University Extension/Department of Economics
Crop Outlook and Farm Programs
Farm Management In-ServiceAmes, Iowa
May 11, 2010
Chad HartAssistant Professor/Grain Markets Specialist
University Extension/Department of Economics
U.S. Corn Supply and Use
Source: USDA
2007 2008 2009 2010
Area Planted (mil. acres) 93.5 86.0 86.5 88.8
Yield (bu./acre) 150.7 153.9 164.7 163.5
Production (mil. bu.) 13,038 12,092 13,110 13,370
Beg. Stocks (mil. bu.) 1,304 1,624 1,673 1,738
Imports (mil. bu.) 20 14 10 10
Total Supply (mil. bu.) 14,362 13,729 14,793 15,118
Feed & Residual (mil. bu.) 5,913 5,205 5,375 5,350
Ethanol (mil. bu.) 3,049 3,677 4,400 4,600
Food, Seed, & Other (mil. bu.) 1,338 1,316 1,330 1,350
Exports (mil. bu.) 2,437 1,858 1,950 2,000
Total Use (mil. bu.) 12,737 12,056 13,055 13,300
Ending Stocks (mil. bu.) 1,624 1,673 1,738 1,818
Season-Average Price ($/bu.) 4.20 4.06 3.60 3.50
University Extension/Department of Economics
U.S. Soybean Supply and Use2007 2008 2009 2010
Area Planted (mil. acres) 64.7 75.7 77.5 78.1
Yield (bu./acre) 41.7 39.7 44.0 42.9
Production (mil. bu.) 2,677 2,967 3,359 3,310
Beg. Stocks (mil. bu.) 574 205 138 190
Imports (mil. bu.) 10 13 15 10
Total Supply (mil. bu.) 3,261 3,185 3,512 3,510
Crush (mil. bu.) 1,803 1,662 1,735 1,640
Seed & Residual (mil. bu.) 93 102 133 154
Exports (mil. bu.) 1,159 1,283 1,455 1,350
Total Use (mil. bu.) 3,056 3,047 3,323 3,144
Ending Stocks (mil. bu.) 205 138 190 365
Season-Average Price ($/bu.) 10.10 9.97 9.50 8.75
Source: USDA
University Extension/Department of Economics
Corn Planting Progress
0
20
40
60
80
100
4/1 4/8 4/15 4/22 4/29 5/6 5/13 5/20 5/27 6/3
% P
lant
ed
Maximum since 1980 Minimum since 1980
2010 2009
5-yr Average (2005-2009)
Source: USDA
University Extension/Department of Economics
Soy Planting Progress
Source: USDA
0
20
40
60
80
100
4/22 4/29 5/6 5/13 5/20 5/27 6/3 6/10 6/17 6/24 7/1
% P
lant
ed
Maximum since 1980 Minimum since 1980
2010 2009
5-yr Average (2005-2009)
University Extension/Department of Economics
World Corn Production
Source: USDA
University Extension/Department of Economics
Corn – Argentina & Brazil
Source: USDA
35
38
41
44
47
50
Mill
ion
acr
es
1800
2100
2400
2700
3000
3300
Mill
ion
bu
she
ls
Area Harvested Production
University Extension/Department of Economics
World Soybean Production
Source: USDA
University Extension/Department of Economics
Soybeans – Argentina & Brazil
Source: USDA
65
75
85
95
105M
illio
n a
cre
s
2700
3150
3600
4050
4500
Mill
ion
bu
she
ls
Area Harvested Production
University Extension/Department of Economics
Hog Crush Margin
Source: ISU Extension
The Crush Margin is the return after the pig, corn and soybean meal costs.Carcass weight: 200 pounds Pig price: 50% of 5 month out lean hog futuresCorn: 10 bushels per pig Soybean meal: 150 pounds per pig
University Extension/Department of Economics
Cattle Crush Margin
Source: ISU Extension
The Crush Margin is the return after the feeder steer and corn costs.Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head
University Extension/Department of Economics
0.4
0.6
0.8
1.0
1.2
1.4
1.6
Canada Mexico Brazil EU China South KoreaJapan Australia
Exchange Rates (Jan. 2003 = 1)
Source: USDA, ERS
University Extension/Department of Economics
Corn Export Sales
Source: USDA, FAS
0
500
1,000
1,500
2,000
2,500
Week
Mill
ion
bu
she
ls
2007 2008 2009
University Extension/Department of Economics
2009 U.S. Corn Exports
Source: USDA, FAS
Other24%
Taiwan7%
South Korea16%
Egypt5%
Mexico18%
Japan30%
University Extension/Department of Economics
Soybean Export Sales
Source: USDA, FAS
0
300
600
900
1,200
1,500
Week
Mill
ion
bu
she
ls
2007 2008 2009
University Extension/Department of Economics
2009 U.S. Soybean Exports
Source: USDA, FAS
Mexico6%
Japan5%
Other21%
EU8%
China60%
University Extension/Department of Economics
0
2
4
6
8
10
12
14
16
2010 2011 2012
Bill
ion
ga
llon
s
Conventional Biofuels Cellulosic Biofuels
Biodiesel Additional Advanced Biofuels
Renewable Fuels Standard (RFS)
CropYear
Billion Bushels
2009 4.11
2010 4.43
2011 4.64
2012 4.86
University Extension/Department of Economics
Ethanol Margins
Source: ISU, CARD
University Extension/Department of Economics
Ethanol Pricing
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1/3
/20
07
4/3
/20
07
7/3
/20
07
10
/3/2
00
7
1/3
/20
08
4/3
/20
08
7/3
/20
08
10
/3/2
00
8
1/3
/20
09
4/3
/20
09
7/3
/20
09
10
/3/2
00
9
1/3
/20
10
4/3
/20
10
$ p
er
ga
llon
Ethanol Gasoline
University Extension/Department of Economics
Ethanol Blending Advantage
-0.04
-0.02
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0.14
0.16
1/3
/20
07
4/3
/20
07
7/3
/20
07
10
/3/2
00
7
1/3
/20
08
4/3
/20
08
7/3
/20
08
10
/3/2
00
8
1/3
/20
09
4/3
/20
09
7/3
/20
09
10
/3/2
00
9
1/3
/20
10
4/3
/20
10
$ p
er
ga
llon
University Extension/Department of Economics
0
20
40
60
80
100
120
140
Ja
n-8
6
Ja
n-8
8
Ja
n-9
0
Ja
n-9
2
Ja
n-9
4
Ja
n-9
6
Ja
n-9
8
Ja
n-0
0
Ja
n-0
2
Ja
n-0
4
Ja
n-0
6
Ja
n-0
8
Ja
n-1
0
Ja
n-1
2
Ja
n-1
4
Ja
n-1
6
Ja
n-1
8
$ p
er
ba
rre
lCrude Oil Prices
Sources: EIA, NYMEX
University Extension/Department of Economics
2007/082008/09
2009/102010/11
1.50
2.00
2.50
3.00
3.50
4.00
4.50
0% 5% 10% 15% 20% 25% 30%
Stocks-to-use ratio
Pric
e ($
per
bus
hel)
Corn
University Extension/Department of Economics
2007/082008/09
2010/11
2009/10
4
5
6
7
8
9
10
11
0% 5% 10% 15% 20%
Stocks-to-use Ratio
Pric
e ($
per
bus
hel)
Soy
University Extension/Department of Economics
Projected 2009 Season-Average Corn Price
2.50
3.00
3.50
4.00
4.50
5.00
5/1
/20
09
6/1
/20
09
7/1
/20
09
8/1
/20
09
9/1
/20
09
10
/1/2
00
9
11
/1/2
00
9
12
/1/2
00
9
1/1
/20
10
2/1
/20
10
3/1
/20
10
4/1
/20
10
5/1
/20
10
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2009 Season-Average Soy Price
8.00
8.50
9.00
9.50
10.00
10.50
5/1
/20
09
6/1
/20
09
7/1
/20
09
8/1
/20
09
9/1
/20
09
10
/1/2
00
9
11
/1/2
00
9
12
/1/2
00
9
1/1
/20
10
2/1
/20
10
3/1
/20
10
4/1
/20
10
5/1
/20
10
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2010 Season-Average Corn Price
3.00
3.50
4.00
4.50
6/8
/20
09
7/8
/20
09
8/8
/20
09
9/8
/20
09
10
/8/2
00
9
11
/8/2
00
9
12
/8/2
00
9
1/8
/20
10
2/8
/20
10
3/8
/20
10
4/8
/20
10
5/8
/20
10
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
Projected 2010 Season-Average Soy Price
8.00
8.50
9.00
9.50
10.00
10.50
6/8
/20
09
7/8
/20
09
8/8
/20
09
9/8
/20
09
10
/8/2
00
9
11
/8/2
00
9
12
/8/2
00
9
1/8
/20
10
2/8
/20
10
3/8
/20
10
4/8
/20
10
5/8
/20
10
$ p
er
bu
she
l
Futures USDA
University Extension/Department of Economics
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
$ pe
r B
ushe
l
Season-average Price Cost per Bushel
Iowa Corn Prices vs. Costs
Right now, about a nickel under breakeven with USDAabout 15 cents over breakeven with futures
University Extension/Department of Economics
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00$
per
Bus
hel
Season-average Price Cost per Bushel
Iowa Soybean Prices vs. Costs
Right now, 7 cents over breakeven with USDA32 cents over breakeven with futures
University Extension/Department of Economics
Using Latest USDA Corn Projections 2009 ACRE revenue guarantee = $635.61/acre
$4.13/bu. * 171.0 bu./acre * 90%
2009 Proj. ACRE actual revenue = $655.20/acre$3.60/bu. * 182.0 bu./acre
No payments under this scenarioWould need price to fall to $3.49 to trigger paymentsCurrent futures (5/10/10) point to a season-average
price of $3.53
University Extension/Department of Economics
Using Latest USDA Soy Projections 2009 ACRE revenue guarantee = $456.32/acre
$10.04/bu. * 50.5 bu./acre * 90%
2009 Proj. ACRE actual revenue = $479.75/acre$9.50/bu. * 50.5 bu./acre
No payments under this scenarioWould need price to fall to $9.03 to trigger paymentsCurrent futures (5/10/10) point to a season-average
price of $9.46
University Extension/Department of Economics
ACRE Set-up for 2010 Iowa CornYear Yield per Planted Acre
(bu./acre)
2005 173.0
2006 166.0
2007 171.0
2008 169.0
2009 182.0
Olympic Average 171.0
Year Season-average Price ($/bu.)
2008 4.06
2009 3.60
Average 3.83
The 2009 yields and prices are USDA’s May 2010 estimates.
Projected 2010 ACRE Revenue Guarantee = $589.44 (’09 = $635.61)
University Extension/Department of Economics
ACRE Payment Rate Matrix ($/acre)$2.70 $2.90 $3.10 $3.30 $3.50 $3.70 $3.90 $4.10 $4.30
155 147.36 139.94 108.94 77.94 46.94 15.94 0.00 0.00 0.00
159 147.36 128.34 96.54 64.74 32.94 1.14 0.00 0.00 0.00
163 147.36 116.74 84.14 51.54 18.94 0.00 0.00 0.00 0.00
167 138.54 105.14 71.74 38.34 4.94 0.00 0.00 0.00 0.00
171 127.74 93.54 59.34 25.14 0.00 0.00 0.00 0.00 0.00
175 116.94 81.94 46.94 11.94 0.00 0.00 0.00 0.00 0.00
179 106.14 70.34 34.54 0.00 0.00 0.00 0.00 0.00 0.00
183 95.34 58.74 22.14 0.00 0.00 0.00 0.00 0.00 0.00
187 84.54 47.14 9.74 0.00 0.00 0.00 0.00 0.00 0.00
PriceYield
For Iowa corn in 2010, based on May 2010 price and yield projections
University Extension/Department of Economics
ACRE Set-up for 2010 Iowa SoybeansYear Yield per Planted Acre
(bu./acre)
2005 52.0
2006 50.5
2007 52.0
2008 46.5
2009 50.5
Olympic Average 51.0
Year Season-average Price ($/bu.)
2008 9.97
2009 9.50
Average 9.74
The 2009 yields and prices are USDA’s May 2010 estimates.
Projected 2010 ACRE Revenue Guarantee = $447.07 (’09 = $456.32)
University Extension/Department of Economics
ACRE Payment Rate Matrix ($/acre)$7.95 $8.15 $8.35 $8.55 $8.75 $8.95 $9.15 $9.35 $9.55
47.0 73.42 64.02 54.62 45.22 35.82 26.42 17.02 7.62 0.00
48.0 65.47 55.87 46.27 36.67 27.07 17.47 7.87 0.00 0.00
49.0 57.52 47.72 37.92 28.12 18.32 8.52 0.00 0.00 0.00
50.0 49.57 39.57 29.57 19.57 9.57 0.00 0.00 0.00 0.00
51.0 41.62 31.42 21.22 11.02 0.82 0.00 0.00 0.00 0.00
52.0 33.67 23.27 12.87 2.47 0.00 0.00 0.00 0.00 0.00
53.0 25.72 15.12 4.52 0.00 0.00 0.00 0.00 0.00 0.00
54.0 17.77 6.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00
55.0 9.82 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
PriceYield
For Iowa soybeans in 2010, based on May 2010 price and yield projections
University Extension/Department of Economics
SURE Prices2008 2009 2010
Corn Soy Corn Soy Corn Soy
($ per bushel)
Revenue 5.40 13.36 4.04 8.80 3.99 9.23
APH 4.75 11.50 4.00 9.90 3.90 9.15
GRP 3.75 8.70 4.00 9.90 3.55 8.55
Season-Avg. Price 4.06 9.97 3.60 9.50 3.50 8.75
University Extension/Department of Economics
Thank you for your time!
Any questions?
My web site:http://www.econ.iastate.edu/faculty/hart/
Iowa Farm Outlook:http://www.econ.iastate.edu/outreach/agriculture/periodicals/ifo/
Ag Decision Maker:http://www.extension.iastate.edu/agdm/