Iowa Farm Outlook & News

  • June 2014 Hogs and Pigs: Inventory of All Hogs and Pigs:
       U.S. 62.1 million head, down 4.7% from last year
       Iowa 19.2 million head, down 4.0% from last year
  • June 2014 Hogs and Pigs: Breeding Herd Inventory:
       U.S. 5.85 million head, down 0.5% from last year
       Iowa 1.00 million head, down 2.9% from last year
  • June 2014 Hogs and Pigs: Market Hog Inventory:
       U.S. 56.3 million head, down 5.1% from last year
       Iowa 18.2 million head, down 4.1% from last year
  • June 2014 Acreage Estimates for 2014/15 Crops:
       Corn 91.6 million acres, down 3.7 million from last year
       Soybean 84.8 million acres, up 8.3 million from last year
  • June 2014 Price Estimates for 2014/15 Crops:
       Corn $4.20 per bushel, same as May
       Soybean $10.75 per bushel, same as May
Plenty of Acres in Play (7/1/14)

The Acreage and Grain Stocks held a fair amount of bearish news for the markets. Corn acreage was estimated at 91.6 million acres, down 3.7 million from last and 0.1 million from the March intentions. Given USDA's current yield projection, corn production would be slightly below last year's record production. Iowa, Illinois, and Indiana all held corn acreage constant with last year. The big drops in corn area were in the Great Plains and Mississippi Delta areas. Only 7 states saw increases in corn area. Meanwhile, soybean area moved strongly into record territory. Overall, soybeans are being planted in 84.8 million acres. That's 8.3 million more than last year and 7.4 million more than the previous record. For all of the states the USDA tracks for soybeans, only two (Virginia and Oklahoma) did not increase soybean plantings. Nine states are setting records (North and South Dakota, Nebraska, Minnesota, Wisconsin, Michigan, Ohio, Pennsylvania, and New York). With USDA's current yield projection, soybean production would reach nearly 3.8 billion bushels.

Looking at crop stocks, corn stocks were up 39 percent from last year, while soybean stocks were down 7 percent. Disappearance for both crops were higher, but stock levels were higher than the trade was expecting. Relative to last year, more corn is being held on farm. More soybeans are being held by off farm storage. The combination of large projected crops and higher than expected stocks have sent futures prices downward. As we start July, price projections based on futures still have soybean pricing above the USDA forecast, but corn has fallen below the USDA forecast.

Hogs and Pigs (7/1/14)

USDA's June Hogs and Pigs report confirmed what the industry had been suspecting for the past quarter - lingering impacts of the Porcine Epidemic Diarrhea Virus (PEDv). Coming into the report there were broad expectations that: i) market hog inventory would be lower than a year ago, attributed primarily to lower year over year pipeline pig supplies, ii) breeding herd inventory would show some form of expansion as the profit margins seen so far in 2014 would be a driver of expansion, iii) PEDv had impacted the number of pigs per litter and reduced productivity during the Mar-May period, and iv) farrowing intentions for June-August 2014 and September-November 2014 would show the potential for solid growth. Most final estimates fell well below pre-report expectations; generally suggesting 2014 hog supplies may be even tighter than previously believed. As such, the latest hogs and pigs report confirmed much of the recent run-up in lean hog futures prices.