Iowa Farm Outlook & News

  • Merging Iowa Farm Outlook and Ag Decision Maker
       Starting in January 2020, the Iowa Farm Outlook and Ag Decision Maker newsletters are merging. Please read our upcoming outlook articles in the Ag Decision Maker newsletter. Thank you for your support over the years.

  • Nov. 2019 Cattle on Feed:
       U.S.: 1,000+ Head Feedlots: 11.831 million head, up 1.2% from last year
       Iowa: 1,000+ Head Feedlots: 660,000 head, down 5.7% from last year
       Iowa: >1,000 Head Feedlots: 530,000 head, down 1.9% from last year
  • Oct. 2019 Cattle Placements:
       U.S.: 1,000+ Head Feedlots: 2.477 million head, up 10.6% from last year
       Iowa: 1,000+ Head Feedlots: 114,000 head, up 6.5% from last year
       Iowa: >1,000 Head Feedlots: 122,000 head, up 62.7% from last year
  • Oct. 2019 Cattle Marketings:
       U.S.: 1,000+ Head Feedlots: 1.875 million head, down 0.6% from last year
       Iowa: 1,000+ Head Feedlots: 92,000 head, down 1.1% from last year
       Iowa: >1,000 Head Feedlots: 67,000 head, up 26.4% from last year
  • Nov. 2019 WASDE:
       U.S. Corn Yield: 167.0 bushels per acre, down 1.4 bushels from last month
       U.S. Soybean Yield: 46.9 bushels per acre, steady with last month
       2019/20 U.S. Corn Ending Stocks: 1.91 billion bushels, down 19 million from last month
       2019/20 U.S. Soybean Ending Stocks: 475 million bushels, up 15 million from last month
       2019/20 U.S. Corn Price: $3.85 per bushel, up 5 cents from last month
       2019/20 U.S. Soybean Price: $9.00 per bushel, steady with last month
Cull Cow Marketing (12/9/19)

Cow culling time often brings tough decisions for producers. Deciding whether cows go or stay seems to require a sharp crystal ball that can see into the future. At times, the market offers guidance for culling and marketing decisions. Profits and prospects matter. Cow-calf profit prospects improved since summer, as November 2019 feeder cattle futures rallied $13 per cwt from Sept. 4 to Nov. 22. Producers may also capture additional value from holding onto calves as backgrounding opportunities look promising. Deferred 2020 feeder cattle futures contracts advanced over $10 on average since early September. Those price gains are not strong signals to expand herds. But prices are not signaling to liquidate either. Costs matter. The 2019 average rental rate for Iowa pastures was $59 per acre. This is a new record, up $5 from 2018. But rents have likely reached a plateau. The average sales value of Iowa pastureland is $2,720 per acre, down $70 from 2018. Iowa hay (excluding alfalfa) prices averaged $118.50 per ton through the first 10 months of 2019, about $10 higher than last year. Many expect feed prices to remain steady to lower for the next several years, pending a major weather impact. Slaughter cow prices matter. And, they matter a lot. Research shows that cull cow income makes up 10% to 20% of the total revenue for a cow-calf operation. Management strategies alone can boost values by 25% to 40%. Producers can hike cull cow values by adding weight, improving quality, and marketing cows during seasonal price rallies. The slaughter cow market price tends to wane during the fall mostly on a rising supply of cows for slaughter as many cow-calf producers market cows at time of calf weaning. Prices typically rise into the new calendar year, often rather dramatically. But in some new calendar years cow prices rally little, if any. We expect slaughter cow prices to rise into early 2020. Fed cattle prices are typically highest in the winter and early spring, which supports slaughter cow prices. The December to February live cattle futures spread is currently $5. Cow-calf producers that are set-up to economically add weight to cull cows and then sell in the first few months of 2020 instead of this fall at the seasonal price low, might want to put a pencil to that soon. Correct decisions depend on the resources available and the degree of staying power or upside in deferred markets.

Slight Adjustments (11/8/19)

The November WASDE and Crop Production reports had very slight adjustments for the corn and soybean markets. The national corn yield estimate was lowered 1.4 bushels per acre, to 167 bushels per acre. While in general, state yields were reduced, USDA did find some evidence to increase yield estimates in Indiana, Ohio, and Alabama. Iowa and Illinois estimates remained at last month's levels, 192 and 179 respectively. The yield drop translated into 118 million reduction in corn production. So corn supplies are declining, but corn usage is falling nearly as quickly. Feed and residual use was lowered by 25 million bushels. Corn usage for ethanol was brought down 25 million bushels as well. And exports took the largest reduction, falling 50 million bushels. But, at least for this month, supplies fell faster than usage, so ending stocks fell 18 million bushels to 1.91 billion bushels. With the lowering of the stocks, USDA raised its season-average price estimate 5 cents to $3.85 per bushel. For soybeans, there was no change to the national yield estimate, holding at 46.9 bushels per acre. The Iowa soybean yield estimate remains at 53 bushels per acre as well. With no changes on the production side, the slight drop in crush (15 million bushels) was the only real adjustment. So 2019/20 ending stocks are raised to 475 million bushels, but the season-average price estimate remains at $9 per bushel.