October 10, 2014 - USDA World Supply and Demand Estimates
Corn
Corn production is forecast 80 million bushels higher at a record 14,475 million bushels as lower
reported area is more than offset by a 2.5-bushel-per-acre increase in the yield. Corn supplies for
2014/15 are projected at 15,736 million bushels, up 129 million from last month reflecting both
higher production and a 55-million-bushel increase in beginning stocks from the September
Grain Stocks report. Projected imports are lowered 5 million bushels with tighter corn supplies in
Canada. Projected U.S. corn use for 2014/15 is raised 50 million bushels on higher expected feed
and residual disappearance driven by the larger crop, higher projected meat production, and the
lower price outlook. Corn ending stocks are raised 79 million bushels to 2,081 million. The
projected range for the season-average farm price is lowered 10 cents on each end to $3.10 to
$3.70 per bushel.
Global corn production is raised 126 million bushels with increases for EU and the United States
partly offset by reductions for FSU. EU corn production is raised 106 million bushels with
increases in a number of countries based on the latest data and harvest results. Corn production is
lowered 39 million bushels for Ukraine and 20 million bushels each for Belarus and Russia, also
on the latest harvest results, which reflect the impact of hot, dry, late summer growing
conditions.
Global coarse grain consumption for 2014/15 is raised slightly, mostly due to increased corn use
in the United States. Corn feed use is also increased for Egypt and Iran with higher imports this
month. Global corn trade is lowered this month, mostly reflecting a 118-million-bushel reduction
in expected imports by EU. Exports are lowered for Canada and Russia. Global corn ending
stocks for 2014/15 are projected 28 million bushels higher with larger stocks in the United
States.
Market Reaction:
December 2014 corn futures closed down 9 ¼ cents at $3.34 with a trading range for the day of
$3.32 ½ to $3.48 ½. March 2015 corn futures closed down 9 cents at $3.46 ¾ with a trading
range of $3.45 ½ to $3.61 ½. September 2015 corn futures closed down 8 ½ cents at $3.71 ¾
with a trading range for the day of $3.70 ¾ to $3.84 ¼. Increases in corn yields were partially
offset by a reduction in harvested acreage. December corn futures bottomed out at $3.18 ½ on
October 1st, since then prices are up more than 30 cents. The October WASDE caused a drop in
futures prices however it remains to be seen if this is a temporary setback or a reversal in the
short term upward trend.
2014/15
USDA
Projected
September
2014/15
USDA
Projected
October
2008/09
2009/10
2010/11
2011/12
86.0
86.4
88.2
91.9
97.2
95.4
91.6
90.9
78.6
79.5
81.4
84.0
87.4
87.7
83.8
83.1
153.9
164.7
152.8
147.2
123.4
158.8
171.7
174.2
Beg. Stocks
1,624
1,673
1,708
1,128
989
821
1,181
1,236
Production
12,092
13,092
12,447
12,360
10,780
13,925
14,395
14,475
14
8
28
29
160
36
30
25
13,729
14,774
14,182
13,517
11,929
14,782
15,607
15,736
Acres Planted (Million
Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
2012/13
Supply
2013/14
USDA
Estimate
Supply (Million Bushels)
Imports
Total Supply
Use (Million Bushels)
Feed and Residual
5,182
5,125
4,792
4,557
4,339
5,175
5,325
5,375
Ethanol
Food, Seed &
Industrial
Exports
3,709
4,591
5,021
5,000
4,641
5,130
5,125
5,125
1,316
1,370
1,407
1,428
1,398
1,374
1,405
1,405
1,849
1,980
1,835
1,543
730
1,917
1,750
1,750
Total Use
12,056
13,066
13,054
12,528
11,108
13,546
13,605
13,655
U.S. Ending Stocks
1,673
1,708
1,128
989
821
1,236
2,002
2,081
Foreign Stocks
4,137
4,040
3,919
4,237
4,619
5,581
5,475
5,422
Price and Stocks to Use Ratio
U.S. Avg. Season
Price ($/Bu)
$4.06
$3.55
$5.18
$6.22
$6.89
$4.46
$3.20$3.80
$3.10$3.70
U.S. Stocks/Use
13.88%
13.07%
8.64%
7.89%
7.39%
9.12%
14.72%
15.24%
Source: USDA-WASDE October 10, 2014
World Corn Supply and Use (Million Bushels) 2014/15 (October)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
World
6,811
39,001
4,398
23,471
38,309
4,491
7,503
US
1,236
14,475
25
5,375
11,905
1,750
2,081
Foreign
5,575
24,527
4,373
18,096
26,404
2,742
5,422
Argentina
111
905
0
240
362
551
104
Brazil
699
2,953
31
1,870
2,224
787
671
South Africa
131
531
1
220
465
87
113
Egypt
85
226
295
453
543
0
63
EU
271
2,796
276
2,224
2,972
98
272
Japan
20
0
610
433
610
0
21
Mexico
83
886
429
630
1,289
20
89
Southeast Asia
142
1,081
362
1,098
1,421
17
146
South Korea
69
3
374
307
390
0
56
Canada
63
453
28
260
472
20
51
3,049
8,543
118
6,299
8,661
4
3,045
China
Ukraine
88
984
2
315
370
630
74
ROW
764
5,165
1,846
3,746
6,624
527
718
World Corn Supply and Use (Million Bushels) 2014/15 (October-September)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
World
-3
125
-45
85
95
-43
26
US
54
80
-5
50
50
-
79
Foreign
-57
45
-40
35
45
-43
-52
Argentina
-
-
-
-
-
-
-
Brazil
-
-
-
-
-
-
-
South Africa
-
-
-
-
-
-
-
Egypt
-12
-
39
35
39
-
-12
EU
-8
105
-118
-
0
-
-21
Japan
-
-
-8
-8
-8
-
-
Mexico
-6
-
-
-
-
-
-6
Southeast Asia
-
-
-
-
-
-
-
South Korea
-
-
-
-
-
-
-
Canada
-38
-4
8
-
-
-20
-14
China
-1
-
-
-
-
-
-1
Ukraine
-
-39
-
-20
-20
-
-20
ROW
6
-17
38
28
33
-24
20
Source: USDA-WASDE October 10, 2014
Cotton
The 2014/15 U.S. cotton supply and demand estimates show lower production, ending stocks,
and prices. Production is reduced 283,000 bales to nearly 16.3 million. The disappearance
forecasts are unchanged. The export forecast remains at 10.0 million bales, despite lower
expected foreign imports, as demand for U.S. cotton is likely to be sustained. The range for the
marketing-year average price received by producers is lowered to 55 to 65 cents per pound; the
midpoint of 60 cents per pound is reduced 4 cents on sharply lower recent prices, which followed
announcements by the government of China indicating a more restrictive import policy.
Global 2014/15 stocks are raised about 800,000 bales this month to 107 million, owing to higher
beginning stocks, as increases for production and consumption are about offsetting. Production is
raised 1.4 million bales, including increases for China, India, and Pakistan, which are partly
offset by reductions for Brazil, the United States, Australia, and Zimbabwe. Forecast
consumption by China is raised 1.5 million bales as mills there are expected to reduce yarn
imports in favor of spinning domestic cotton. Consumption also is raised for Indonesia, due to
changes in the historical estimates series, and Vietnam, but is reduced for India. World trade is
reduced about 800,000 bales on lower imports by China. Forecast stocks for India are raised
sharply from last month due to a combination of higher production and lower offtake. With
China’s stocks now projected to fall by 550,000 bales from last season, stocks outside of China
are expected to rise 17 percent year-on-year to about 45 million bales.
World stocks for 2013/14 are raised 1.0 million bales, due mainly to higher production estimates
for China and Brazil. The China production estimate is raised 750,000 bales consistent with
increased estimates of cotton which entered the national reserve.
Market Reaction:
December 2014 cotton futures closed up 0.16 cents at 64.10 with a trading range for the day of
63.60 to 65.50. March 2015 cotton futures closed down 0.22 cents at 61.84 with a trading range
for the day of 61.5 to 62.97. December 2015 cotton futures closed down 0.05 cents at 65.45 with
a trading range for the day of 65.03 to 66.16. December cotton futures have traded in a 61 to 68 a
cent range since late July. A 2+ cent inverted spread exists between the December and March
futures contracts.
2013/14
USDA
Estimate
2014/15
USDA
Projected
September
2014/15
USDA
Projected
October
2008/09
2009/10
2010/11
2011/12
2012/13
Supply
9.47
9.15
10.97
14.74
12.31
10.41
11.01
11.01
7.57
7.53
10.7
9.46
9.37
7.54
9.88
9.88
813
777
812
790
887
821
803
790
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
17.32
12.91
16.54
16.26
0
0
0.01
0.02
0.01
0.01
0.01
0.01
22.87
18.53
21.06
18.19
20.68
16.72
19
18.72
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average
Yield (lbs/acre)
Supply (Million Bales)
Imports
Total Supply
Use (Million Bales)
Domestic
3.59
3.46
3.9
3.3
3.5
3.55
3.8
3.8
Exports
13.26
12.04
14.38
11.71
13.03
10.53
10
10
Total Use
U.S. Ending
Stocks
Foreign Stocks
16.85
15.5
18.28
15.01
16.53
14.08
13.8
13.8
6.34
2.95
2.6
3.35
3.8
2.45
5.2
4.9
54.47
43.71
46.84
69.97
85.26
95.11
101.09
102.21
Chinese Stocks
22.37
15.25
10.6
31.08
50.36
59.56
62.91
62.16
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
$0.58$0.70
$0.55$0.65
37.63%
19.03%
14.22%
22.32%
22.99%
17.40%
37.68%
35.51%
50.84%
30.50%
23.04%
81.79%
139.89%
172.64%
172.36%
163.58%
Source: USDA-WASDE October 10, 2014
World Cotton Supply and Use (Million 480 lb Bales) 2014/15 (October)
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
101.31
119.37
34.39
2.45
16.26
0.01
98.86
103.12
34.38
2.52
6.46
0
1.15
4.51
0
1.81
2.3
0
7.67
7
0.08
11.32
31
0.8
0.58
1.2
1.03
62.71
30.5
7
0.56
1.79
0.89
1.36
3.15
3.8
2.48
9.8
1.5
0.57
0.03
3.1
0.29
0
1.58
1.02
0.12
4.45
0.51
0.02
3.6
4.31
5.23
6.55
Domestic
Use
113.68
3.8
109.88
2.35
0.15
0.04
4.1
24.5
1.88
38
0.93
6.5
10.6
3.05
1.5
4.35
3.4
Exports
34.4
10
24.4
3.6
3.81
3.2
3.4
5
0.2
0.05
1.51
0.2
0.45
0.01
0.01
0
0
Loss
-0.12
0.02
-0.14
0
0
-0.15
-0.15
0
0.03
0
0.05
0
0.03
0
0.03
0.01
0
Ending
Stocks
107.11
4.9
102.21
3.04
1.7
1.02
7.39
13.62
0.7
62.16
0.74
1.61
2.7
0.64
0.34
1.23
0.72
8.53
2.96
0.01
4.6
World Cotton Supply and Use (Million 480 lb Bales) 2014/15 (October-September)
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
1.01
1.01
0.01
0.01
0.2
0.75
0.1
-0.06
1.36
-0.28
1.64
-0.2
-0.3
1
1
0.05
0.3
-0.21
-0.8
-0.8
-1
-0.01
0.05
-0.1
0.22
-0.05
-0.05
0.2
-0.06
1.56
1.56
-0.1
0.1
-0.25
1.5
-0.03
0.05
0.1
0.3
-0.05
-0.1
0.15
-0.11
-0.78
-0.78
0.2
-0.3
-0.7
0.08
0.05
-0.11
-0.03
0.02
-0.05
-0.05
-
0.82
-0.3
1.12
0.11
-0.4
0.1
1.95
-0.75
-0.01
0.05
0.07
0.05
0.05
-0.1
Source: USDA-WASDE October 10, 2014
Soybeans
Soybean production is forecast at a record 3,927 million bushels, up 14 million with improved
yields more than offsetting reduced harvested area. The soybean yield is projected at 47.1
bushels per acre, up 0.5 bushels from September. Harvested area is reduced 0.7 million acres to
83.4 million. Soybean supplies for 2014/15 are projected 24 million bushels below last month
with lower beginning stocks from the Grain Stocks report more than offsetting increased
production. U.S. soybean exports and crush for 2014/15 are unchanged this month. Soybean
ending stocks are projected at 450 million bushels, down 25 million on reduced supplies. Prices
for soybeans, soybean oil, and soybean meal are unchanged.
Global oilseed production for 2014/15 is projected up from last month as higher soybean, peanut,
and cottonseed production more than offset reduced sunflowerseed and rapeseed production.
Global soybean production is projected at 11.435 billion bushels, up 4 million. Small reductions
in soybean production for China and Russia partly offset increases for the United States and EU.
Global oilseed stocks for 2014/15 are projected at a 29 percent increase from 2013/14. Oilseed
stocks are virtually unchanged from last month as lower rapeseed stocks in Canada offset an
increase in soybean stocks. Higher soybean stocks in Argentina offset a reduction in the United
States.
Futures Market Reaction:
November 2014 soybean futures closed down 17 cents at $9.22 ½ with a trading range for the
day of $9.21 ¼ to $9.50. January 2015 soybean futures closed down 16 ¾ cents at $9.30 ½ with a
trading range for the day of $9.29 to $9.57 ¾. November 2015 soybean futures closed down 16
½ cents at $9.44 with a trading range for the day of $9.42 ½ to $9.69 ¾. November soybeans hit
a low of $9.04 on October 1st. Whether record domestic production will push prices below this
level remains to be seen.
2013/14
USDA
Estimate
2014/15
USDA
Projected
September
2014/15
USDA
Projected
October
2008/09
2009/10
2010/11
2011/12
2012/13
Supply
75.7
77.5
77.4
75.0
77.2
76.8
84.8
84.2
74.7
76.4
76.6
73.8
76.2
76.3
84.1
83.4
39.7
44.0
43.5
41.9
39.8
44.0
46.6
47.1
Beg. Stocks
205
138
151
215
169
141
130
92
Production
2,967
3,359
3,329
3,094
3,034
3,358
3,913
3,927
13
15
14
16
41
72
15
15
Total Supply
3,185
3,512
3,495
3,325
3,243
3,570
4,058
4,034
Crushing
1,662
1,752
1,648
1,703
1,689
1,734
1,770
1,770
Exports
1,279
1,499
1,501
1,365
1,317
1,647
1,700
1,700
106
110
130
88
97
98
114
114
3,047
3,361
3,280
3,155
3,103
3,478
3,583
3,583
138
151
215
169
141
92
475
450
1,440
2,082
2,361
1,797
1,948
2,330
2,838
2,881
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
Supply (Million Bushels)
Imports
Use (Million Bushels)
Seed and Residual
Total Use
U.S. Ending Stocks
Foreign Stocks
Price and Stocks to Use Ratio
U.S. Average Season
Price ($/Bu)
$9.97
$9.59
$11.30
$12.50
$14.40
$13.00
$9.00$11.00
$9-$11.00
U.S. Stocks/Use
4.53%
4.49%
6.55%
5.36%
4.54%
2.65%
13.26%
12.56%
Source: USDA-WASDE October 10, 2014
World Soybean Supply and Use (Million Bushels) 2014/15 (October)
Country /
Region
World
US
Beginning
Stocks
Production
Imports
Domestic
Crush
Domestic
Total
Exports
Ending
Stocks
2,443
11,435
4,134
9,240
10,447
4,233
3,332
92
3,927
15
1,770
1,883
1,700
450
Foreign
2,351
7,508
4,119
7,470
8,564
2,533
2,881
Argentina
1,091
2,021
0
1,437
1,514
312
1,285
617
3,454
22
1,382
1,497
1,716
880
8
301
1
132
137
159
15
China
486
434
2,719
2,701
3,120
11
509
EU
24
58
468
469
507
3
40
Japan
8
8
107
72
113
0
10
6
11
145
154
156
0
6
111
1,222
656
1,124
1,520
332
136
Brazil
Paraguay
Mexico
ROW
World Soybean Supply and Use (Million Bushels) 2014/15 (October-September)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Crush
Domestic
Total
Exports
Ending
Stocks
World
-15
3
-
-22
-24
-7
18
US
-39
14
-
-
-
-
-25
Foreign
23
-11
-
-22
-24
-7
43
Argentina
39
-
-
-26
-26
-
64
Brazil
-16
-
-
-
-
-
-16
Paraguay
-
-
-
-
-
-
-
China
-
-7
-
-
-2
-
-6
EU
-
4
-
4
4
-
-
Japan
-
-
-
-
-
-
-
Mexico
-
-
-
-
-
-
-
ROW
-
-8
-
-
-
-7
-
Source: USDA-WASDE October 10, 2014
Wheat
Projected U.S. wheat ending stocks for 2014/15 are lowered 44 million bushels as increased
production is more than offset by higher feed and residual disappearance and higher exports.
Production for 2014/15 is raised 5 million bushels based on the latest estimate from the
September 30 Small Grains 2014 Summary. Hard Red Spring (HRS) wheat and Hard Red
Winter wheat are raised 32 million bushels and 9 million bushels, respectively. Reductions in the
other three classes are partially offsetting. Projected feed and residual use is raised 25 million
bushels reflecting the September 1 stocks that indicated higher-than-expected June-August
disappearance. Projected exports are raised 25 million bushels on higher-than-expected sales for
HRS and Soft Red Winter wheat. The projected range for the 2014/15 season-average farm price
is narrowed 5 cents on both the high and low end to $5.55 to $6.25 per bushel.
Global 2014/15 wheat supplies are raised 11 million bushels with increased production offsetting
lower beginning stocks. World production is raised 44 million bushels led by a 110-millionbushel increase for EU and 18-million-bushel increases for both Pakistan and Ukraine. Decreases
are led by a 37-million-bushel reduction for Kazakhstan, a 0.8-million-bushel reduction for
Algeria, 18-million-bushel reductions for both Australia and Canada, and an 11-million-bushel
reduction for Argentina. Changes for Northern Hemisphere countries reflect updated harvest
reports and government statistics. For the Southern Hemisphere, Australia is lowered on
continued dryness in portions of the southeast, and Argentina is lowered on wet conditions that
have limited planting.
Global wheat consumption for 2014/15 is raised 151 million bushels to a record 26.239 billion
reflecting both higher food and feed use. Global wheat trade is raised with exports up 44 million
bushels to 5.732 billion. The largest increase is 73 million bushels for EU due to the larger crop.
Mexico exports are raised 18 million bushels on large durum supplies and strong international
demand. Offsetting decreases are made for Kazakhstan (down 37 million bushels), Australia
(down 18 million bushels), and Argentina (down 11 million bushels) on smaller crops. Projected
consumption rises faster than supplies lowering global ending stocks 140 million bushels to
7.077 billion bushels.
Futures Market Reaction:
December 2014 wheat futures closed up 5 cents at $4.98 ½ with a trading range for the day of
$4.88 ¼ to $5.08 ½. July 2015 wheat futures closed at $5.22 ¾ up 2 ¾ cents with a trading range
for the day of $5.15 to $5.32 ½. Lower global wheat stocks and increased feed and export use in
the U.S. provided minor support to wheat futures. December wheat futures are up over 30 cents
since the low on September 25th of $4.66 ¼.
Acres Planted
(Million Acres)
Acres Harvested
(Million Acres)
U.S. Average Yield
(Bu/Acre)
2012/13
Supply
2013/14
USDA
Estimate
2014/15
USDA
Projected
September
2014/15
USDA
Projected
October
2008/09
2009/10
2010/11
2011/12
63.2
59.2
53.6
54.4
55.7
56.2
56.5
56.8
55.7
49.9
47.6
45.7
48.9
45.3
46.2
46.5
44.9
44.5
46.3
43.7
46.3
47.1
43.9
43.8
Supply (Million Bushels)
Beg. Stocks
306
657
976
862
743
718
590
590
Production
2,499
2,218
2,207
1,999
2,266
2,135
2,030
2,035
127
119
97
112
123
169
170
170
2,932
2,993
3,279
2,974
3,131
3,021
2,789
2,795
Food
927
919
926
941
945
951
960
960
Seed
78
69
71
76
73
77
76
76
Feed
255
150
132
162
384
228
155
180
Exports
1,015
879
1,289
1,051
1,012
1,176
900
925
Total Use
2,275
2,018
2,417
2,231
2,414
2,432
2,091
2,141
657
976
862
743
718
590
698
654
5,482
6,427
6,446
6,567
5,735
6,182
6,518
6,422
Imports
Total Supply
Use (Million Bushels)
U.S. Ending Stocks
Foreign Stocks
Price and Stocks to Use Ratio
U.S. Avg. Season
Price ($/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%
29.74%
24.26%
Source: USDA-WASDE October 10, 2014
$5.50$6.30
33.38%
$5.55$6.25
30.55%
World Wheat Supply and Use (Million Bushels) 2014/15 (October)
Country /
Region
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
6,819
26,497
5,685
5,156
26,239
5,733
7,076
590
2,035
170
180
1,216
925
654
6,229
24,461
5,515
4,976
25,023
4,808
6,422
Argentina
93
441
0
4
226
220
88
Australia
216
919
6
125
250
680
210
Canada
360
1,010
18
165
358
808
222
EU
373
5,658
184
2,113
4,630
1,029
556
World
US
Foreign
Brazil
66
231
239
22
437
37
62
China
2,215
4,630
73
845
4,556
37
2,325
Sel. Mideast
374
644
776
147
1,383
19
392
N. Africa
495
641
895
87
1,585
18
428
Pakistan
79
919
37
44
922
26
87
Southeast Asia
145
0
625
90
605
31
134
India
655
3,524
1
165
3,471
110
599
Russia
195
2,168
18
478
1,279
827
276
Kazakhstan
73
459
0
73
250
202
80
Ukraine
135
900
2
147
441
367
229
ROW
754
2,317
2,642
469
4,630
397
734
World Wheat Supply and Use (Million Bushels) 2014/15 (October-September)
Country /
Region
World
US
Beginning
Stocks
Production
Imports
Domestic
Feed
Domestic
Total
Exports
Ending
Stocks
-32
43
65
94
151
44
-139
-
6
-
25
25
25
-44
Foreign
-32
37
65
69
125
19
-95
Argentina
-7
-11
-
-
-
-11
-7
Australia
18
-18
-
-
-
-18
18
Canada
-
-18
-
-
-
-
-18
EU
-
111
-18
18
18
73
-
Brazil
-
-
-
-
-
-
-
China
-
-
-
-
-
-
-
-18
-
8
20
31
-
-41
N. Africa
-
-29
15
-
12
-
-26
Pakistan
4
18
-18
18
15
-
-11
Southeast Asia
-1
-
15
2
8
-
5
India
-
2
-
-
2
-
-
Russia
-8
-
-7
-
11
-
-27
Kazakhstan
-
-37
-
-
-
-37
-
Ukraine
-
18
-
-
-
-
18
-19
2
71
10
29
11
-6
Sel. Mideast
ROW
Source: USDA-WASDE September 11, 2014
2015 Estimated Returns
As the 2014 harvest is in full swing, plans are being made for the 2015 crop starting with
whether to plant wheat. Many producers were negatively impacted by price discounts received
on their 2014 wheat. However, that should not be the sole influencer for 2015 wheat production
decisions. Wheat and double crop soybeans depending on an individual farmer’s situation can be
a profitable mix. However, that is a decision each producer will have to make. The planning
process is also on going and if you are considering wheat, you have consider how it looks
compared to other crops. Yields used for non-irrigated estimates are a 5 year Tennessee state
average year plugging in the 2014 projection. Based on these averages, 2015 will have negative
profit margins at current prices for 2015 considering variable, land, and fixed machinery cost.
These estimates do not consider any USDA or crop insurance payments from the new farm bill.
As the 2014 crop is harvested, producers will need to look closely at their plans for the 2015 crop
and make adjustments where needed. 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 - $ 121, Soybeans - $40, Corn - $167
(includes 170 units of N), Milo - $104, and Wheat/Soybeans - $111. 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 2014 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
Cotton
Soybeans
Corn
Milo
Wheat/Soybeans
Yield
875 lbs.
40 bu.
128 bu.
85 bu.
65 bu./28 bu.
Price (as of 10/10/14)
$0.66 lb.
Revenue
578
$367
$420
$287
Variable Expenses
$504
$274
$406
$231
$455
Returns Over Variable
$74
$93
$14
$56
$120
$142
$89
$102
$71
$139
-$68
$4
-$88
-$15
$18
$85
$63
$60
$60
$107
Returns Over Specified Costs
-$153
-$59
-$147
-$74
-$125
Breakeven Price at Average Yield
and Specified Cost
$0.83
$10.66
$4.43
$4.25
$6.10/$10.91
Land Costs (25% of Revenue-25%
crop insurance)
Returns Over Variable and Land
Costs
Fixed Costs
Depreciation & interest on machinery
$9.18 bu. $3.28 bu. $3.38 bu. $4.89 bu./$9.18 bu.
$575
2015 Estimated Returns - Irrigation
As with dryland production, lower prices have squeezed profit margins in the irrigated crops
creating negative margins considering variable, land and fixed cost. 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 $26 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 - $ 121, Soybeans - $40, Corn - $215 (includes 225 units of N), Milo - $138, and
Wheat/Soybeans - $111. 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 2014 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.
65 bu./45 bu.
Price (as of 10/10/14)
$0.66 lb.
Revenue
$726
$551
$623
$439
Variable Expenses( include energy
cost)
$542
$312
$506
$307
$493
Fixed Irrigation Costs per Acre
$88
$88
$88
$88
$88
$96
$151
$29
$44
$150
$157
$113
$131
$87
$156
-$61
$38
-$102
-$43
-$6
$100
$78
$75
$75
$122
Returns Over Specified Costs
-$161
-$40
-$177
-$118
-$128
Breakeven Price at Average Yield
and Specified Cost
$0.81
$9.85
$4.21
$4.28
$6.10/$10.30
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
$9.18 bu. $3.28 bu. $3.38 bu. $4.89 bu./$9.18 bu.
$731