SlideShare a Scribd company logo
JJ, Boone, and Mike Toney , Michael
Toney
 Colonists vs. Native Americans
 Midwestern Expansion
 Technological Changes of the 1940’s
Today US Corn Yield is 20% higher than any other country in the world!
HOWEVER – beware of volatility!
Corn accounts for 75% of total grain crops traded in the world and
the US accounts for almost 60% of total world production.
 60% of the total world production, only 15% of
what the US produces is exported
 3 major uses for corn in the US
 Food
 Feed
 Industrial Uses
 Futures Price
 Weather- 8 states = 76% of corn
 International
- 12% of Agricultural Export Value
- We set the Price that that rest of the world (Asia)
pays- only 15% vs. 60%
- S. America
 Expected Acres
-Based on baseline projections
 Expected Yield
- Since 1960
- Steadily increasing
 Subsidies
- Keeps prices artificially low
- Sauk Valley Farms $4m ‘95-’12
 Ethanol Producers
-Energy Independence and Security Act
-If corn supplies limited, ethanol industry
will pay any price needed to meet quota
 Farmers
-Incentivized by price of corn to grow more/less corn
- Subsidies
 Livestock producers / Dairy
-2009 Dairy Cattle alone consumed 30.5 million metric
tons of corn-based feed = 3.8m bushels
-Rule of thumb: Every 10-cent change in price / bu
changes feeder cattle prices by $1
-Livestock can quickly turn from beings profitable to
unprofitable
 Meat prices
-If corn price increases, meat price initially decreases and
then increases later
 Corn-sumers
-3/4 products in supermarket contain some form
of corn
-Price takers
-Foreign consumers also subject to changing corn
prices
 Positive
 America will maintain dependence on corn
-Steady price (weather)
-Grain stocks strengthening
 Increasing foreign demand
 Renewable fuel mandates decreasing
-However, demand from other markets
will make up for this
Commodities study mba ( michael toney , mike toney )
Commodities study mba ( michael toney , mike toney )

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Commodities study mba ( michael toney , mike toney )

  • 1. JJ, Boone, and Mike Toney , Michael Toney
  • 2.  Colonists vs. Native Americans  Midwestern Expansion  Technological Changes of the 1940’s
  • 3. Today US Corn Yield is 20% higher than any other country in the world! HOWEVER – beware of volatility!
  • 4. Corn accounts for 75% of total grain crops traded in the world and the US accounts for almost 60% of total world production.
  • 5.  60% of the total world production, only 15% of what the US produces is exported  3 major uses for corn in the US  Food  Feed  Industrial Uses
  • 6.
  • 7.  Futures Price  Weather- 8 states = 76% of corn  International - 12% of Agricultural Export Value - We set the Price that that rest of the world (Asia) pays- only 15% vs. 60% - S. America
  • 8.  Expected Acres -Based on baseline projections  Expected Yield - Since 1960 - Steadily increasing  Subsidies - Keeps prices artificially low - Sauk Valley Farms $4m ‘95-’12
  • 9.  Ethanol Producers -Energy Independence and Security Act -If corn supplies limited, ethanol industry will pay any price needed to meet quota
  • 10.  Farmers -Incentivized by price of corn to grow more/less corn - Subsidies  Livestock producers / Dairy -2009 Dairy Cattle alone consumed 30.5 million metric tons of corn-based feed = 3.8m bushels -Rule of thumb: Every 10-cent change in price / bu changes feeder cattle prices by $1 -Livestock can quickly turn from beings profitable to unprofitable  Meat prices -If corn price increases, meat price initially decreases and then increases later
  • 11.  Corn-sumers -3/4 products in supermarket contain some form of corn -Price takers -Foreign consumers also subject to changing corn prices
  • 12.  Positive  America will maintain dependence on corn -Steady price (weather) -Grain stocks strengthening  Increasing foreign demand  Renewable fuel mandates decreasing -However, demand from other markets will make up for this