 302.98

7.80 (34.82) 70.63 176.08 281.53 386.98

8.60 1.18 118.63 236.08 353.53 470.98

Estimated 2015 Wheat returns over variable cost for various yields and prices

Yield: 45 55 65 75 85

Price$/bu

bushels


5.00 (63.36) (19.46) 24.44 68.34 112.24

5.50 (40.86) 8.04 56.94 105.84 154.74

6.02 (17.46) 36.64 90.74 144.84 198.94

6.50 4.14 63.04 121.94 180.84 239.74

7.00 26.64 90.54 154.44 218.34 282.24

Estimated 2015 Cotton returns over variable cost for various yields & prices

Yield: 500 800 1100 1400 1700

Price$ / lb

lbsReturns over Variable Costs ($)

0.50 (200.31) (70.87) 58.57 188.00 317.44

0.55 (175.31) (30.87) 113.57 258.00 402.44

0.58 (160.31) (6.87) 146.57 300.00 453.44

0.65 (125.31) 49.13 223.57 398.00 572.44

0.70 (100.31) 89.13 278.57 468.00 657.44

Estimated 2015 Corn Silage returns over variable cost for various yields & prices

Yield: 18 22 27 32 38

Price$/bu

tons


30 (249.09) (164.29) (58.29) 47.71 174.91

35 (159.09) (54.29) 76.71 207.71 364.91

40 (69.09) 55.71 220.71 367.71 554.91

45 20.91 165.71 346.71 527.71 744.91

50 110.91 275.71 481.71 687.71 934.91

Estimated 2015 Sorghum Silage returns over variable cost for various yields & prices

Yield: 12 16 21 26 30

Price$/cwt

tons


25 (147.94) (83.14) (2.14) 78.86 143.66

30 (87.94) (3.14) 102.86 208.86 293.66

36 (15.94) 92.86 235.86 364.86 473.66

40 32.06 156.86 312.86 468.86 593.66

45 92.06 236.86 417.86 589.86 743.66

Cotton Sorghum Wheat Sunflowers

Production/Ac 400 lbs 25 cwt 20 bu 10 cwt

Price $0.58 / 160 $7.00 $6.02 $17.30

Grazing Income - - $36.50 -

Gross Returns $280.29 $175.00 $156.90 $173.00

Variable Costs $305.42 $144.09 $136.41 $161.68

Returns Above VC ($25.13) $30.91 $20.49 $11.32

Estimated Costs and Returns for 2015 Primary Dryland Crops in Texas High Plains

2015 Feed Grain Fundamentals

World Days of Use on Hand, 12/10/2014

72

020406080

100120140

Days of Use 20-yr avg 10-yr avg

115

020406080

100120140


100

0

20

40

60

80

100

120

140


75

0

20

40

60

80

100

120

140


Corn

RiceWheat

Soybeans

Cotton: 350 day supply

World Per Capita Grain Use

384

300

310

320

330

340

350

360

370

380

390

400

barley, corn, millet, mixed grains, oats, rice , rye, sorghum, soybeans, and wheat

kg

USDA, Foreign Agricultural Service, PSD, 12/18/2014

-6

-4

-2

0

2

4

6

8

10

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

World Advanced Economies Emerging Market and Developing Economies

World Economic, Outlook, October 2014: http://www.imf.org

Percent Change

Global Economic Growth

U.S. Corn: Disappearance

0100020003000400050006000700080

/81

81/8

282

/83

83/8

484

/85

85/8

686

/87

87/8

888

/89

89/9

090

/91

91/9

292

/93

93/9

494

/95

95/9

696

/97

97/9

898

/99

99/0

000

/01

01/0

202

/03

03/0

404

/05

05/0

606

/07

07/0

808

/09

09/1

010

/11

11/1

212

/13

13/1

414

/15

Mill

ion

Bus

hels

Feed & Residual

Exports FSI Minus Fuel

Source: Feed Yearbook, USDA/ERS, WASDE, USDA 2013/14 preliminary; 2014/15 projected

Fuel

Corn U.S. Supply/Demand (million bushels)

2010/11 2011/12 2012/13 2013/14 2014/15SupplyBeginning StksProduction

1,70812,447

1,12812,360

98910,755

82113,925

1,33114,216

Total Supply 14,182 13,517 11,904 14,782 15,547DisappearanceDomestic UseExports

11,2211,834

10,9851,543

10,353730

11,6291,917

11,9201,750

Total Use 13,055 12,528 11,083 13,546 13,670Ending StksCarryover/Use (%)Avg. Farm Price

1,1288.645.18

9897.906.22

8217.416.89

1,2369.134.46

1,87713.733.65

Corn, SAFP and Stocks to Use Ratio 1969/70-2014/15

0

1

2

3

4

5

6

7

8

0 10 20 30 40 50 60 70

2012

20132007 2008

2011

2009

2010

2014

Sorghum U.S. Supply/Demand (million bushels)

2010/11 2011/12 2012/13 2013/14 2014/15SupplyBeginning StksProduction

41346

27214

23248

15389

34408

Total Supply 387 242 280 404 442DisappearanceDomestic UseExports

208152

15663

18976

158212

175230

Total Use 359 219 265 370 405Ending StksCarryover/Use (%)Avg. Farm Price

277.525.02

2310.515.99

155.666.33

349.194.28

379.143.50

Feed Use

Feed and Residual Use

0.0

0.5

1.0

1.5

2.0

2.5

0

10

20

30

40

50

60

70

80

90

100

19751977197919811983198519871989199119931995199719992001200320052007200920112013

Dairy Cattle on Feed Other Cattle HogsPoultry Other Livestock Feed per GCAU Plus DDGs

GCAU mil mt/GCAU

USDA Feed Grain Database and Agricultural Marketing Resource Center, December 19, 2014

37% Cattle28% Pork34% Poultry

Year to Year Change: GCAU: +2.7%Feed/GCAU: +3.5%

Cattle on Feed1,000+ capacity feedlots

Latest Data: October 2014

Iowa State Hog Inventory & Price Projections

Ethanol Demand

One gallon = 3.87 liters

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Corn Natural Gas Other VC FC Revenue

Ethanol Profitability per gallonAgricultural Marketing Resource Center, Iowa State Universityhttp://www.agmrc.org/renewable_energy/

Oct 2014 revenue and prices (change from previous month): profit $0.03/gal (-91%); ethanol $1.56/gallon (-15%);corn $3.26/bu (-2%); natural gas $7.94/1000 ft3 (-0%); ddgs $103/ton (-15%)

U.S. Ethanol Production

http://www.ren21.net/REN21Activities/GlobalStatusReport.aspx

“144 countries have defined renewable energy targets”

US ethanol exports in November reached 344 million liters (90.8 million gallons), the highest volume seen so far in 2014 and the highest since December 2011, when more than 600 million liters left the country, US Census Bureau data showed Wednesday.

2014 U.S. Ethanol Exports

Exports

Corn Production

0

5,000

10,000

15,000

20,000

25,000

30,000

US Foreign

Million bu

WASDE 11/8/2013

Corn Exports as % of World Share1972 - 2014

0

20

40

60

80

100

72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Perc

ent

U.S. Share

EU-27 Share

Note: From 1972/73 – 1998/99 is EU-15. USDA revised to EU-27 in 1999/00. USDA revised to EU-28 in 2014/15.

Corn: Major Exporters2013/14 and 2014/15(million metric tons)

48.70

24.6515.50

16.79

21.503.00Brazil

U.S.

Argentina

Other44.45

19.84

12.00

14.35

19.502.20

Other

Argentina

Brazil

2013/14 (estimated) Total = 130.14

2014/15 (projected) Total = 112.34

U.S.

FSU-12 FSU-12

S. Africa S. Africa

Sorghum: Major Importers2013/14 and 2014/15(million metric tons)

0.104

1.003

0.162

0.150

2.175 0.075

4.161

0.250

1.200

0.100

0.250

1.3900.200

5.000

Other

Japan



Other

Mexico

Japan

Chile

Mexico

Chile

Sudan Sudan

Columbia Columbia

China

China

Corn and Soybean Harvested Area in Brazil and Argentina Combined

020406080

100120140160180200

1980

/198

119

81/1

982

1982

/198

319

83/1

984

1984

/198

519

85/1

986

1986

/198

719

87/1

988

1988

/198

919

89/1

990

1990

/199

119

91/1

992

1992

/199

319

93/1

994

1994

/199

519

95/1

996

1996

/199

719

97/1

998

1998

/199

919

99/2

000

2000

/200

120

01/2

002

2002

/200

320

03/2

004

2004

/200

520

05/2

006

2006

/200

720

07/2

008

2008

/200

920

09/2

010

2010

/201

120

11/2

012

2012

/201

320

13/2

014

2014

/201

5

Soybeans Corn

Million acres

2014/15—combined all time record high; soybeans +4 mil (+3.2%), corn -2 mil (-4.5%)PSD, 9/24/2014

U.S. Corn Export Sales Commitments, 2014/15 MY

U.S. Sorghum Export Sales Commitments, 2014/15 MY

U.S. Dollar Index 1-23-15

Up 17%

2015 FeedgrainProduction

Possibilities

Sorghum: Area Planted andHarvested, 2006 – 2014(1,000 acres)

2006 2007 2008 2009 2010 2011 2012 2013 2014 2006 2007 2008 2009 2010 2011 2012 2013 2014

Kansas

Nebraska

Texas

U.S

2750

370

2000

6522

2800

350

2750

7712

3000

270

3500

8404

2700

210

2700

6599

2350

140

1900

5369

2600

130

1550

5451

2500

120

2350

6259

3100

285

3000

8061

2850

170

2600

7213

2500

240

1300

4937

2650

240

2450

6792

2800

210

3050

7312

2550

135

2050

5502

2250

80

1700

4806

2000

90

1150

3945

2100

60

1900

4995

2800

140

2300

6530

2650

120

2100

6174

1/ Includes area planted in preceding fall. 2013 estimated, 2014 forecasted; 2014 intended planting as indicated by reports from farmers.

Source: USDA Planted Acreage Report, 6/30/14; Prospective Plantings 3/28/14; WASDE and Crop Production, 12/10/14, Annual Crop Production, January 2014

Planted 1/ Harvested

Corn: Area Planted andHarvested, 2007 – 2014(1,000 acres)

2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014

Iowa

Illinois

Kansas

Nebraska

Texas

U.S

14200

13200

3900

9400

2150

93527

13300

12100

3850

8800

2300

85982

13600

12000

4100

9150

2350

86382

13400

12600

4850

9150

2300

88192

14100

12600

4900

9850

2050

91936

14200

12800

4700

10000

1850

97291

13600

12000

4300

9950

2350

95365

13600

11900

4050

9300

2250

90885

13900

13050

3680

9200

1970

86520

12800

11900

3630

8550

2030

78570

13300

11800

3860

8850

1960

79490

13050

12400

4650

8850

2080

81446

13700

12400

4200

9600

1470

83879

13700

12250

3950

9100

1550

87365

13100

11800

4000

9550

2000

87668

13200

11700

3700

8750

1930

83097




U.S. Corn Acres

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

2006 2007 2008 2009 2010 2011 2012 2013 Dec-14

FSA Planted, Failed, Prevented USDA Planted

Average USDA:FSA =101%

103%

U.S. Planted Acres

0

50

100

150

200

250

300

Corn Soybeans Wheat Cotton Sorghum

Million acres

Corn: 88 million, down 3.2%Soybeans: 84 million, down 0.2%Wheat: 56 million, -1.4% Cotton: 9.8 million, -9.3%Sorghum: 7.5 million, +4.2%

USDA, 12/18/2014

CornU.S. Supply/Demand

Item 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15

Planted Acreage (Mil. Acs.)Harvested Acreage (Mil. Acs.)Yield (Bushels)

78.3070.60

149.10

93.5086.50

150.70

86.0078.60

153.90

86.4079.50

164.70

88.2081.40

152.80

91.9084.00

147.20

97.3087.40

123.10

95.4087.70

158.80

90.9083.10

171.00

Supply - - - - - - - - - - - - - - - - - - - - - - Million Bushels - - - - - - - - - - - - - - - - - - - - -

Beginning StocksProductionImports

1,96710,531

12

1,30413,038

20

1,62412,092

14

1,67313,092

8

1,70812,447

28

1,12812,360

29

98910,755

160

82113,925

36

1,23614,216

25

Total Supply 12,510 14,362 13,729 14,774 14,182 13,517 11,904 14,782 15,547

Disappearance

Feed and ResidualFood, Seed & IndustrialExports

5,5913,4902,125

5,9134,3872,437

5,1825,0251,849

5,1255,9611,980

4,7956,4261,834

4,5576,4281,543

4,3156,038

730

5,1326,4971,917

5,3756,5451,750

Total Use 11,207 12,737 12,056 13,066 13,055 12,528 11,083 13,546 13,670

Ending Stocks 1,304 1,624 1,673 1,708 1,128 989 821 1,236 1,877

Carryover/Use (%) 11.64 12.75 13.88 13.07 8.64 7.90 7.41 9.13 13.73

Average Farm Price ($/Bu.) 3.04 4.20 4.06 3.55 5.18 6.22 6.89 4.46 3.65

2013/14 estimated; 2014/15 projected; numbers may not add due to rounding; SOURCE: USDA/NASS/ERS/WASDE

U.S. Corn Yields

164.7173.4

60

80

100

120

140

160

180

Yield Trend

Bushels per acre

WASDE, 12/10/2014

Corn Yield, % Deviation From Trend

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

WASDE, 12/10/2014

Area and Yield Needed to Produce 13.745 billion bushel cropUSDA Long-range projections: December 18, 2014

140142144146148150152154156158160162164166168170172174176178180

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100

Bushels per acre

Planted acres, millions

Add to Ending Stocks

Reduce Ending Stocks

-440 mil

This and That

Corn to Soybean Price Ratio

• Normal or considered neutral 2.5

• Current ratio: 9.60/4.17 = 2.30

El Niño/Southern Oscillation (ENSO) Diagnostic Discussion, 18 December 2014http://www.cpc.ncep.noaa.gov/products/analysis_monitoring/enso_advisory/

Corn

Dec. 2015 Corn Contract

December Corn Futures and 2015 Marketing Plan

300

320

340

360

380

400

420

440

460

480

500

9/2/

2014

9/15

/201

49/

26/2

014

10/9

/201

410

/22/

2014

11/4

/201

411

/17/

2014

12/1

/201

412

/12/

2014

12/2

5/20

141/

7/20

151/

20/2

015

1/31

/201

52/

11/2

015

2/24

/201

53/

9/20

153/

20/2

015

4/2/

2015

4/15

/201

54/

28/2

015

5/11

/201

55/

22/2

015

5/31

/201

56/

9/20

156/

18/2

015

6/27

/201

57/

6/20

157/

15/2

015

7/24

/201

58/

2/20

158/

11/2

015

8/20

/201

58/

29/2

015

9/7/

2015

9/16

/201

59/

25/2

015

10/4

/201

510

/13/

2015

10/2

2/20

1510

/31/

2015

11/9

/201

511

/18/

2015

11/2

7/20

1512

/6/2

015

12/1

5/20

15

20% 20% 20% 20% 20%¢/bu Planting

IntentionsGrain StocksEarly season

crop conditionsWeather outlook

South American crop conditionsBattle for Acres

Planting Intentions

Tassel and

August Crop

Report

Cash sales at harvest

Acreage Report/Grain Stocks

Weather

2015 Wheat Fundamentals

World Days of Use on Hand, 12/10/2014

72

020406080

100120140


115

020406080

100120140


100

0

20

40

60

80

100

120

140


75

0

20

40

60

80

100

120

140


Corn

RiceWheat

Soybeans

Cotton: 350 day supply

Wheat Production, Major Countries

0102030405060708090

100110120130140150160

Argentina Australia Canada China EU 28 FSU-12 India Pakistan US2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

mmt

USDA, Foreign Agricultural Service, 12/10/2014

World Wheat Supply, Use, Ending Stocks, and Exports 2009 - 2014

0

200

400

600

800

1000

Supply Use EndingStocks

Exports

Mill

ion

Met

ric

Ton

s

200920102011201220132014

World Wheat Exports 2013/14 - 2014/15(million metric tons)

20.73

23.24

18.62

32.01

31.93

2.20

37.10



Argentina

Other

Canada

AustraliaEU-28

U.S.

19.78

23.00

17.50

25.1730.00

6.00

37.74

Australia

Canada

Argentina

EU-28

U.S.

Other FSU-12 FSU-12

U.S. Wheat Exports, 1980 - 2014

800

1000

1200

1400

1600

1800

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Mill

ion

Bus

hels

International Grain Council –January 22, 2015

WheatU.S. Supply/Demand(million bushels)

2010/11 2011/12 2012/13 2013/14 2014/15

SupplyBeginning StksProductionImports

9762,207

97

8621,999

112

7432,252

123

7182,135

169

5902,026

180Total Supply 3,279 2,974 3,118 3,021 2,796

DisappearanceDomestic UseExports

1,1281,289

1,1801,051

1,3881,012

1,2551,176

1,184925

Total Use 2,417 2,231 2,400 2,431 2,109

Ending StksCarryover/Use (%)Avg. Farm Price

86235.675.70

74333.317.24

71829.927.77

59024.276.87

68732.586.10

Wheat: Area Planted andHarvested, 2007 – 2014(1,000 acres)

2007 2008 2009 2010 2011 2012 2013 2014 2007 2008 2009 2010 2011 2012 2013 2014

Kansas

N. Dakota

Oklahoma

Texas

U.S

10400

8595

5900

6200

60460

9600

9230

5600

5800

63193

9300

8680

5700

6400

59168

8400

8530

5300

5700

53593

8800

6800

5100

5300

54409

9400

7840

5400

5700

55294

9500

6105

5600

6300

56236

9600

7960

5300

6000

56822

8600

8405

3500

3800

50999

8900

8640

4500

3300

55699

8800

8415

3500

2450

49893

8000

8400

3900

3750

47619

7900

6590

3200

1900

45705

9000

7765

4300

2900

48758

8450

6025

3400

2350

45332

8800

7490

2800

2250

46381




U.S. Wheat Yield, 1980 - 2014

25

30

35

40

45

50

80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12 14

Bu.

/Ac.

y = 0.3184x + 33.882015 est. = 45.34

Winter Wheat Crop Condition Index

Wheat

July 15 KC Wheat

Wheat, Corn, and Soybeans Speculative Investment

High and LowJuly KCBT Wheat Prices1976-2014

0

2

4

6

8

10

12

Earlier J J A S O N D J F M A M J J

# of

Occ

urre

nces

High Low

2015 Cattle Fundamentals

-0.1 Percent2014 = 9.2 Million Head

-2 Percent2014 = 29 Million Head

BEEF COW SLAUGHTERFederally Inspected, Weekly

4045505560657075808590

JAN

APR JUL

OCT

Thou. Head

.Avg-200711

2012

2013

HEIFER SLAUGHTERFederally Inspected, Weekly

135

145

155

165

175

185

195

205

215

JAN

APR JUL

OCT

Thou. Head

.Avg-200711

2012

2013

Cattle on Feed Report 1-23-15

Supply Factors

• Continued Tight Supplies– Calves, feeder cattle, cows

• Herd Expansion?– Sharply lower beef cow slaughter– Expect more heifers held back– Expect cow herd growth

Demand

1009991 89 86 84

75 73 75 7782 82 83 85

9287

83 8378

74 75 76 78 7987

0

20

40

60

80

100

120

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Index Value

RETAIL ALL FRESH BEEF DEMAND INDEXThird Quarter, Using CPI 1990=100

Demand

• Surprisingly Strong in 2014– More than expected

• Aided by High Pork and Poultry Prices• Growing Economy

Interesting Stuff

• Feeder Cattle vs Fed Cattle– Feeders too high

• Calf Slaughter– Contribute to more on feed

• Record High Dressed Weights• More Choice• More Formula Pricing

Ag Center Feeder Matrix

Projected profitability analysis for feeders being placed on feed January

25th

BEEF GRADED CHOICEAs a Percent of Beef Graded, Weekly

56

58

60

62

64

66

68

JAN

APR JUL

OCT

Percent

.Avg-200711

2012

2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Percent

STEERS/HEIFERS SOLD BY TRANSACTIONTexas, Oklahoma & New Mexico

Weekly

Negotiated

NegotiatedGrid

Formula

ForwardContract

Feed Grains Summary • Abundant carryover stocks both domestically &

worldwide will limit upside• Demand is and will be increasing but how much???

– Feed use - - will be up but limited– Ethanol use and exports will be relatively flat due to the strength

of the dollar• Basis maybe weakening slightly due to lower fuel/oil prices• Loss of Direct Farm Program Payments• Weather is starting off in a normal pattern• Wildcards

– Planted acreage– Weather

Wheat Summary • Abundant carryover stocks both domestically &

worldwide will limit upside• Demand appears to be at best flat due to dependence

on exports and increased feed grain supplies– Increased feed grain supplies worldwide– Strength of the dollar

• Basis maybe Strengthening slightly due to lower fuel/oil prices

• Currently crop condition and projected weather patterns suggest normal production

• Really need something good to happen!

Summary & Grain EWAGS

• Estimated breakevens– Corn …….. $4.05/bu. – Sorghum…….. Irrigated $4.24/bu. & Dryland $4.42/bu.– Wheat…….. Irrigated - VC $4.42/bu. & Dryland $4.87/bu.

Irrigated - TC $6.95/bu. & Dryland $7.46/bu.• Harvest prices – normal weather

– Corn ………. $4.15/bushel– Sorghum….. 90 – 95% the price of corn– Wheat……… $5.50/bushel

• It is going to be a tricky year to make a profit so you need to:– Use a sharp pencil in determining your crop mix– Take advantage of marketing opportunities when they present

themselves

Cattle Fundamental Summary

• Continued tight supplies• Herd expansion appears to be starting• Beef demand was strong in 2014 supported by

high hog and poultry prices• Beef production will fall only slightly in 2015

– Heavier weights & reduced calf slaughter• Expect increases in swine & poultry production to

dampen further increases in beef prices as the year unfolds

• May see feeder prices falling somewhat

11-1300 7-800 5-6002013 125.88 150.69 172.15

2014 I 146.34 171.45 201.23II 147.82 189.72 225.72

III 158.49 217.95 250.76IV 165.59 229.63 272.21

2015 I 162-166 222-228 266-272II 162-167 224-230 270-277

III 159-164 223-230 263-272IV 161-167 218-226 256-265

2016 I 162-168 218-227 260-273II 162-169 220-230 264-277

III 159-166 218-228 258-272IV 158-168 212-225 251-266

Projected Prices for 2013-2016

Texas Combined Auction for 5-600 and 7-800

Farm Program Update

Farm Program Sign-up Timeline

Annual Sign-upAnnual Sign-up

Fix Planted Acres with FSA

Fix Planted Acres with FSA

Reallocate Bases & Update YieldsReallocate Bases & Update Yields

Choice Between ARC & PLCChoice Between ARC & PLC

August 2014

June2015Sept Oct Nov Dec Jan Feb March April May

17th 31st

Mid Summer??29th 27th

Dairy Margin Protection

Program for 2014 and 2015

Dairy Margin Protection

Program for 2014 and 2015

2nd 28th

• 348 Farms have been Analyzed

• Observations by Major Crops – Corn (124)– Sorghum (251)– Wheat (328)– Other Crops (54)

• Crop Observations by Area– Eastern Panhandle (358)– Western Panhandle (399)

Preliminary Decision Aid Results

Base Acre Reallocation Results

33%

67%

Total Farm Base Acre Reallocation Decision

Yes ReallocateDo Not Reallocate

Yield Analysis Results

53%47%

Texas Panhandle Yield Update Decision for Corn

UpdateDo Not Update


33%

67%

Texas Panhandle Yield Update Decision for Sorghum

UpdateDo Not Update


27%

73%

Texas Panhandle Yield Update Decision for Wheat

UpdateDo Not Update

Average Payment Per Base Acre

$209 $192

$27 $50 $43

$164

$84

$31

$133

$655

$47$71

$0

$100

$200

$300

$400

$500

$600

$700

ARC PLC

Average Payment Per Base Acre

Corn

Wheat

Sorghum

Soybeans

Peanuts

Sunflowers

AFPC Decision Aid

The tool is available at: https://afpc.tamu.edu or

https://usda.afpc.tamu.edu

REMEMBER

• FECES HAPPENS!!

2015 High Plains Crop Spreadsheet Analyzer is Available

• High Plains Crop Spreadsheet Analyzer– Includes current crop budgets– Ability to customize budgets to fit your operation– Compares relative profitability of cropping choices– Evaluate crop-share lease agreements– Value of irrigation– Considers Water District Limits***Project funding provided by the Texas Corn Producers Board***

Educational programs of Texas A&M AgriLife Extension Service are open to all people without regard to race, color, sex,

disability, religion, age or national origin.

Documents

2015 Market Outlook - - Overviewamarillo.tamu.edu/files/2010/11/2015-Market-Outlook... · 2015. 8. 26. · • Feed grain outlook ... Source: Feed Yearbook, USDA/ERS, WASDE, USDA