Commodity Situation and Outlook (Corn, Wheat, Soybeans, and Livestock)

National Turkey Federation

Westin Hotel, Washington, DC

October 24, 2011

http://www.usda.gov/oce/speeches/index.htm

World Corn Production

October 12, 2011

Country or Region2010/11 estimate

2011/12 forecast

Change from 2010/11

Million Tons Percent

World 828.3 860.1 3.8United States 316.2 315.8 -0.1

Foreign 512.1 544.3 6.3Argentina 22.5 27.5 22.2Brazil 57.5 61.0 6.1Mexico 20.6 24.0 16.5Canada 11.7 10.0 -14.6European Union 55.9 61.0 9.1FSU-12 18.6 31.1 67.6Ukraine 11.9 21.0 76.2

South Africa 11.8 12.5 5.9China 177.2 182.0 2.7

U.S. Corn Supply and Use2010 Estimate and 2011/12 Forecasts

2010/11 estimate(Oct. 12)

2011/12 forecast(May 11)

2011/12 forecast(June 9)

2011/12 forecast(July 12)

2011/12 forecast(Aug. 11)

2011/12 forecast(Sept. 12)

2011/12 forecast(Oct. 12)

Planted area (Mill. acres) 88.2 92.2 90.7 92.3 92.3 92.3 91.9Harvested area (Mill. acres) 81.4 85.1 83.2 84.9 84.4 84.4 83.9Yield (bushels per acre) 152.8 158.7 158.7 158.7 153.0 148.1 148.1

Million bushelsBeginning stocks 1,708 730 730 880 940 920 1,128Production 12,447 13,505 13,200 13,470 12,914 12,497 12,433Total supply 14,182 14,255 13,950 14,370 13,874 13,432 13,576

Feed and residual 4,803 5,100 5,000 5,050 4,900 4,700 4,700Food, seed, and industrial 6,415 6,455 6,455 6,550 6,510 6,410 6,410Ethanol 5,020 5,050 5,050 5,150 5,100 5,000 5,000Domestic use 11,218 11,555 11,455 11,600 11,410 11,110 11,110

Exports 1,835 1,800 1,800 1,900 1,750 1,650 1,600Total use 13,053 13,355 13,255 13,500 13,160 12,760 12,710

Ending stocks 1,128 900 695 870 714 672 866Percent

Stocks to use ratio 8.6 6.7 5.2 6.4 5.4 5.3 6.8Dollars per bushel

Average market price 5.18 5.50/6.50 6.00/7.00 5.50/6.50 6.20/7.20 6.50/7.50 6.20/7.20

Renewable Fuel Standard

0

4

8

12

16

20

24

28

32

36

40

2007 2009 2011 2013 2015 2017 2019 2021

Bil. gal. Conventional Biofuel RFS Total RFS

Source: Energy Independence and Security Act of 2007.

U.S. Ethanol Production Capacity

0

2

4

6

8

10

12

14

16

Sep 2006 Sep 2007 Sep 2008 Sep 2009 Sep 2010 Sep 2011

Bil. gallons/year

Growing production capacity

Calendar Year Conventional Biofuels RFS

Source: Production capacity from Renewable Fuels Association. RFS from Energy Independence and Security Act of 2007.

20072006

2008

20092010

2011 2012

U.S. Blended Motor Gasoline Consumption

Source: DOE-Energy Information Administration, Short-term Energy Outlook (STEO) and Annual Energy Outlook (AEO).

130

135

140

145

150

155

2000 2002 2004 2006 2008 2010 2012F 2014F 2016F

Bil. gallons Actual EIA AEO Dec. 2007

EIA STEO Oct. 2011 EIA STEO Feb. 2011

7.6 bil. gal.

5.3 bil. gal.

Ethanol Producer Net Returns Above Variable Costs / Spot prices

-0.20

-0.10

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

9/3/10 10/31/10 12/28/10 2/24/11 4/23/11 6/20/11 8/17/11 10/14/11

$/gal.

Note: USDA-WAOB estimates based on USDA-AMS plant reports and DOE-EIA estimates and forecasts for natural gas and electricity prices.

+ 39 cents / gal. (10/14/11)

Ethanol and RBOB Nearby Futures Prices

1.40

1.60

1.80

2.00

2.20

2.40

2.60

2.80

3.00

3.20

3.40

3.60

9/1/10 10/29/10 12/26/10 2/22/11 4/21/11 6/18/11 8/15/11 10/12/11

$/gal.

Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.

Reformulate Gasoline Blend Stock (RBOB)

Ethanol

$0.12

Ethanol and RBOB Nearby Futures Spreads

-0.90

-0.70

-0.50

-0.30

-0.10

0.10

0.30

0.50

0.70

9/1/10 10/29/10 12/26/10 2/22/11 4/21/11 6/18/11 8/15/11 10/12/11

$/gal. Spread Blender Credit

Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.

45-cent blender credit

(Ethanol – RBOB)

Blending incentive (10/13/11) = $0.57

World Wheat Production

October 12, 2011

Country or Region2010/11 estimate

2011/12 forecast

Change from 2010/11

Million Tons Percent

World 648.2 681.2 5.1United States 60.1 54.7 -9.0

Foreign 588.1 626.5 6.5Argentina 15.0 13.5 -10.0Canada 23.2 24.2 4.5Australia 26.0 26.0 0.0European Union 135.6 136.3 0.5Russian Federation 41.5 56.0 34.9Ukraine 16.8 22.0 30.6Kazakhstan 9.7 19.0 95.9China 115.2 117.0 1.6India 80.8 85.9 6.3

U.S. Wheat Supply and Demand

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Planted area (million acres) 53.6 54.4 1.5Harvested area (million acres) 47.6 45.7 -4.0Yield (bushels per acre) 46.3 43.9 -5.2

Million bushelsBeginning stocks 976 862 -11.6Production 2,207 2,008 -9.0Imports 97 120 23.8Total supply 3,279 2,990 -8.8

Food use 926 940 1.6Seed 71 78 10.3Feed and residual 132 160 21.3Domestic use 1,128 1,178 4.4

Exports 1,289 975 -24.4Total use 2,417 2,153 -10.9

Ending stocks 862 837 -2.9Percent

Stocks to use ratio 35.7 38.9Dollars per bushel

Average market price 5.70 7.10/7.90 31.6

World Soybean Production

October 12, 2011

Country or Region

2010/11 estimate

2011/12 forecast

Change from 2010/11

Million Tons Percent

World 264.1 258.6 -2.1United States 90.6 83.3 -8.1

Foreign 173.5 175.3 1.0Argentina 49.0 53.0 8.2Brazil 75.5 73.5 -2.6India 8.3 7.5 -9.6India 9.8 10.6 8.2China 15.1 14.0 -7.3

U.S. Soybeans Supply and Use2010 Estimate and 2011/12 Forecasts

2010/11 estimate(Oct. 12)

2011/12 forecast(May 11)

2011/12 forecast(June 9)

2011/12 forecast(July 12)

2011/12 forecast

(August 11)

2011/12 forecast(Sept. 12)

2011/12 forecast(Oct. 12)

Planted area (Mill. acres) 77.4 76.6 76.6 75.2 75.0 75.0 75.0Harvested area (Mill. acres) 76.6 75.7 75.7 74.3 73.8 73.8 73.7Yield (bushels per acre) 43.5 43.4 43.4 43.4 41.4 41.8 41.5

Mill. bushelsBeginning stocks 151 170 180 200 230 225 215Production 3,329 3,285 3,285 3,225 3,056 3,085 3,060Imports 15 15 15 15 15 15 15Total supply 3,495 3,470 3,480 3,440 3,301 3,325 3,290

Crush 1,648 1,655 1,655 1,655 1,635 1,635 1,635Seed and residual 132 115 115 115 111 111 120Domestic use 1,780 1,770 1,770 1,769 1,746 1,746 1,755

Exports 1,500 1,540 1,520 1,495 1,400 1,415 1,375Total use 3,280 3,310 3,290 3,264 3,146 3,161 3,130

Ending stocks 215 160 190 175 155 165 160Percent

Stocks to use ratio 6.6 4.8 5.8 5.4 4.9 5.2 5.1Dollars per bushel

Average market price 11.30 12.00/14.00 13.00/15.00 12.00/14.00 12.50/14.50 12.65/14.65 12.15/14.15

China Soybean Imports

0

10

20

30

40

50

60Million Tons 56.5 million tons

U.S. Soybean Meal Supply and Demand

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11

Thousand short tons PercentBeginning stocks 302 350 16.1Production 39,518 38,835 -1.7Imports 180 165 -8.3Total supply 40,000 39,350 -1.6

Domestic use 30,550 30,500 -0.2Exports 9,100 8,550 -6.0Total use 39,650 39,050 -1.5

Ending stocks 350 300 -14.3Dollars/short ton

Average market price 346 335/365 1.3

U.S. Soybean Oil Supply and Demand

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11

Million pounds PercentBeginning stocks 3,406 2,816 -17.3Production 19,050 18,670 -2.0Imports 160 185 15.6Total supply 22,616 21,671 -4.2

Domestic use 16,600 17,700 6.6Methyl ester 2,500 3,600 44.0Food, feed, other 14,100 14,100 0.0

Exports 3,200 1,800 -43.8Total use 19,800 19,500 -1.5

Ending stocks 2,816 2,171 -22.9Cents per pound

Average market price 53.20 53.00/57.00 3.4

Soybean Meal Prices 1995 - 2011

Dollars per ton

Soybean Oil Prices 1995 - 2011

Cents per pound

U.S. Monthly Biodiesel Production

U.S. Domestic Soybean Oil-based Biodiesel Production Margin

Biodiesel Price Comparisons

Renewable Fuel Mandates(RFS 2 -- Excluding Corn-Based)

1.8

1.9

2.0

2.1

2.2

2.3

2.4

2.5

2.6

Aug-10

Oct-10

Dec-10

Feb-11

Apr-11

Jun-11

Aug-11

Oct-11

2011 2012

Soybean/Corn Price Ratio

ratio

1.92

2.10

Soybean Price(Brazilian Real)

September 12, 2011

U.S. Meat Production and Prices

October 12, 2011

2011 forecast

2012 forecast

Change from 2011

Production Billion pounds PercentBeef 26.31 25.03 -4.9Pork 22.64 23.06 1.8Broilers 37.34 37.00 -0.9Turkey 5.79 5.74 -1.0Total meat 92.89 91.61 -1.4

Prices Dollars/cwtSteers 112.73 116.25 3.1Hogs 65.20 64.50 -1.1

Cents/lbBroilers 79.1 82.8 4.6Turkey 101.4 99.0 -2.3

U.S. Meat TradeMillion Pounds

October 12, 2011

2011 forecast

2012 forecast

Change from 2011

Exports PercentBeef 2,735 2,755 0.7Pork 4,951 5,090 2.8Broilers 6,539 6,700 2.5Turkey 651 620 -4.8Mature Chickens 85 90 5.9Total Meat 14,979 15,269 1.9

ImportsBeef 2,009 2,090 4.0

World Cotton Production

October 12, 2011

Country or Region2010/11 estimate

2011/12 forecast

Change from 2010/11

Million Bales Percent

World 115.1 124.2 7.9United States 18.1 16.6 -8.3

Foreign 97.0 107.6 10.9Argentina 1.28 1.35 5.9Brazil 9.0 9.0 0.0Australia 4.2 5.0 19.0China 30.5 33.5 9.8India 25.4 27.5 8.3Pakistan 8.8 10.0 13.6Uzbekistan 4.1 4.2 2.4African Franc Zone 2.3 2.9 26.4

U.S. Cotton Supply and Demand

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Planted area (million acres) 10.97 14.72 34.1Harvested area (million acres) 10.70 9.85 -7.9Yield (pounds per acre) 812 809 -0.4

Million balesBeginning stocks 2.95 2.60 -11.8Imports 0.01 0.01 0.0Production 18.10 16.61 -8.3Total supply 21.06 19.22 -8.7

Mill use 3.90 3.80 -2.6Exports 14.38 11.50 -20.0

Total use 18.28 15.30 -16.3Unaccounted 0.18 0.02 0.0

Ending stocks 2.60 3.90 50.0Percent

Stocks/use 14.2 25.5Cents per pound

Average market price 81.5 87.5/102.5 16.6

U.S. Agricultural Exports and the Dollar

U.S. Agricultural Trade

U.S. Consumer Prices

U.S. Consumer Food Prices

U.S. Consumer Food PricesJanuary 2008-August 2011

U.S. Cash Farm Income

Cash Receipts

END

(Summary Tables Follow)

Production Summary

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Crops and ProductsWheat (Million bu) 2,207 2,008 -9.0Rice (Million cwt) 243.1 186.9 -23.1Corn (Million bu) 12,447 12,433 -0.1Sorghum (Million bu) 345 244 -29.4Barley (Million bu) 180 155 -14.0Oats (Million bu) 81 54 -33.5Soybeans (Million bu) 3,329 3,060 -8.1Soybean oil (Million lbs) 19,050 18,670 -2.0Soybean meal (Thousand s.t.) 39,518 38,835 -1.7Cotton (Million bales) 18.10 16.61 -8.3Sugar (Thousand s.t., raw value) 7,824 7,935 1.4

Milk (Billion lbs) 195.9 198.4 1.3

Meat (Billion lbs)Beef 26.31 25.03 -4.9Pork 22.64 23.06 1.8Broilers 37.34 37.00 -0.9Turkey 5.79 5.74 -1.0Total Meat 92.89 91.61 -1.4

Domestic Demand Summary

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Crops and ProductsWheat (Million bu) 1,128 1,178 4.4Rice (Million cwt) 137.8 127.0 -7.9Corn (Million bu) 11,218 11,110 -1.0Sorghum (Million bu) 209 145 -30.7Barley (Million bu) 208 190 -8.8Oats (Million bu) 176 166 -5.8Soybeans (Million bu) 1,780 1,755 -1.4Soybean oil (Million lbs) 16,600 17,700 6.6Soybean meal (Thousand s.t.) 30,550 30,500 -0.2Cotton (Million bales) 3.90 3.80 -2.6Sugar (Thousand s.t., raw value) 11,335 11,415 0.7

Milk (Billion lbs) 188.6 192.0 1.8

Meat (Billion lbs)Beef 25.76 24.46 -5.0Pork 18.49 18.80 1.7Broilers 30.62 30.00 -2.0Turkey 5.06 5.06 0.0Total meat 80.82 79.21 -2.0

U.S. Export Summary

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Crops and productsWheat (Million bu) 1,289 975 -24.4Rice (Million cwt) 111.6 91.0 -18.5Corn (Million bu) 1,835 1,600 -12.8Sorghum (Million bu) 150 100 -33.3Barley (Million bu) 8 10 31.7Soybeans (Million bu) 1,500 1,375 -8.3Soybean oil (Million lbs) 3,200 1,800 -43.8Soybean meal (Thousand s.t.) 9,100 8,550 -6.0Cotton (Million bales) 14.38 11.50 -20.0

Meat (Million lbs)Beef 2,735 2,755 0.7Pork 4,951 5,090 2.8Broilers 6,539 6,700 2.5Turkey 651 620 -4.8Mature Chickens 85 90 5.9Total Meat 14,979 15,269 1.9

Price Summary

October 12, 2011

2010/11 estimate

2011/12 forecast

Change from 2010/11Percent

Crops and productsWheat ($/bu) 5.70 7.50 31.6Rice ($/cwt) 12.70 14.50 14.2Corn ($/bu) 5.18 6.70 29.3Soybeans ($/bu) 11.30 13.15 16.4Soybean oil (¢/lb) 53.20 55.00 3.4Soybean meal ($/s.t.) 345.52 350.00 1.3Cotton (¢/lb) 81.50 95.00 16.6

LivestockSteers ($/cwt) 112.7 116.3 3.1Hogs ($/cwt) 65.2 64.5 -1.1Broilers (¢/lb) 79.1 82.8 4.6Turkeys (¢/lb) 101.4 99.0 -2.3

Dairy productsCheese 1.82 1.71 -6.0Butter 1.96 1.66 -15.3Nonfat dry milk 1.51 1.39 -8.1Dry whey 0.52 0.47 -10.3

Milk classesClass III ($/cwt) 18.20 16.75 -8.0Class IV ($/cwt) 19.15 16.80 -12.3All milk ($/cwt) 20.05 18.20 -9.2