2019/20 Corn Outlook Southern Extension Economics Committee (SEEC), Atlanta, GA, September - PowerPoint Presentation

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2019/20 Corn Outlook Southern Extension Economics Committee (SEEC), Atlanta, GA, September - PPT Presentation

S Aaron Smith PhD Associate Professor and Extension Economist Department of Agricultural and Resource Economics University of Tennessee Institute of Agriculture Email aaronsmithutkedu Website ID: 1018414

crop 2019 acre 225 2019 crop 225 acre 275 tennessee corn stocks 125 175 aaron smith prevented acres amp

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1. 2019/20 Corn OutlookSouthern Extension Economics Committee (SEEC), Atlanta, GA, September 24, 2019 S. Aaron Smith, PhDAssociate Professor and Extension EconomistDepartment of Agricultural and Resource EconomicsUniversity of Tennessee Institute of AgricultureEmail: aaron.smith@utk.eduWebsite: http://cropeconomics.tennessee.edu/ Ph: (865) 974-7476

2. OverviewPrevented PlantingSupply and DemandCost of Production & RevenuePrice Outlook

3. Prevented PlantingVery challenging spring and early summer for plantingMajor issues in Ohio and South DakotaMississippi Delta hardest hit are in the Southeast USEx. Lauderdale County, TN 32,000 acres prevented planted (Corn, Soybean, Cotton)OptionsPrevented planting crop insurance claimPlant in late planting Switch to later planted cropFallow / cover crop

4. 2019 Corn Prevented Planting

5. 2019 Prevented Planting less 10-year Average for Corn, Cotton, Soybean, and Wheat

10. 2015/162016/172017/18 2018/19 Est2019/20 Projected August2019/20 Projected SeptemberChange From Previous MonthChange 2018/19 to 2019/20Planted and Harvested Acres & YieldPlanted (Million Acres)88.09490.289.190900.00.9Harvested (Million Acres)80.886.782.781.782820.00.3U.S. Average Yield (Bu/Acre)168.4174.6176.6176.4169.5168.2-1.3-8.2Supply (Million Bushels)Beg. Stocks 1,7311,7372,2932,1402,3602,44585305Production13,60215,14814,60914,42013,90113,799-102-621Imports685736255050025Total Supply15,40116,94216,93916,58516,31116,295-16-290Use & Ending Stocks (Million Bushels)Feed and Residual5,1145,4705,3045,2755,1755,1750-100Ethanol5,2245,4325,6055,3755,4755,450-2575Food, Seed & Industrial1,4241,4531,4521,4301,4301,43000Exports1,9012,2942,4382,0602,0502,0500-10Total Use13,66414,64914,79814,14014,13014,105-25-35U.S. Ending Stocks1,7372,2932,1402,4452,1812,1909-255Foreign Stocks 10,52311,51511,22710,5289,9339,868-65-660Price and Stocks to Use RatioU.S. Avg. Price ($/Bu)$3.61$3.36$3.36$3.60$3.60$3.60$0.00$0.00U.S. Stocks/Use12.71%15.65%14.46%17.29%15.44%15.53%0.09%-1.76%

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12. US SummaryStill a lot of production uncertainty for this time of year.Likely down on below trend line yieldRegional production shortfalls are likely.Regional basis is likely to be erratic in some locations.Quantity drivenEthanol /RFS uncertainty.

13. Source: https://cropmonitor.org/index.php/2019/09/04/crop-monitor-for-amis-september-2019/

14. Source: https://cropmonitor.org/index.php/2019/09/04/crop-monitor-for-amis-september-2019/

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21. Global Supply and Demand SummaryFeed use is uncertain (African swine fever)Increased production out of South America competing for exports.1st and 2nd crop competition with US exportsTrade is difficult to predictUSMCAChinaOther

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23. Corn - Net Return Table ($/acre) - $675/acre Cost of Production Yield (bu/acre) 1001101201301401501601701801902002.00(475)(455)(435)(415)(395)(375)(355)(335)(315)(295)(275)2.25(450)(428)(405)(383)(360)(338)(315)(293)(270)(248)(225)2.50(425)(400)(375)(350)(325)(300)(275)(250)(225)(200)(175)2.75(400)(373)(345)(318)(290)(263)(235)(208)(180)(153)(125)3.00(375)(345)(315)(285)(255)(225)(195)(165)(135)(105)(75)3.25(350)(318)(285)(253)(220)(188)(155)(123)(90)(58)(25)3.50(325)(290)(255)(220)(185)(150)(115)(80)(45)(10)25 Price3.75(300)(263)(225)(188)(150)(113)(75)(38)(0)37 75 ($/bu)4.00(275)(235)(195)(155)(115)(75)(35)5 45 85 125 4.25(250)(208)(165)(123)(80)(38)5 47 90 132 175 4.50(225)(180)(135)(90)(45)(0)45 90 135 180 225 4.75(200)(153)(105)(58)(10)37 85 132 180 227 275 5.00(175)(125)(75)(25)25 75 125 175 225 275 325 5.25(150)(98)(45)7 60 112 165 217 270 322 375 5.50(125)(70)(15)40 95 150 205 260 315 370 425 5.75(100)(43)15 72 130 187 245 302 360 417 475

24. Government Payments / Revenue (Tennessee Example)MFP Payment = $67-126/acreCrop Insurance = $0 Crop Revenue = 175 bu/acre x $3.70/bu = $648/acre2018 ARC = $0-28/acreTotal =$715-$802/acre

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26. 2019/20 projected at 15.5%

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30. YearSpringFall2015$4.15$3.832016$3.86$3.492017$3.96$3.492018$3.96$3.682019$4.00?2020??Crop Insurance Prices

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32. Price Outlook2019 December Futures: $3.50-$3.902020 March Futures: $3.60-$4.102020 December: $3.80-$4.30Basis is likely to be erratic in many locations with deviation from typical patterns.

33. Thank You!Questions and DiscussionS. Aaron Smith, PhDAssociate Professor and Extension EconomistDepartment of Agricultural and Resource EconomicsUniversity of Tennessee Institute of AgricultureEmail: aaron.smith@utk.eduWebsite: http://cropeconomics.tennessee.edu/ Ph: (865) 974-7476