Farm Programs

The annual U.S. Department of which would be slightly above other Agriculture “Ag Outlook Forum” was held recent U.S. soybean yields of 51.4 bushels in Washington, DC in late February. This per acre in 2021 and 51 bushels per acre Forum is usually the first USDA projec- in 2020. The estimated total 2022 U.S. tion for expected crop acreage and pro- soybean production would be nearly 4.5 duction for the coming growing season — billion bushels, which would be up slightas well as other current economic condi- ly from 4.43 billion bushels in 2021. tions in the agriculture industry. USDA estimates the 2022-23 soybean It should be noted the Forum was held just as the Russian invasion of Ukraine was being initiated and before we knew the impacts of the conflict. FARM PROGRAMS By Kent Thiesse ending stocks at 305 million bushels, which would be above the estimated 285 million bushels in 2021-22 and 257 million bushels in 2020-21. Total soybean usage for 2022-23 is estimated at 4.52 billion bushels, compared to an estimated usage of near 4.38 billion bushels for 2021-22, and a usage of 4.5 billion bushels in 2020-21. Soybean export levels for 2022-23 are projected to hold strong at 2.15 bilThe recent Ag Outlook Forum projects record U.S. corn yield and production in 2022. However, it also forecasted lower corn and soybean prices in the next 12 months, compared to the end of 2021. MARKETING

USDA released these figures for 2022 U.S. crop lion bushels, which would be very similar to export acreage, yields, production, usage, and grain prices levels for the past two years but would be well above for the major U.S. crops: the export level of 1.68 billion bushel in 2019-20.

Total — 2022 U.S. acreage planted to the three Domestic soybean usage for 2022-23 is expected to major crops (corn, soybeans and wheat) is estimated stay steady at about 2.37 billion bushels. USDA is at 228 million acres, which is an increase of 700,000 projecting a 2022-23 market year avcrage price of acres compared to 2021 and is at the highest level $12.75 per bushel, which would be down from the in the past eight years (2015-2022). current price estimate of $13.25 per bushel for 2021Corn — U.S. corn acreage is estimated at 92 million acres for 2022, which would be a decrease from 93.4 million acres in 2021. That number would be 22; but would still be well above the above the final market year average prices of $10.80 per bushel for 2020-21 and $8.57 per bushel for 2019-20. above all other years since 2016, when 94 million Wheat — U.S. wheat acreage in 2022 is projected to corn acres were planted. USDA is projecting a trend be 48 million acres, which is an increase from recent line national corn yield of 181 bushels per acre in wheat acreage levels of 46.7 million acres in 2018, 2022, which would result in an estimated total U.S. 44.3 million acres in 2020, and 45.5 million acres in corn production at the record level of nearly 15.24 2019. USDA is estimating the 2022 U.S. wheat yield billion bushels. USDA estimated the 2022-23 corn at 49.1 bushels per acre, with a total production of ending stocks at 1.96 billion bushels, compared to 1.94 billion bushels. This compares to a drought1.44 billion bushels in 2021-22, 1.23 billion bushels reduced wheat yield of only 44.3 bushels per acre and in 2019-20, and 1.92 billion bushels in 2018-19. a total production level of 1.65 billion bushels in Total corn usage for 2022-23 is estimated at just over 14.8 billion bushels, which is similar to the corn usage estimate for 2021-22. The 2022-23 corn usage includes approximately 5.65 billion bushels for livestock feed, 5.4 billion bushels for ethanol production, and 1.4 billion bushels for food and industrial use. The corn export level is projected at 2.35 billion bushels, which would be down from 2.42 billion bushels for 2021-22 and 2.75 billion bushels for 2020-21 but would still be above the 1.78 billion bushels in 2019-20. USDA is estimating the farmlevel market year average corn price for 2022-23 at $5.00 per bushel, compared to the current estimated 2021. USDA is projecting wheat ending stocks at 731 million bushels, which compares to 653 million bushels for 2021-22 and 845 million bushels for 2020-21. USDA is estimating the average farm-level wheat price at $6.80 per bushel for the 2022-23 marketing year, compared to the current market year average price estimate of $7.50 per bushel for 2021-22, as well as final market year aveage prices of $5.05 per bushel for 2020-21 and $4.58 per bushel for 2019-20. Of course, it should be noted that the final 2021-22 price estimate and the 2022-23 wheat price projections were made before the recent sharp increase in wheat prices since the Russian invasion of Ukraine. 2021-22 price of $5.65 per bushel; as well as final USDA also released livestock production and price market year average prices of $4.53 per bushel for estimates for the coming year at the Forum. 2020-21 and $3.56 per bushel for 2019-20. Cattle — USDA estimated the total U.S. cattle

Soybeans — 2022 U.S. soybean acreage is expect- inventory at 91.9 million head on Jan. 1, 2022, ed to be 88 million acres, which would be a slight which is down 2 percent from a year earlier. USDA increase from the 2021 soybean acreage of 87.2 mil- is projecting total U.S. beef production in 2022 to lion acres and would be well above the U.S. soybean decrease by about 2 percent to 27.38 billion pounds, acreage of 82.6 million acres in 2020 and 74.9 mil- with lower slaughter numbers and higher cattle lion acres in 2019. USDA is estimating the 2022 weights. Beef export levels are expected to be over trend line soybean yield at 51.5 bushels per acre, 3.27 billion pounds in 2022, with U.S. beef imports at 3.37 billion pounds. USDA is estimating the 2022 fed cattle market price to average $137 per hundredweight, which would be $15 per cwt. above the 2021 average price and would be the highest average price since 2015.

Hogs — Based on the Dec. 1, 2021 Quarterly Hogs and Pigs Report. USDA estimated total inventory of all U.S. hogs and pigs at 74.2 million head, which was down 4 percent from a year earlier and was at the lowest level since 2017. Total U.S. pork production for 2022 is projected at 27.38 billion pounds, which would be 1 percent below the 2021 level, with lower slaughter numbers being partially offset by heavier pork carcasses — especially if grain prices moderate later in 2022.

Pork export levels in 2022 are expected to decline by about 3 percent to 6.8 billion pounds, after surpassing 7 billion pounds in both 2020 and 2021. USDA is estimating 2022 average hog market price on a live weight basis to be $65 per cwt., which correlates to a lean carcass price of approximately 90 to $95 per cwt. The 2022 lean carcass price projections are down over $3-4 per cwt. from final 2021 average market hog prices.

In recent weeks, the grain markets have been totally focused on the conflict between Russia and Ukraine and the potential impacts to worldwide grain production and the movement of grain from those countries to other parts of the world. The has resulted in a strong upswing in the grain markets, with wheat futures rising by nearly 40 percent on the Chicago Board of Trade from early February to early March. However, the wheat market was extremely volatile in early March. Nearby CBOT corn futures rose by approximately 25 percent during that same timeframe, with more modest gains to CBOT soybean futures.

It will be interesting to watch how the changing dynamics of worldwide grain production and exports are included in the future monthly USDA World Agriculture Supply and Demand Estimates reports. There could be some grain marketing opportunities in the coming months, given the likelihood of tighter levels of ending stocks for corn and soybeans — especially if there are some spring planting delays or summer weather issues with the 2022 crop in the United States. On the other hand, the corn and soybean market prices may face some downward pressure later in 2022 if we get favorable growing conditions or domestic grain demand in the United States is reduced. The continuation or the resolution of the Russia and Ukraine conflict is also likely to be a major factor in global grain trade and prices in the coming months.

Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal, Minn. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com. v