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World Agricultural Supply and Demand Estimates - March 2009

by 5m Editor
13 March 2009, at 12:00am

Total US meat production for 2009 is forecast lower this month as a slight increase in red meat output is more than offset by lower poultry production, says USDA's <em>World Agricultural Supply and Demand Estimates</em> for March 2009.

Livestock, Poultry and Dairy

The beef production forecast is raised from last month as carcass weights are forecast higher. In addition, cow slaughter is forecast higher as dairy herd liquidation is expected to increase during the year.

Pork production is forecast slightly higher than last month as hog weights are increased slightly. Higher than expected feeder pig imports in the last quarter of 2008 are expected to lead to higher slaughter in the first half of the year but lower forecast hog imports in 2009 lead to reduced forecasts of second half slaughter.

Broiler production forecasts are lowered as hatchery data point to continued reductions in eggs set and chicks placed.

Turkey production is also forecast lower as there are no indications that hatchery flocks will expand before mid-year.

Total egg production is forecast lower as a fractional increase in the first quarter table egg output is more than offset by lower forecast hatching egg production, which reflects reduced forecasts for broilers.

Production estimates for 2008 reflect recently released annual revisions.

strong>Export forecasts for 2009 for major meats are unchanged. Export estimates for 2008 are adjusted to reflect December data.

Price forecasts for cattle, hogs, broilers, turkey and eggs are reduced, reflecting expected weakness in demand.

Milk production for 2009 is lowered from last month. Cow numbers for 2009 are forecast higher than last month because recent revisions to 2008 cow estimates indicated a larger-than-expected dairy herd. However, milk production forecasts for 2009 are lowered as milk per cow growth is forecast slower, reflecting poor returns. The herd liquidation rate during 2009 is raised from last month. Trade forecasts for 2009 are unchanged from last month. CCC net removals are reduced as early demand strength is helping absorb dairy products and reduced production later in the year is expected to help limit supplies. Milk production estimates for 2008 are revised higher. Trade estimates for 2008 reflect December data. Ending stocks for 2008 are raised to reflect recently published revisions.

Milk price estimates for 2009 are raised. Forecasts for butter and cheese prices are raised from last month as demand has been stronger than expected and later year reductions in milk supplies are expected to support product prices. Nonfat dry milk and whey prices are unchanged. As a result of higher cheese and butter prices, the annual Class III and Class IV price forecasts are raised. The all milk price is also forecast higher this month at $11.25 to $11.85 per cwt.

Sugar

Projected 2008/09 U.S. sugar supply is decreased 85,000 short tons, raw value, from last month, due to reduced production. Processor indications of higher storage losses and lower rates of sugar extraction reduce beet sugar production 25,000 tons. Florida cane sugar is reduced 60,000 tons based on lower sugarcane production. Sugar use is unchanged.

Oilseeds

U.S. soybean ending stocks for 2008/09 are projected at 185 million bushels, down 25 million as increased soybean exports are only partly offset by lower crush. Soybean exports are raised 35 million bushels to 1.185 billion reflecting record sales to China and reduced export competition from Argentina. Soybean crush is reduced 10 million bushels to 1.640 billion because of continued weak domestic soybean meal demand and poor crush margins. Despite lower production, soybean oil stocks are projected higher due to a sharp reduction in domestic use resulting from lower soybean oil-based biodiesel production. Soybean oil used for biodiesel is reduced 0.7 billion pounds to 2.2 billion as biodiesel producers face poor margins, reduced export prospects, and strong competition from other feedstocks.

The U.S. season-average soybean price range is projected at $8.85 to $9.85 per bushel, up 10 cents on both ends of the range. The soybean meal price projection is unchanged at $265 to $305 per short ton. The soybean oil price is projected at 28.5 to 31.5 cents per pound, down 2.5 cents on both ends of the range.

Coarse Grains

U.S. corn ending stocks for 2008/09 are projected 50 million bushels lower this month as higher ethanol use more than offsets a reduction in exports. Corn use for ethanol is projected 100 million bushels higher on indications of improving blender incentives and higher ethanol use. Blender margins have become increasingly favorable since late February as gasoline prices have risen relative to those for ethanol. A continuing recovery in weekly production of gasoline blends with ethanol is also supportive of ethanol demand as are the latest data on ethanol production, imports, and stocks which indicate record use in December. Corn exports are projected 50 million bushels lower on sales and shipments to date, and pressure from increased foreign supplies of corn and wheat. Other 2008/09 feed grain balance sheet changes include a 5-million-bushel reduction in projected barley exports and 5-million-bushel increases in both projected imports and feed and residual use for oats.

The 2008/09 season-average farm price for corn is projected at $3.90 to $4.30 per bushel compared with $3.65 to $4.15 last month. Continued strength in prices received by producers indicates higher-than-expected forward contracting as farmers took advantage of pricing opportunities last spring and summer. The farm price for barley is projected higher at $5.10 to $5.30 per bushel compared with $4.95 to $5.35 last month. The oats farm price is projected 5 cents higher on both ends of the range at $3.05 to $3.25 per bushel.

Global coarse grain output for 2008/09 is nearly unchanged with higher corn production offset by lower sorghum and barley production. Global coarse grain supplies for 2008/09 are raised 2.2 million tons mostly reflecting upward revisions to 2007/08 corn production and carryout in Argentina and Mexico, and lower 2007/08 corn feeding in South Africa.

World corn production for 2008/09 is raised 0.6 million tons as an increase for South Africa more than offsets downward post-harvest revisions for India and Kenya. South Africa production is projected 1.5 million tons higher this month at 12.0 million. Despite some late December dryness that delayed plantings in western growing areas, weather conditions throughout the Maize Triangle have been extremely favorable again this year. Rainfall was above average in both January and February. This year=s crop has developed through pollination and, in eastern growing areas, well into grain fill with little or no stress. India corn production is reduced 0.5 million tons on lower harvested area and yields. Kenya production is reduced 0.4 million tons on lower yields.

Global sorghum production for 2008/09 is lowered 0.5 million tons with a reduction for Argentina partly offset by an increase for India. Argentina sorghum production is lowered 1.3 million tons with lower projected harvested area and yields. Early season drought that continued in southern growing areas through February has increased expected abandonment and reduced yield prospects for this year=s crop. Sorghum production for India is raised 0.7 million tons on higher reported yields. India barley production, however, is lowered 0.2 million tons on lower yields.

World corn imports, exports, and consumption for 2008/09 are all projected lower this month. Imports are lowered 0.5 million tons each for Malaysia and Taiwan. Partly offsetting is a 0.5- million-ton increase for Kenya imports. Lower expected corn exports for the United States are only partly offset by small increases for India and Russia. Global corn consumption is lowered with reductions in expected feeding and food, seed, and industrial use. Feed use is lowered 2.2 million tons with reductions for China, Taiwan, Malaysia, and South Africa. Food, seed, and industrial use is also lowered 2.2 million tons with a 5.0-million-ton reduction for China and a 0.6-million-ton reduction for India more than offsetting increases for the United States, South Africa, and the Philippines. Government procurement policies in China are expected to reduce industrial corn use, including ethanol, and boost stocks. Global corn ending stocks are projected 8.0 million tons higher with the largest increase for China where stocks are projected 6.0 million tons higher. Increases are also projected for South Africa, Argentina, and Mexico.

Wheat

U.S. wheat ending stocks for 2008/09 are projected 57 million bushels higher this month with higher projected imports and lower expected domestic use and exports. Imports are raised 10 million bushels reflecting the strong pace to date. Food use is projected 25 million bushels lower based on the latest mill grind data from the U.S. Bureau of Census. High extraction rates for 2008-crop wheat have reduced the amount of grain needed to produce flour and lower per capita consumption is reducing demand for flour. Seed use is lowered 2 million bushels reflecting lower expected 2009-crop acreage. Exports are projected 20 million bushels lower as increased exports by major competitors limit opportunities for U.S. wheat. Lower projected exports of hard red winter, hard red spring, and durum wheats are only partly offset by an increase for white wheat. The projected season-average farm price is unchanged at $6.70 to $6.90 per bushel.

Global 2008/09 wheat production is projected 1.6 million tons higher this month to a record 684.4 million. Production is raised 1.4 million tons for Australia with higher harvested area and better-than-expected yields, especially in Western Australia. Smaller upward revisions are also made for Morocco, India, Mexico, and Bangladesh. Partly offsetting is a reduction for Turkmenistan.

World imports and exports for 2008/09 are projected higher this month. Imports are raised 1.0 million tons for Iran and 0.3 million tons each for Azerbaijan, Turkey, and the United States. Imports are also raised 0.2 million tons for Turkmenistan. Partly offsetting are reductions of 0.3 million tons each for Indonesia and Morocco, and 0.2 million tons for the Philippines. Exports are raised 1.0 million tons for Australia with the increase in production. Exports are also raised 1.0 million tons for Russia based on the strong pace of shipments to date. Exports are raised 0.5 million tons for Ukraine based on the pace of sales and shipments and 0.5 million tons for EU-27 based on license and shipment data. Partly offsetting are reductions of 0.8 million tons for China and 0.5 million tons for the United States.

Projected world wheat consumption for 2008/09 is lowered 3.7 million tons, mostly reflecting lower expected feed use in Russia and reduced food use in the United States. Global ending stocks are raised 5.9 million tons with larger stocks in Russia, the United States, Iran, and China accounting for most of the increase. At 155.9 million tons, world ending stocks are projected at a 6-year high.

Further Reading

- You can view the full report by clicking here.

March 2009