30
Corn, Cattle and Confusion Frayne Olson, PhD Crop Economist/Marketing Specialist NDSU Extension Service ND Agricultural Experiment Station Dept. of Agribusiness & Applied Economics
Corn, Cattle and Confusion
Frayne Olson, PhD
Crop Economist/Marketing Specialist
NDSU Extension Service
ND Agricultural Experiment Station
Dept. of Agribusiness & Applied Economics
Today's 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!!
Dec CBOT Corn
DTN – Prophet X 11-07-2012 am
Corn Update
Corn Supply & Demand Table
U.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
Corn Supply & Demand Table
U.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.
Core Issue!!
U.S. will not produce enough corn to meet
needs.
Who will use less!
USDA – WASDE – Oct. 11, 2012
USDA – WASDE – Oct. 11, 2012
Corn Supply & Demand Table
U.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.
Both Yield and Harvested Acres are still
being debated.
Production is the real number to watch!
USDA – WASDE – Oct. 11, 2012
Corn Supply & Demand Table
U.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.
Industry Estimates:
High = 10.881 Mill Bu.Low = 10.100 Mill. Bu.
Avg. = 10.629 Mill. Bu.
What is the U.S. trend line yield?
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
60
80
100
120
140
160
180
Average YieldTrend Line
Bus
hels
/Acr
e
Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
What is the U.S. trend line yield?
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
60
80
100
120
140
160
180
Average YieldTrend Line
Bus
hels
/Acr
e
Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
2012 ≈ 122.0 bu./a.
38.0 bu. below trend line!
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
60
80
100
120
140
160
180
Average YieldTrend Line
Bus
hels
/Acr
eWhat is the U.S. trend line yield?
Oct. 11, 2012 WASDE – Feed Grains Data Base Table 1
1983 = -21.6 (-21%)1988 = -28.0 (-25%)1993 = -21.8 (-18%)2012 = -38.0 (-24%)
Have Production estimates stabilized?
Who will use less corn?
Corn - Total Use(Billion Bushels)
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Feed & Residual
Ethanol
Non-Ethanol Food, Seed & Industrial
Exports
Bil
lion
Bus
hels
Oct. 11, 2012 WASDE Report & USDA – Feed Grains Data Base Table 4
U.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.
Corn Supply & Demand Table
Will the ethanol industry use 10% less
corn?
USDA – WASDE – Oct. 11, 2012
Weekly Ethanol Production(06/04/2010 – 10/26/2012)
EIA September Short Term Energy Outlook & EIA Custom Query
Jun 04, 2
010
Jul 09, 2
010
Aug 13, 2
010
Sep 1
7, 2010
Oct
22, 2010
Nov 26, 2
010
Dec 3
1, 2010
Feb 0
4, 2011
Mar 1
1, 2011
Apr 15, 2
011
May 2
0, 2011
Jun 24, 2
011
Jul 29, 2
011
Sep 0
2, 2011
Oct
07, 2011
Nov 11, 2
011
Dec 1
6, 2011
Jan 20, 2
012
Feb 2
4, 2012
Mar 3
0, 2012
May 0
4, 2012
Jun 08, 2
012
Jul 13, 2
012
Aug 17, 2
012
Sep 2
1, 2012
Oct
26, 2012
Nov 30, 2
012700
750
800
850
900
950
1,000
Weekly Production USDA Est. Corn Use
1,00
0 B
arre
ls/D
ay
Corn Supply & Demand Table
U.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.
Will corn exports drop by 25%?
USDA – WASDE – Oct. 11, 2012
Weekly Corn Export Sales(06/10/2010 – 10/25/2012)
USDA-FSA Weekly Export Sales Report & Oct. 11, 2012 WASDE
06/1
0/20
10
07/2
0/20
10
08/2
9/20
10
10/0
8/20
10
11/1
7/20
10
12/2
7/20
10
02/0
5/20
11
03/1
7/20
11
04/2
6/20
11
06/0
5/20
11
07/1
5/20
11
08/2
4/20
11
10/0
3/20
11
11/1
2/20
11
12/2
2/20
11
01/3
1/20
12
03/11
/201
2
04/2
0/20
12
05/3
0/20
12
07/0
9/20
12
08/1
8/20
12
09/2
7/20
12
11/0
6/20
12200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
USDA Exports Actual Exports
Bu
shel
s/W
eek
World Corn Prod, Use & Stocks/Use(Million Metric Ton)
1980
/81
1982
/83
1984
/85
1986
/87
1988
/89
1990
/91
1992
/93
1994
/95
1996
/97
1998
/99
2000
/01
2002
/03
2004
/05
2006
/07
2008
/09
2010
/11
2012
/13
300.00
400.00
500.00
600.00
700.00
800.00
900.00
0.1000
0.2000
0.3000
0.4000
0.5000
0.6000Stocks-to-Use Total Production Total Use
Mil
lion
Met
ric
Ton
s
Stoc
ks-t
o-U
se R
atio
Oct.11, 2012 USDA -WASDE & PSD Custom Query
U.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.
Corn Supply & Demand Table Will feed use drop by
9.0%?
This value will be the most difficult to track!
Quarterly Grain Stocks
USDA – WASDE – Oct. 11, 2012
USDA – WASDE – Oct. 11, 2012
U.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.
Corn Supply & Demand Table
Projected 5.5% Stocks/Use Ratio
Lowest since 1995/96, which was record low
percentage.
Corn – Total Production & Use(Billion Bushels)
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
2012
/13
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
0.000
0.050
0.100
0.150
0.200
0.250
0.300
0.350
0.400
0.450
0.500Stocks-to-Use Total Production Total Use
Bil
lion
Bus
hels
Stoc
ks-t
o-U
se R
atio
Oct. 11, 2012 WASDE Report & USDA – Feed Grains Data Base Table 4
0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.2101.00
3.00
5.00
7.00
9.00
11.00
13.00
Historical Price Forecasted Price
Percent Stocks/Use
US
Dolla
r/Bu
shel
Price vs. Stocks/Use Ratio1993/94 to 2012/13
1993/94 to 2006/07
0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.2101.00
3.00
5.00
7.00
9.00
11.00
13.00
Historical Price Forecasted Price
Percent Stocks/Use
US
Dolla
r/Bu
shel
Price vs. Stocks/Use Ratio1993/94 to 2012/13
1995/96
0.030 0.050 0.070 0.090 0.110 0.130 0.150 0.170 0.190 0.2101.00
3.00
5.00
7.00
9.00
11.00
13.00
Historical Price Forecasted Price
Percent Stocks/Use
US
Dolla
r/Bu
shel
Price vs. Stocks/Use Ratio1993/94 to 2012/13
2007/08 to 2012/13
QUESTIONS & COMMENTS?
Frayne OlsonDept. of Agribusiness & Applied Econ.
NDSU Dept. 7110
P.O. Box 6050
Fargo, ND 58108-6050
701-231-7377
http://www.ndsu.edu/cropeconomics
