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The Outlook for Ethanol, Corn, and Beef
Chad HartCenter for Agricultural and Rural Development &Food and Agricultural Policy Research Institute
Iowa State [email protected]
515-294-9911
Beef Quality Summit: Beef Quality in the Ethanol EraOmaha, NebraskaNovember 8, 2007
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Outline
•Look at key variables for ethanol, crops, and beef sectors
•FAPRI March 2007 Baseline
•FAPRI August 2007 Update
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Model Interactions
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Current ethanol capacity: 131 plants, 6.92 billion gallons/year
Total capacity under construction and expansion: 6.56 billion gallons/year
73 new ethanol plants and 10 expansion projects underway
U.S. Ethanol Industry
2.2 billion bushels of corn were used in producing fuel ethanol in 2006/2007 marketing year.
3.2-3.5 billion bushels of corn are expected to be used in producing fuel ethanol for 2007/2008 marketing year.
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Projected U.S. Ethanol Production
0
2
4
6
8
10
12
14
16
2006 2008 2010 2012
billion gallons
0
2
4
6
8
10
12
14
16
Aug-07 Mar-07
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Wholesale Gasoline and Ethanol Prices
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
2006 2008 2010 2012
US$/gallon
Unleaded Gasoline Ethanol
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Projected U.S. Corn Acreage
75
80
85
90
95
2006 2008 2010 2012
million acres
75
80
85
90
95
Aug-07 Mar-07
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Projected U.S. Corn Production
10
11
12
13
14
15
2006 2008 2010 2012
billion bushels
10
11
12
13
14
15
Aug-07 Mar-07
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Projected U.S. Corn Prices
3.00
3.05
3.10
3.15
3.20
3.25
3.30
3.35
3.40
2006 2008 2010 2012
$/bushel
3.00
3.05
3.10
3.15
3.20
3.25
3.30
3.35
3.40
Aug-07 Mar-07
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Projected Utilization of U.S. Corn
0
1000
2000
3000
4000
5000
6000
7000
2006 2007 2008 2009 2010 2011 2012
million bushels
Feed Fuel HFCS Seed Food, Other Exports
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Projected U.S. Wheat Acreage
55
57
59
61
63
65
2006 2008 2010 2012
million acres
55
57
59
61
63
65
Aug-07 Mar-07
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Projected U.S. Wheat Prices
4.00
4.20
4.40
4.60
4.80
5.00
5.20
2006 2008 2010 2012
$/bushel
4.00
4.20
4.40
4.60
4.80
5.00
5.20
Aug-07 Mar-07
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Projected U.S. Soybean Acreage
60
65
70
75
80
2006 2008 2010 2012
million acres
60
65
70
75
80
Aug-07 Mar-07
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Projected U.S. Soybean Prices
6.00
6.40
6.80
7.20
7.60
8.00
8.40
2006 2008 2010 2012
$/bushel
6.00
6.40
6.80
7.20
7.60
8.00
8.40
Aug-07 Mar-07
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Projected U.S. Soybean Meal Prices
170.00
180.00
190.00
200.00
210.00
220.00
2006 2008 2010 2012
$/ton
170.00
180.00
190.00
200.00
210.00
220.00
Aug-07 Mar-07
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Projected U.S. Hay Acreage
60.0
60.5
61.0
61.5
62.0
62.5
2006 2008 2010 2012
million acres
60.0
60.5
61.0
61.5
62.0
62.5
Aug-07 Mar-07
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Projected U.S. Distillers Grains Production
15
25
35
45
2006 2008 2010 2012
million tons
15
25
35
45
Aug-07 Mar-07
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Projected U.S. Distillers Grains Prices
85.00
95.00
105.00
115.00
2006 2008 2010 2012
$/ton
85.00
95.00
105.00
115.00
Aug-07 Mar-07
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Projected U.S. Beef Cows (Jan. 1)
30
31
32
33
34
35
2006 2008 2010 2012
million head
30
31
32
33
34
35
Aug-07 Mar-07
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Projected U.S. Cattle and Calves (Jan. 1)
95
96
97
98
99
100
2006 2008 2010 2012
million head
95
96
97
98
99
100
Aug-07 Mar-07
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Projected U.S. Beef Production
25
26
27
28
29
30
2006 2008 2010 2012
billion pounds
25
26
27
28
29
30
Aug-07 Mar-07
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Projected U.S. Beef Domestic Use
27
27.5
28
28.5
29
29.5
30
2006 2008 2010 2012
billion pounds
27
27.5
28
28.5
29
29.5
30
Aug-07 Mar-07
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Projected U.S. Cattle Prices
1100-1300 lb. NE Direct Steers
80
83
86
89
92
95
2006 2008 2010 2012
$/cwt.
80
83
86
89
92
95
Aug-07 Mar-07
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Projected U.S. Beef Retail Prices
3.50
3.70
3.90
4.10
4.30
4.50
2006 2008 2010 2012
$/lb.
3.50
3.70
3.90
4.10
4.30
4.50
Aug-07 Mar-07
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Projected U.S. Cow-Calf Net Returns
-50.00
-25.00
0.00
25.00
50.00
75.00
100.00
2006 2008 2010 2012
$/cow
-50.00
-25.00
0.00
25.00
50.00
75.00
100.00
Aug-07 Mar-07