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World Agricultural Supply and Demand Estimates - December 2010

by 5m Editor
10 December 2010, at 12:00am

Forecasts for 2010 and 2011 pork production have been raised, according to the latest USDA <em>World Agricultural Supply and Demand Estimates</em>. The turkey production forecast for 2011 is unchanged from last month, while the egg production forecast is lowered slightly in 2010 but is unchanged for 2011.

Livestock, Poultry and Dairy

The forecast of total US meat production is raised for 2010 and 2011. Forecasts for 2010 beef, pork, broilers and turkeys are raised reflecting high slaughter levels during the fourth quarter and higher weights for hogs and broilers. For 2011, production forecasts for beef, pork, and broilers are increased. The beef production increase largely reflects higher forecast placements of cattle during the fourth quarter of 2010 and early 2011. Pork production is raised from last month on slightly higher slaughter. Broiler production is forecast higher as hatchery data indicate continued large egg sets and poultry placements during the fourth quarter of 2010. The turkey production forecast for 2011 is unchanged from last month. The egg production forecast is lowered slightly in 2010 but is unchanged for 2011.

Trade forecasts for 2010 are adjusted, largely reflecting third quarter data. However, beef imports are lowered for both late 2010 and early 2011 as exportable supplies of beef for several US suppliers are expected to be relatively tight. Beef exports are raised for 2011 as improved economic growth in major export markets is expected to stimulate sales. Pork exports for 2010 are reduced as relatively high pork prices are likely constraining growth in exports. Forecasts for pork exports for 2011 are unchanged. Poultry forecasts for 2011 are unchanged.

The cattle price forecasts for 2010 and 2011 are raised to reflect continued strong demand for cattle. Hog prices for 2010 and 2011 are forecast lower than last month as pork supplies are large. The broiler price forecast is lowered on larger supplies. Egg prices for 2010 and 2011 are forecast higher.

Forecast milk production for 2010 and 2011 is little changed last month. Fat-basis imports for 2010 are lowered primarily due to lower imports of cheese but skim-solids imports are unchanged due to higher imports of expected imports of other products. Fat basis exports for 2010 are raised as sales of cheese and fluid milk and cream are strong and skim-solids exports are boosted by strong sales of cheese and nonfat dry milk (NDM). Exports for 2011 are forecast higher due to expected growth in butter and nonfat dry milk sales. Ending stocks for 2010 are raised to reflect higher-than expected stocks of cheese.

For 2010, cheese and whey prices are unchanged from last month. NDM prices are forecast higher but the butter price forecast is reduced reflecting recent sharp declines in butter prices. With no change in either the cheese or whey price, the Class III price forecast is unchanged. However, the Class IV price forecast is reduced, due to a lower butter price forecast which more than offsets a higher expected NDM price. For 2011, the range of the cheese price forecast narrowed but whey is forecast higher. The butter price is reduced as current price weakness spills into early 2011. NDM prices are forecast higher. The ranges of the Class III and Class IV price forecasts are narrowed from last month. The all milk price is forecast to average $16.25 to $16.35 per cwt for 2010 and $15.90 to $16.70 per cwt for 2011.

Wheat

US wheat ending stocks for 2010/11 are projected 10 million bushels higher this month reflecting lower domestic use. Projected food use is lowered 10 million bushels on the latest mill-grind data from the US Census Bureau which indicate flour extraction rates that are higher than the long-term average for a third straight year. With historically high wheat prices, millers continue to get more flour out of each bushel of wheat. Total exports are unchanged, but small shifts among classes result in higher projected exports of Hard Red Spring and White wheat and lower projected exports of Hard Red Winter wheat and durum. The projected marketing-year average price received by producers is narrowed 5 cents on each end of the range to $5.30 to $5.70 per bushel.

Global 2010/11 wheat supplies are projected 4.9 million tons higher this month reflecting an increase in EU-27 beginnings stocks with lower 2009/10 feed use and higher 2010/11 production in Australia, Pakistan, Canada, Brazil, and Ukraine. Production for Australia is raised 1.5 million tons as higher reported yields in eastern Australia continue to boost production prospects. Recent, heavy rains in many of these same areas, however, have dampened production prospects and reduced wheat quality. Official government statistics for Pakistan and Canada boost production 1.3 million tons and 1.0 million tons, respectively. Brazil production is raised 0.4 million tons as favorably dry harvest weather in southern growing areas add to output. Ukraine production is raised 0.2 million tons on the latest government data. Partly offsetting these increases is a 0.5-million-ton reduction for Russia.

World wheat trade for 2010/11 is projected lower this month as tighter supplies of high quality wheat raise world prices and slow demand in several smaller markets. Wheat imports are also reduced 0.5 million tons each for Brazil and EU-27. Larger production reduces the need for imports in Brazil. In EU-27, lower expected wheat feeding reduces demand for imported wheat. World wheat exports are lowered 1.7 million tons with reductions for Australia, China, Canada, and Mexico. Export prospects for Australia and Canada are reduced reflecting the lower quality of wheat in both countries this year. Partly offsetting are increases for Iran, Serbia and Croatia.

Global 2010/11 wheat consumption is raised with higher expected wheat feeding in China and higher expected feed and residual disappearance in Australia and Canada. Reduced government incentives to export wheat from China make more wheat available for domestic feeding. Larger supplies of lower quality wheat in Australia and Canada are expected to boost feeding and increase residual losses in both countries. Partly offsetting are 0.5-million-ton reductions in feed use for both EU-17 and Russia, and small declines in food use in several countries due to high prices. Ending stocks are raised 4.2 million tons with the largest increases for Pakistan, EU-27, Australia and Canada.

Coarse Grains

US feed grain supplies for 2010/11 are virtually unchanged as a small increase in corn imports is offset by a reduction in barley imports both reflecting feed grain production changes for Canada this month. US corn imports are raised five million bushels with record production reported for Canada. US corn ending stocks are raised accordingly. Barley imports are lowered 5 million bushels with lower production in Canada and the slow pace of imports to date. US barley food, seed, and industrial use is lowered the same amount as domestic beer consumption remains weak slowing demand for malting barley. The projected marketing-year average price received by US corn producers is unchanged this month at $4.80 to $5.60 per bushel. Farm prices for barley and oats are both projected slightly lower based on prices received by producers to date.

Global coarse grain production for 2010/11 is increased 3.4 million tons with corn production up 2.2 million tons, barley production up 0.6 million tons, and oats production up 0.4 million tons. India corn production is raised 1.0 million tons as the extended monsoon increased late-season soil moisture for the summer corn crop. The same conditions boosted harvested area for millet, adding 0.3 million tons to India production. Australia barley and oats production are raised 1.9 million tons and 0.5 million tons, respectively, both on higher reported yields. The latest official statistics from Canada indicated mostly offsetting production changes for coarse grains. Canada corn production is raised 0.7 million tons as favorable weather boosted corn yields in Ontario and Quebec. Canada barley production is lowered 0.6 million tons with lower area and yields in the western prairies. Corn production is raised 0.5 million tons for Ukraine and 0.4 million tons for EU-27. Small offsetting reductions are made this month for Paraguay corn, Ukraine barley and oats, and Russia barley and rye.

Global 2010/11 coarse grain trade is lowered slightly mostly reflecting reduced corn imports by Mexico as feeding there is projected lower. Corn exports are lowered 0.8 million tons for Serbia, but raised 0.5 million tons and 0.2 million tons, respectively, for India and Canada. Barley exports are lowered 0.4 million tons for Canada, but raised 0.3 million tons for Australia. Reduced corn feeding for Mexico and Serbia is mostly offset by increases for India, South Africa, and Canada. Global corn ending stocks are projected 0.8 million tons higher with larger stocks in EU-27 and Serbia partly offset by smaller stocks in South Africa and Mexico.

Oilseeds

Total US oilseed production for 2010/11 is projected at 101.7 million tons, down slightly due to a small reduction in cottonseed. Soybean exports are increased 20 million bushels to 1.59 billion reflecting record export commitments (shipments plus outstanding sales) through November. With projected crush unchanged, soybean ending stocks for 2010/11 are projected at 165 million bushels, down 20 million from last month.

The US season-average soybean price range for 2010/11 is projected at $10.70 to $12.20 per bushel, unchanged from last month. The soybean meal price projection is also unchanged at $310 to $350 per short ton. Soybean oil prices are projected at 45 to 49 cents per pound, up 2.5 cents on both ends of the range.

Global oilseed production for 2010/11 is projected at 442.6 million tons, up 1.9 million tons from last month. Foreign oilseed production accounts for most of the change with increases for soybeans, rapeseed, sunflower seed, and cottonseed. Global soybean production is projected at a 257.8 million tons, up 0.4 million mainly due to an increase for Canada. Global rapeseed production is projected at 58.4 million tons, up 1.2 million due to gains for Canada and EU-27. Canadian rapeseed production is raised 0.9 million tons to 11.9 million based on the latest survey results from Statistics Canada. Higher-than-expected yields account for the change. EU-27 rapeseed production is increased due to higher yield estimates for Germany, United Kingdom, and Romania. Other changes this month include increased sunflower seed production for EU-27, increased cottonseed production for Brazil and Australia, and reduced cottonseed production for Pakistan.

Global oilseed trade is projected at 112.2 million tons, up 0.9 million from last month. Increased soybean exports from the United States and Canada account for most of the change. Global oilseed ending stocks are projected at 70.3 million tons, down 1 million, as lower soybean stocks in Brazil and the United States are only partly offset by higher rapeseed stocks in Canada.

Further Reading

- You can view the full report by clicking here.

December 2010