Outlook for Major Crops United States Department of Agriculture

Outlook for Major CropsUnited States Department of Agriculture

Presented to

American Farm Bureau Atlanta, Georgia

January 10, 2011

http://www.usda.gov/oce/speeches/index.htm

December 10, 2010

Wheat Cash Prices

2

4

6

8

10

12

14

Jun 07 Nov 07 Apr 08 Oct 08 Mar 09 Aug 09 Feb 10 Jul 10 Jan 11

$/bushelHRW (Western KS)

Source: USDA-AMS.

December 10, 2010

World Wheat Production

Country or Region2009/10 estimate

2010/11 forecast

Change from 2009/10

Million Tons PercentWorld 682.1 646.5 -5.2United States 60.4 60.1 -0.4

Foreign 621.7 586.4 -5.7Argentina 10.5 13.5 28.6Canada 26.8 23.2 -13.7Australia 21.9 25.5 16.3European Union 138.1 136.2 -1.3Russian Federation 61.7 41.5 -32.7Ukraine 20.9 17.2 -17.7Kazakhstan 17.0 11.0 -35.3China 115.1 114.5 -0.5India 80.7 80.7 0.0

500

520

540

560

580

600

620

640

660

680

700

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P

Mil. metric tons Production Consumption

Global Wheat Production & Consumption

Source: USDA-WAOB, World Agricultural Supply and Demand Estimates, December 10, 2010.

0

10

20

30

40

50

60

70

80

90

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P

Mil. metric tonsUnited States EU-27 Canada Australia Argentina FSU-12

Major Exporter Wheat Ending Stocks


0102030405060708090

100110

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P

Mil. metric tonsWheat Coarse Grains

Russia Wheat and Coarse Production


0

5

10

15

20

25

30

35

40

45

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P


Russia Wheat and Coarse Grain Feeding


02468

1012141618202224

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P


Russia Wheat and Coarse Grain Exports


0

2

4

6

8

10

12

14

16

1989/90 1992/93 1995/96 1998/99 2001/02 2004/05 2007/08 2010/11P

Million tons

Russia Wheat Imports


0

2

4

6

8

10

12

14

16

18

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P


Russia Wheat and Coarse Grain Ending Stocks


WesternAustralia

NorthernTerritory

SouthAustralia

Queensland

New SouthWales

Victoria

Tas.

Java

INDONESIA

CoralSea

Gulfof

Carpentaria

TimorSea

INDIANOCEAN

INDIANOCEAN Australia

Percent of Normal PrecipitationMay 1, 2010 - December 7, 2010

40 to 50

60 to 70

80 to 90

125 to 150

175 to 200

50 to 60

70 to 80

100 to 125

150 to 175

200 to 250

90 to 100

250 to 300

350 to 400

500 to 600

300 to 350

400 to 500

600 to 800Above 800

Percent of Normal0 to 10

20 to 3010 to 20

30 to 40

Agricultural Weather AssessmentsWorld Agricultural Outlook Board

Data Source: World Meteorological Organization

Season Summary

Drought developed during the growing season, reducing winter wheat yield potential.

Cool, wet weather in the Southand East led to good to excellentcrop prospects, offsettingproduction losses in the West.

December 10, 2010

WesternAustralia

NorthernTerritory

SouthAustralia

Queensland

New SouthWales

Victoria

Tas.

Java

INDONESIA

CoralSea

Gulfof

Carpentaria

TimorSea

INDIANOCEAN

INDIANOCEAN Australia

Total Precipitation (mm)November 29, 2010 - December 8, 2010

25 to 50

75 to 100

125 to 150

200 to 225

250 to 275

50 to 75

100 to 125

175 to 200

225 to 250

275 to 300

150 to 175

300 to 350

400 to 450

500 to 600

350 to 400

450 to 500

600 to 800Above 800

Precipitation (mm)0 to 1

5 to 101 to 5

10 to 25


Data Source: Supplemental

Recent, flooding rains are aconcern, however, hampering

winter wheat harvestingand reducing crop quality.

Wet Weather Disrupted Wheat Harvest

Australia’s January-March Rainfall Forecast

December 10, 2010

U.S. Wheat Supply and Demand2009/10 estimate

2010/11 forecast

Change from 2009/10Percent

Planted area (million acres) 59.2 53.6 -9.4Harvested area (million acres) 49.9 47.6 -4.5Yield (bushels per acre) 44.5 46.4 4.3

Million bushelsBeginning stocks 657 976 48.6Production 2,218 2,208 -0.4Imports 119 110 -7.2Total supply 2,993 3,294 10.1

Food use 917 930 1.4Seed 69 76 9.4Feed and residual 150 180 20.3Domestic use 1,137 1,186 4.4

Exports 881 1,250 41.9Total use 2,018 2,436 20.7

Ending stocks 976 858 -12.1Percent

Stocks to use ratio 48.4 35.2Dollars per bushel

Average market price 4.87 5.30/5.70 12.9

Corn Cash Prices

2

3

4

5

6

7

8


$/bushelCorn (Central IL)

Source: USDA-AMS.

December 10, 2010

World Corn Production


2010/11 forecast

Change from 2009/10

Million Tons PercentWorld 812.4 820.7 1.0United States 333.0 318.5 -4.4

Foreign 479.4 502.2 4.8Argentina 22.5 25.0 11.1Brazil 56.1 51.0 -9.1Mexico 20.4 24.5 20.3Canada 9.6 11.7 22.5European Union 57.1 55.2 -3.4FSU-12 17.8 18.5 3.9Ukraine 10.5 12.0 14.3

South Africa 13.4 12.5 -6.9China 158.0 168.0 6.3

500

550

600

650

700

750

800

850

900

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P

Mil. metric tons Production Consumption

Global Corn Production & Consumption


157

185

0

50

100

150

200

250

300

350

400

2000/01 2002/03 2004/05 2006/07 2008/09 2010/11P

Mil. metric tonsUnited States Foreign

Global Corn Food, Seed, and Industrial Use


December 10, 2010

U.S. Corn Supply and Demand2009/10 estimate

2010/11 forecast


Planted area (million acres) 86.5 88.2 2.0Harvested area (million acres) 79.6 81.3 2.1Yield (bushels per acre) 164.7 154.3 -6.3

Million bushelsBeginning stocks 1,673 1,708 2.0Production 13,110 12,540 -4.4Total supply 14,792 14,262 -3.6

Feed and residual 5,159 5,300 2.7Food, seed, and industrial 5,938 6,180 4.1Ethanol 4,568 4,800 5.1Domestic use 11,098 11,480 3.4

Exports 1,987 1,950 -1.8Total use 13,084 13,430 2.6

Ending stocks 1,708 832 -51.3Percent



Renewable Fuel Standard

0

4

8

12

16

20

24

28

32

36

40

2006 2008 2010 2012 2014 2016 2018 2020 2022

Bil. gal. Conventional Biofuel RFS Total RFS

Source: Energy Independence and Security Act of 2007.

U.S. Ethanol Production Capacity

0

2

4

6

8

10

12

14

16

Sep 2006 Sep 2007 Sep 2008 Sep 2009 Sep 2010 Sep 2011

Bil. gallons/year

Growing production capacityCalendar Year Conventional Biofuels RFS

Source: Production capacity from Renewable Fuels Association and USDA projections. RFS from Energy Independence and Security Act of 2007.

20072006

2008

2009 2010 2011

6

1012

19

24

31

35 36

0

1

2

3

4

5

6

1998/99 2001/02 2004/05 2007/08 2010/11P

Bil. bushels

0

5

10

15

20

25

30

35

40PercentEthanol corn use Ethanol share of corn use (%)

U.S. Corn Used for Ethanol


Ethanol Producer Net Returns Above Variable Costs

-0.15

-0.05

0.05

0.15

0.25

0.35

0.45

0.55

0.65

9/7/07 1/18/08 5/30/08 10/10/08 2/20/09 7/3/09 11/13/09 3/26/10 8/6/10 12/17/10

$/gal.

Note: USDA-WAOB estimates based on USDA-AMS plant reports and DOE-EIA estimates and forecasts for natural gas and electricity prices.

13 cents/gal. (12/30/10)

Ethanol and RBOB Nearby Futures Prices

0.50

1.00

1.50

2.00

2.50

3.00

9/4/08 12/7/08 3/11/09 6/13/09 9/15/09 12/18/09 3/22/10 6/24/10 9/26/10 12/29/10

$/gal.

Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.

Reformulate Gasoline Blend Stock (RBOB)

Ethanol

Ethanol and RBOB Nearby Futures Spreads

-0.90

-0.70

-0.50

-0.30

-0.10

0.10

0.30

0.50

0.70

0.90

9/4/08 12/19/08 4/4/09 7/19/09 11/2/09 2/16/10 6/2/10 9/16/10 12/31/10

$/gal. Spread Blender Credit

Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.

51-cent blender credit

45-cent blender credit

(Ethanol – RBOB)

Blending incentive (1/3/11) = $0.56

0

500

1,000

1,500

2,000

2,500

3,000

1/6/06 9/22/06 6/8/07 2/22/08 11/7/08 7/24/09 4/9/10 12/24/10

Mil. gallons All Finished Blends Ethanol Blends

U.S. Weekly Gasoline ProductionAll Gasoline and Ethanol Blends

Source: U.S. Dept. of Energy, Energy Information Administration.

U.S. Blended Motor Gasoline Consumption

Source: DOE-Energy Information Administration, Short-term Energy Outlook (STEO) and Annual Energy Outlook (AEO).

130

135

140

145

150

155

2000 2002 2004 2006 2008 2010F 2012F 2014F 2016F

Bil. gallons Actual EIA AEO Dec. 2007 EIA STEO Dec. 2010

7.9 bil. gal.

Soybean Cash Prices

6

7

8

9

10

11

12

13

14

15

16

17

18


$/bushelSoybeans (Central IL)

Source: USDA-AMS.

December 10, 2010

World Soybean Production

Country or Region

2009/10 estimate

2010/11 forecast

Change from 2009/10

Million Tons PercentWorld 260.1 257.8 -0.9United States 91.4 91.9 0.5

Foreign 168.7 165.9 -1.6Argentina 54.5 52.0 -4.6Brazil 69.0 67.5 -2.2India 9.0 9.6 6.7China 14.7 14.4 -2.0

December 10, 2010

U.S. Soybean Supply and Demand2009/10 estimate

2010/11 forecast


Planted area (million acres) 77.5 77.7 0.3Harvested area (million acres) 76.4 76.8 0.6Yield (bushels per acre) 44.0 43.9 -0.1

Million bushelsBeginning stocks 138 151 9.4Production 3,359 3,375 0.5Imports 15 10 -31.5Total supply 3,512 3,536 0.7

Crush 1,752 1,665 -4.9Seed and residual 108 116 7.6Domestic use 1,860 1,781 -4.2

Exports 1,501 1,590 5.9Total use 3,361 3,371 0.3

Ending stocks 151 165 9.1Percent



December 10, 2010

U.S. Soybean Oil Supply and Demand2009/10 estimate

2010/11 forecast

Change from

2009/10Million pounds Percent

Beginning stocks 2,861 3,358 17.4Production 19,614 18,980 -3.2Imports 103 115 12.1Total supply 22,577 22,453 -0.5

Domestic use 15,863 17,100 7.8Methyl ester 1,681 2,900 72.6

Exports 3,357 2,700 -19.6Total use 19,219 19,800 3.0

Ending stocks 3,358 2,653 -21.0Cents per pound


U.S. Biodiesel Production

0

200

400

600

800

1,000

1,200

2002/03 2004/05 2006/07 2008/09 2010/11 2012/13 2014/15 2016/17051015202530354045505560

Mandate SBO Share

Million gallons percent SBO

Aug-06Oct-

06

Dec-06

Feb-07Apr-0

7

Jun-07

Aug-07Oct-0

7

Dec-07

Feb-08Apr-0

8

Jun-08

Aug-08Oct-

08

Dec-08

Feb-09Apr-0

9

Jun-09

Aug-09Oct-

09

Dec-09

Feb-10Apr-1

0

Jun-10

Aug-10Oct-1

0

Dec-10-200

-150

-100

-50

0

50

100

150Cents per Gallon

Blending Credit Returned Jan. 1

U.S. Domestic Biodiesel Margin

Blending Credit Expired

U.S., Brazil, and Argentina Industrial Use

1999/00

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11012345678

U.S. Brazil Argentina

Million Tons

U.S. Soybean Exports

0.0

500.0

1,000.0

1,500.0

2,000.0Billion Bushels

China Soybean Imports(From All Sources)

2000/01

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10

2010/110.0

500.0

1000.0

1500.0

2000.0

2500.0Billion Bushels

December 10, 2010

World Cotton Production


2010/11 forecast

Change from 2009/10

Million Bales PercentWorld 101.5 115.5 13.8United States 12.2 18.3 49.9

Foreign 89.4 97.3 8.8Argentina 1.00 1.25 25.0Brazil 5.5 8.1 48.6Australia 1.8 4.0 125.4China 32.0 30.0 -6.3India 23.2 26.0 12.1Pakistan 9.6 8.8 -8.3Uzbekistan 3.9 4.8 23.1African Franc Zone 2.2 2.6 18.4


Global Cotton Production and Consumption2001/02 through 2010/11 est.

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11 est.

40

50

60

70

80

90

100

110

120

130

Production Consumption

mil.

bal

es

December 10, 2010

December 10, 2010

Global Cotton Ending Stocks2001/02 through 2010/11 est.

2001/02

2002/03

2003/04

2004/05

2005/06

2006/07

2007/08

2008/09

2009/10

2010/11 est.

0

10

20

30

40

50

60

70

mil.

bal

es

December 10, 2010

U.S. Cotton Supply and Demand2009/10 estimate

2010/11 forecast


Planted area (million acres) 9.15 11.04 20.6Harvested area (million acres) 7.53 10.77 43.1Yield (pounds per acre) 777 814 4.8

Million balesBeginning stocks 6.34 2.95 -53.5Imports 0.00 0.01 0.0Production 12.19 18.27 49.9Total supply 18.53 21.22 14.5

Mill use 3.46 3.55 2.6Exports 12.04 15.75 30.8

Total use 15.50 19.30 24.5Unaccounted 0.08 0.02 0.0

Ending stocks 2.95 1.90 -35.5Percent

Stocks/use 19.0 9.8Cents per pound


Nearby Cotton Futures PricesAug. 1, 2007 – Dec. 31, 2010

8/1/20

07

10/20

/2007

1/8/20

08

3/28/2

008

6/16/2

008

9/4/20

08

11/23

/2008

2/11/2

009

5/2/20

09

7/21/2

009

10/9/

2009

12/28

/2009

3/18/2

010

6/6/20

10

8/25/2

010

11/13

/2010

30

50

70

90

110

130

150

170

cent

s pe

r pou

nd

December 10, 2010

U.S. Cotton Planted Area2001 - 2010

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

2

4

6

8

10

12

14

16

18

mil.

acr

es

New-crop Futures PricesAverages of December Settlement Prices

8.18

5.86 5.59

8.41

10.70

8.95

10.17

4.354.154.52

5.40

12.34

0

2

4

6

8

10

12

14

Dec 2007 Dec 2008 Dec 2009 Dec 2010

$/bushel Corn HRW Wheat Soybeans

Note: Corn and soybean prices from new-crop December and November CBOT futures contracts. HRW wheat prices from new-crop July KCBT futures contract.

2008 crop 2009 crop 2010 crop 2011 crop

48

New-crop Soybean/Corn Price Ratios2007-crop, 2009-crop, and 2011-crop thru Jan. 3, 2011

1.80

1.90

2.00

2.10

2.20

2.30

2.40

1-Sep 1-Oct 1-Nov 1-Dec 1-Jan 1-Feb 1-Mar

Soybean/corn Nov 2007 Soy/Dec 2007 Corn Nov 2009 Soy/Dec 2009 CornNov 2011 Soy/Dec 2011 Corn

Note: Chicago Board of Trade daily settlement prices.

Soybean area expanded in 2009

Corn area expanded in 2007

453

199

521

408

191

372

0

100

200

300

400

500

600

Corn Soybeans Wheat

$ per acre 2006 2007 2008 2009 2010 2011P

Note: For 2006-2010, net returns are above variable costs and reflect trend yields and USDA price and production cost forecasts as of February for the respective years. Projections for 2011 are based on USDA-ERS projected total operating costs for 2011 as of November 2010 and current Central Illinois corn and soybean cash forward bids for fall 2011 delivery (1/3/11). For wheat, gross revenue based on the currently quoted Western Kansas HRW cash forward bid for June/July 2011 delivery (1/3/11).

Pre-planting Net Returns Outlook

Retail Prices for Fertilizers in Illinois

ITEMWeek of

Dec 24, 2009Week of

Dec 23, 2010 Difference$/ton $/ton Percent

Anhydrous Ammonia

514 774 +51

Urea 419 472 +13

DAP 432 668 +55

Potash 526 561 +7

Source: USDA/AMS, Illinois Production Cost Report (Bi-weekly).

Major Field Crop Planted Area & CRP

79.2 78.3 93.5 86.0 86.5 88.2

64.2 75.5 64.7 75.7 77.5 77.7

75.1 57.3 60.5 63.2 59.2 53.6

42.332.3 29.1 28.2 25.9 26.1

34.536.0 36.8 34.6 33.7 31.4

0

50

100

150

200

250

300

350

1996 ………. 2006 2007 2008 2009 2010F 2011P

Mil. acresCorn Soybeans Wheat Other Feed Grains, Rice & Cotton CRP

Source: USDA-NASS, 2010 planted area forecast from the December 10, 2010, Crop Production report. CRP data from USDA-FSA..

295.3 287.7 277.0

?

END

http://www.usda.gov/oce/speeches/index.htm

Documents

Outlook for Major Crops United States Department of Agriculture