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What’s Ahead for COMMODITY PRICES & FARMLAND VALUES

What’s Ahead for COMMODITY PRICES & FARMLAND VALUES. Remarks by Mark Pearson Independent Community Bankers Nashville, Tennessee March 12, 2012. Back in Production… Any Way Possible. Source: Matt Leavitt. 10-Year Corn Prices. Source: NASS. Corn Use: Fuel versus Food. 6 4 2 0.

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What’s Ahead for COMMODITY PRICES & FARMLAND VALUES

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  1. What’s Aheadfor COMMODITY PRICES & FARMLAND VALUES Remarks by Mark Pearson Independent Community Bankers Nashville, TennesseeMarch 12, 2012

  2. Back in Production… Any Way Possible Source: Matt Leavitt

  3. 10-Year Corn Prices Source: NASS

  4. Corn Use: Fuel versus Food 6 4 2 0 Bushels Feed Ethanol ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 Source: USDA

  5. U.S. Corn Ending Stocksas Percentage of Use Compliments of PHI Marketing

  6. World Corn Ending Stocksas a Percentage of Use Compliments of PHI Marketing

  7. USDA Corn Supply and Use 2010/11 est. (2/9/12) 2011/2012 proj. Area Planted 88.2 91.9 Area Harvested 81.4 84.0 Yield 152.8 147.2 Beginning Stocks 1,708 1,128 Production 12,447 12,358 Imports 28 20 Supply, Total 14,182 13,506 Feed & Residual 4,793 4,600 Food, Seed & Industrial 6,428 6,405 Domestic Use, Total 11,220 11,005 Exports 1,835 1,700 Use, Total 13,055 12,705 Ending Stocks 1,128 801 Average Farm Price $5.18 $5.80-$6.60 Compliments of PHI Marketing

  8. World Corn Supply and Use 2009-10 2010-11 (est.) 2011-12 (proj.) Beginning Stocks 147.54 144.18 128.83 Production 819.23 827.54 864.11 Imports 89.76 91.34 92.84 Feed 488.48 494.41 510.83 Total 822.60 842.89 867.59 Exports 96.82 90.45 94.93 Ending Stocks 144.18 128.83 125.35 Million Metric Tons Compliments of PHI Marketing

  9. May ’12 Corn Source: CBOT

  10. December ’12 Corn Source: CBOT

  11. Light Sweet Crude Oil Source: NYMEX

  12. 10-Year Soybean Prices Source: NASS

  13. Brazil’s Big Ag Expansion 2011-21 75% 60% 50% 40% 30% 20% 10% 0% Production 24% 46% 36% 39% 48% 68% Exports Coffee Soybeans Cotton Source: DTN

  14. U.S. Soybean Ending Stocks As % of Use Compliments of PHI Marketing

  15. World Soybean Ending Stocksas Percentage of Use Compliments of PHI Marketing

  16. USDA Soybean Supply and Use 2010/11 Est. (2/9/12) 2011/2012 Projected Area Planted 77.4 75.0 Area Harvested 76.6 73.6 Yield (bushels per acre) 43.5 41.5 Beginning Stocks 151 215 Production 3,329 3,056 Imports 14 15 Supply, Total 3,495 3,286 Crush 1,648 1,615 Exports 1,501 1,275 Seed 87 88 Residual 43 32 Use, Total 3,280 3,011 Ending Stocks 215 275 Average Farm Price $11.30 $11.10-$12.30 Compliments of PHI Marketing

  17. World Soybean Supply and Use 2009/102010/11 (est.)2011/2012(Proj.) Beginning Stocks 42.72 59.60 68.90 Production 260.85 264.18 251.47 Imports 86.83 88.83 90.76 Crush 209.50 221.09 227.42 Total 238.25 251.74 258.05 Exports 92.55 91.97 92.79 Ending Stocks 59.60 68.90 60.28 Million Metric Tons Compliments of PHI Marketing

  18. May ’12 Soybeans Source: CBOT

  19. November ’12 Soybeans Source: CBOT

  20. 10-Year Wheat Prices Source: NASS

  21. USDA Wheat Supply and Use 2010/11 (2/9/12) 2011/2012 Projected Area Planted 53.6 54.4 Area Harvested 47.6 45.7 Yield (bushels per acre) 46.3 43.7 Beginning Stocks 976 862 Production 2,207 1,999 Imports 97 120 Supply, Total 3,279 2,982 Food 926 935 Seed 71 82 Feed & Residual 132 145 Exports 1,289 1,162 Use, Total 2,417 2,137 Ending Stocks 862 845 Average Farm Price $5.70 $7.15-$7.45 Compliments of PHI Marketing

  22. World Wheat Supply and Use 2009/102010/11(est.)2011/2012 (Proj.) Beginning Stocks 167.05 202.34 200.70 Production 685.43 651.61 692.88 Imports 133.58 130.07 135.91 Feed 115.36 112.42 130.66 Total 650.14 653.24 680.48 Exports 135.80 131.82 140.25 Ending Stocks 202.34 200.70 213.10 Million Metric Tons Compliments of PHI Marketing

  23. U.S. Wheat Ending Stocks As % of Use Compliments of PHI Marketing

  24. World Wheat Ending Stocks As Percentage of Use Compliments of PHI Marketing

  25. May ’12 Chicago Wheat Source: CBOT

  26. December ’12 Chicago Wheat Source: CBOT

  27. 10-Year Cotton Prices Source: NASS

  28. May ’12 Cotton Source: CBOT

  29. December ’12 Cotton Source: NYMEX

  30. 10-Year Cattle Prices Source: NASS

  31. April ’12 Live Cattle Source: CBOT

  32. December ’12 Live Cattle Source: CBOT

  33. April ’12 Feeder Cattle Source: CBOT

  34. November ’12 Feeder Cattle Source: CBOT

  35. January Milk Cows 2002-12 Source: NASS

  36. April ’12 Class III Milk Source: CBOT

  37. December ’12 Class III Milk Source: CBOT

  38. 10-Year Hog Prices Source: NASS

  39. April ’12 Lean Hogs Source: CBOT

  40. December ’12 Lean Hogs Source: CBOT

  41. Inflation Adjusted Farmland Values 1964-2010 Source: Chicago Federal Reserve

  42. Globally Local World: What’s Ahead • Recovering economy • Demographics will drive ag/food product demand • Next world industrial expansion: Africa • U.S. continues to be ag technology leader • U.S., China will drive African development • Infrastructure build-out continues in South America • ‘Youth bulge’ means growth in Middle East, but continued destabilization following Arab Spring • What’s this mean for you: Continued strong demand for U.S. agricultural commodities

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