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Purdue Outlook Update 2011
September 13, 2010 1 Purdue Extension
Department of Agricultural Economics
Purdue University
2011 Indiana
Agricultural Outlook
Corinne Alexander &
Chris Hurt
Purdue University
September 13, 2010
Ethanol
World
Economic
Growth
Dollar Value
Department of Agricultural Economics
Purdue University
Surprises and Uncertainty!
Change Wheat Production
2010 vs. 2009
World -5.6%
Canada -15.1%
FSU-12 -15.7%
EU -22.4%
Ukraine -2.2%
U.S. + 2.2%
Department of Agricultural Economics
Purdue University
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
798081828384858687888990919293949596979899 0 1 2 3 4 5 6 7 8 9 10
Hu
nd
red
s
Quarterly Real GDP: 1979-2010
Department of Agricultural Economics
Purdue University
0
1
2
3
4
5
6
JFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASONDJFMAMJJASOND
4 5 6 7 8 9 10
Perc
en
t
3 Month, 3 Year, 10 Year, and 20 Year Treasury Rates
20 Year Treasury
10 Year Treasury
3 Year Treasury
3 Month Treasury
Department of Agricultural Economics
Purdue University
Purdue Outlook Update 2011
September 13, 2010 2 Purdue Extension
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Corn: USDA
9/10/10
07/08 08/09 09/10 10/11
Million Bu.
Carryin 1,304 1,624 1,673 1,386
Production 13,074 12,092 13,110 13,160
Total Supply 14,398 13,729 14,791 14,556
Feed & Residual 5,974 5,205 5,525 5,250
FSI Non-Fuel 1,338 1,316 1,365 1,390
FSI Fuel (Ethanol) 3,026 3,677 4,535 4,700
Export 2,436 1,858 1,980 2,100
Total Use 12,774 12,056 13,405 13,440
Ending Stocks 1,624 1,673 1,386 1,116
US Farm Price $4.20 $4.06 $3.55 $4.00-$4.80
$4.40
Department of Agricultural Economics
Purdue University
19.6
13.9
24.9
11.2
16.7
5.0
10.0
14.9
19.2 18.1
19.5
16.3
11.4
9.4
19.8
17.5
11.6 12.8
13.9
10.7
8.3
29.9 28.5
32.0
25.5
28.4
25.0
29.6 29.0
32.9 32.3
28.8
24.3
20.3
16.2
19.2 17.6
15.2
17.0
18.9
17.1 16.3
0
5
10
15
20
25
30
35
90 91 92 93 94 95 96 97 98 99 0 1 2 3 4 5 6 7 8 9 10
Perc
en
t o
f U
se
Corn: Ending Stocks
U.S. World
$4.47
$4.63
$4.72
$4.00
$4.10
$4.20
$4.30
$4.40
$4.50
$4.60
$4.70
$4.80
$4.90
$5.00
S O N D J F M A M J J A
$/B
u.
Futures Estimates of Cash Prices: 9-10-10
U.S.
Central Ind
Avg U.S.
Central Ind. Avg
Southern indiana
S. Ind Avg
Department of Agricultural Economics
Purdue University
Dec Futures =
$4.78
$4.63
0.00
0.08 0.14 0.14
0.19
0.12 0.14 0.14 0.17
-0.12 -0.12
-$0.20
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$4.00
$4.10
$4.20
$4.30
$4.40
$4.50
$4.60
$4.70
$4.80
$4.90
$5.00
S O N D J F M A M J J A
Central Indiana Cash Corn Futures Forecast: 9-10-10
Department of Agricultural Economics
Purdue University
Dec Futures =
$4.78
Department of Agricultural Economics
Purdue University
19.9
26.3
30.7 33.0
35.5
38.4 39.0 39.6 40.1 39.5 38.9 38.2 37.6 37.0 36.4
10
15
20
25
30
35
40
45
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
11/1
2
12/1
3
13/1
4
14/1
5
15/1
6
16/1
7
17/1
8
18/1
9
19/2
0
20/2
1
Crop Years
Corn + Soybean Biofuel Acres by 2020
(Millions)
Purdue Outlook Update 2011
September 13, 2010 3 Purdue Extension
Department of Agricultural Economics
Purdue University
0
100
200
300
400
500
600
700
China Corn Trade: Million Bushels
Imports
Exports
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Soybeans:USDA
9/10/10
07/08 08/09 09/10 10/11
Million Bushels
Carryin 574 205 138 150
Production 2,676 2,967 3,359 3,483
Total Supply 3,260 3,185 3,512 3,643
Seed & Residual 93 102 117 158
Crush 1,801 1,662 1,750 1,650
Exports 1,161 1,283 1,495 1,485
Total Use 3,055 3,047 3,362 3,293
Ending Stock 205 138 150 350
Farm Price $10.10 $9.97 $9.60 $9.15-$10.65
$9.90
Department of Agricultural Economics
Purdue University
17.9
13.6 13.4
10.7
14.0
7.9
5.4
7.6
13.4
10.7
8.8
7.1 6.4
4.5
8.6
15.6
18.6
6.7
4.5 4.8
10.6
20.79
18.11 18.86
15.79
18.97
14.40
11.82
19.01 18.42 19.04 19.71 19.33
22.44
20.15
23.61 24.63
28.08
23.01
19.92
26.75 25.19
0
5
10
15
20
25
30
35
90/9
1
92/9
3
94/9
5
96/9
7
98/9
9
00/0
1
02/0
3
04/0
5
06/0
7
08/0
9
10/1
1
Perc
en
t o
f U
se
Soybean Carryover Stocks-to-Use
U.S. World
$9.85
$10.11
10.38
$9.60
$9.80
$10.00
$10.20
$10.40
$10.60
$10.80
S O N D J F M A M J J A
Futures Estimates of Cash Prices: 9-10 -10
U.S.
Central Ind
Avg U.S.
Avg Central Ind
Southern Ind Cash
S. Ind Avg
Department of Agricultural Economics
Purdue University
Nov Futures =
$10.31
$10.11
0.00
0.16 0.18 0.14 0.13
0.04 0.08
0.15 0.13
0.00
-0.16
-$0.40
-$0.20
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$9.40
$9.60
$9.80
$10.00
$10.20
$10.40
$10.60
S O N D J F M A M J J A
Central Indiana Cash Soybean Futures Forecast: 9-10-10
Department of Agricultural Economics
Purdue University
Nov Futures =
$10.31
Returns to On-Farm Storage
Purdue Outlook Update 2011
September 13, 2010 4 Purdue Extension
Department of Agricultural Economics
Purdue University
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000China Soybean Trade: Million Bushels
Imports
Exports
Department of Agricultural Economics
Purdue University
0
100
200
300
400
500
600
700
800
900
Soybean Imports from the U.S.: 1990/91-2010/11 (Million Bu.)
China
Mexico
Japan
FAS
Data
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Wheat: USDA
9/10/10
07/08 08/09 09/10 09/11
Million Bushels
Carryin 456 306 657 973
Production 2,067 2,499 2,216 2,264
Total Supply 2,635 2,932 2,991 3,338
Feed & Residual 30 255 150 170
Other Domestic 1,035 1,005 987 1,016
Exports 1,264 1,015 881 1,250
Total Use 2,329 2,275 2,018 2,436
End Stocks 306 657 973 902
Farm Price $6.48 $6.78 $4.87 $4.95 - $5.65
$5.30
Department of Agricultural Economics
Purdue University
24.1
35.7
19.7 21.4
23.0
20.5
15.8
19.3
31.4
39.0 39.8
36.6 36.1
25.0 23.2 24.2
26.5
22.3
13.2
28.9
45.6
35.6
0
5
10
15
20
25
30
35
40
45
50
89/9
0
90/9
1
91/9
2
92/9
3
93/9
4
94/9
5
95/9
6
96/9
7
97/9
8
98/9
9
99/0
0
00/0
1
01/0
2
02/0
3
03/0
4
04/0
5
05/0
6
06/0
7
07/0
8
08/0
9
09/1
0
10/1
1
Pe
rce
nt
of
Us
e
Wheat: World and U.S. Endings Stocks
U.S. World
Department of Agricultural Economics
Purdue University
With $5.10 U.S. price averages expect
about $42/acre of 10 Crop ACRE Payments.
Crop in 2009 will average around $58/acre
Purdue Outlook Update 2011
September 13, 2010 5 Purdue Extension
Department of Agricultural Economics
Purdue University
0
100
200
300
400
500
600
700China Wheat Trade: Million Bushels
Imports
Exports
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Crops 2009
$/acre
2010
$/acre
2011
$/acre
% ∆
10 to 11
Continuous Corn 443 355 376 5.9%
Rotation Corn 425 342 361 5.6%
Rotation Soybeans 223 183 187 2.2%
Wheat 194 149 163 9.4%
Double Crop Soybeans 181 156 165 5.8%
Variable Costs (Average Cropland)
Department of Agricultural Economics
Purdue University
2011 Estimated Crop Budget:
Indiana: September 10, 2010
Prices Corn Soybeans Wheat
HarvestBasis $4.58 $10.26 $7.43
Expected
Basis -0.35 -0.40 -0.80
Expected Cash Price $4.23 $9.86 $6.63
Estimated Yield/Acre and Returns/Acre Above Variable Costs
Corn $4.23 Soybeans $9.86 Wheat $6.63
Wheat/DC
Beans
Land Quality bu./acre $/acre bu./acre $/acre bu./acre $/acre $/acre
Low 129.0 $220 39.0 $209 62.0 $260 $329
Average 161.0 $320 49.0 $296 70.0 $301 $422
High 193.0 $441 59.0 $385 84.0 $371 $544
Budget: Purdue Id-166 (August 2010)
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
-2.3%
-5.7%
4.6%
-2.3% -0.8%
1.3%
3.0%
1.7%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
Beef Pork Broilers Turkey
Domestic Per Capita Availability: 2010
Purdue Outlook Update 2011
September 13, 2010 6 Purdue Extension
Department of Agricultural Economics
Purdue University
$50.05
$47.26 $47.09 $47.84
$41.24
$54.50 $55.00
35
37
39
41
43
45
47
49
51
53
$38
$40
$42
$44
$46
$48
$50
$52
$54
$56
$58
5 6 7 8 9 10 11
Barrow & Gilt prices and Per Capita Supplies
Price
Per Capita Supply
Department of Agricultural Economics
Purdue University
44
55
57
52 51
46
43
48
52
46
53
50
40
53
57
42 43
39
41
50
59 58
53 53
58
56
49
$30
$35
$40
$45
$50
$55
$60
1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4
4 5 6 7 8 9 10 11
$/c
wt
Estimated Hog Prices and Costs Per Live Hundredweight:
Hog Price
Costs
Department of Agricultural Economics
Purdue University
$87.28 $85.41
$91.82 $92.27
$83.25
$94.00
$98.50
40
45
50
55
60
65
70
$78
$83
$88
$93
$98
5 6 7 8 9 10 11
Choice Steer per Capita Supplies and Prices
Price Per Capita Supply
Department of Agricultural Economics
Purdue University
19.13
18.34
12.84
16.00 16.05
$10
$11
$12
$13
$14
$15
$16
$17
$18
$19
$20
95 97 99 1 3 5 7 9 11
$/C
wt.
U.S. All Milk Price
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
$2,100
$913
$2,173
$2,945
$4,240
$4,419
$60
$80
$100
$120
$140
$160
$180
$500$750
$1,000$1,250$1,500$1,750$2,000$2,250$2,500$2,750$3,000$3,250$3,500$3,750$4,000$4,250$4,500$4,750
75 77 79 81 83 85 87 89 91 93 95 97 99 1 3 5 7 9
Indiana Land Values and Cash Rents: Purdue
Land Value
Cash Rent
Purdue Outlook Update 2011
September 13, 2010 7 Purdue Extension
Department of Agricultural Economics
Purdue University