US ERS Feed Outlook
Allen Baker, Edward Allen, and Heather Lutman
Feed Outlook/FDS-08f/July 15, 2008
Economic Research Service, USDA
Selected quotes from report:
[US] Feed Grains Supply To Shrink In 2008/09
U.S. feed grain production in 2008 is projected at 314.3 million metric tons, down 713,000 tons from a month ago and down 36.5 million from 2007. The June 30 Acreage report showed planted acres increased from earlier intentions for corn and oats, while sorghum and barley acres declined. The first survey-based production forecast for barley was down 17 million bushels from the previous projection, which was based on trend yields and expected plantings, and oats was up 2.9 million bushels.
[US] 2008/09 Corn Production Projected Lower
The projection for 2008 corn production was decreased 20 million bushels from last month because of a reduction in forecast yield. Producers increased plantings 1.3 million acres from their March intentions to 87.3 million acres; however, this is down from 93.6 million acres in 2007. Despite the decrease from 2007, planted acreage is at its second highest level since 1946. Producers planted 80 percent of their acreage with biotech seed varieties, up 7 percent from 2007. Projected yield was lowered 0.5 bushels from last month to 148.4 bushels per acre, due to the decline in the harvested area in the higher yielding Corn Belt States as indicated in the Acreage report. As of July 7, 62 percent of the corn crop was rated good or excellent, down from 70 percent last year.
In addition to the usual uncertainty at this time of year about prospective yields, there is an unusual amount of uncertainty about acreage. This year has had one of the latest planting seasons on record due to heavy rainfall in many areas. At the time of USDA’s National Agricultural Statistics Service's (NASS) acreage survey, conducted in early June, a majority of the flooding had not occurred yet.
Although mid-June is typically the cutoff date for corn plantings, many farmers may have continued to plant past this time because of rising prices.
The projected [corn] farm price range for 2008/09 was increased to $5.50-$6.50 per bushel, up 20 cents on each end of the range. Increased competition from soybeans for 2009 acres is expected to support corn prices in the new marketing year. In 2007/08, the season average price received by farmers is expected to be $4.25-$4.45, unchanged from last month.
World 2008/09 Coarse Grain Production Up Slightly This Month
Global coarse grain production is up 1.5 million tons this month to 1,069.0 million, as foreign increases more than offset the U.S. decline. World corn production is unchanged this month at 775.3 million tons with increases and decreases offsetting.
World production increases for millet, barley, and sorghum more than offset small reductions in production for oats and rye.
The largest increase this month in 2008/09 projected coarse grain production is for the EU-27, up 2.1 million tons to 151.4 million. Corn production prospects are up 1.3 million tons to 57.5 million due to increased area in France. Projected barley production is up 0.8 million tons to 60.8 million, with better-than-expected yields reported in Spain, France, Finland, and Hungary more than offsetting lower yields in Poland and Germany.
India’s coarse grain production prospects are up 2.0 million tons this month to 37.4 million, as an early onset of the monsoon has helped expand area and boosted yield prospects. India’s corn production is projected up 1.0 million tons this month to 18.5 million, with increased expected yields. Increased use of high-yielding hybrids and timely planting are boosting yield prospects. India’s millet production projection also increased 1.0 million tons this month, forecast to reach 10.5 million.
A year-to-year area increase is expected, and with good planting conditions, average yields are expected to nearly reach year-ago levels. Canada’s coarse grain production in 2008/09 is projected down 1.3 million tons to 23.7 million, due to lower-than-expected reported area. Barley and oats production each were reduced 0.5 million tons, and corn was shaved 0.3 million tons.
Corn area also was reduced this month for Russia and Ukraine. According to official planting progress reports, area is increasing less than previously expected. Moreover, in Russia, shortages of good hybrid corn seed are reported. Russia’s 2008/09 corn production is projected down 1.0 million tons to 5.8 million, while Ukraine is down 0.5 million tons to 9.5 million.
In Argentina, planting reports indicate a larger increase in barley area, as wheat is less attractive due to government intervention on export registrations. Barley production is up 0.4 million tons this month to 2.0 million. Area planted to oats in Australia is up this month, boosting production 0.2 million tons to 1.5 million tons.
China’s preliminary summer-crop harvest reports support a 0.3-million-ton increase in barley production to 3.5 million tons.
2007/08 Record World Coarse Grains Trade Up This Month
World coarse grain trade is projected to reach a record 125.3 million tons in 2007/08, up 1.7 million tons this month. Most of the increase is for corn, up 1.2 million tons to 98.6 million, and for barley, up 0.4 million to 15.2 million.
Trade data indicate stronger-than-expected exports of corn and barley by India.
Even with government intervention cutting off additional exports, India corn exports for 2007/08 were increased 1.1 million tons this month to 2.6 million.
India’s barley shipments to Saudi Arabia are expected to reach 0.2 million tons (not previously forecast)
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