OUTLOOK FOR US AGRICULTURE
Joe GlauberChief Economist
20 February 2014
Real commodity prices
Fig 1
2005=1002005=100
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700
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100
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700
1950
/51
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/56
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/61
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/66
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/71
1975
/76
1980
/81
1985
/86
1990
/91
1995
/96
2000
/01
2005
/06
2010
/11
2014
/15f
2019
/20
2023
/24
CornSoybeansWheatRice
Source: USDA Agricultural Projections to 2023 and OCE, February 2014
Real commodity prices
Fig 1
2005=1002005=100
0
100
200
300
400
500
600
700
0
100
200
300
400
500
600
700
1950
/51
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/56
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/61
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/66
1970
/71
1975
/76
1980
/81
1985
/86
1990
/91
1995
/96
2000
/01
2005
/06
2010
/11
2014
/15f
2019
/20
2023
/24
CornSoybeansWheatRice
Source: USDA Agricultural Projections to 2023 and OCE, February 2014
Global consumption of grains and oilseeds at record levels
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/01
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Oilseeds
Soybean RapeseedPalm CottonseedOther
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Grains
Corn Wheat Rice Other
MMT MMT
Fig 2
Source: USDA PSD database
FY 2014 US ag exports expected to top $142 billion; China remains top market
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1990
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ChinaROW
Fig 3
Source: USDA-ERS Outlook for U.S. Agricultural Trade
Global trade
Fig 4
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Soybeans and products
WheatCoarse Grains
million metric tons
Source: USDA Agricultural Projections to 2023
US corn used in ethanol to grow modestly
0
5
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Ethanol corn use Ethanol share of corn use (%)
Fig 5
PercentBil bu
Source: USDA Agricultural Projections to 2023
US ethanol exports
020406080
100120140160180
Jan-
2010
Apr
-201
0
Jul-2
010
Oct
-201
0
Jan-
2011
Apr
-201
1
Jul-2
011
Oct
-201
1
Jan-
2012
Apr
-201
2
Jul-2
012
Oct
-201
2
Jan-
2013
Apr
-201
3
Jul-2
013
Oct
-201
3
Brazil Canada EU Other
Fig 6
Mil gals
Source: DOE-EIA
Farm bill presents farmers with new choices
AreaRevenue
Coverage (ARC)
PriceLoss
Coverage(PLC)
ARCCounty
Coverage
ARCIndividualCoverage
Crop Insurance
SupplementalCoverage
Option (SCO) (if not in ARC)
Stacked Income
ProtectionPlan (STAX)
Program Crops
Title I: Commodities Title XI: Crop Insurance
Upland Cotton
Fig 7
Drought lingers in West
Fig 8
Short run outlook for crops
Global grain ending stocks remain tight
Crop2000‐03Avg 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Days of useWheat 120 76 96 112 111 105 93 96Corn 89 62 69 65 55 56 56 61Rice 115 69 77 79 81 83 84 81Soybeans 74 83 71 93 102 76 83 99Cotton 193 187 208 144 160 261 305 322
Fig 9
Source: USDA, PSD database
Feed grain plantings expected to fall reflecting lower pricesCrop 2008 2009 2010 2011 2012 2013 2014F
Percent change
Corn 86.0 86.4 88.2 91.9 97.2 95.4 92.0 -3.5%
Soybeans 75.7 77.5 77.4 75.0 77.2 76.5 79.5 3.9%
Wheat 63.2 59.2 53.6 54.4 55.7 56.2 55.5 -1.2%
All cotton 9.5 9.1 11.0 14.7 12.3 10.4 11.5 10.5%Minor feed grains 15.8 13.6 11.4 10.5 12.6 14.6 12.4 -14.8%
Rice 3.0 3.1 3.6 2.7 2.7 2.5 2.9 16.5%Total 8 crops 253.1 248.9 245.2 249.4 257.7 255.5 253.8 -0.7%
CRP 34.6 33.7 31.3 31.1 29.5 26.8 26.0 -3.1%8 crops + CRP 287.7 282.6 276.5 280.5 287.2 282.3 279.8 -0.9%
Fig 10
Source: USDA-World Ag Outlook Board
Corn, wheat, and soybean prices expected to fall from recent high levels
2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15FWheat 6.78 4.87 5.70 7.24 7.77 6.80 5.30Corn 4.06 3.55 5.18 6.22 6.89 4.50 3.90Soybeans 9.97 9.59 11.30 12.50 14.40 12.70 9.65Cotton 47.80 62.90 81.50 88.30 72.50 76.00 68.00Rice 16.80 14.40 12.70 14.50 14.90 16.00 15.90
Wheat, corn and soybeans in dollars per bushel; rice in dollars per hundredweight;cotton in cents per pound. Numbers in red denote record levels.
Source: USDA-NASS, Feb 2014 WASDE, and USDA-World Ag Outlook Board
Fig 11
Specialty crop revenues to fall in 2014 but subject to much uncertainty due to CA drought
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2010 2011 2012 2013F 2014F
Fruits and nutsVegetables
Bil $
Fig 12
Source: USDA-ERS
Livestock outlook
Feed price ratios improve in 2013
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Hogs Steers Broilers (right axis)
Fig 13
Extended period of low price ratios
Source: USDA-NASS
Meat exports
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500
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4,00020
0020
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1120
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14
Beef and veal
Pork
Broilers
Fig 14
1000 MT
Source: USDA PSD database
Jan 1 cattle and calf numbers lowest since 1951
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1950
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Mil head
Fig 15
Source: USDA-NASS Cattle Report
Fig 16
January 2014 Cattle InventoryPercent of PY & Change-All cattle and calves
US:Jan 2013: 89,299.6Jan 2014: 87,730.0
Change: 98.20% Change: -1.1%
NC=No Change
Source: USDA-NASS Cattle report
Decline in cattle and calf inventory since 2011
-1,277,400
-640,000
-210,000
-40,000 -60,000
-1,400,000
-1,200,000
-1,000,000
-800,000
-600,000
-400,000
-200,000
0
US TX OK KS MO
Fig 17
Source: USDA-NASS Cattle report
PEDv affects litter rates
99.29.49.69.810
10.210.410.6
Jan
201
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201
3
Pigs per litter
Fig 18
Source: USDA-NASS
Dairy feed cost margins improving
Fig 19
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4.00
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12.00
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16.00
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00S
ep-0
0M
ay-0
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n-02
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ep-0
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n-10
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12S
ep-1
2M
ay-1
3
$/cwt
Source: Office of the Chief Economist, February 2014
Dairy exports
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Nonfat Dry MilkButterCheeseDry Whole Milk Powder
Thou MT
Fig 20
Source: USDA PSD database
Livestock, dairy and poultry prices expected to remain high in 2014
Animalproducts
2009 2010 2011 2012 2013 2014F % Change2014/13
Dollars per cwtSteers 83.25 95.38 114.73 122.86 125.89 136.00 8.0
Hogs 41.24 55.06 66.11 60.88 64.05 63.00 ‐2.0
Broilers 77.60 82.90 79.90 86.60 99.70 97.50 ‐2.2
Milk 12.83 16.26 20.14 18.51 20.01 21.20 6.0
Source: Office of the Chief Economist, February 2014
Fig 21
Prices in red denote record levels.
Food CPI remains low
-4
-2
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10
Jan
-07
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all foodat home
ERS forecast:2.5-3.5% for 2014
Fig 22
% change year/year
Source: BLS
Farm income and land values
27
Net cash income
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140
2000
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F
Direct govt payments Net crop insurance indemnities
Bil $
Fig 23
Source: USDA-ERS
Farmland values
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350019
8019
8219
8419
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Nominal2009$
Fig 24
$/acre
Source: USDA-NASS
10-year Treasury yield
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1.50
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3.00
3.50
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4.50
1/2/
2009
7/2/
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7/2/
2011
1/2/
2012
7/2/
2012
1/2/
2013
7/2/
2013
1/2/
2014
Fig 25
Source: Federal Reserve Bank of St. Louis
Debt as a percent of assets
Held by all farms
10
12
14
16
18
20
22
24
1975
1980
1985
1990
1995
2000
2005
2010
2014
F
Held by farm businesses, by age of operator, 2012
02468
10121416
Fig 26
Source: USDA-ERS