Ag Decision Maker website updates for July

July 17th, 2015

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

July Newsletter (pdf)

New and Updated Files


Iowa Farm Outlook

Outlook Information for Crops and Livestock

July Newsletter (pdf)

LivestockInterpreting the Hogs and Pigs Report: Perspective Makes a Difference
CropsHeading into July with Price Fireworks


AgMRC Renewable Fuels Monthly Report

Implications of EPA’s Proposed 2014 through 2017 Biofuels Mandates
The Importance of China in Combating Global Warming
Prices, Profitability and Supply/Demand


CARD Agricultural Policy Review

Agricultural Land Use Change in the Corn Belt
Capturing Dynamic Linkages Between Agriculture and Energy in Biofuel Assessment: The Case of Iowa
Searching for Profitable Margins
Food Programs and the Potato


Ag Decision Maker (AgDM) 

An agricultural economics and business website.

Other

Demand Remains Robust (7/10/15)

July 10th, 2015

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbThe July USDA World Ag Supply and Demand Estimates (WASDE) report held some interesting nuggets for the market to chew on. Starting with the 2014 crops, demand remained robust as all of the major demand sectors were increased for the crops in the bins. Corn feed demand was increased 50 million bushels. Ethanol demand for corn was raised 25 million bushels. Corn export demand was also increased 25 million bushels. Soybean crush bumped up 15 million bushels and soybean exports were increased the same amount. These changes pulled 2014/15 ending stocks below the average trade expectations and allowed USDA to increase its season-average price estimate for corn to $3.70 per bushel, up 5 cents from last month. The soybean season-average price estimate remained at $10.05 per bushel.

Looking at the 2015 crops, the acreage numbers from last month’s report were the only update on the supply side. So yield and production estimates came in above trade expectations as the trade was looking for a downshift in yields given the weather issues this spring and summer. Current estimates have the national average corn yield at 166.8 bushels per acre and the national average soybean yield at 46 bushels per acre. Given the June acreage numbers, that would put production at 13.53 billion bushels for corn and 3.885 billion bushels for soybeans. Both of those numbers were roughly 100 million bushels above trade expectations.

On the demand side for the 2015 crops, the news was mixed. Increases were reported for corn usage in ethanol and for soybean crush. However, corn feed usage and exports were lowered. The end result is lower 2015/16 ending stocks than previously estimated by USDA, but the numbers still exceeded trade expectations. Corn stocks were projected at 1.6 billion bushels, while soybean stocks stood at 425 million bushels. With the tightening of the stocks for 2015/16, USDA increased both the corn and soybean season-average price estimates by 25 cents per bushel, with corn at $3.75 per bushel and soybeans at $9.25 per bushel.

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Crop Outlook , ,

Ag Decision Maker website updates for June 2015

June 18th, 2015

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

June Newsletter (pdf)

Iowa Farm Outlook

Outlook Information for Crops and Livestock

June Newsletter (pdf)

LivestockRegional Hay-Pasture Situation and Outlook
CropsSearching for a Reason to Rally


AgMRC Renewable Fuels Monthly Report

An Overview of U.S. Progress in Renewable Energy
The Future of Electric Powered Vehicles
Prices, Profitability and Supply/Demand


Ag Decision Maker (AgDM) 

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Other

Relatively Quiet Report for Corn and Soybeans (6/10/15)

June 10th, 2015

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbThere are only a few changes in the U.S. corn and soybean outlooks from USDA. For corn, the only change is a 25 million drop in corn usage for ethanol from the 2014 crop. All other supply and demand numbers remain the same. And the season-average price midpoints hold at $3.65 per bushel for the 2014 crop and $3.50 per bushel for the 2015 crop. For soybeans, demand is ratcheted up a little bit. On the 2014 crop, both domestic crush and export demand are raised 10 million bushels. On the 2015 crop, crush is raised another 5 million bushels. Combined, this lowered 2015/16 soybean ending stocks to 475 million bushels. But the price outlook holds steady at $10.05 per bushel for the 2014 crop and $9.00 per bushel for the 2015 crop.

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Crop Outlook, Crops

Survey Shows Farmland Rental Rates Down

May 14th, 2015

A second year of declining rates for renting land in Iowa

Alejandro PlastinaRental rates for Iowa farmland decreased by 5 percent in 2015, according to results from the Cash Rental Rates for Iowa – 2015 Survey conducted by Iowa State University Extension and Outreach. This is the second consecutive year of declining rates after a 15-year streak of increasing rental rates, accumulating a 9 percent loss since 2013.

“Average rents were lower in all nine crop reporting districts,” according to Alejandro Plastina, assistant professor and extension economist with Iowa State University. “The average estimated cash rent for corn and soybean land in the state for 2015 was $246 per acre, a decrease of $14 per acre or nearly 5 percent from last year. Low crop prices for the 2014 crop and small- to negative-profit margin forecasts for this year’s crop put downward pressure on rental rates,” Plastina said.

The largest decreases in land rental occurred in central and west central Iowa, at $24 and $23 per acre, respectively. Those districts had the highest rents among all crop reporting districts in 2014. Northeast Iowa reported the highest average in 2015 at $273, and the lowest district value was $187 in south central Iowa. Grundy County had the highest average rent in the state, at $316 per acre.

“It isn’t a trend yet, but it certainly is a reversal of the 15-year trend we’ve seen of land rental rate increases,” said Plastina. “Land rates and other input costs take time to adjust to lower levels of crop revenue; so if corn and soybean prices don’t improve soon, we can expect land rental rates to continue to decline.”

Plastina indicated the typical rental rates per bushel of corn yield, soybean yield and the average Corn Suitability Rating 2 points were computed for each county. In addition, typical charges for land growing oats and hay, for grazing pasture and corn stalks, and renting for hunting rights were reported.

Rental values were estimated by asking people familiar with land rental markets what they thought were typical rates in their county. Of the 1,437 total responses received, 49 percent came from farmers, 27 percent from landowners, 12 percent from agricultural lenders, 10 percent from professional farm managers and 2 percent from other professionals.

The Cash Rental Rates for Iowa – 2015 Survey is available online as a downloadable document from the ISU Extension and Outreach Store and Ag Decision Maker website.

Other resources available for estimating a fair cash rental rate include the Ag Decision Maker information files Computing a Cropland Cash Rental Rate (C2-20), Computing a Pasture Rental Rate (C2-23), and Flexible Farm Lease Agreements (C2-21). All documents include decision file electronic worksheets to help analyze leasing questions.

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Ag Decision Maker website updates for May 2015

May 13th, 2015

Ag Decision Maker

Business Solutions for Farms and Agribusiness from Iowa State University Extension and Outreach

May Newsletter (pdf)

Iowa Farm Outlook

Outlook Information for Crops and Livestock

May Newsletter (pdf)

LivestockSeveral Factors Supporting, Pressuring Fed Cattle Prices
CropsPlanting and Prices Are Moving in Opposite Directions


AgMRC Renewable Fuels Monthly Report

Current Indicators Point to Ample Low-priced Feedstocks for U.S. Biofuels but Continued Weak Processing Margins
The Coming Electricity Storage Revolution
Prices, Profitability and Supply/Demand


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Old vs. New Crop (5/12/15)

May 12th, 2015

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbWith the May monthly reports, USDA provides an update on old crop data and a forecast on new crop information. For soybeans, the old crop news was mixed. Domestic crush and export demand were both raised by 10 million bushels. That lowered projected 2014/15 ending stocks by 20 million bushels, but that still leaves 350 million bushels in storage as we enter the next marketing year, more than triple what we had to begin this marketing year. But despite the increase in old crop demand, the season-average soybean price for 2014/15 was reduced by 5 cents to $10.05 per bushel. For the 2015/16 soybean crop, the acreage and yield remained steady with earlier USDA estimates. So the market is staring at 84.6 million acres of soybeans with an expected yield of 46 bushels per acre. The combination would produce 3.85 billion bushels of soybeans, the 2nd largest soybean crop on record. And while overall soybean demand is projected to be steady, domestic demand is seen increasing, while international demand is expected to fall slightly. Ending stocks are expected to build to 500 million bushels and the first official estimate of the 2015/16 season-average price is $9 per bushel.

The story for corn is a little different. Old crop demand is shrinking slightly, mainly in the food, seed, and industrial sector. Export demand is up 25 million bushels, but the nearly 50 million bushel drop in food, seed, and industrial use more than offset the international boost. 2014/15 ending stocks now top 1.85 billion bushels and the season-average price was lowered 5 cents to $3.65 per bushel. On the new crop, like with soybeans, the production numbers were unchanged from earlier estimates, 89.2 million acres planted with a yield of 166.8 bushels per harvested acre. So production is estimated at 13.63 billion bushels, projected to be the 3rd largest corn crop. New crop demand is expected to rise, with a 50 million bushel rise in feed demand, a 13 million bushel increase in food, seed, and industrial use, and a 75 million bushel growth in export demand. With the growth in demand, 2015/16 ending stocks are forecast to be roughly 1.75 billion bushels and the first official estimate of the 2015/16 season-average price is $3.50 per bushel.

Ag Decision Maker (AgDM) 

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Crop Outlook

Ready to Plant

March 31st, 2015

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA reports.

Hart_Chad-thumbFarmers provided their first outlook on the 2015 crop year with the release of USDA’s Prospective Plantings report. And the general shift is along the lines that the market expected. Corn planting intentions came in at 89.2 million acres. That’s 200,000 acres more than USDA’s early estimate and a half of million acres more than the average trade guess, but it’s still 1.4 million acres less than was planted last year. Illinois, Indiana, and Iowa all reduced corn intentions slightly, but there are offsetting increases on the fringes of the Corn Belt. The largest moves are in Minnesota, up 300,000 acres, and South Dakota, down 600,000 acres. Soybean planting intentions are at a record 84.6 million acres. That is well above USDA’s early estimate of 83.5 million acres, but below the average trade guess at 85.9 million acres. The I-states all increased soybean intentions, with Iowa topping 10 million acres. The big movers are Nebraska, down 300,000 acres, and Ohio, up 250,000 acres. Given USDA’s trend yields, the acreage numbers imply expected crops of 13.625 billion bushels for corn and 3.85 billion bushels of soybeans.

These projected large crops are coming on top of last year’s record crops. The Grain Stocks report was also released today and it showed more crop still sitting in storage. Soybean stocks came in at 1.33 billion bushels, up 34 percent from last year, even though disappearance was slightly higher. Corn stocks stand 7.74 billion bushels, up 11 percent from last year, as disappearance was basically flat. The main punchline from today’s reports is that supplies continue to build and while demand is growing, it will take a while to work through the expected production. Prices have lowered to reflect this and these reports don’t change that dynamic.

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Ag Decision Maker website updates for March 2015

March 17th, 2015

Finding a Little More Demand for Corn (3/10/15)

March 11th, 2015

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.

Hart_Chad-thumbWith the mid-March USDA supply and demand report, the corn picture is a little brighter today. Feed demand was increased to 5.3 billion bushels as the expansion in the livestock sector continues. Corn demand via ethanol was lowered 50 million bushels, but still stands at 5.2 billion bushels.  Processing efficiency at ethanol plants has improved and USDA incorporated that efficiency change in this update. So the feed and ethanol changes offset each other. But with corn exports also shifted up 50 million bushels, the overall demand structure for corn continues to grow. With total use now estimated at just under 13.7 billion bushels, corn demand is at record levels. And while ending stocks are projected to increase from last year, the growth in stocks is not as large as once feared. Given the improving demand, USDA increased the midpoint of its season-average price range 5 cents, to $3.70 per bushel.

For soybeans, this was a very quiet report on the domestic front. There were no changes to the U.S. soybean balance sheet. Domestic crush demand is projected at 1.795 billion bushels. Soybean exports are set at 1.79 billion bushels. Ending stocks are estimated at 385 million bushels, up from 92 million the year before. And the midpoint of the season-average price range is set at $10.20 per bushel. Globally, soybean production is at record levels as well. But global soybean trade is growing to work through the large supplies.

Ag Decision Maker (AgDM) 

An agricultural economics and business website.

Crop Outlook