what’s ahead for commodity prices & farmland values
DESCRIPTION
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. - PowerPoint PPT PresentationTRANSCRIPT
WHAT’S AHEADFOR
COMMODITY PRICES &
FARMLAND VALUESRemarks by Mark Pearson
Independent Community BankersNashville, Tennessee
March 12, 2012
Back in Production…Any Way Possible
Source: Matt Leavitt
10-Year Corn Prices
Source: NASS
Corn Use: Fuel versus Food
Source: USDA
‘02
EthanolFeed
6
4
2
0
Bushels
‘03 ‘05‘04 ‘06 ‘08‘07 ‘09 ‘10 ‘11
U.S. Corn Ending Stocksas Percentage of Use
Compliments of PHI Marketing
World Corn Ending Stocksas a Percentage of Use
Compliments of PHI Marketing
USDA Corn Supply and Use 2010/11 est. (2/9/12) 2011/2012 proj.
Area Planted 88.2 91.9Area Harvested 81.4 84.0Yield 152.8 147.2Beginning Stocks 1,708 1,128Production 12,447 12,358Imports 28 20Supply, Total 14,182 13,506Feed & Residual 4,793 4,600Food, Seed & Industrial 6,428 6,405Domestic Use, Total 11,220 11,005Exports 1,835 1,700Use, Total 13,055 12,705Ending Stocks 1,128 801Average Farm Price $5.18 $5.80-$6.60
Compliments of PHI Marketing
World Corn Supply and Use 2009-10 2010-11 (est.) 2011-12 (proj.)
Beginning Stocks 147.54 144.18 128.83Production 819.23 827.54 864.11Imports 89.76 91.34 92.84Feed 488.48 494.41 510.83Total 822.60 842.89 867.59Exports 96.82 90.45 94.93Ending Stocks 144.18 128.83 125.35
Million Metric Tons
Compliments of PHI Marketing
May ’12 Corn
Source: CBOT
December ’12 Corn
Source: CBOT
Light Sweet Crude Oil
Source: NYMEX
10-Year Soybean Prices
Source: NASS
Brazil’s Big Ag Expansion 2011-21
Source: DTN
75%60%50%40%30%20%10%0%
Coffee Soybeans CottonExports
Production24% 46% 36% 39% 48% 68%
U.S. Soybean Ending Stocks As % of Use
Compliments of PHI Marketing
World Soybean Ending Stocks
as Percentage of Use
Compliments of PHI Marketing
USDA Soybean Supply and Use
2010/11 Est. (2/9/12) 2011/2012 ProjectedArea Planted 77.4 75.0Area Harvested 76.6 73.6Yield (bushels per acre) 43.5 41.5Beginning Stocks 151 215Production 3,329 3,056Imports 14 15Supply, Total 3,495 3,286Crush 1,648 1,615Exports 1,501 1,275Seed 87 88Residual 43 32Use, Total 3,280 3,011Ending Stocks 215 275Average Farm Price $11.30 $11.10-$12.30
Compliments of PHI Marketing
World Soybean Supply and Use 2009/10 2010/11 (est.)
2011/2012(Proj.)
Beginning Stocks 42.72 59.60 68.90Production 260.85 264.18 251.47Imports 86.83 88.83 90.76Crush 209.50 221.09 227.42Total 238.25 251.74 258.05Exports 92.55 91.97 92.79Ending Stocks 59.60 68.90 60.28
Million Metric Tons
Compliments of PHI Marketing
May ’12 Soybeans
Source: CBOT
November ’12 Soybeans
Source: CBOT
10-Year Wheat Prices
Source: NASS
USDA Wheat Supply and Use2010/11 (2/9/12) 2011/2012 Projected
Area Planted 53.6 54.4Area Harvested 47.6 45.7Yield (bushels per acre) 46.3 43.7Beginning Stocks 976 862Production 2,207 1,999Imports 97 120Supply, Total 3,279 2,982Food 926 935Seed 71 82Feed & Residual 132 145Exports 1,289 1,162Use, Total 2,417 2,137Ending Stocks 862 845Average Farm Price $5.70 $7.15-$7.45
Compliments of PHI Marketing
World Wheat Supply and Use
2009/10 2010/11(est.) 2011/2012 (Proj.)
Beginning Stocks 167.05 202.34 200.70Production 685.43 651.61 692.88Imports 133.58 130.07 135.91Feed 115.36 112.42 130.66Total 650.14 653.24 680.48Exports 135.80 131.82 140.25Ending Stocks 202.34 200.70 213.10
Million Metric Tons
Compliments of PHI Marketing
U.S. Wheat Ending Stocks As % of Use
Compliments of PHI Marketing
World Wheat Ending Stocks
As Percentage of Use
Compliments of PHI Marketing
May ’12 Chicago Wheat
Source: CBOT
December ’12 Chicago Wheat
Source: CBOT
10-Year Cotton Prices
Source: NASS
May ’12 Cotton
Source: CBOT
December ’12 Cotton
Source: NYMEX
10-Year Cattle Prices
Source: NASS
April ’12 Live Cattle
Source: CBOT
December ’12 Live Cattle
Source: CBOT
April ’12 Feeder Cattle
Source: CBOT
November ’12 Feeder Cattle
Source: CBOT
January Milk Cows 2002-12
Source: NASS
April ’12 Class III Milk
Source: CBOT
December ’12 Class III Milk
Source: CBOT
10-Year Hog Prices
Source: NASS
April ’12 Lean Hogs
Source: CBOT
December ’12 Lean Hogs
Source: CBOT
Inflation Adjusted Farmland Values 1964-2010
Source: Chicago Federal Reserve
• 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
Globally Local World: What’s Ahead