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Drought, Grain Marketing, and Risk Management

Drought, Grain Marketing, and Risk Management. Clear Lake Bank & Trust Ag. Meeting Garner, Iowa Dec. 6, 2012 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911. U.S. Corn Supply and Use. Source: USDA-WAOB. U.S. Soybean Supply and Use. Source: USDA-WAOB.

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Drought, Grain Marketing, and Risk Management

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  1. Drought, Grain Marketing, and Risk Management Clear Lake Bank & Trust Ag. Meeting Garner, Iowa Dec. 6, 2012 Chad Hart Associate Professor/Grain Markets Specialist chart@iastate.edu 515-294-9911

  2. U.S. Corn Supply and Use Source: USDA-WAOB

  3. U.S. Soybean Supply and Use Source: USDA-WAOB

  4. Prices

  5. Projected Corn Yields

  6. Projected Soybean Yields

  7. World Corn Production Source: USDA-WAOB

  8. World Soybean Production Source: USDA-WAOB

  9. World Weather Source: USDC and USDA

  10. Hog Crush Margin The Crush Margin is the return after the pig, corn and soybean meal costs. Carcass weight: 200 pounds Pig price: 50% of 5 mth out lean hog futures Corn: 10 bushels per pig Soybean meal: 150 pounds per pig Source: ISU Extension

  11. Cattle Crush Margin The Crush Margin is the return after the feeder steer and corn costs. Live weight: 1250 pounds Feeder weight: 750 pounds Corn: 50 bushels per head Source: ISU Extension

  12. U.S. Meat Production & Prices Source: USDA-WAOB

  13. Corn Export Shifts Source: USDA-FAS

  14. Soy Export Shifts Source: USDA-FAS

  15. Corn Grind for Ethanol

  16. U.S. Blended Gasoline Consumption 7.6 bil. gal. 7.4 bil. gal. Source: DOE-EIA, via USDA-ERS

  17. Current Corn Futures 6.91 6.07 5.63 Source: CME Group, 12/5/2012

  18. Current Soybean Futures 13.92 12.67 12.27 Source: CME Group, 12/5/2012

  19. Early Prices for 2013 Crops

  20. Total Acreage Shift Source: USDA-NASS

  21. Acreage Shift by Crop Acreage change from 2011 Units: 1,000 acres Source: USDA-NASS

  22. Acreage Shift by State Top: Planted in 2012 Bottom: Change from 2011 Units: 1,000 acres Source: USDA-NASS

  23. Thoughts for 2013 and Beyond • Supply/demand concerns • Soil moisture issues • Biofuel and export strength • Worldwide response to drought-induced pricing • Risk management • Crop insurance • Price protection

  24. Thank you for your time!Any questions?My web site:http://www.econ.iastate.edu/~chart/Iowa Farm Outlook:http://www.econ.iastate.edu/ifo/Ag Decision Maker:http://www.extension.iastate.edu/agdm/

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