Aquaculture for all

US Feed Outlook


By ERS USDA. This monthly report examines supply, use, prices, and trade for feed grains, including supply and demand prospects in major importing and exporting countries. Focuses on corn; also contains information on sorghum, barley, oats, and hay.

2008 Corn Crop Forecast Increased

The 2008 corn crop forecast is increased this month because of higher yields; higher harvested acreage raised sorghum production; and barley production also increased. Oat production reached a new record low. Total feed grain supplies are forecast to be the third highest ever, and total use is expected to be the second highest on record. Feed and residual use of feed grains was increased, but food, seed, and industrial use, including ethanol use, was lowered. Corn exports are unchanged from last month, but sorghum exports increased. U.S. feed grain ending stocks are projected higher than last month, but world coarse grain stocks are nearly unchanged as reductions for Brazil offset increases for the EU-27, Russia, and the United States. Projected prices were lowered from last month for all the feed grains but are higher than those from last year.

Domestic Outlook

Feed Grain Production Decreased to 328.2 Million Tons

U.S. feed grain production for 2008/09 is forecast at 328.2 million tons, up from 323.5 million last month. The month-to-month increase reflects additions in corn, sorghum, and barley production but a slight reduction in oats production. Planted area for the four grains was increased 613,000 acres, and harvested for grain acres were increased 780,000 acres this month. Yields per harvested acre for the four grains combined were increased slightly to 3.58 metric tons per acre, compared with 3.56 metric tons last month. Beginning stocks were raised to 45.1 million tons. Total 2007/08 feed grain supply is forecast at 376.0 million tons, down from 390.3 million in 2007/08.

Total 2008/09 feed grain utilization is projected at 342.4 million tons, up from 339.9 million last month, but down from 345.2 million in 2007/08. The month-tomonth increase came from higher feed and residual use for corn and sorghum and a slight increase in sorghum exports. Total feed grain ending stocks for 2008/09 were raised 3.3 million tons to 33.5 million.

On a September-August marketing year basis, feed and residual use for the four feed grains plus feed wheat in 2008/09 is projected to total 148.2 million tons, down from 163.8 in 2007/08. Corn is estimated to account for 92 percent of feed and residual use in 2008/09. The projected index of grain-consuming animal units (GCAU) in 2008/09 is down 1.1 million units to 93.8 million. Feed and residual per GCAU is estimated at 1.58 tons, down 8.5 percent from 2007/08.

Livestock production for 2009 is summarized below:

  • Beef production is forecast at 26.8 billion pounds, unchanged from 2008.
  • Pork production is forecast at 23.2 billion pounds, down from 23.6 billion in 2008.
  • Broiler production is forecast at 36.3 billion pounds, down from 36.8 billion in 2008.
  • Turkey production is forecast at 6.0 billion pounds, down from 6.2 billion in 2008.
  • Egg production is forecast at 7.6 billion dozen, up from 7.5 billion dozen in 2008.
  • Milk production is forecast at 192.3 billion pounds, up from 190.8 billion in 2008.

2008/09 Corn Crop Forecast Up

Corn production is forecast at 12.2 billion bushels, up 128 million from last month. Planted area is forecast at 86.9 million acres, down 68,000 acres from the August forecast. Area harvested and to be harvested for grain is forecast at 79.2 million acres, down 93,000 acres from the previous forecast. If realized, area harvested for grain will be the second largest on record since 1944, behind the 86.5 million acres harvested last year. The forecast 2008/09 average yield of 154.0 bushels per acre is up 1.7 bushels from September and up 2.9 bushels from the level last year.

The October 1 corn objective yield indicated number of ears per acre is the highest on record for the combined 10 objective yield States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin). Record high ear counts are forecast in all objective yield States except Kansas and Nebraska.

Total use for 2007/08 is estimated at 12.8 billion, down 49 million bushels from last month. Feed and residual use was decreased 51 million bushels to 6.0 billion because of the slower rate of domestic use implied by the September 1 stocks as reported in the September 30 Grain Stocks report. Food, seed and industrial (FSI) use was lowered 7 million bushels this month, to 4.3 billion, as a result of decreased production of glucose, dextrose, and starch. Exports for 2007/08 are raised to 2.4 billion bushels, up 10 million from last month. Ending stocks for 2007/08 are up 49 million from last month to 1.6 billion bushels, based on the September 1 stocks.

Total use for 2008/09 is projected at 12.7 billion bushels, up 40 million this month. Feed and residual use was raised 150 million bushels this month, due to larger supplies, reduced availability of distiller’s grains, and sharply lower prices. Ethanol production was lowered 100 million bushels to 4 billion as a result of declining gasoline consumption. FSI is down 110 million bushels to 5.3 billion. FSI use is up 23 percent from last year with the 1-billion-bushel year-to-year increase in projected ethanol corn use. Exports in 2008/09 remain unchanged from last month at 2 billion bushels. Ending stocks for 2008/09 were raised this month by 136 million bushels to 1.2 billion.

Prices received by farmers are expected to decrease due to sharp declines in futures and cash prices over the past month, which have dramatically reduced price prospects for corn that was not forward priced. The price forecast was lowered 80 cents on both ends of the range to $4.20-$5.20 per bushel.

Sorghum Production to Increase

Sorghum production is forecast at 464 million bushels, up 9 percent from last month but down 8 percent from last year. Planted area increased to 8.13 million acres, up 11 percent from the previous forecast and up 5 percent from 2007. Area for harvest as grain is forecast at 7.24 million acres, up 13 percent from last month and up 6 percent from last year. Based on October 1 conditions, yield is forecast at 64.1 bushels per acre, down 2.0 bushels from September and down 10.1 bushels from last year.

Total use for 2007/08 is down 1 million bushels to 484 million this month. Feed and residual use was lowered 4 million to 171 million, which was offset by an increase in exports to 278 million, up 3 million bushels from last month. Ending stocks for 2007/08 are increased 1 million bushels from the previous forecast based on the September 1 stocks.

With a 39-million-bushel increase in production from last month, total supply for 2008/09 is projected at 517 million bushels, down from 537 million a year earlier. Projected total utilization is 445 million bushels, up 35 million from last month, but down from 484 million from 2007/08. Feed and residual use is raised to 235 million bushels, up 25 million from last month. Exports are increased by 10 million bushels to 140 million in 2008/09 as a result of increased supplies. Ending stocks for 2008/09 were raised 4 million bushels this month to 72 million.

Prices for 2008/09 were lowered to $3.70-$4.70 per bushel, down 75 cents on each end of the range. The season average price for 2007/08 was lowered 2 cents to $4.08 per bushel.

Barley Crop Forecast up in 2008/09

Barley production is forecast at 239 million bushels, 10 percent above the August forecast and 13 percent above the 2007 level. Average yield per acre, at 63.6 bushels, is up 3.2 bushels from 2007/08. Area planted is estimated at 4.2 million acres, 5 percent above the level a year ago. The area harvested for grain is estimated at 3.77 million acres, 7 percent above that of a year ago. Harvested area increased from last year in the top two producing States, up 150,000 acres in North Dakota and up 30,000 acres in Idaho. These increases in harvested acres coupled with increased or unchanged yields in the top producing States resulted in the increased production.

Total supply of barley in 2008/09 is projected at 333 million bushels, up 22 million bushels due to increase in production. Imports for 2008/09 were unchanged from last month’s forecast of 25 million bushels.

Feed and residual use is estimated at 80 million bushels, up 30 million from last month and 46 million from 2007/08. Increased feed and residual use raises total use to 265 million bushels, up 9 percent from last year. Ending stocks for 2008/09 are lowered 8 million bushels this month to 68 million bushels. Barley prices were lowered 55 cents on both the high and low range to $4.60-$5.60 per bushel, compared with $4.02 per bushel in 2007/08.

Oats Continue To Decline to Record Lows

Oat production in 2008 is estimated at a record low of 88.6 million bushels, 1 percent below the August 1 forecast and down 3 percent from last year. The estimated yield is 63.5 bushels per acre, up 2.6 bushels from the previous year.

area planted to oats is estimated at a record low 3.22 million acres, down 14 percent from 2007. Harvested area, at 1.40 million acres, is 7 percent below last year. This is the smallest acreage harvested for grain on record, continuing a steady downward trend. The largest decline occurred in North Dakota, where area harvested for grain decreased 130,000 acres from last year.

Total supplies are forecast at 260 million bushels, down 1.3 million bushels from last month, as 2008/09 production declined. Ending stocks were lowered by 1.3 million bushels to 62 million, down from 67 million in 2007/08. Prices were lowered 45 cents on both ends of the range to $2.65-$3.35 per bushel, compared with $2.63 per bushel last year.

Hay Production Forecast To Increase in 2008/09

All hay production in 2008 is forecast at 150.5 million tons, up 196,000 from 2007 due to increased yields. The all-hay yield is expected to be 2.49 tons per acre, up from 2.44 tons per acre in 2007. Harvested acres are forecast at 60.4 million acres, down from 61.6 million last year.

Production of alfalfa hay and alfalfa mixtures is forecast at 71.4 million tons, up 1 percent from the August forecast but down 2 percent from last year. Based on October 1 conditions, yields are expected to average 3.44 tons per acre, up 0.03 tons from August and up 0.09 tons from 2007. Harvested area is forecast at 20.8 million acres, unchanged from August, but down 4 percent from the level of the previous year.

Other hay production is forecast at 79.1 million tons, up 3 percent from the August forecast and up 2 percent from 2007. Based on October 1 conditions, yields are expected to average 1.99 tons per acre, up 0.05 tons from the August forecast and up 0.04 tons from last year. Harvested area, at 39.7 million acres, is unchanged from August but down 1 percent from the level of the previous year.

Roughage-consuming animal units (RCAUs) in 2008/09 are estimated to be down slightly from 2007/08. With hay production up and RACUs down, hay supply per RCAU is 2.38 tons in 2008/09, compared with 2.29 tons in 2007/08.

International Outlook

World Coarse Grain Production Prospects Up This Month

World coarse grain production in 2008/09 is projected up 7.6 million tons to 1,094.3 million tons. Much of the increase is in the United States, with foreign production up 2.9 million tons. Foreign corn production is down 1.0 million tons this month, but barley production is up 3.0 million, oat production is up 0.8 million, and rye and sorghum production are up slightly.

Corn production prospects for 2008/09 in Brazil were cut 2.0 million tons to 55.0 million tons. Planting of the main crop is beginning, and the incentives to plant are not enough to maintain area. Corn prices have been dropping worldwide, and a large, recently harvested second-season corn crop has depressed corn prices in Brazil. Moreover, corn is expensive to grow, requiring more fertilizer than soybeans, the main alternative. Tight credit and existing farm debt are also expected to restrict corn area planted in Brazil. Corn area harvested was cut 0.5 million hectares this month to 14.3 million, and is now showing a year-toyear decline.

EU-27 corn production is projected up 1.0 million tons this month to 59.2 million, tons mostly due to higher area and yields reported in France. Belarus reported less area harvested for grain and more modest yields, trimming production 0.3 million tons. This month, production was reviewed for Sub-Saharan Africa, resulting in small changes to many countries. The largest corn changes were a 0.5-million-ton decrease for Malawi and a similar sized increase for Ghana.

World barley production projected for 2008/09 increased 3.5 million tons this month to 153.4 million tons. EU-27 barley is forecast up 1.6 million tons to 64.4 million, the highest level in 11 years. The largest increases are for Spain, Sweden, and France, all reporting increased yields, with Sweden also revising area up. Russia’s harvest reports increased barley area and yield, boosting forecast production 1.0 million tons to 22.0 million. U.S. barley production is raised 0.5 million tons to 5.2 million. Canada and Belarus also reported increased barley production.

World oats production is up 0.8 million tons this month to 26.3 million. Russia’s harvest reports indicated increased area harvested for grain, matching the previous year, and boosting production 0.4 million tons this month to 5.4 million. Statistics Canada also reported increased oat area, boosting forecast production 0.2 million tons to 4.3 million. Belarus reported a small production increase on higher yields. World rye production projected for 2008/09 increased 0.3 million tons to 16.8 million, mostly due to small increases for Belarus and the EU-27. World mixed grain production was reduced 0.4 million to 14.5 million due to a reduction in Poland. Changes to foreign millet and sorghum production were small and mostly offsetting.

Foreign 2008/09 Beginning Stocks Decline Bigger Than the U.S. Increase

Foreign coarse grain beginning stocks forecast for 2008/09 are down 1.9 million tons this month, enough to more than offset the U.S. increase, leaving global beginning stocks down 0.6 million tons to 150.0 million. Brazil’s 2007/08 corn ending stocks are down 1.2 million tons this month to 10.4 million. Increased feed use in 2007/08 has reduced expected stocks. Increased feed use in Argentina cut expected 2007/08 corn ending stocks 0.5 million tons this month. Increased feed use and exports trimmed Canada’s 2007/08 corn ending stocks by 0.2 million tons this month.

World Coarse Grain Use Projected Up

World coarse grain use in 2008/09 is forecast up 6.8 million tons this month to 1,097.2 million tons. World corn use is projected up 3.9 million tons this month, exceeding 800 million for the first time. Global barley use is projected up 2.8 million tons to 145.0 million. World sorghum use is forecast up 0.5 million tons this month to 62.0 million, but oats and rye are little changed, with mixed grains declining slightly.

Corn consumption in Brazil and Argentina has been forecast higher this month for both 2007/08 and 2008/09. Brazil’s 2008/09 corn use is projected up 2.5 million tons, with 2.0 million of the increase in feed use. Argentina’s 2008/09 total corn use and feed use are each up 1.8 million tons. Meat production in both countries supports the increase, with poultry the main driver in Brazil. In Argentina, increased poultry production and more beef production from feedlots are boosting corn use.

Corn feed consumption prospects for 2008/09 were cut this month for Canada, down 1.1 million tons, and for Mexico, down 0.5 million tons. Barley and feed wheat are expected to replace corn in Canada, while increased sorghum feeding and a slower overall increase in grain feed use is forecast for Mexico.

The Sub-Saharan Africa production changes resulted in many adjustments to corn food use. The largest changes were a 0.5-million-ton increase for total corn use in Ghana, and a 0.4-million-ton decrease for Malawi. The many small changes netted an increase of 0.5 million tons in corn use by the region this month.

The largest increase in projected 2008/09 barley use is a 1.0-million-ton increase for Canada. With increased production and a significant portion not expected to make malting quality, projected feed use is up. Russian barley use is up 0.5 million tons due to increased production, but feed use is up only 0.2 million because some of the low-quality grain is expected to be used to make alcohol. There are also small increases for Syria, Belarus, and Uruguay, but a small reduction for Kyrgyzstan.

Projected sorghum use was cut 0.5 million tons for the EU-27. Abundant supplies of cheap grain, including feed-quality wheat, both domestically produced and available from the Black Sea, are expected to limit sorghum imports. However, without the EU bidding sorghum prices higher, Mexico has increased purchases of U.S. sorghum, boosting consumption 0.4 million tons this month. Changes in sorghum use for several countries in Sub-Saharan Africa result in a small net decline. The U.S. increase is the largest consumption adjustment this month.

Global Coarse Grains Ending Stocks Nearly Unchanged

World coarse grains ending stocks for 2008/09 are projected up 0.2 million tons to 147.2 million. A drop in forecast global corn stocks of 2.2 million tons is mostly offset by increased stocks of oats, barley, sorghum, and rye.

Higher U.S. corn stocks are more than offset by lower foreign stocks prospects, especially in Brazil. Brazil’s corn stocks are projected down 5.7 million tons this month to 9.2 million. Increased use estimated for 2007/08 and forecast for 2008/09 combined with lower 2008/09 production to change corn stocks prospects. Brazil’s corn beginning stocks for 2008/09 are at a relatively high level, but increased domestic use is expected to lower ending stocks for 2008/09 instead of increasing them as previously forecast. Other changes to projected 2008/09 corn stocks include a 0.6-million-ton increase for the EU-27 based on larger production and a 0.3-million-ton decline for Argentina due to reduced carry-in stocks. Smaller changes to a number of countries were partly offsetting, but, on net, contributed to the global decline in projected corn stocks.

World oat 2008/09 ending stocks are projected up 0.8 million tons this month to 4.6 million. Due to increased production prospects this month, Russia is up 0.4 million tons, while the EU-27 and Canada are each up 0.2 million tons.

Global barley stocks are forecast up 0.6 million tons to 26.0 million. A 0.7-millionton decline for Canada caused by increased feed use is more than offset by 0.7- million-ton increases each for Russia and the EU-27, caused by increased production prospects. Other changes are smaller and mostly offsetting.

World sorghum ending stocks are up 0.5 million tons this month to 5.2 million. Argentina’s ending stocks are up 0.3 million tons due to reduced export prospects. The United States, the EU-27, and Mozambique are up slightly as well. Global rye stocks are projected up 0.3 million tons, with a 0.2-million-ton increase for Belarus and a small increase for the EU-27.

World Corn Trade Prospects for 2008/09 Cut This Month

Global coarse grain trade for 2008/09 (October-September trade year) is projected down 1.9 million tons this month to 109.1 million. This is down 14 percent from the record trade estimated for 2007/08. World corn trade is down 1.7 million tons this month; barley and sorghum are each reduced 0.1 million and oats and rye are unchanged.

World corn trade is cut this month due to reduced import demand from Canada, the EU-27, and Mexico. Canada’s corn imports are reduced 1.0 million tons this month to 1.6 million, as domestically produced barley and feed-quality wheat are expected to reduce the need to import corn. EU-27 corn import prospects are down 0.5 million tons this month to 2.5 million due to the large crop. Mexico’s corn import prospects are down 0.5 million tons to 9.0 million because of strong import purchases of sorghum and slowing meat production growth. A small increase in Belarus’s corn import prospects, caused by reduced production, is partly offsetting.

Argentina’s corn export prospects for 2008/09 are cut 1.5 million tons to 10.5 million. Reduced stocks and increased domestic feed consumption are expected to limit corn exports in 2008/09. Old crop supplies are very limited for shipment in the first months of 2008/09. Also, with a smaller corn crop, Belarus is not expected to export corn in 2008/09, cutting exports 0.2 million tons.

The U.S. corn export forecast for 2008/09 was unchanged this month at 50.0 million tons, down 17 percent from the near record reached the previous year. As of October 2, 2008, outstanding corn sales were down 43 percent from those of a year ago, but with limited alternative sources of corn, U.S. sales are expected to increase as the year progresses. With prices declining in recent months, importers have not been aggressive at buying ahead.

World barley trade is projected down slightly this month to 19.0 million tons. Import prospects are nearly unchanged, but exports projected for Ukraine were cut 1.0 million tons, while exports for Kazakhstan and the EU-27 were each increased 0.5 million tons.

U.S. Sorghum Export Prospects Up This Month

U.S. sorghum exports in 2008/09 (October-September) are up 0.2 million tons to 3.5 million. Large U.S. supplies have made sorghum prices attractive compared with prices for corn, and Mexico has increased purchases.

World trade in sorghum is down slightly this month. The EU-27 is expected to buy little sorghum in 2008/09 because of large domestic supplies of grains. EU-27 forecast imports are cut 0.5 million tons this month to 0.5 million. That is less than 10 percent of the previous year’s imports. The EU-27 import cut more than offsets a 0.4-million-ton increase in forecast imports by Mexico. With EU-27 imports reduced, Argentina’s export prospects were trimmed 0.3 million tons to 0.5 million.

Further Reading

- You can view the full report by clicking here.

October 2008

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