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April 9, 2015 - USDA World Supply and Demand Estimates
Corn
Projected corn ending stocks are raised 50 million bushels with a reduction in expected feed and
residual use reflecting December-February disappearance as indicated by March 1 stocks. The
projected range for the corn season-average farm price is narrowed 5 cents on each end to $3.55
to $3.85 per bushel.
Global coarse grain supplies for 2014/15 are projected higher with much of the increase
reflecting higher sorghum and millet output in Sudan. There are a number of smaller changes to
corn, sorghum, and millet production in several other countries of Sub-Saharan Africa.
Elsewhere, corn production is raised for Serbia, Mexico, and Argentina, up 35 million bushels,
31 million bushels, and 20 million bushels, respectively. The change for Serbia is based on the
latest government revisions for the crop that was grown last summer. Heavy fall rains delayed
harvesting and the final tally for that crop. Production is raised for Mexico reflecting the latest
government statistics for the crop grown last summer. Increased area, exceptional winter rains,
and plentiful supplies of irrigation water support prospects for the winter crop that was planted in
the final months of 2014. The increase for Argentina is based on early harvest results that
suggest very good yields in early planted corn and abundant soil moisture for the later planted
corn now in grain fill. In addition to last month’s reduction of 79 million bushels, the South
Africa corn crop is lowered an additional 8 million bushels based on further analysis of weather
and satellite imagery.
Global coarse grain consumption for 2014/15 is raised slightly, mostly on higher sorghum and
millet food use for Sudan. Indonesia corn feeding is raised 16 million bushels, more than
offsetting a decrease in FSI use. Lower domestic use of corn, sorghum, and barley in the United
States offset much of these increases. Global corn trade is raised for 2014/15 with imports higher
for Indonesia, China, Iran, Algeria, Peru, and Colombia. Partly offsetting is a reduction in
imports for Mexico with the larger crop. Corn exports are raised for Argentina and
Serbia, but lowered for South Africa. Global coarse grain ending stocks are higher with corn
stocks projected up 126 million bushels mostly on increases for the United States, Indonesia, and
China.
Market Reaction:
May 2015 corn futures closed down 1 ¼ cents at $3.78 with a trading range for the day of $3.75
to $3.80. September 2015 corn futures closed down 1 ½ cents at $3.93 ½ with a trading range for
the day of $3.90 ¾ to $3.95 ¾. On the domestic front no new information materialized as the
decrease in feed and residual and increase in ending stocks were contained in the quarterly Grain
Stocks report.
2014/15
USDA
Projected
March
2014/15
USDA
Projected
April
2008/09
2009/10
2010/11
2011/12
86.0
86.4
88.2
91.9
97.3
95.4
90.6
90.6
78.6
79.5
81.4
84.0
87.4
87.5
83.1
83.1
153.9
164.7
152.8
147.2
123.1
158.1
171
171
Beg. Stocks
1,624
1,673
1,708
1,128
989
821
1,232
1,232
Production
12,092
13,092
12,447
12,360
10,755
13,829
14,216
14,216
14
8
28
29
160
36
25
25
13,729
14,774
14,182
13,517
11,904
14,686
15,472
15,472
Acres Planted (Million
Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
2012/13
Supply
2013/14
USDA
Estimate
Supply (Million Bushels)
Imports
Total Supply
Use (Million Bushels)
Feed and Residual
5,182
5,125
4,792
4,557
4,315
5,036
5,300
5,250
Ethanol
Food, Seed &
Industrial
Exports
3,709
4,591
5,021
5,000
4,641
5,134
5,200
5,200
1,316
1,370
1,407
1,428
1,397
1,367
1,395
1,395
1,849
1,980
1,835
1,543
730
1,917
1,800
1,800
Total Use
12,056
13,066
13,054
12,528
11,083
13,454
13,695
13,645
U.S. Ending Stocks
1,673
1,708
1,128
989
821
1,232
1,777
1,827
Foreign Stocks
4,137
4,040
3,919
4,237
4,619
5,581
5,517
5,592
Price and Stocks to Use Ratio
U.S. Avg. Season
Price ($/Bu)
$4.06
$3.55
$5.18
$6.22
$6.89
$4.46
$3.50$3.90
$3.55$3.85
U.S. Stocks/Use
13.88%
13.07%
8.64%
7.89%
7.41%
9.16%
12.98%
13.39%
Source: USDA-WASDE April 9, 2015
World Corn Supply and Use (Million Bushels) 2014/15 (April)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
World
6,726
39,050
4,512
23,466
38,357
4,633
7,419
US
1,232
14,215
25
5,250
11,845
1,800
1,827
Foreign
5,494
24,835
4,488
18,216
26,512
2,833
5,592
Argentina
48
945
0
240
370
591
32
Brazil
747
2,953
31
1,870
2,224
807
700
South Africa
85
445
1
205
441
28
63
Egypt
94
235
295
453
547
0
76
EU
253
2,920
315
2,342
3,090
98
298
Japan
22
0
606
429
606
0
22
Mexico
106
945
394
661
1,321
20
104
Southeast Asia
150
1,099
394
1,106
1,421
31
191
South Korea
73
3
378
315
398
0
56
Canada
63
453
59
295
508
20
47
3,044
8,484
118
6,220
8,503
4
3,138
Ukraine
88
1,120
2
354
409
709
92
ROW
721
5,235
1,893
3,725
6,672
526
772
China
World Corn Supply and Use (Million Bushels) 2014/15 (April-March)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
-51
89
72
-43
-87
33
125
-
-
-
-50
-50
-
50
Foreign
-51
89
72
7
-37
33
75
Argentina
-12
20
-
-
-
20
-12
1
-
-
-
-
-
1
South Africa
-
-8
-
-
-4
-12
8
Egypt
9
8
-
-
4
-
13
EU
-
-
-
-
-
-
-
Japan
-
-
-
-
-
-
-
Mexico
-
31
-35
-
-
-
-4
Southeast Asia
1
9
31
8
-
6
35
South Korea
-
-
-
-
-
-
-
Canada
-
-
-
-
-
-
-
China
-
-
20
-
-
-
20
Ukraine
-
-
-
-
-
-
-
-50
28
56
-1
-37
20
14
World
US
Brazil
ROW
Source: USDA-WASDE April 9, 2015
Cotton
The U.S. 2014/15 cotton supply and demand estimates include higher production and ending
stocks relative to last month. Production is raised to 16.3 million bales to reflect the USDA’s
final Cotton Ginnings report, released March 25, 2015. With no revisions to domestic mill use or
exports, ending stocks are raised 200,000 bales to 4.4 million. The range of 59 to 61 cents per
pound for the estimated marketing year average price received by producers is reduced 1 cent on
the upper end, based on prices to date.
The aggregate 2014/15 world supply and demand estimates show very marginal changes from
last month. World production is virtually the same at 119 million bales, as decreases for India
and Uzbekistan are offset by increases for the United States, Mexico, Pakistan, and others.
Consumption is raised marginally, as increases for India, Vietnam, and Pakistan are mostly offset
by reductions for Turkey, Brazil, Hong Kong, and others. World trade is lowered slightly,
including increases in imports by China and Vietnam and reductions for several other countries.
Global stocks of 110 million bales are virtually unchanged from last month.
Market Reaction:
May 2015 cotton futures closed down 0.51 cents at 66.22 with a trading range for the day of
66.11 to 67.13. December 2015 cotton futures closed down 0.01 cents at 65.96 with a trading
range for the day of 65.11 to 65.98. Since the March WASDE report, May and December cotton
futures were up 5.35 and 3.18 cents, respectively.
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average
Yield (lbs/acre)
2012/13
Supply
2013/14
USDA
Estimate
2014/15
USDA
Projected
March
2014/15
USDA
Projected
April
2008/09
2009/10
2010/11
2011/12
9.47
9.15
10.97
14.74
12.26
10.41
11.04
11.04
7.57
7.53
10.7
9.46
9.32
7.54
9.71
9.71
813
777
812
790
892
821
795
806
Supply (Million Bales)
Beg. Stocks
10.05
6.34
2.95
2.6
3.35
3.8
2.45
2.45
Production
12.82
12.19
18.1
15.57
17.31
12.91
16.08
16.3
0
0
0.01
0.02
0.01
0.01
0.01
0.01
Total Supply
22.87
18.53
21.06
18.19
20.67
16.72
18.54
18.76
Domestic
3.59
3.46
3.9
3.3
3.5
3.55
3.65
3.65
Exports
13.26
12.04
14.38
11.71
13.03
10.53
10.7
10.7
Total Use
U.S. Ending
Stocks
Foreign Stocks
16.85
15.5
18.28
15.01
16.53
14.08
14.35
14.35
6.34
2.95
2.6
3.35
3.8
2.45
4.2
4.4
54.47
43.71
46.84
69.97
86.17
99.21
105.86
105.69
Chinese Stocks
22.37
15.25
10.6
31.08
50.36
62.71
64.96
65.13
Imports
Use (Million Bales)
Price and Stocks to Use Ratio
U.S. Avg. Season
Price ($/lb)
U.S. Stocks/Use
Chinese
Stocks/Use
$0.48
$0.63
$0.82
$0.88
$0.725
$0.779
$0.59$0.62
$0.59$0.61
37.63%
19.03%
14.22%
22.32%
22.99%
17.40%
29.27%
30.66%
50.84%
30.50%
23.04%
81.79%
139.89%
181.77%
185.60%
186.09%
Source: USDA-WASDE April 9, 2015
World Cotton Supply and Use (Million 480 lb Bales) 2014/15 (April)
Country /
Region
World
US
Foreign
Central Asia
Afr. Fr. Zone
Australia
Brazil
India
Mexico
China
EU
Turkey
Pakistan
Indonesia
Thailand
Bangladesh
Vietnam
ROW
Beginning
Stocks
Production Imports
101.82
119.23
34.25
2.45
16.3
0.01
99.37
102.93
34.24
2.69
6.16
0
1.16
4.78
0
1.81
2.2
0
7.67
7
0.05
11.52
30
1.1
0.58
1.37
0.83
62.71
30
7.5
0.54
1.62
0.87
1.36
3.2
3.55
2.48
10.6
0.7
0.6
0.02
3.35
0.22
0
1.48
1.02
0.12
4.55
0.5
0.01
4.1
4.51
5.85
6.16
Domestic
Use
111.05
3.65
107.4
2.41
0.16
0.04
3.9
24.2
1.85
35
0.87
6.2
10.6
3.3
1.45
4.45
3.85
Exports
34.26
10.7
23.56
3.59
4
2.8
3.85
3.9
0.16
0.08
1.45
0.28
0.6
0.01
0.01
0
0
Loss
-0.1
0.01
-0.11
0
0
-0.1
-0.15
0
0.03
0
0.03
0
0.03
0
0.03
0.01
0
Ending
Stocks
110.09
4.4
105.69
2.85
1.78
1.27
7.12
14.52
0.73
65.13
0.68
1.63
2.55
0.66
0.21
1.23
0.75
9.12
2.83
0.01
4.58
World Cotton Supply and Use (Million 480 lb Bales) 2014/15 (April-March)
Country / Region
World
US
Foreign
Central Asia
Afr. Fr. Zone
Australia
Brazil
India
Mexico
China
EU
Turkey
Pakistan
Indonesia
Thailand
Bangladesh
Vietnam
ROW
Beginning
Stocks
Production
Imports
Domestic
Use
Exports
Loss
Ending
Stocks
0.11
0.11
0.12
-0.02
0.02
-0.01
0
-0.01
0.22
-0.23
-0.05
-0.5
0.15
0.08
0.1
-0.01
-0.01
0.01
-0.15
-0.15
-0.1
0.74
0.2
0.03
-0.05
0.15
-1.12
0.09
0.09
0.01
-0.1
0.2
-0.03
-0.15
0.1
0.2
-0.14
-0.16
-0.16
0.14
-0.08
-0.2
0.1
-0.3
0.01
0.03
0.15
0.05
-0.06
-0.01
0.02
-0.02
-0.02
-0.01
0.03
0.2
-0.17
-0.08
0.07
0.2
-0.1
-0.4
0.06
0.17
0.1
-0.05
-0.01
-0.07
-0.06
Source: USDA-WASDE April 9, 2015
Soybeans
U.S. soybean supplies for 2014/15 are projected at 4,091 million bushels, up 5 million on
increased imports. Soybean exports and crush projections are unchanged at 1,790 million and
1,795 million bushels, respectively. Seed use is raised in line with the record plantings indicated
in the March 31 Prospective Plantings report, and residual use is raised based on indications from
the March 31 Grain Stocks report. U.S. soybean ending stocks are projected at 370 million
bushels, down 15 million from last month. Soybean oil supplies are increased this month with
higher imports more than offsetting slightly lower production resulting from a lower oil
extraction rate. Soybean oil domestic disappearance is raised on increased food use which offsets
reductions for palm oil and canola oil consumption. Despite lower projected soybean oil exports,
ending stocks are projected at 1.38 billion pounds, down 125 million from last month.
Projected prices for soybeans and soybean oil are reduced this month. The range for the season
average soybean price is lowered 10 cents at the midpoint to $9.60 to $10.60 per bushel based on
marketings to date and lower expected prices for the second half of the marketing year. Soybean
oil prices are projected at 30 to 33 cents per pound, down 0.5 cents at the midpoint. Soybean
meal prices are projected at $355 to $385 per short ton, unchanged at the midpoint.
Global oilseed production for 2014/15 is projected at a record. Gains for soybeans, rapeseed, and
sunflowerseed more than offset lower projections for peanuts, copra, palm kernel, and
cottonseed. Global soybean production is projected at 11.593 billion bushels, up 15 million from
last month. Argentina soybean production is forecast at 2.094 billion bushels, up 37 million from
last month on higher yields resulting from favorable rainfall and mild temperatures across much
of the growing area. India soybean production is reduced 26 million bushels to 360 million
reflecting below average yields resulting from an unusually short monsoon season. Uruguay
soybean production is raised this month on higher harvested area.
Futures Market Reaction:
May 2015 soybean futures closed down 18 cents at $9.53 ½ with a trading range for the day of
$9.50 ¼ to $9.72. November 2015 soybean futures closed down 15 ¼ cents at $9.45 ¼ with a
trading range for the day of $9.41 ¼ to $9.61. Soybeans were down approximately 15 cents prior
to the report release partially due to disappointing weekly export sales numbers. Soybeans
remain somewhat of an anomaly as record acreage (both in 2014 and 2015) are battling with
strong demand. As usual, moving forward the weather will play the pivotal role in where markets
proceed from here.
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
2013/14
USDA
Estimate
2014/15
USDA
Projected
March
2014/15
USDA
Projected
April
2008/09
2009/10
2010/11
2011/12
2012/13
Supply
75.7
77.5
77.4
75.0
77.2
76.8
83.7
83.7
74.7
76.4
76.6
73.8
76.1
76.3
83.1
83.1
39.7
44.0
43.5
41.9
40.0
44.0
47.8
47.8
Supply (Million Bushels)
Beg. Stocks
205
138
151
215
169
141
92
92
Production
2,967
3,359
3,329
3,094
3,042
3,358
3,969
3,969
13
15
14
16
41
72
25
30
3,185
3,512
3,495
3,325
3,252
3,570
4,086
4,091
Imports
Total Supply
Use (Million Bushels)
Crushing
1,662
1,752
1,648
1,703
1,689
1,734
1,795
1,795
Exports
1,279
1,499
1,501
1,365
1,317
1,647
1,790
1,790
Seed and Residual
Total Use
U.S. Ending Stocks
Foreign Stocks
106
110
130
88
105
97
116
136
3,047
3,361
3,280
3,155
3,111
3,478
3,701
3,721
138
151
215
169
141
92
385
370
1,440
2,082
2,361
1,797
1,948
2,330
2,905
2,921
Price and Stocks to Use Ratio
U.S. Average
Season Price ($/Bu)
$9.97
$9.59
$11.30
$12.50
$14.40
$13.00
$9.45$10.95
$9.60$10.60
U.S. Stocks/Use
4.53%
4.49%
6.55%
5.36%
4.53%
2.65%
10.40%
9.94%
Source: USDA-WASDE April 9, 2015
World Soybean Supply and Use (Million Bushels) 2014/15 (April)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Crush
Domestic
Total
Exports
Ending
Stocks
2,437
11,591
4,196
9,333
10,616
4,318
3,290
92
3,969
30
1,795
1,931
1,790
370
Foreign
2,345
7,622
4,167
7,537
8,685
2,528
2,921
Argentina
1,066
2,094
0
1,440
1,554
294
1,312
607
3,472
11
1,382
1,497
1,690
903
3
312
0
132
136
176
3
530
454
2,719
2,732
3,167
9
527
EU
8
63
468
500
525
3
12
Japan
8
8
107
72
114
0
9
Mexico
5
11
149
156
158
0
7
118
1,208
712
1,124
1,535
356
147
World
US
Brazil
Paraguay
China
ROW
World Soybean Supply and Use (Million Bushels) 2014/15 (April-March)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Crush
Domestic
Total
Exports
Ending
Stocks
World
-
15
5
-7
15
4
1
US
-
-
5
-
21
-
-15
Foreign
-
15
-
-7
-5
4
16
Argentina
-
37
-
-
-
-
37
Brazil
-
-
-
-
-
-
-
Paraguay
-
-
-
-
-
-
3
China
-
-
-
-6
-
-
-
EU
-
-
-
-
-
-
-
Japan
-
-
-
-
-
-
-
Mexico
-
-
-
-
-
-
-
ROW
0
-22
0
-2
-5
4
-24
Source: USDA-WASDE April 9, 2015
Wheat
U.S. wheat ending stocks for 2014/15 are projected 7 million bushels lower with reduced imports
and higher domestic use mostly offset by lower exports. Imports are projected 15 million bushels
lower (mostly durum) based on available shipment data. Feed and residual use is projected 10
million bushels higher on disappearance during the December-February and SeptemberNovember quarters as indicated by March 1 stocks and revisions to December 1 stocks, both
from the March 31 Grain Stocks report. The all wheat export projection is lowered 20 million
bushels on continued strong competition in global markets. This would be the lowest export total
since 2009/10. The projected season-average farm price range for all wheat is raised 10 cents on
the low end to $6.00 to $6.10 per bushel.
Global 2014/15 wheat supplies are raised 29 million bushels with increased production more
than offsetting lower beginning stocks. The largest production increase is for EU, up 29 million
bushels for both 2013/14 and 2014/15 on revised country data. The Pakistan crop for 2014/15 is
also raised 18 million bushels. Global beginning stocks are lowered 33 million bushels mostly on
an EU increase in wheat feeding for 2013/14.
World wheat imports for 2014/15 are raised 55 million bushels mostly on the addition of six
African countries (Benin, Malawi, Mali, Namibia, Rwanda, and Uganda) to the official USDA
wheat database this month. Global exports are also raised 55 million bushels with EU having by
far the biggest increase. EU exports are raised 73 million bushels to a record 1.231 billion
bushels on the continued fast pace of export licenses and the competitiveness of EU supplies to
key markets in the Middle East and North Africa. Canada and Russia are each raised 18 million
bushels. Canada is raised on a strong pace to date and Russia on expectations that small
shipments will continue despite export taxes. Argentina is lowered 37 million bushels on the
slow pace of export licenses.
Global wheat consumption for 2014/15 is raised 48 million bushels largely on the addition of the
six African countries. Global wheat ending stocks for 2014/15 are lowered 18 million bushels
with large decreases for Canada, EU, and Russia and large increases for Pakistan and Argentina.
Futures Market Reaction:
May 2015 wheat futures closed down 7 ½ cents at $5.18 ¾ with a trading range for the day of
$5.13 ¾ to $5.26 ¾. July 2015 wheat futures closed at $5.17 ½ down 6 ¼ cents with a trading
range for the day of $5.11 to $5.24. The relative strength of the US dollar continues to provide
challenges for US wheat exports as prices in other key export regions are substantially lower.
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
2012/13
Supply
2013/14
USDA
Estimate
2014/15
USDA
Projected
March
2014/15
USDA
Projected
April
2008/09
2009/10
2010/11
2011/12
63.2
59.2
53.6
54.4
55.3
56.2
56.8
56.8
55.7
49.9
47.6
45.7
48.8
45.3
46.4
46.4
44.9
44.5
46.3
43.7
46.2
47.1
43.7
43.7
Supply (Million Bushels)
Beg. Stocks
306
657
976
862
743
718
590
590
Production
2,499
2,218
2,207
1,999
2,252
2,135
2,026
2,026
127
119
97
112
123
169
160
145
2,932
2,993
3,279
2,974
3,118
3,021
2,776
2,761
Food
927
919
926
941
951
955
960
960
Seed
78
69
71
76
73
77
75
77
Imports
Total Supply
Feed
255
150
132
162
364
223
150
160
Exports
1,015
879
1,289
1,051
1,012
1,176
900
880
Total Use
2,275
2,018
2,417
2,231
2,400
2,431
2,085
2,077
657
976
862
743
718
590
691
684
5,482
6,427
6,446
6,567
5,735
6,182
6,574
6,562
U.S. Ending Stocks
Foreign Stocks
Price and Stocks to Use Ratio
U.S. Avg. Season
Price ($/Bu)
$6.78
$4.87
$5.70
$7.24
$7.77
$6.87
U.S. Stocks/Use
28.88%
48.36%
35.66%
33.30%
29.92%
24.27%
Source: USDA-WASDE April 9, 2015
$5.90$6.10
33.14%
$6.00$6.10
32.93%
World Wheat Supply and Use (Million Bushels) 2014/15 (April)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
6,855
26,692
5,841
5,121
26,302
5,954
7,246
590
2,026
145
160
1,197
880
685
6,265
24,667
5,696
4,962
25,105
5,074
6,562
Argentina
94
459
1
11
233
202
119
Australia
226
882
6
140
265
625
225
Canada
355
1,077
18
184
380
863
206
EU
367
5,749
202
2,003
4,523
1,231
563
Brazil
69
217
246
29
434
59
40
China
2,215
4,630
55
845
4,556
37
2,306
Sel. Mideast
371
640
846
161
1,404
56
396
N. Africa
497
621
895
84
1,571
20
421
Pakistan
80
937
28
37
900
26
118
Southeast Asia
130
0
669
122
635
32
132
India
655
3,522
2
165
3,444
129
606
Russia
191
2,171
13
478
1,304
753
317
Kazakhstan
73
478
15
73
250
220
95
Ukraine
135
909
2
147
441
404
201
ROW
807
2,376
2,699
484
4,765
417
815
World
US
Foreign
World Wheat Supply and Use (Million Bushels) 2014/15 (April-March)
Country /
Region
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
62
54
-26
-
-15
10
47
54
-18
12
-20
-6
-33
62
69
-36
36
73
-12
Argentina
-
-
-
7
7
-37
29
Australia
-
-
-
-11
-11
-
11
Canada
-
-
-
18
18
18
-37
-24
28
-
-55
-51
73
-18
Brazil
-
-
-
7
7
4
-11
China
-
-
-
-
-
-
-
Sel. Mideast
-
-
-6
-
2
-
-7
N. Africa
1
4
7
-
18
-
-6
Pakistan
-
18
-
-7
-22
-
41
Southeast Asia
-
-
7
11
11
-
-4
India
-
-
-
-
-
-
-
Russia
-
3
-
-
-
18
-15
Kazakhstan
-
-
-
-
-
-
-
World
US
Foreign
EU
Ukraine
ROW
Beginning
Stocks
Production
-34
-
-
-
-
-
-
-
-
-11
9
60
-6
56
-4
5
Source: USDA-WASDE April 9, 2015
2015 Estimated Returns – Non-irrigated
The profitability outlook has been updated after the release of the April 9, 2015 USDA WASDE
reports. Today’s market reaction while negative, did not change much in the profitability
outlook. I would like to point out the cotton price of 70 cents that is being used in the
profitability outlook. I would guess that there has been very little cotton priced for 2015. The
price of 70 cents is made up of a cash price of 62 – 63 cents and gin rebates (seed & hauling) of
7-8 cents. The cash price of 62-63 cents is composed of a loan rate of 52 cents or 53 cents with a
slight premium and a 10 cent equity from the buyer. This 70 cent price has been used for the last
few months even while cotton prices have changed up and down. Basically, this is a result of the
way the cotton marketing loan program works. As long as cotton prices stay in a roughly 63-70
cent December futures range, cotton equities most likely will stay in that 10 cent range. My
observations and discussions with cotton buyers would indicate that if futures move above 70-71
cents, then the prices to the producers would start to move up penny for penny. At this point of
the season in Tennessee, crop selection will depend more on planting conditions as affected by
the weather more so than projected profitability. It should be noted the grain sorghum
profitability projections. Grain sorghum due to the positive basis at many elevators is projecting
to be the crop with the least loss as well as the lowest cost to produce. Producers considering
grain sorghum should discuss with their grain elevator the possibilities of delivery in the fall and
get some assurances that it will be deliverable coming out of the field (if on farm storage is not
available). Producers might also want to consider locking in at least the basis on grain sorghum.
Producers should look at these returns as what could be if no adjustments are made in their
operation and consider it a warning sign that adjustments will need to be made in 2015 to be
sustainable. These estimates do not consider any USDA or crop insurance payments from the
new farm bill. Please contact your local County Extension office or Area Specialist – Farm
Management for assistance in developing your own budget or farm financial plan. This table
below should be used as a guide as yields, prices, and expenses will vary among producers and
locations. Expenses will vary among producers and production systems. Cotton prices include
revenue for cottonseed and hauling. For reference, in variable expenses below, fertilizer expense
per acre is estimated as follows: Cotton - $ 120, Soybeans - $43, Corn - $161 (includes 170 units
of N), Milo - $103, and Wheat/Soybeans - $117. Cost of production will continue to be adjusted
as information becomes available. Weed control costs with resistant weeds have also been
difficult to estimate. These costs will vary greatly among producers and individual fields.
Production costs are estimates based on the 2015 University of Tennessee Crop Budgets with
adjustments made where needed. Please visit with your farm supplier on estimated cost in your
area. Producers with owned land and or cash rent can use Returns Over Variable as a guide in
decision making. Producers with share rent ground should use Returns Over Variable and Land
Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue
minus 25% of crop insurance cost is used in the table as a guide or method of comparison and
should not be construed as the appropriate rent for a particular area. Producers who are not
making major equipment changes can use UT budgets and this table as a guide in developing
their own cropping decision budgets. If equipment changes are being made, then a whole farm
financial plan would be better suited as a decision aid.
2015 Estimated Returns – Non-irrigated
Yield
Price (as of 4/9/15)
Cotton
Soybeans
Corn
Milo
Wheat/Soybeans
864 lbs.
42 bu.
132 bu.
85 bu.
64 bu./30 bu.
$0.70 lb. $9.39 bu. $3.88 bu. $4.43 bu. $5.35 bu./$9.39 bu.
$624
Revenue
$605
$394
$512
$377
Variable Expenses
$459
$285
$412
$234
$448
Returns Over Variable
$146
$110
$100
$142
$176
$149
$96
$125
$93
$152
-$3
$14
-$25
$49
$24
$142
$76
$73
$69
$107
Returns Over Specified Costs
-$145
-$62
-$97
-$20
-$83
Breakeven Price at Average Yield
and Specified Cost
$0.87
$10.88
$4.62
$4.67
$6.21/$10.39
Land Costs (25% of Revenue-25%
crop insurance)
Returns Over Variable and Land
Costs
Fixed Costs
Depreciation & interest on machinery
2015 Estimated Returns – Irrigated
As with dryland production, lower prices have squeezed profit margins in the irrigated crops
creating negative margins for all crops considering variable, land and fixed cost. Producers
should look at these returns as what could be if no adjustments are made in their operation and
consider it a warning sign that adjustments will need to be made in 2015 to be sustainable. The
table below is an estimate of returns for crops under irrigation. Since irrigated yields are not as of
yet kept separate in Tennessee, yields below are an estimate of irrigated yields. Irrigation fixed
costs and energy costs will vary greatly among producers and systems. These projections include
in variable expenses energy costs for irrigation of $21 per acre and $11 per acre of irrigation
repairs and maintenance. Fixed costs of $88 per acre for irrigation equipment are used. Please
contact your local County Extension office or Area Specialist – Farm Management for assistance
in developing your own budget or farm financial plan. This table below should be used as a
guide as yields, prices, and expenses will vary among producers and locations. Expenses will
vary among producers and production systems. Cotton prices include revenue for cottonseed and
hauling. For reference, in variable expenses below, fertilizer expense per acre is estimated as
follows: Cotton - $ 125, Soybeans - $43, Corn - $206 (includes 225 units of N), Milo - $135, and
Wheat/Soybeans - $117. Cost of production will continue to be adjusted as information becomes
available. Weed control costs with resistant weeds have also been difficult to estimate. These
costs will vary greatly among producers and individual fields. Production costs are estimates
based on the 2015 University of Tennessee Crop Budgets with adjustments made where needed.
Please visit with your farm supplier on estimated cost in your area. Producers with owned land
and or cash rent can use Returns Over Variable and Fixed IR Costs as a guide in decision
making. Producers with share rent ground should use Returns Over Variable, Fixed IR Costs and
Land Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue
minus 25% of crop insurance cost minus 25% of the irrigation equipment fixed cost is used in
the table as a guide or method of comparison and should not be construed as the appropriate rent
for a particular area. A management cost of $30 per acre is included in Fixed Costs –
management labor, depreciation & interest on machinery. This is an additional $15 above the
dryland crop management labor. Producers who are not making major equipment changes can
use UT budgets and this table as a guide in developing their own cropping decision budgets. If
equipment changes are being made, then a whole farm financial plan would be better suited as a
decision aid.
2015 Estimated Returns - Irrigation
Cotton
Soybeans
Corn
Milo
Wheat/Soybeans
Yield
1100 lbs.
60 bu.
190 bu.
130 bu.
64 bu./45 bu.
Price (as of 4/9/15)
$0.70 lb.
Revenue
$770
$563
$737
$576
Variable Expenses( include energy
cost)
$502
$317
$504
$300
$481
Fixed Irrigation Costs per Acre
$88
$88
$88
$88
$88
$180
$158
$145
$188
$196
$168
$116
$159
$121
$165
$12
$42
-$14
$67
$31
$151
$91
$86
$84
$122
Returns Over Specified Costs
-$139
-$49
-$100
-$17
-$91
Breakeven Price at Average Yield
and Specified Cost
$0.83
$10.20
$4.40
$4.56
$6.21/$10.52
Returns Over Variable & Fixed IR
Costs
Land Costs (25% of Revenue-25%
crop insurance-25% fixed irrigation
costs)
Returns Over Variable, IR Fixed Cost
and Land Costs
Fixed Costs- management labor,
depreciation & interest on machinery
$9.39 bu. $3.88 bu. $4.43 bu. $5.35 bu./$9.39 bu.
$765