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World Agricultural Supply and Demand Estimates – November 2011

by 5m Editor
8 November 2011, at 12:00am

While beef and broiler production forecasts for 2011 are lowered, pork and turkey production are increased, according to the latest <em>World Agricultural Supply and Demand Estimates</em> (WASDE) report for November.

Livestock, Poultry and Dairy

The 2012 forecast of total red meat and poultry production is reduced from last month. Beef production is reduced due to slightly lower cattle slaughter during the year and slower growth in carcass weights. Broiler production is forecast lower as sharper declines are expected in bird numbers during late 2011 and into 2012. Turkey production is raised as prices are expected to favour expansion during 2012. Pork production is unchanged. For 2011, beef and broiler production forecasts are reduced, but pork and turkey production is increased. Egg production is forecast higher in the last quarter of 2011 and for 2012.

The beef import forecast is raised slightly for 2011. Beef export forecasts for 2011 and 2012 are raised slightly as strong global beef demand supports continued gains in US exports to a number of Asian markets. Small changes are made to US pork imports for 2011 and 2012 and pork exports for 2011. Broiler exports are raised for 2011 and 2012 on strong demand in a number of countries and a relatively weak dollar.

Cattle prices are forecast higher for the remainder of 2011 and through 2012. Strong demand is expected to carry into next year along with tight cattle supplies. Hog prices are raised for 2011 and 2012 on demand strength and support from lower beef and broiler production. Broiler prices are lowered for the last quarter of 2011 and the first quarter of 2012 as weakness in domestic demand and current overhanging supplies pressure prices.

Milk production forecasts for 2011 and 2012 are unchanged from last month. Commercial exports are forecast higher for 2011. Fat and skim-solids ending stocks for 2011 are lowered.

Cheese, butter and whey prices are forecast higher for both 2011 and 2012, but the non-fat dry milk (NDM) price forecast is reduced for 2011 and unchanged for 2012. Class III prices are raised for 2011 and 2012 on the increased price forecast for cheese and whey. The Class IV price is unchanged for 2011 as the higher butter price is mostly offset by a lower NDM price forecast. However, for 2012 with an unchanged NDM price forecast, the Class IV price forecast is raised due to higher butter prices. The all milk price is forecast at $20.10 to $20.20 per cwt for 2011, and $18.05 to $18.95 per cwt for 2012.

Wheat

US wheat supplies for 2011/12 are lowered nine million bushels based on updated production estimates for the states resurveyed following the 30 September Small Grains report. Adjustments to production in these states, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring (HRS) wheat and durum. An increase in white wheat production is partly offsetting. Projected use for 2011/12 is unchanged for all wheat; however, domestic food use is projected higher for Hard Red Winter (HRW) wheat and lower for HRS wheat. Projected exports are raised for HRS and lowered for HRW. All wheat ending stocks are lowered nine million bushels in line with the production change. The season average farm price is projected lower at $7.05 to $7.75 per bushel compared with $7.10 to $7.90 last month, reflecting the latest reported prices.

Global wheat supplies for 2011/12 are projected 2.6 million tons higher mostly reflecting higher production in Kazakhstan and EU-27. Kazakhstan production is raised 2.0 million tons as an extended harvest period capped off a nearly ideal growing season, confirmed by the latest government reports. EU-27 production is raised 1.2 million tons with further upward revisions for France and Spain and higher reported production in the United Kingdom and Czech Republic. Partly offsetting these increases is a 0.5-million-ton reduction for Argentina and 0.3-million-ton reductions for both Algeria and Ethiopia.

World wheat trade is raised for 2011/12 with higher expected imports for China, a number of African countries, including Morocco and Algeria, as well as for Brazil and several FSU-12 countries neighboring Kazakhstan. Partly offsetting is a reduction in projected imports for South Korea where more corn feeding is expected. Exports are raised 1.0 million tons each for EU-27 and Russia reflecting larger supplies in EU-27 and the continued heavy pace of shipments from Russia.

Global wheat consumption for 2011/12 is raised 2.4 million tons with increased feeding expected for Kazakhstan, Brazil and Serbia. Larger crops in Kazakhstan and Serbia support more wheat feeding. Recent rains in southern Brazil have reduced wheat quality in some areas, raising the potential for more feeding. Higher consumption is also expected for EU-27, Ethiopia, Kenya and several smaller FSU-12 countries. Global ending stocks are projected 0.2 million tons higher. Rising stocks in Kazakhstan, China, and Morocco are partly offset by reductions in major exporting countries including Russia, Argentina and EU-27.

Coarse Grains

US feed grain supplies for 2011/12 are projected lower with reduced corn and oats production more than offsetting small increases for sorghum and barley. Corn production for 2011/12 is forecast 123 million bushels lower with the national average yield forecast 1.4 bushels per acre below last month. At 146.7 bushels per acre, this year’s yield would be the lowest since 2003/04. Feed and residual use is lowered 100 million bushels with the smaller crop and further reductions in the outlook for broiler production. Projected US ending stocks are lowered 23 million bushels. The season-average farm price is unchanged at $6.20 to $7.20 per bushel.

Other 2011/12 changes include small adjustments to projected ending stocks for sorghum, barley and oats, reflecting this month’s production changes. Projected sorghum exports are reduced 10 million bushels as sales and shipments continue to lag earlier expectations. A 10-million-bushel increase in expected sorghum food, seed and industrial use is offsetting. Projected farm prices for sorghum are unchanged, but projected ranges are narrowed for barley and oats, and the barley farm price is projected lower based on reported malting barley prices.

Changes for 2010/11 corn mostly reflect a 13-million-bushel increase in food, seed, and industrial use with usage raised for sweeteners, starch and ethanol, all based on the latest available data. In addition, there are small adjustments to imports and exports based on August trade data from the US Census Bureau. These changes reduce 2010/11 feed and residual use 11 million bushels.

Global coarse grain supplies for 2011/12 are projected slightly lower with reduced US corn production and lower EU-27 rye production more than offsetting higher Argentina sorghum production, higher EU-27 corn, barley, oats production and higher Kazakhstan barley production. Corn production is lowered for a number of countries with the biggest reduction for Mexico where production is lowered 3.5 million tons. A late start to the summer rainy season and an early September freeze in parts of the southern plateau corn belt reduced yields for Mexico’s summer crop. Lower expected area for the winter crop, which will be planted in November and December, also reduces 2011/12 corn production prospects. Reservoir levels are well below those necessary to sustain a normal seasonal draw down in the northwestern corn areas which normally account for 70 to 80 per cent of Mexico’s winter corn crop.

Increases in 2011/12 corn production for a number of countries partly offset reductions in Mexico, the United States and Serbia. Corn production is raised 2.5 million tons for China with increases in both area and yields in line with the latest indications from the China National Grain and Oils Information Center. EU-27 corn production is raised 1.9 million tons mostly reflecting higher reported output in France, Romania and Austria. Argentina production is raised 1.5 million tons with higher expected area. FSU-12 production is raised 0.7 million tons with higher reported yields in Belarus and Russia. There are also a number of production changes this month to corn and sorghum production in Sub-Saharan Africa which reduce coarse grain production for the region.

World coarse grain trade for 2011/12 is raised with increased global imports and exports of barley and corn. Barley imports are raised for Algeria, Saudi Arabia and Jordan with exports increased for EU-27 and Russia. Corn imports are increased for China, Mexico and South Korea. Higher expected corn exports from Argentina and EU-27 support these increases. Higher sorghum exports from Argentina offset the reduction in expected US sorghum shipments. Global corn consumption is mostly unchanged with higher industrial use and feeding in China and higher corn feeding in EU-27 and South Korea offsetting reductions in Mexico and the United States. Global corn ending stocks are projected 1.6 million tons lower with reductions in EU-27, Mexico, Brazil and the United States outweighing increases for China and Argentina.

Rice

US all rice production in 2011/12 is forecast at 188.1 million cwt, 1.2 million above last month due to an increase in yield. Average all rice yield is estimated at 7,167 pounds per acre, up 44 pounds from last month, and the second highest yield on record. Harvested area is unchanged at 2.62 million acres. Long-grain rice production is raised 0.7 million cwt to 117.5 million, while combined medium- and short-grain production is increased 0.4 million to 70.6 million. No changes are made to rice use for either all rice or the rice by-class forecasts. All rice domestic and residual use is forecast at 127.0 million cwt, and all rice exports are forecast at 91.0 million, both down from a year ago. All rice ending stocks are forecast at 37.5 million cwt, up 1.2 million from a month ago, and a decrease of 10.9 million from the previous year.

The long-grain, combined medium- and short-grain, and all rice 2011/12 season-average farm price forecasts are unchanged from last month at $13.50 to $14.50 per cwt, $15.50 to $16.50 per cwt, and $14.00 to $15.00 per cwt, respectively.

Global 2011/12 rice supply and use are lowered from a month ago. World 2011/12 production is forecast at a record 461.0 million tons, down 0.4 million from last month due mainly to decreases for Burma, Cambodia, Laos and Thailand, which are partially offset by an increase for China. Thailand’s 2011/12 rice crop is lowered nearly one million tons as losses in the main-season crop from recent flooding are partially offset by an expected re-planting of some of the main season crop in the Northern Region along with an expected record dry-season crop. Flooding also lowered crop prospects in Burma, Cambodia and Laos. China’s 2011/12 crop is raised 2.0 million tons to a record 141.0 million, due to an increase in harvested area. Harvested area is increased based on recent indications from the government of China. The increase in global consumption is due mostly to an increase for China. Global exports are lowered slightly due to reductions for Burma and Cambodia, which are partially offset by increases for Argentina and Brazil. Global ending stocks for 2011/12 are projected at 100.6 million tons, down 0.8 million from last month, but an increase of 2.6 million from the previous year.

Oilseeds

Total US oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. Soybean production is forecast at 3.046 billion bushels, down 14 million from last month. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month. Soybean exports are reduced 50 million bushels to 1.325 billion mainly due to a slow export sales pace through October. Soybean ending stocks are projected at 195 million bushels, up 35 million from last month.

Soybean oil ending stocks and exports for 2011/12 are reduced this month due to lower beginning stocks resulting from changes in the 2010/11 soybean oil balance sheet. Changes for 2010/11 include reduced soybean oil production and ending stocks. These changes are based on industry indications of soybean crush and soybean oil stocks. Soybean meal production and domestic use for 2010/11 are also reduced due to lower October-September year crush. Soybean meal changes for 2011/12 include reduced domestic use and higher exports.

The US season-average soybean price range is projected at $11.60 to $13.60 per bushel, down 55 cents on both ends of the range. The soybean meal price is projected at $310 to $340 per short ton, down $25.00 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, unchanged from last month.

Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month. Global soybean production accounts for a quarter of the increase with larger crops projected for Brazil, Paraguay and Mexico. Brazil soybean production is increased 1.5 million tons to 75 million with improved yield prospects related to rapid planting progress and good early season moisture throughout the country. These gains are partly offset by lower production projected for Argentina, which is reduced 1.0 million tons to 52 million due to reduced area as producers shift to corn. Global sunflower seed production is raised due to larger crops in Ukraine, EU-27 and Argentina. Increased yields are projected for Ukraine as harvest nears completion. Other changes include increased rapeseed production for EU-27, increased cottonseed production for Turkey and increased palm oil production for Malaysia.

Global oilseed trade is projected at 113.3 million tons, down 0.8 million. Reduced soybean exports for the United States and Argentina are only partly offset by increases for Brazil and Paraguay. Soybean imports are reduced for Japan and Russia. Global oilseed crush is reduced 0.2 million tons to 389.1 million with reduced soybean crush in Argentina partly offset by increased sunflower seed crush in Ukraine. Global oilseed ending stocks for 2011/12 are raised 0.9 million tons to 73.9 million. Soybeans account for most of the change with increased stocks for the United States and China more than offsetting lower stocks in Argentina and Japan.

Sugar

Projected US sugar supply for fiscal year 2011/12 is increased from last month, as higher beginning stocks and imports more than offset lower production. Sugar production is decreased 50,000 tons, based on lower forecast US sugarbeet production. Imports from Mexico are increased based on increased supplies – higher beginning stocks and increased tariff rate quota imports – and reduced consumption and ending stocks in Mexico

This month's 2010/11 US sugar supply and demand reflect final estimates of stocks, production, and use in Farm Service Agency’s Sweetener Market Data report and final import data from the Foreign Agricultural Service. Ending stocks are modestly higher than estimated last month. Mexico's government data for fiscal-year 2010/11 are the basis for decreasing imports and domestic use and increasing ending stocks.

Note: Beginning this month, sugar supply and use data in the WASDE report will be shown in ‘actual weight’. The WASDE report will continue to show US sugar supply and use, including imports from Mexico, in raw value. Raw value for Mexico sugar converts from actual weight by multiplying by 1.06. The Foreign Agricultural Service will continue to report world sugar supply and use, including for Mexico, in raw value.

Further Reading

- You can view the full report by clicking here.

November 2011