Iowa Farm Outlook & News

Headlines
  • Dec. 2016 Hogs & Pigs: Inventory of All Hogs & Pigs:
       U.S. 71.5 million head, up 3.7% from last year
       IA 22.4 million head, up 7.2% from last year
  • Dec. 2016 Hogs & Pigs: Breeding Herd:
       U.S. 6.09 million head, up 1.5% from last year
       IA 1.03 million head, steady with last year
  • Dec. 2016 Hogs & Pigs: Market Hogs:
       U.S. 65.41 million head, up 4.0% from last year
       IA 21.37 million head, up 7.5% from last year
  • Jan. 2017 Prices for 2016/17 Crops:
       Corn $3.40 per bushel, up 5 cents from last month
       Soybean $9.50 per bushel, up 5 cents from last month
  • Jan. 2017 Yield Estimates for 2016/17 Crops:
       Corn 174.6 bushels per acre, down 0.7 bushels from last month
       Soybean 52.1 bushels per acre, down 0.4 bushels from last month
Livestock
Hogs and Pigs (1/1/17)

The talk of 2016 was heavy hog supplies relative to available processing capacity. While this was the main theme, the subplots are what the markets continued to adjust to in the search of the right price. Resurgent pork demand from China and Hong Kong in the early parts of 2016 helped support hog prices. The thought--if demand was strong enough, such large production could be absorbed. By mid-year prices were eroding and the market was pricing sharp discounts for year end, as exports failed to improve fast enough. Then came the late-year rally in hog prices. Producers aggressively marketed hogs. The market stayed current. The pork cutout outperformed year ago levels despite notably more pork available. Retail features and foodservice offerings were plentiful and robust export volumes helped clean up the market. First half 2017 pork production will rise based on hogs already in the pipeline. Second half output will likely top 2016's record levels. Most of the factors that could diminish market conditions at this point, accepting the historically high pork supplies, relate to the demand side. Consumer incomes, prices of competing meats, trade relationships, exchange rates, and economic growth rates in other countries will all impact the export demand profile.

Crops
The Final Numbers Gave the Markets Some Breathing Room (1/14/17)

The final yield and production estimates were released earlier this week and the estimates provided a little bullish news for the markets. For both corn and soybeans, planted area, yields, and production were adjusted downward. And while the U.S. still produced record crops, the reduction in supplies, coupled with still relatively strong demand, was welcomed by the crop markets. Corn plantings were lowered by 500,000 acres, yields dropped by 0.7 bushels, and production declined by 78 million bushels. While feed and residual use was lowered by 50 million, ethanol usage rose by 25 million and exports held steady. The new midpoint of USDA's price range in $3.40 per bushel, up 5 cents from last month. For soybeans, plantings were reduced by 300,000 acres, yields lowered by 0.4 bushels, and production dropped by 54 million bushels. Soybean demand projections were left unchanged, while the midpoint of price range moved up 5 cents to $9.50 per bushel.

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