Doane held its annual outlook conference Oct. 21-22. Attendees were provided with insights and information about the issues affecting agriculture – from farm policy to consumer attitudes about food products and everything in between. Here are some of the highpoints from the conference.
The Director of the Food and Agriculture Policy Research Institute, Dr. Pat Westoff, went through the differences in the farm bill proposals, the impacts the different policies would have on prices and income and the different ways the process could go between now and the end of the year. It is very possible that the farm bill will get rolled into any overall budget deal – but if that doesn’t happen we could see another extension of the 2008 Farm Bill.
click image to zoom The Doane economists went through the 5-year forecasts for the major crops in detail. We expect USDA to lower corn acreage in the November Crop Production report, but boost the national average yield. The changes will partially offset each other and production is expected to still be record large and high enough to push 2013/14 ending stocks up significantly. With ethanol demand leveling off – we will need to see a big rebound in exports over the next few years – and even with that, stocks could continue to rise in 2014/15 and beyond if yields are near trend.
Lower production in Brazil and Argentina should allow for a rebound in U.S. corn exports this season. Over the longer term – we need to reduce corn acreage. Production exceeds 14.5 billion bushels with trend yield and acreage near 97 million acres while demand is expected to be closer to 13.5 billion bushels. We need less than 90 million acres to produce that much with a yield of around 165 bushels per acre.
Soybean supplies remain tight with the third consecutive year of yields below trend in the U.S. but record production in South America. Soybean stocks are expected to edge up a little in 2013/14 but prices should stay high and soybean acreage is expected to increase next year. With yields near trend, we could see 2014/15 ending stocks get back above 200 million bushels – but the stocks-to-use ratio stays pretty low. U.S. exports of both soybeans and soybean meal are expected to increase as the tight supply situation eases. U.S. soybean acreage is expected to trend higher over the next few years getting to 79 million acres by 2015 and 79.5 million by 2017. How EPA decides to handle changes to the Renewable Fuels Standard could have big implications for the soybean oil market and indirectly on the overall soybean market.