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World Agricultural Supply and Demand Estimates – July 2011

by 5m Editor
13 July 2011, at 12:00am

Meat production in the US is expected to remain stable next year, according to the latest USDA <em>World Agricultural Supply and Demand Estimates</em>.

Livestock, Poultry and Dairy

The forecast for 2011 total meat production is lowered from last month as lower beef production more than offsets higher expected pork and turkey production. Beef production is lowered as steer and heifer slaughter in the second quarter was lower than expected although more cows were slaughtered. In addition, recent placements of lighter-weight cattle are expected to moderate carcass weight growth during the year. The 2011 pork production forecast is raised on larger fourth-quarter slaughter. Broiler production for 2011 is unchanged as higher second-quarter production is offset by lower forecast production in the fourth quarter. Turkey production is raised largely on higher second-quarter production. No change is made to table egg production but hatching egg production is lowered due to a stronger forecast decline in last-quarter broiler production.

For 2012, meat production forecasts are reduced as a sharper reduction in the broiler production forecast more than offsets higher pork and turkey production. Larger cut-backs in broiler production are expected to carry into 2012 before production increases gradually later in the year. The pork production forecast is raised slightly, driven primarily by gains in pigs per litter. Despite higher forecast hog prices, producers are expected to remain cautious in expanding farrowings. Egg production forecasts for 2012 are reduced on less demand for hatching eggs.

A small increase is made to the export forecast for beef in 2011 but no changes are made to pork or broiler exports. For 2012, pork exports are raised, but no changes are made to either beef or broilers. No changes are made to beef, pork, or broiler imports for either 2011 or 2012.

Cattle and hog prices are forecast higher for 2011 but forecast broiler prices are lowered as large supplies are pressuring prices. For 2012, cattle price forecasts are unchanged. Hog price forecasts are raised as demand strength carries into 2012, but price gains will be moderated by higher production. Broiler prices are raised slightly as 2012 supplies are forecast to be tighter.

Milk production forecasts for 2011 and 2012 are raised. Cow numbers are forecast higher as higher milk prices and lower forecast feed prices support further herd expansion, but milk per cow is unchanged from last month. Commercial exports on a fat basis are forecast higher for 2011. Ending stock forecasts are raised as cheese stocks are larger than expected.

Dairy product price forecasts for 2011 are raised from last month. The Class III and Class IV price forecasts are raised from last month in line with increased product prices. The all-milk price is forecast at $20.00 to $20.30 per cwt for 2011. For 2012, the butter price is forecast slightly higher than last month, but forecasts for other products are unchanged. Class price forecasts are unchanged. The all milk price forecast for 2012 is unchanged at $17.75 to $18.75 per cwt.

Wheat

US wheat supplies for 2011/12 are raised 90 million bushels as higher carry-in and production more than offset reductions in imports and higher use. Beginning stocks are raised 52 million bushels mostly reflecting higher estimated carryout for 2010/11 as reported in the 30 June Grain Stocks report. Production for 2011/12 is forecast at 2,106 million bushels, up 48 million from last month as higher winter wheat production and higher forecast yields for durum and other spring wheat more than offset lower area as estimated in the 30 June Acreage report. Partly offsetting is a 10-million-bushel reduction in projected imports with lower expected supplies in Canada.

US wheat usage for 2011/12 is raised with a shift in expected seed usage from 2010/11 and higher expected exports compared with last month. Seed use for 2011/12 is raised seven million bushels as late planting in the Northern Plains shifted seed usage for the 2011 crop into the 2011/12 marketing year which began on 1 June. Exports are raised 100 million bushels with larger domestic supplies and reduced competition expected from Canada. Ending stocks are projected 17 million bushels lower at 670 million. While ending stocks remain adequate for most classes of wheat, durum stocks are projected to be especially tight with sharply lower area and production this year. The 2011/12 season-average farm price for all wheat is lowered 40 cents on each end of the projected range to $6.60 to $8.00 per bushel, mostly reflecting the sharp drop in projected corn prices this month.

Global wheat supplies for 2011/12 are projected 0.9 million tons higher as larger beginning stocks more than offset lower expected world production. Larger carry-in in the United States and Russia accounts for most of the increase in 2011/12 world beginning stocks. Revisions to 2010/11 trade and usage for a number of other countries, based on the latest data, also affect world beginning stocks for 2011/12.

World wheat production for 2011/12 is projected down 1.9 million tons with reductions in Canada, Ukraine and Mexico more than offsetting increases for the United States, Turkey and EU-27. Canada production is lowered 3.5 million tons as persistent heavy rains and flooding well into the second half of June limited planting opportunities for spring wheat in southeast Saskatchewan and southwest Manitoba. Production is lowered 1.0 million tons for Ukraine as persistent spring dryness in north central areas of the country stressed developing plants and appears to have limited vegetative growth and tillering. Production is lowered 0.4 million tons for Mexico based on the latest official reports. Turkey production is raised 1.1 million tons as abundant spring moisture boosted yields across the country. EU-27 production is raised 0.6 million tons as higher yields for Spain and Romania more than offset a reduction for Hungary.

Global wheat exports for 2011/12 are projected 2.4 million tons higher, mostly with higher expected exports from the United States and Russia. Imports are raised for EU-27, Egypt, Mexico, Japan, Sri Lanka, Malaysia and Yemen. Partly offsetting are import reductions for the United States, South Korea and Viet Nam. Exports are raised for Russia as relatively low prices make Russian wheat competitive into North Africa and Middle East markets. Exports are also raised for Turkey with larger production. Exports are lowered for Ukraine reflecting the smaller expected crop. Lower exports from Canada are more than offset by higher exports from the United States.

Global 2011/12 wheat consumption is raised 3.0 million tons, mostly reflecting higher wheat feeding in EU-27, Russia and Turkey, higher food use in Egypt, Japan and Russia, and higher industrial use in Canada. Partly offsetting these increases are reductions in wheat feeding in Australia, Canada and South Korea. Global ending stocks are projected 2.1 million tons lower with most of the decline expected in the Russia, Canada and the United States.

Coarse Grains

US feed grain supplies for 2011/12 are projected higher this month mostly with higher expected beginning stocks and production for corn. Corn beginning stocks are raised 150 million bushels reflecting changes to 2010/11 usage projections. Corn production for 2011/12 is projected 270 million bushels higher based on planted and harvested area as reported in the Acreage report. Feed and residual use for 2011/12 is raised 50 million bushels with larger supplies and lower expected prices. Corn use for ethanol is raised 100 million bushels with larger supplies and an improved outlook for ethanol producer margins. Exports are raised 100 million bushels mostly reflecting increased demand from China. Ending stocks for 2011/12 are projected 175 million bushels higher at 870 million. The 2011/12 season-average farm price for corn is projected at a record $5.50 to $6.50 per bushel, down 50 cents on both ends of the range.

Lower production for the other US feed grains for 2011/12 mostly reflect lower estimated area from the Acreage report, which is partly offset by higher forecast yields for barley. Oats yields are lowered. Domestic use is projected lower for sorghum and oats, and sorghum exports are lowered. Projected farm prices are lowered for sorghum, barley and oats.

Total US corn use for 2010/11 is projected 145 million bushels lower mostly reflecting the larger-than-expected stocks estimate on 1 June. Feed and residual use is lowered 150 million bushels. Ethanol use is raised 50 million bushels with larger supplies and improved ethanol producer margins. Partly offsetting is a 20-million-bushel reduction in use for sweeteners reflecting slower demand from Mexico. Corn exports are lowered 25 million bushels based on the slower-than-expected pace of shipments in recent weeks. Imports are raised five million bushels with continued strong shipments from Canada. Ending stocks for 2010/11 are raised 150 million bushels to 880 million. The season-average farm price is projected at $5.15 to $5.35 per bushel compared with $5.20 to $5.50 last month.

Global coarse grain supplies for 2011/12 are projected 10.3 million tons higher mostly on higher corn beginning stocks and production in the United States. Foreign coarse grain beginning stocks changes are mostly offsetting with corn carry-in lowered 0.5 million tons for Canada and barley carry-in raised 0.2 million tons and 0.3 million tons, respectively, for Argentina and Australia. Foreign corn production is lowered 0.6 million tons. Corn production is lowered 0.5 million tons each for Mexico and Russia, and 0.2 million tons for Canada. Ukraine corn production is raised 0.5 million tons and production for Belarus is raised 0.2 million tons. World barley production is raised 1.3 million tons with production raised 1.0 million tons for Russia, 0.8 million tons for Turkey, 0.4 million tons for EU-27 and 0.2 million tons for Argentina. Partly offsetting is a 1.0-million-ton reduction for Ukraine barley. Canada oats production is lowered 0.4 million tons.

Global corn trade for 2011/12 is raised with higher imports for China. China corn imports are raised 1.5 million tons to 2.0 million tons, reflecting the recently announced sale to China and favourable pricing opportunities for US corn into southern China where growing demand is reducing stocks. Corn exports are lowered 0.5 million tons for Canada and 0.2 million tons each for Mexico and Russia, partly offsetting the US increase. Global corn consumption is raised 5.9 million tons with higher expected feeding in China, the United States and Ukraine, and higher industrial use expected in the United States and Canada. Global corn ending stocks are projected 3.8 million tons higher with the US increase only partly offset by reductions for Canada and Mexico.

Rice

US rice supplies in 2011/12 are lowered six per cent to 256.6 million cwt as beginning stocks and production are reduced 6.0 million and 12.5 million, respectively. These reductions are partially offset by a 1.0 million cwt increase in imports to 19.0 million. Ending stocks for 2010/11 (beginning stocks for 2011/12) are lowered 6.0 million cwt as 2010/11 domestic and residual use is raised based on the Rice Stocks report showing stocks as of 1 June, which indicated lower-than-expected stocks and implied higher 2010/11 annual usage than previously estimated. Rice production in 2011/12 is lowered six per cent to 187.0 million cwt, due entirely to a reduction in acreage. Harvested area for 2011/12 is lowered 185,000 acres to 2.65 million. The average all rice yield is raised slightly to 7,059 pounds per acre. Area in 2011/12 is the lowest since 1987/88, and the crop size would be the lowest since 1997/98.

Total use for 2011/12 is lowered 5.0 million cwt to 227.0 million as exports are lowered 6.0 million (all in long-grain rice) to 100.0 million, partially offset by a 1.0 million increase in domestic and residual use. Rough rice and combined milled and brown rice exports (rough-equivalent basis) are each reduced 3.0 million cwt to 36.0 million and 64 million, respectively. Tighter supplies in 2011/12 along with plentiful supplies among the major exporters will likely limit US exports. Ending stocks for 2011/12 are projected at 29.6 million cwt, down 12.5 million, or 30 per cent from a month ago, and 21.0 million or 42 per cent below 2010/11.

The 2011/12 long-grain rice US season-average farm price is projected at $12.00 to $13.00 per cwt, up 70 cents per cwt on each end of the range from last month compared to $11.10 per cwt for 2010/11. The combined medium- and short-grain price is projected at $16.00 to $17.00 per cwt, up $1.00 per cwt from a month ago compared to $17.00 per cwt for 2010/11. The 2011/12 all rice price is projected at $13.20 to $14.20 per cwt, up $1.00 per cwt on each end of the range.

Global 2011/12 rice production and trade are little changed from last month, while consumption is lowered and ending stocks are raised. Global production is projected at a record 456.3 million tons, down fractionally as the drop in the US crop is nearly offset by an increase for Egypt. Global exports in 2011/12 are lowered slightly due mostly to an expected decline in US exports. Global consumption in 2011/12 is lowered 1.7 million tons due mostly to a reduction for India. World ending stocks for 2011/12 are projected at 96.3 million tons, up 1.4 million from last month, and nearly the same as the previous year. The increase in ending stocks is due mostly to an increase for India.

Oilseeds

US oilseed production for 2011/12 is projected at 96.3 million tons, down 2.3 million tons from last month, with lower soybean production accounting for most of the change. Soybean production is projected at 3.225 billion bushels, down 60 million due to reduced harvested area. Harvested area, estimated at 74.3 million acres in the Acreage report on 30 June, is 1.4 million below the June projection. The soybean yield is projected at 43.4 bushels per acre, unchanged from last month. Soybean supplies are 40 million bushels below last month's forecast as higher beginning stocks partly offset lower production. Exports for 2011/12 are reduced 25 million bushels to 1.495 billion reflecting lower US supplies, increased supplies in South America this fall and reduced global imports. US soybean ending stocks are projected at 175 million bushels, down 15 million.

US soybean exports for 2010/11 are projected at 1.52 billion bushels, down 20 million from last month in part reflecting lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 200 million bushels, up 20 million.

The 2011/12 US season-average soybean price is projected at a record $12.00 to $14.00 per bushel, down $1.00 on both ends of the range. Soybean meal prices are projected at $345 to $375 per short ton, down $30 on both ends of the range. Soybean oil prices are projected at 54 to 58 cents per pound, down 4 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 455.5 million tons, down 1.4 million from last month. Lower soybean, peanut and rapeseed production estimates are only partly offset by increases for sunflower seed. Global soybean production is projected at 261.5 million tons, down 1.3 million mostly due to lower production in the United States. Higher soybean production for Russia resulting from increased area partly offsets the US reduction. Rapeseed production is reduced for Canada due to lower harvested area. Despite a record planted area estimate reported by Statistics Canada based on producer surveys conducted in late May and early June, much of the intended area in southeast Saskatchewan and southwest Manitoba did not get planted due to excessive moisture through late June. As a result, the Canada rapeseed crop is projected at 12.6 million tons, down 0.4 million from last month. Other changes include increased rapeseed production for Russia, increased sunflower seed production for Russia and Ukraine, and reduced canola, cottonseed and peanut production for the United States.

Sugar

Projected US sugar supply for fiscal year 2011/12 is increased 218,000 short tons, raw value, from last month. Higher imports from Mexico more than offset lower beginning stocks. Total 2011/12 US sugar use is unchanged.

For Mexico, 2010/11 ending stocks are increased 102,000 metric tons, raw value, with lower production more than offset by reduced domestic use and exports. For 2011/12, the larger beginning stocks and decreases in domestic use and ending stocks result in higher exports of 258,000 tons. The decrease in 2011/12 domestic use is in line with weaker demand for total sweeteners in Mexico.

Further Reading

- You can view the full report by clicking here.


July 2011