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Feed Outlook

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Feed Outlook Jim Dunn Ag Economist Pennsylvania State University Hog notes Integrators suffering from feed prices Demand is okay but prices too low to cover costs ... – PowerPoint PPT presentation

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Title: Feed Outlook


1
Feed Outlook
  • Jim Dunn
  • Ag Economist
  • Pennsylvania State University

2
Sources of InformationUSDA
  • http//usda.mannlib.cornell.edu/MannUsda/homepage.
    do
  • http//usda.mannlib.cornell.edu/MannUsda/viewTaxon
    omy.do?taxonomyID3
  • http//usda.mannlib.cornell.edu/MannUsda/viewTaxon
    omy.do?taxonomyID25
  • http//usda.mannlib.cornell.edu/MannUsda/viewDocum
    entInfo.do?documentID1273

3
What these are called
  • USDA Economics, Statistics and Market Information
    System (ESMIS)
  • Field Crops
  • Outlooks, Yearbooks, and Estimates
  • Feed Outlook

4
Other useful links
  • Oil Crops Outlook
  • Livestock, Dairy, and Poultry Outlook
  • Milk Production
  • Feed grains database
  • Livestock, Dairy, and Poultry Outlook Tables

5
Issues for Feed Economy
  • Bio-Fuel
  • Expensive inputs
  • More debt
  • Cheap dollar
  • China and India
  • Banking crisis
  • Weather

6
Bio-Fuel
  • Ethanol
  • Bio-diesel
  • Both ethanol bio-diesel subsidies and tariff on
    ethanol expired this year
  • Does it make sense to use food for fuel?

7
Source CME
8
Prices today Verasun 0 Pacific 1.13 Aventine
3.10 old shares 0
9
Ethanol
  • 36 of 211 plants are not operating
  • Others are on partial slowdown
  • All of these plants cannot survive
  • Clearfield operating again present owner has
    very little capital costs
  • Margins may still be negative

Source Renewable Fuels Association
10
Corn Supply
Year Beg stocks Production Supply
Bil. Bu. Bil. Bu. Bil. Bu.
2007/08 1.30 13.07 14.36
2008/09 1.62 12.09 13.73
2009/10 1.67 13.10 14.77
2010/11 1.71 12.45 14.18
2011/12 1.13 12.36 13.51
2012/13 est 0.99 10.73 11.81
Source USDA
11
Corn Usagebil. bu
Year Feed Food Fuel Exports Total
2007/08 5.86 1.32 3.05 2.44 12.74
2008/09 5.18 1.32 3.71 1.85 12.06
2009/10 5.13 1.35 4.59 1.98 13.07
2010/11 4.79 1.41 5.02 1.84 13.05
2011/12 4.55 1.43 5.01 1.54 12.53
2012/13 est 4.15 1.37 4.50 0.90 11.17
Source USDA
12
Food and Industrial Corn Usemil. bu.
Crop Year HFCS Other sweeteners Starch Fuel Liquor Cereal
2007 490 236 262 3,049 135 192
2008 489 245 234 3,709 134 192
2009 513 257 250 4,568 134 194
2010 521 272 258 5,021 135 197
2011 514 294 254 5,011 135 203
2012 485 280 240 4,500 135 202
Source USDA
13
Corn Usage
Crop 2004 2007 2010 2012
Feed 57.8 46.0 36.7 37.1
Food 12.6 10.4 10.8 12.2
Exports 17.1 19.0 14.1 10.3
Ethanol 12.4 24.7 38.5 40.2
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Corn futures prices2/7/13
Month Price (cts/bu.)
March 13 718 (62 cents more than last year
May 13 719
July 13 710
Sept 13 597
Dec 13 573
16
Corn Price History
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Soybean Supplymil.bu.
Year Carry-in Production Total
2007 574 2677 3261
2008 205 2967 3185
2009 138 3359 3512
2010 151 3329 3495
2011 215 3056 3286
2012 175 3205 3395
19
Soybean Usage
Year Crush Exports Seed Total
2007 1803 1159 94 3056
2008 1662 1279 106 3047
2009 1752 1501 108 3361
2010 1648 1501 130 3280
2011 1660 1335 116 3111
2012 1645 1485 125 3255
20
Soybean Carryout Price
Year Carryout mil. bu. Price Days Use of carryout
2006 574 6.43 67
2007 140 10.10 24
2008 138 9.97 16
2009 151 9.59 16
2010 215 11.30 19
2011 175 12.50 23
2012 140 14.55 15
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Soybean Price History
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Soybean futures prices2/7/13
Month Price (cts/bu.)
March 13 1490
May 13 1479
July 13 1468
Sept 13 1380
Nov 13 1329
25
Low values mean animal producers lose money
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Beef notes
  • Feeder cattle numbers were hit hard by drought in
    Texas
  • Animals put in feed lots early
  • High feeder cattle prices
  • Feed lots returns low
  • Packers cant pass costs on in this economy
    high-valued cuts are not high enough

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34
Hog notes
  • Integrators suffering from feed prices
  • Demand is okay but prices too low to cover costs

35
Poultry Notes
  • Eggs and Broilers cheapest form of protein
  • Margins bad
  • Exports important and weakness in world economy
    affects price
  • Demand is okay but feed is too high priced

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Concluding Questions
  • How will meat producers deal with feed prices?
  • How will dairy producers deal with feed situation
  • How will consumers adjust consumption in weak
    economy?
  • Will we really keep cutting per capita meat
    consumption?
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