the drought of 2012 revisited
DESCRIPTION
The Drought of 2012 revisited. AG BM 102. Corn Supply ( Bil . Bu .). Source: USDA. Corn Usage ( bil . bu ). Source: USDA. Food and Industrial Corn Use mil. bu. Source: USDA. Corn Usage. December Corn Contract August 23. Effect of 2012 Drought on Farmers. Crop farmers - PowerPoint PPT PresentationTRANSCRIPT
The Drought of 2012revisited
AG BM 102
Corn Supply (Bil. Bu.)Year Beg stocks Production Supply
2007/08 1.30 13.07 14.36
2008/09 1.62 12.09 13.73
2009/10 1.67 13.10 14.77
2010/11 1.71 12.45 14.18
2011/12 1.13 12.36 13.51
2012/13 0.99 10.78 11.93
2013/14 0.72 13.76 14.51
Source: USDA
Corn Usage (bil. bu)
Source: USDA
Year Feed Food Fuel Exports Total
2008/09 5.18 1.32 3.71 1.85 12.06
2009/10 5.13 1.35 4.59 1.98 13.07
2010/11 4.79 1.41 5.02 1.84 13.05
2011/12 4.55 1.39 5.00 1.55 12.66
2012/13 4.45 1.40 4.65 0.72 11.22
2013/14 5.10 1.45 4.90 1.22 12.68
Food and Industrial Corn Usemil. bu.
CropYear
HFCS Other sweeteners
Starch Fuel Liquor Cereal
2007 490 236 262 3,049 135 192
2008 489 245 234 3,709 134 192
2009 513 257 250 4,568 134 194
2010 521 272 258 5,021 135 197
2011 495 285 250 5,000 135 201
2012 465 285 235 4,500 135 205
Source: USDA
Corn UsageCrop 2004 2007 2011 2013
Feed 57.8% 46.0% 36.3% 40.2%
Food 12.6% 10.4% 11.4% 11.4%
Exports 17.1% 19.0% 12.3% 9.7%
Ethanol 12.4% 24.7% 40.0% 38.6%
December Corn Contract August 23
Effect of 2012 Drought on Farmers
• Crop farmers– Without crop insurance huge losses
• Animal farmers– Major inputs much more expensive– Cow-calf operators – lack of grass extremely serious –
western plains– Although animal prices will rise, not immediately –
asset fixity– Generally losses esp. for those buying lots of feed
(California dairy farmers)
2013 Crop
• Corn & soybeans much lower – much bigger crops
• Dry weather in western Corn Belt an issue• Also wet weather in South
Some important points
• Farm prices are MUCH more volatile than retail prices!
• Consumers can adjust their consumption easier than a farmer can adjust a feed ration
• It is a global market for most ag products• Drought induced Brazil to raise corn – in
future US share will be smaller
US65%
Argentina22%
Brazil9%
Other4%
World Corn Exports2009 Crop Year
Source: USDA