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Corn cattle-confusion.ext conf.11-07_12.final

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Frayne Olson

Frayne Olson

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  • 1. Corn, Cattle and Confusion Frayne Olson, PhDCrop Economist/Marketing Specialist NDSU Extension Service ND Agricultural Experiment Station Dept. of Agribusiness & Applied Economics
  • 2. Todays Topics• Review October 11, 2012 WASDE – Where are we now (Where have we been).• Are prices high enough to ration use?• What does this mean for 2013 acreage and production?• What are your questions!!
  • 3. Dec CBOT Corn DTN – Prophet X 11-07-2012 am
  • 4. Corn Update
  • 5. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.7 Mill. A.Yield/Harvest A. 147.2 bu. 122.8 bu. 122.0 bu.Begin Stocks 1,128 Mill. Bu. 1,181 Mill. Bu. 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu.Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 6. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. Core91.9 Mill. A. Issue!! 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. U.S. will not produce 87.4 Mill. A. 87.7 Mill. A.Yield/Harvest A. enough corn to bu. 147.2 meet 122.8 bu. 122.0 bu.Begin Stocks needs. Mill. Bu. 1,128 1,181 Mill. Bu. 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu. Who will use less!Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 7. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.7 Mill. A. Both Yield andYield/Harvest A. 147.2 bu. 122.8 bu. 122.0 bu. Harvested Acres are stillBegin Stocks being debated. Mill. Bu. 1,128 1,181 Mill. Bu. 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu. Production is the realImports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. number to watch! Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 8. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.7 Mill. A. Industry Estimates:Yield/Harvest A. 147.2 bu. 122.8 bu. 122.0 bu.Begin Stocks = 10.881 Mill Bu. High 1,128 Mill. Bu. 1,181 Mill. Bu. 988 Mill. Bu. Low = 10.100 Mill. Bu. Bu.Production 12,358 Mill. 10,727 Mill. Bu. 10,706 Mill. Bu.Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Avg. = 10.629 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 9. What is the U.S. trend line yield? 180 160 140Bushels /Acre 120 Average Yield Trend Line 100 80 60 Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
  • 10. What is the U.S. trend line yield? 180 160 140Bushels /Acre 120 Average Yield Trend Line 100 80 2012 ≈ 122.0 bu./a. 38.0 bu. below 60 trend line! Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
  • 11. What is the U.S. trend line yield? 180 160 140Bushels /Acre 120 Average Yield Trend Line 100 80 1983 = -21.6 (-21%) 60 1988 = -28.0 (-25%) 1993 = -21.8 (-18%) 2012 = -38.0 (-24%) Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
  • 12. Have Production estimates stabilized? Who will use less corn?
  • 13. Corn - Total Use (Billion Bushels) 7.00 6.00 5.00 Feed & ResidualBillion Bushels 4.00 Ethanol 3.00 2.00 Non-Ethanol Food, Seed & 1.00 Industrial 0.00 Oct. 11, 2012 WASDE Report & USDA – Feed Grains Data Base Table 4
  • 14. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. 87.4 Mill. A. Will the ethanol 87.7 Mill. A.Yield/Harvest A. 147.2 bu. industry use bu. less 122.8 10% 122.0 bu.Begin Stocks 1,128 Mill. Bu. 1,181 Mill. Bu. corn? 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu.Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 15. 1,000 Barrels/Day 700 750 800 850 900 950 1,000 Jun 04, 2010 Jul 04, 2010 Aug 04, 2010 Sep 04, 2010 Oct 04, 2010 Nov 04, 2010 Dec 04, 2010 Jan 04, 2011 Feb 04, 2011 Mar 04, 2011 Apr 04, 2011 May 04, 2011 Jun 04, 2011 Weekly Production Jul 04, 2011 Aug 04, 2011 Sep 04, 2011 Oct 04, 2011 Nov 04, 2011 Dec 04, 2011 Jan 04, 2012 Feb 04, 2012 (06/04/2010 – 10/26/2012) Mar 04, 2012 USDA Est. Corn Use Apr 04, 2012 May 04, 2012 Jun 04, 2012 Weekly Ethanol Production Jul 04, 2012 Aug 04, 2012 Sep 04, 2012 Oct 04, 2012 Nov 04, 2012 Dec 04, 2012EIA September Short Term Energy Outlook & EIA Custom Query
  • 16. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A.Harvested A. 84.0 Mill. A. 87.4 Mill. A. Will corn exports drop 87.7 Mill. A.Yield/Harvest A. 147.2 bu. by 25%? 122.8 bu. 122.0 bu.Begin Stocks 1,128 Mill. Bu. 1,181 Mill. Bu. 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu.Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 17. Weekly Corn Export Sales (06/10/2010 – 10/25/2012) 1,400,000 1,200,000Bushels/Week 1,000,000 800,000 600,000 400,000 200,000 USDA Exports Actual Exports USDA-FSA Weekly Export Sales Report & Oct. 11, 2012 WASDE
  • 18. World Corn Prod, Use & Stocks/Use (Million Metric Ton) 900.00 0.6000 Stocks-to-Use Total Production Total Use 800.00 0.5000Million Metric Tons Stocks-to-Use Ratio 700.00 0.4000 600.00 0.3000 500.00 0.2000 400.00 300.00 0.1000 Oct.11, 2012 USDA -WASDE & PSD Custom Query
  • 19. Corn Supply & Demand Table Will feed use drop byU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 9.0%? 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A. This value will be theHarvested A. 84.0 Mill. A. 87.4 Mill. A. 87.7 Mill. A. most difficult to track!Yield/Harvest A. 147.2 bu. 122.8 bu. 122.0 bu.Begin Stocks Quarterly Grain Stocks 1,128 Mill. Bu. 1,181 Mill. Bu. 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. 10,706 Mill. Bu.Imports 25 Mill. Bu. 75 Mill. Bu. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 20. Corn Supply & Demand TableU.S. Corn 2011/2012 (Est) 2012/2013 (Sep) 2012/2013 (Oct)Planted A. 91.9 Mill. A. 96.4 Mill. A. 96.9 Mill. A. Projected 5.5%Harvested A. 84.0 Mill. A. 87.4 Mill. A. 87.7 Mill. A. Stocks/Use RatioYield/Harvest A. 147.2 bu. 122.8 bu. 122.0 bu.Begin Stocks 1,128 Mill. Bu. Lowest sinceMill. Bu. 1,181 1995/96, 988 Mill. Bu.Production 12,358 Mill. Bu. 10,727 Mill. Bu. which was record low 10,706 Mill. Bu.Imports 25 Mill. Bu. percentage. Bu. 75 Mill. 75 Mill. Bu. Total Supply 13,511 Mill. Bu. 11,983 Mill. Bu. 11,769 Mill. Bu.Feed & Residual 4,562 Mill. Bu. 4,150 Mill. Bu. 4,150 Mill. Bu.Food, Seed, Ind. 6,421 Mill. Bu. 5,850 Mill. Bu. 5,850 Mill. Bu. Ethanol 5,000 Mill. Bu. 4,500 Mill. Bu. 4,500 Mill. Bu.Exports 1,543 Mill. Bu. 1,250 Mill. Bu. 1,150 Mill. Bu. Total Use 12,526 Mill. Bu. 11,250 Mill. Bu. 11,150 Mill. Bu.Ending Stocks 988 Mill. Bu. 733 Mill. Bu. 619 Mill. Bu. USDA – WASDE – Oct. 11, 2012
  • 21. Corn – Total Production & Use (Billion Bushels) 14.00 0.500 Stocks-to-Use Total Production Total Use 13.00 0.450 12.00 0.400 Stocks-to-Use Ratio 11.00 0.350Billion Bushels 10.00 0.300 9.00 0.250 8.00 0.200 7.00 0.150 6.00 0.100 5.00 0.050 4.00 0.000 Oct. 11, 2012 WASDE Report & USDA – Feed Grains Data Base Table 4
  • 22. Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 1993/94 to 11.00 2006/07US Dollar/Bushel 9.00 7.80 7.00 6.22 5.18 5.00 4.20 4.06 3.24 3.55 3.00 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Percent Stocks/Use Historical Price Forecasted Price
  • 23. Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 1995/96 11.00US Dollar/Bushel 9.00 7.80 7.00 6.22 5.18 5.00 4.20 4.06 3.24 3.55 3.00 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Percent Stocks/Use Historical Price Forecasted Price
  • 24. Price vs. Stocks/Use Ratio 1993/94 to 2012/13 13.00 11.00 2007/08 toUS Dollar/Bushel 9.00 7.80 2012/13 7.00 6.22 5.18 5.00 4.20 4.06 3.55 3.00 1.00 0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.210 Percent Stocks/Use Historical Price Forecasted Price
  • 25. QUESTIONS & COMMENTS? Frayne OlsonDept. of Agribusiness & Applied Econ. NDSU Dept. 7110 P.O. Box 6050 Fargo, ND 58108-6050 701-231-7377 frayne.olson@ndsu.eduhttp://www.ndsu.edu/cropeconomics

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