Aquaculture for all

US Feed Outlook - June 2009

Nutrition Economics

Projected US 2009/10 corn production was decreased 155 million bushels this month to 11.9 billion according to the USDA Economic Research Service.

The decline reflects lower expected yields due to slow planting progress, slow crop emergence and persistent, heavy rainfall across the Eastern Corn Belt. Lower supplies are expected to boost prices and lower feed and residual use. Projected US corn ending stocks are down 55 million bushels to 1.09 billion. World coarse grain production in 2009/10 is projected down 7.1 million tons this month, with reduced prospects for EU barley. Foreign coarse grain ending stocks are projected down 4.9 million tons to 133.8 million. USDA’s National Agricultural Statistics Service will release the first survey-based estimates for US 2009/10 crop acreage at the end of June and for barley and oats production in July.

Feed Grains Production and Use Prospects Lowered for 2009/10

US feed grain production for 2009/10 is projected at 319 million metric tons, down from 323 million last month. This decrease stems from smaller projected corn production as the yield was lowered to reflect planting delays.

For the four feed grains, combined yield is projected at 3.60 tons per acre, down from 3.65 tons per acre last month, due to a smaller expected corn yield. Beginning feed grain stocks for 2009/10 remain unchanged at 45.3 million tons. Total feed grain supply is projected at 367.2 million tons in 2009/10, down from 371.1 million last month.

Feed grain use for 2009/10 is expected to be down slightly this month to 335.3 million tons. Feed and residual use is forecast at 138.5 million tons, down from 141.1 million. Exports and food, seed, and industrial (FSI) use remain unchanged at 52.3 and 144.5 million tons, respectively. Ending feed grain stocks are projected to decrease 1.4 million tons this month to 31.8 million. Projected 2009/10 farm prices are raised this month for all four feed grains.

Feed and residual use for the four feed grains plus wheat converted to a September- August marketing year is 143.4 million tons, down from 145.9 million last month. This is based on lower projections for red meat and poultry production and lower expected residual use with the lower corn yield. Higher forecast feed prices are expected to reduce prospects for the pork and broiler sectors. Grain-consuming animal units are projected at 91.1 million this month, down slightly from 91.5 million last month. Feed and residual use per animal unit is decreased to 1.57 tons, down from 1.60 tons last month.

The only change to 2008/09 supply and use for feed grains was a slight decline in total use to 328.6 million tons, as barley exports were lowered slightly this month.

2009/10 Corn Yield Projected Lower

US corn production for 2009/10 is reduced 155 million bushels this month to 11.94 billion, reflecting lower yield prospects. Wet weather conditions this spring have delayed planting and crop emergence in the Eastern Corn Belt. As a result, the 2009/10 projected corn yield was reduced two bushels per acre to 153.4 bushels per acre. However, early planting in the Western Corn Belt is expected to partly offset the poor start to this year’s crop in other parts of the country. Corn supplies for 2009/10 are forecast at 13.55 billion bushels, down 190 million from 2008/09.

According to the June 8 Crop Progress report, 97 per cent of the intended acreage was planted in the 18 major growing States, compared with an average of 99 per cent in the previous five years and 97 per cent in 2008. Corn emergence is also delayed with only 87 per cent of the corn crop emerged in 18 major growing states as of June 7. This compares with an average of 94 per cent in the previous five years and 87 per cent last year.

Growers planting after mid-May often switch to shorter season varieties that also have lower yield potential. In general, later plantings increase the risk of heat stress at pollination, along with the risk of yield loss from early frosts. Weather over the rest of the growing season will be the most critical factor in determining actual yields. With plantings in many areas delayed beyond usual completion dates, there will be a wide range in the stages of crop development this season, which increases the potential for variability in yields.

Tighter supplies and higher corn prices are forecast to lower feed and residual use in 2009/10 by 100 million bushels to 5.15 billion. FSI for 2008/09 is unchanged this month at 5.41 billion bushels. Exports in 2009/10 also remain unchanged this month. As corn use is expected to exceed production, ending stocks are projected to decline to 1.09 billion bushels, down 55 million from last month.

The season average farm price for corn is projected higher this month for the 2009/10 marketing year, partly due to higher new crop bids and futures prices for corn. The 2009/10 farm price is projected at $3.90 to $4.70 per bushel, up 20 cents on both ends of the range. The projected range for 2008/09 remains unchanged at $4.10 to $4.30 per bushel. If farmers have marketed their old-crop corn at the same rate as the average of the last five years, then 19 per cent of the 2008/09 marketing year corn remains to be sold through August.

Sorghum Price Projected Higher in 2009/10

Prices received by producers for sorghum in 2009/10 were projected higher this month at $3.30 to $4.00 per bushel, up 15 cents on both ends of the range, supported by higher expected corn prices. The expected season average price for 2008/09 remains unchanged this month at $3.20 to $3.40 per bushel. If farmers have marketed their old-crop sorghum at the same rate as the average of the last 5 years, then 18 per cent of the 2008/09 marketing year sorghum remains to be sold.

Barley and Oats Prices Projected Higher in 2009/10

The only change to barley supply and use this month is a one-million-bushel decrease in 2008/09 barley exports to a projected 13 million bushels reflecting continued weakness in export sales and shipments. This reduction raises 2008/09 ending stocks one million bushels to 90 million, which raises projected beginning and ending stocks one million bushels for 2009/10.

Prices received by farmers for barley in 2009/10 were projected higher this month at $3.85 to $4.55 per bushel, up 10 cents on both ends of the range. This compares with $5.20 per bushel in 2008/09. Marketing for feed barley have been extremely light in 2008/09, which can be partially attributed to increases in distillers’ grains feeding. Much of the rise in farm prices seen in 2008/09 results from increased production of malting barley, which is primarily grown on contract.

Oats supply and use remains unchanged this month for both 2008/09 and 2009/10. The oats farm price for the 2009/10 marketing year is projected at $2.30 to $3.10 per bushel, up 10 cents on both ends of the range, but down from $3.15 per bushel in 2008/09.

Global Coarse Grain Production Prospects Reduced This Month

World coarse grain production in 2009/10 is projected to reach 1,074.5 million tons, down 7.1 million this month. More than half the decline is in the United States but foreign production is down 3.2 million tons to 755.3 million. Forecast world area is up slightly this month but it is more than offset by reduced yield prospects.

Global corn production is down due to reduced US prospects but foreign corn production for 2009/10 is projected up slightly to 478.3 million tons. The decline in foreign coarse grain production is mostly attributed to barley, down 3.4 million tons this month to 138.0 million. Foreign sorghum production is forecast up fractionally this month to 52.0 million tons but oats and rye are each projected slightly lower at 22.7 million tons and 15.5 million tons, respectively.

Ukraine’s corn production prospects in 2009/10 increased 1.0 million tons this month to 9.5 million based mostly on reports of increased area planted. Increased corn plantings are also reported for Zimbabwe, boosting production prospects 0.2 million tons to 0.6 million. Reduced prospects for planted area caused small reductions in corn production projected for Croatia, Bosnia, and Taiwan. In the EU, forecast corn production is reduced 0.4 million tons this month to 56.5 million. Lowered production prospects for Germany, Spain, and Bulgaria are only partly offset by higher expected output for Greece. Area planted is slightly lower in Bulgaria, and yields are lowered for Spain, where dryness is limiting prospects.

Global corn production for 2008/09 was reduced 0.6 million tons to 787.3 million, mostly because of a 0.5-million-ton reduction in Brazil based on lower reported yields.

Barley production prospects are down sharply this month for the EU, cut 3.2 million tons to 61.0 million. As EU barley went through critical growth stages in April and May, dryness in some areas cut production prospects. A very dry April followed a wet March, making May rainfall critical. May rainfall across some parts of the EU was good but dryness persisted in other countries. The largest production cut is for Spain, with extreme drought in key winter grain regions cutting barley production prospects 2.4 million tons. Smaller reductions are forecast for the Czech Republic, Hungary, Denmark, Finland, Estonia, and Latvia, but a fractional increase is projected for Ireland.

Canada’s barley yield potential is cut this month by dryness in Alberta and a very cold spring across the Prairies. The poor early start has cut expected production 0.7 million tons to 10.0 million. Dry planting conditions in Argentina reduced area planted, cutting production 0.3 million tons to 1.6 million. However, increased planted area is reported for Russia, boosting projected production 0.5 million tons to 16.5 million. Extremely favorable rains in Morocco produced a bumper crop, with harvest reports indicating increased area and yield, boosting production 0.3 million tons this month to 3.7 million. Small increases are also forecast this month for Afghanistan and Azerbaijan.

World corn beginning stocks for 2009/10 are reduced 1.0 million tons this month to 138.5 million, mostly due to reduced production in Brazil and increased 2008/09 exports by Ukraine and Russia. The reduced beginning stocks of corn, lower US corn production, and cuts in world barley production combine to trim 2009/10 global coarse grain supplies 8.1 million tons this month.

Supplies Cut More Than Projected Use, Trimming Stocks

Global coarse grain use in 2009/10 is projected down 1.9 million tons to 1,091.3 million. The decline in US corn use is larger than the global reduction, and foreign coarse grain use is projected 0.7 million tons higher this month to 808.0 million.

Corn use is projected 0.2 million tons higher this month for Ukraine, Zimbabwe, Indonesia and Taiwan. Ukraine and Zimbabwe have increased production this month, boosting use prospects, while for Indonesia and Taiwan, the prospects for feed use are reported better than previously thought. These increases are partly offset by small reductions in use projected for Bosnia and Croatia, countries with reduced production.

World barley use is projected slightly higher this month as small increases for Russia, Morocco, Afghanistan and Azerbaijan are mostly offset by a reduction in Canada. The use changes in these countries reflect production changes.

Foreign coarse grain ending stocks are projected down 4.9 million tons this month to 133.8 million. Reduced supplies and increased use are trimming stocks prospects. Whereas last month foreign ending stocks were projected slightly higher than beginning stocks for 2009/10, this month, foreign coarse grain stocks are expected to decline.

The largest cut in foreign coarse grain stocks is for the EU, down 3.7 million tons this month to 16.8 million, mostly due to reduced barley production prospects. Canada also faces reduced barley production, dropping stocks prospects 0.5 million tons. Brazil’s beginning and ending stocks for 2009/10 are down 0.5 million tons because of reduced 2008/09 corn production. Ukraine’s ending stocks are down 0.4 million tons this month as increased exports for both 2008/09 and 2009/10 and increased feed use for 2009/10 more than offset increased production. Indonesia’s stocks are down 0.2 million tons this month due to increased feed use. However, Morocco’s ending stocks are up 0.2 million tons because of increased barley production. Changes for other countries are smaller.

World Corn Trade Prospects Increased

World corn trade in 2009/10 (October-September) is projected to reach 81.2 million tons, up 0.4 million this month. Taiwan’s imports are up 0.3 million tons to 4.3 million as feed demand is projected to be stable year-to-year. Bosnia’s imports are up 0.1 million tons to 0.3 million due to reduced production prospects. Ukraine’s exports are projected up 0.5 million tons this month to 3.0 million, supported by increased production. However, with reduced production prospects, corn exports by Croatia are down 0.15 million tons to 0.1 million.

Corn trade in 2008/09 is forecast to reach 77.9 million tons, up 1.0 million tons this month. Exports by Ukraine are up 0.7 million tons to 5.2 million, and exports by Russia are up 0.3 million tons to 1.3 million. Recent shipment data indicate stronger-than-expected exports for these countries. Imports forecast for Taiwan increased 0.3 million tons to 4.3 million based on recent purchases and steady feed demand.

The US corn export projections for 2008/09 and 2009/10 remain unchanged this month. Recent sales and shipments data support the 44.5-million-ton forecast for 2008/09. Census export data indicate corn exports from October 2008 through April 2009 reached 25.2 million tons, and inspections data for May reached 4.0 million tons. If the May Census data confirm the inspections number, corn exports during June through September 2009 will need to average 3.8 million tons per month, a reasonable pace supported by the 9.4 million tons of outstanding sales at the end of May.

Further Reading

- You can view the full report by clicking here.

June 2009

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