Iowa Farm Outlook & News

Headlines
  • Jan. 2016 Cattle, All Cattle and Calves
       U.S.: 91.988 million head, up 3.2% from last year
       Iowa: 3.950 million head, up 2.6% from last year
  • Jan. 2016 Cattle, Beef Cows
       U.S.: 30.331 million head, up 3.5% from last year
       Iowa: 940,000 head, up 4.4% from last year
  • Jan. 2016 Cattle, Cattle on Feed
       U.S.: 13.177 million head, up 1.2% from last year
       Iowa: 1.230 million head, up 0.8% from last year
  • Jan. 2016 Cattle, Calf Crop
       U.S.: 34.302 million head, up 2.3% from last year
       Iowa: 1.060 million head, up 1.9% from last year
  • Jan. 2016 Price Estimates for 2015/16 Crops:
       Corn $3.60 per bushel, down 5 cents from last month
       Soybean $8.80 per bushel, down 10 cents from last month
  • Jan. 2016 Yield Estimates for 2015/16 Crops:
       Corn 168.4 bushels per acre, down 0.9 bushels from last month
       Soybean 48.0 bushels per acre, down 0.3 bushels from last month
Crops
Shrinking Numbers (1/12/16)

The January USDA reports provide the final production estimates for last year's crops and an update on current and projected crop usage. With today's reports, USDA found a number of areas to shrink. Starting with corn, final planting area was established at 88 million acres, down 400,000 from previous estimates. The national corn yield estimate was reduced by nearly a bushel to 168.4 bushels per harvested acre. That combination reduced national corn production by 53 million bushels to 13.6 billion bushels. So last year's corn crop is still the 3rd largest on record, but it is a little smaller than first measured. Corn demand was also reduced in the export and food, seed, and other industrial uses categories. Overall, demand was lowered by 60 million bushels, while supplies only slipped by 43 million. So corn ending stocks for the 2015/16 marketing year were raised by 17 million bushels to 1.8 billion. And the midpoint of the season-average price range was dropped to $3.60 per bushel, down 5 cents from the previous estimate.

For soybeans, the general is the same. Planted area was reduced by 500,000 acres to 82.7 million acres. The national soybean yield was set at 48 bushels per acre, down 0.3 bushels. Total soybean supplies fell 51 million bushels to 4.15 billion. Soybean exports were lowered 25 million bushels, while seed and residual use dropped 2 million. However, unlike corn, the drop in supplies exceeded the drop in demand. So soybean ending stocks for 2015/16 were lowered to 440 million. But USDA moved the midpoint of their season-average price range lowered to more closely match recent futures prices, with the current midpoint at $8.80 per bushel, down 10 cents.

Thinking forward to the 2016 planting season, one of the bigger items in today's report was the winter wheat acreage. Cropland sown to winter wheat is not generally available for corn and soybean production (unless winterkill hits hard or the area has potential for double cropping). This fall's wheat planting came in at 36.6 million acres, down 2.85 million from the previous year. So there will be more available for corn and soybean production this spring, especially in the Plains states.

Livestock
Beef Expansion (2/1/16)

Curious about how fast the beef cow herd grew in 2015, and is expected to grow in 2016? Interested in the size of the 2015 calf crop and feeder cattle supplies? Concerned with regional shifts in cattle production? Producer responses to surveys for USDA's annual cattle report helped to answer these questions and many more. Overall the take-home contribution of this report was additional confirmation of growing cattle inventories. Every national inventory number on January 1, 2016 was larger than a year ago and several final estimates were above the range of pre-report expectations. However, these larger numbers should not be all that surprising given the beef cattle herd is in a period of accelerated expansion driven by the 2014 profit signals. The main fundamental headwind to prices in the coming year will be the rising beef supply driven by herd expansion. Ultimately, growth in domestic and export beef demand will be a more significant cattle price driver. Demand will also drive how large inventories can and will expand in the coming years.

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