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World Agricultural Supply and Demand Estimates - June 2009

by 5m Editor
8 June 2009, at 12:00am

Total US meat production for 2009 and 2010 is reduced from last month as higher forecast feed prices are expected to reduce prospects in the pork and broiler sectors, according to the <em>World Agricultural Supply and Demand Estimates</em> produced by the USDA's World Agricultural Outlook Board.

Livestock, Poultry and Dairy

Beef production is forecast lower in 2009 due to the slower pace of fed-cattle slaughter to date in the second quarter and lighter average carcass weights. The pork production forecast is raised for 2009 as higher second quarter slaughter weights boost production and more than offset a reduced second half forecast that is lower due to reduced imports of hogs from Canada.

Pork production in 2010 is lowered as higher feed prices and weaker forecast hog prices are expected to dampen growth in animal weights and reduce incentives to increase production. The Quarterly Hogs and Pigs report, to be released on June 26, will provide an indication of producer farrowing intentions through the end of 2009. Pork production is also reduced due to a reduced forecast of imports of hogs from Canada during 2010. The broiler production forecasts for both 2009 and 2010 are lowered from last month as production is dampened by higher feed prices. Turkey production forecasts are raised slightly in the second quarter of 2009. Egg production in 2009 is reduced.

Export forecasts are raised due to firm shipments of beef, pork, and broilers during the first quarter. Pork exports are raised slightly for 2010.

Price forecasts for 2009 are lowered for cattle and hogs but are raised for broilers. Generally weak red meat demand is expected to pressure livestock prices. The hog price forecast is also lowered for 2010. Broiler prices for both 2009 and 2010 are raised from last month as lower production is expected to support prices. Turkey and egg price forecasts are unchanged.

The milk production forecasts for 2009 and 2010 are reduced as higher feed prices further weaken producer returns and sharpen the expected contraction in cow numbers. Growth in milk per cow is also slowed due to higher feed costs. Commercial exports, primarily on a skim-solids basis, are forecast higher in 2009 and 2010 on tighter global dairy product supplies and a weaker U.S. dollar. CCC removals are adjusted to reflect exports under the Dairy Export Incentive Program (DEIP).

Most product prices are forecast higher in the face of tighter supplies, but cheese prices are forecast lower for 2009. The Class III price is unchanged for 2009 but raised for 2010 while Class IV prices are forecast higher for 2009 and 2010. The all milk price is forecast at $11.95 to $12.35 per cwt for 2009 and $15.10 to $16.10 for 2010.

Wheat

US wheat supplies for 2009/10 are lowered this month reflecting a 10-million-bushel reduction in forecast winter wheat production. Soft red winter wheat, forecast down 7 million bushels, accounts for most of the reduction, however, hard red winter wheat production is also forecast 4 million bushels lower.

Partly offsetting is a small increase in white winter wheat. Feed and residual use is lowered 20 million bushels based on higher projected prices which are expected to limit the competitiveness of all but the lowest quality wheat in feed rations. Ending stocks are projected 10 million bushels higher as reduced use more than offsets the decrease in production. The 2009/10 marketing-year average farm price is projected at $4.90 to $5.90 per bushel, up 20 cents on both ends of the range as higher feed grain and soybean prices support domestic wheat values.

Global wheat supplies for 2009/10 are projected lower this month as reduced production more than offsets higher beginning stocks. Beginning stocks are raised 1.3 million tons mostly reflecting lower expected 2008/09 domestic consumption for Russia. World wheat production for 2009/10 is lowered 1.6 million tons with reductions for EU-27, Canada, and Ukraine only partly offset by increases for Russia, China, Afghanistan, Azerbaijan, Morocco, Syria, and Tunisia.

EU-27 production is lowered 2.3 million tons mostly reflecting lower expected yields in Hungary, Romania, and Spain where continued dryness has reduced crop prospects. Increases for France and Denmark are partly offsetting. Production for Canada is lowered 1.0 million tons on dryness in Alberta and western Saskatchewan and on unseasonably cool temperatures that have delayed spring wheat seeding and development across the Prairie Provinces. Ukraine production is reduced 1.0 million tons on persistent April and May dryness in the country’s central growing areas.

Russia production is raised 1.0 million tons on higher area and improved prospects for spring wheat yields with abundant early season moisture in the northern and eastern growing areas. Production for China is raised 0.5 million tons on higher area. Production increases for North Africa and Syria reflect higher expected yields.

Global wheat imports, exports, and consumption for 2009/10 are all projected lower this month. Imports are lowered for Afghanistan, Azerbaijan, and Bangladesh. Exports are lowered for Ukraine, with increases for Russia and Turkey partly offsetting. Global consumption is projected 1.0 million tons lower with reduced wheat feeding in Ukraine and the United States, and lower food use in Russia more than offsetting higher feeding. Global ending stocks are projected at 182.6 million tons, up 0.7 million tons from last month.

Coarse Grains

US feed grains supplies for 2009/10 are projected lower with reduced prospects for corn yields and production. Corn production for 2009/10 is projected at 11.9 billion bushels, down 155 million from last month’s projection. The national average yield is projected at 153.4 bushels per acre, 2 bushels lower as continued planting delays through late May reduce yield prospects, especially for the eastern Corn Belt. Early planting in the western Corn Belt and improved crop conditions from last year at this time, as reported in the June 8 Crop Progress, are expected to partly offset the poor start to this year’s crop in other parts of the country. Corn supplies are projected at 13.6 million bushels, down 190 million bushels from 2008/09.

Projected feed and residual use for 2009/10 is reduced 100 million bushels this month based on lower projections for red meat and poultry production and lower expected residual use with the lower corn yield. Total use, projected at 12.5 billion bushels, is expected to exceed production by 525 million bushels drawing down stocks sharply year-to-year. Ending stocks are projected at 1.1 billion bushels, down 55 million from last month and 510 million below the 2008/09 projection.

The 2009/10 marketing-year average farm price is projected at $3.90 to $4.70 per bushel, up 20 cents on both ends of the range. This compares with $4.10 to $4.30 per bushel for 2008/09. Projected 2009/10 farm prices for sorghum, barley, and oats are also raised this month.

Global coarse grain supplies for 2009/10 are projected 8.1 million tons lower this month with lower U.S. corn production accounting for nearly half the reduction. Global coarse grain beginning stocks are lowered 1.0 million tons with a 0.5-million-ton reduction for 2008/09 Brazil corn production and reduced corn carryin for Russia and Ukraine due to higher 2008/09 exports. Global corn production is lowered 3.7 million tons with the 3.9-million-ton reduction for the United States only partly offset by a 1.0-million-ton increase for Ukraine on higher reported area.

Corn production is also lowered 0.4 million tons for EU-27 and 0.3 million tons for Croatia. World barley production is lowered 3.4 million tons mostly reflecting a 3.2-million ton reduction for EU-27. Barley production is also lowered 0.7 million tons for Canada and 0.3 million tons for Argentina with mostly offsetting increases of 0.5 million tons and 0.3 million tons, respectively, for Russia and Morocco.

World coarse grain imports and exports are projected higher on 0.4-million-ton increases for both corn imports and exports. Global corn feeding is lowered 2.1 million tons reflecting the 2.5-million-ton U.S. reduction, which is partly offset by small increases for Indonesia, Taiwan, and Ukraine. World coarse grain ending stocks are projected 6.3 million tons lower with a 3.5-million-ton reduction for barley and a 2.7-million-ton reduction for corn. Most of the reduction in barley stocks is for EU-27, down 3.2 million tons. Half of the reduction in global corn stocks is the result of changes for the United States. Global corn ending stocks are projected at 125.5 million tons, down 13.1 million from the 2008/09 projection.

Oilseeds

This month’s U.S. oilseed supply and use projections for 2009/10 include reductions in beginning and ending stocks. Lower beginning stocks reflect higher export and crush projections for 2008/09. Soybean exports for 2008/09 are raised to a record 1.25 billion bushels reflecting record sales and increased projected imports for China and reduced soybean exports from Argentina.

Projected soybean exports for Argentina for 2008/09 are reduced 2 million tons to 5.4 million, the lowest in 9 years. U.S. soybean crush is raised mainly due to higher projected soybean meal exports. Soybean ending stocks for 2008/09 are projected at 110 million bushels, down 20 million from last month. Ending stocks for 2009/10 are also reduced 20 million bushels to 210 million. Other changes this month include reduced soybean oil used for biodiesel production for 2008/09 and increased soybean oil exports for both 2008/09 and 2009/10. Higher soybean oil exports reflect lower projected exports from Brazil due to increased biodiesel production and use.

Soybean, meal, and oil prices are all raised this month. The U.S. season-average soybean price for 2009/10 is projected at $9.00 to $11.00 per bushel, up 55 cents on both ends of the range. Soybean meal prices for 2009/10 are projected at $275 to $335 per short ton, up 15 dollars on both ends of the range. Soybean oil prices are projected at 33 to 37 cents per pound, up 0.5 cents on both ends of the range.

Global oilseed production for 2009/10 is projected at 421.4 million tons, down 0.7 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production is reduced 0.6 million tons to 18.5 million mainly due to lower yields resulting from dry conditions in April and May in eastern growing areas. Increased China rapeseed production partly offsets the smaller EU-27 crop. Other changes include reduced sunflowerseed production for EU-27 and reduced soybean production for Ukraine. Argentina’s 2008/09 soybean production is reduced two million tons to 32 million reflecting low yields reported as harvest nears completion.

Sugar

Projected US sugar supply for fiscal year 2009/10 is decreased 40,000 short tons, raw value, from last month based on lower production more than offsetting higher carryin stocks. Reduced area for sugarcane in Hawaii reduces sugar production 50,000 tons based on processor reports. Sugar deliveries are reduced 210,000 tons from last month based on prospects for tight supplies and rising prices. Ending stocks increased 170,000 tons.

For 2008/09, Hawaii cane sugar production is reduced 25,000 tons based on processor reports, and imports from Mexico are increased 200,000 tons due to the recent strong pace. Sugar deliveries are increased 165,000 tons and ending stocks increase 10,000 tons.

Projected 2009/10 sugar supply in Mexico is decreased 135,000 metric tons, raw value, from last month. Lower carryin stocks more than offset higher imports. Domestic use is lowered 110,000 tons. Ending stocks decrease 20,000 tons. For 2008/09, production is lowered and use is raised based on pace-to-date estimates. Ending stocks are decreased 470,000 tons.

Further Reading

- You can view the full report by clicking here.


June 2009