FEED OUTLOOK September 18, 2001 September 2001 FDS-0901 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------- The Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831, issues FEED OUTLOOK 11 times a year. Electronic release only, no published copies are available. FEED OUTLOOK is supplemented by an annual FEED YEARBOOK. The yearbook summary for 2001 was released on April 25, 2001. Yearbooks are available in print from USDA Order Desk. For the 2001 issue, call 1-800-999-6779 (703-605-6220) and ask for stock #ERS-FDS-2001, $21. -------------------------------------------------------------------------------- SUMMARY This months outlook is shaped by the survey-based yield data on corn, sorghum, and barley that lowered production estimates. Forecast yields of all three crops were lowered by less than 1 bushel from the previous month. Even though supplies and stocks of feed grains have tightened, projected 2001/02 ending stocks of the four feed grains, of 38.9 million metric tons, are still well above the low of 14.4 million recorded in 1995/96. Tightened supplies have caused expected prices to strengthen. Foreign production and use of coarse grains in 2001/02 increased 3 million tons this month, resulting in a slight drop in ending stocks. Foreign coarse grain ending stocks are projected at 118 million tons, the lowest in 16 years largely due to a decline in Chinas corn stocks. Reduced global corn production, mainly reflecting lower U.S. production and larger consumption, are projected to reduce world corn stocks to the lowest level since 1984/85. FEED GRAIN ENDING STOCKS LOWERED FROM LAST MONTH U.S. feed grain production in 2001 is forecast at 256 million metric tons, down almost 1 million from a month ago and down 18.2 million from 2000. Feed grain supply in 2001/02 is forecast at 312 million tons, down nearly 1 percent from last month, and down 4 percent from 2000/01. Forecast beginning stocks are down 3 percent from last month, but still up 9 percent from the previous year. Total 2001/02 feed grain use is projected at 272.8 million tons, down slightly from last month as a reduction in exports outweighed an increase in domestic use. For the year, total use is forecast up 0.2 million ton. Even though total use is down from last month, ending stocks are expected to be 38.9 million metric tons, down 2.5 million from last month, and down 14.2 million from last year. On a September-August marketing year basis, feed and residual use for the four feed grains plus wheat in 2000/01 is projected to total 165 million tons, up 1 million ton from last month but down 1 million ton from last year. Corn is estimated to account for 89 percent of feed and residual use in 2001/02, about the same as in 2000/01. The projected index of grain consuming animal units (GCAU) for 2001/02 is 90.143 million units, up 2 percent from last month and up from 89.4 million units in 2000/01. Feed and residual used per GCAU in 2001/02 is 1.83 tons, down from 1.86 in 2000/01. In the index components, GCAUs for beef and dairy cattle are down and those for pork and poultry are up from last year. CORN PRODUCTION DECLINES Corn production in 2001 is forecast at 9,238 million bushels, down 28 million from last months projection and down 730 million from 2000. The average corn yield is forecast at 133.5 bushels per acre, compared with last months forecast of 133.9 bushels and the actual 2000 yield of 137.1 bushels. The September 1 Corn Objective Yield data indicate a record-high stalk count for the seven objective yield States (Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio, and Wisconsin). The September forecast of ears per acre is also record high. However, ear measurements from sample plots indicate a length below the 5-year average and the shortest length since 1995. Forecast total corn use in 2001/02 was unchanged from last month and up nearly 1 percent from the estimate for 2000/01. Exports were lowered 25 million bushels from last month, but are up 35 million from 2000/01. Feed and residual use was raised 25 million bushels from last month because of the increase in GCAUs, but down 50 million from last year. In addition, forecast carry-in stocks are down 65 million bushels because of increased 2000/01 exports. Given the lower supplies, projected ending stocks are down and prices are up. Corn stocks are projected at 1.361 billion bushels, the lowest in 4 years. The projected price for 2001/02 is $1.95-$2.35 per bushel, up from last months $1.90-$2.30. In 2000/01, the season-average price received by farmers is expected to be $1.85. SORGHUM CROP UP FROM LAST YEAR Sorghum production in 2001 is forecast at 537 million bushels, down 7 million from last month because of lower expected yields. This production is up 14 percent from 2000's 470 million bushels. Yields are forecast at 61.2 bushels per acre, down 0.8 bushel from last month, but up 0.3 bushel from last year. Yield decreases are expected in 6 of the 11 top producing States this month, mainly in the Central Plains. Total use of sorghum is expected to total 510 million bushels, down 10 million bushels from last month and down 5 million from expected use in 2000/01. Exports are projected at 240 million bushels, down 10 million from last month and down 5 million from 2000/01. Ending stocks are expected to be up from last month and up 28 million bushels from the projected 20 million ending stocks for 2000/01. Prices for 2000/01 are forecast at $1.88 per bushel, 3 cents above the expected corn price. The projected price for sorghum in 2001/02 is $1.95-$2.35 per bushel, up from $1.85-$2.25 last month, and approximately the same as the corn price. BARLEY PRODUCTION DECREASES FROM 2000/01 Barley production for 2001 is forecast at 262 million bushels, down 4 million from a month ago and down 56 million from 2000. Yields are expected to average 57.9 bushels per acre, down from 58.8 bushels last month and down from 61.1 bushels last year. Compared with the August forecast, Minnesota, Montana, Oregon, and Washington are expecting lower yields, while South Dakota yields are up. Ending stocks are down 4 million bushels from last month and down 10 million from 2000/01. Total barley use in 2000/01 is unchanged from last month, but the lower production reduced stocks. Prices received by farmers for barley in 2001/02 are expected to average $2.10- $2.50 per bushel, up $.05 on each end from last month. The spread between malting barley and feed barley is expected to remain wider than in past years. GLOBAL 2001/02 CORN CROP FORECAST REDUCED, TRADE UP, STOCKS DOWN Forecast foreign corn production was reduced over 1 million tons this month. Poor growing conditions in Ontario have reduced corn production prospects in Canada by 1 million ton. Summer drought in Ukraine and nearby parts of Russia has reduced corn prospects in the former Soviet Union more than 1 million tons. These reductions were partly offset by increased 2001/02 corn production forecasts for Eastern Europe. Hungary and Serbia have had favorable conditions, boosting forecast production, while parts of Romania suffered from dryness, reducing corn prospects. World corn trade in 2001/02 is forecast at over 73 million tons, up almost 2 million this month. Projected imports increased, led by Canada, whose imports nearly doubled this month to 2.5 million tons. Forecast corn imports for Indonesia and Iran increased 0.3 million tons each based on the pace of recent purchases. However, South Koreas corn import forecast dropped 0.5 million ton because it is expected to import more feed wheat. China has reportedly sold corn aggressively over the past month for delivery this fall and early next year in order to reduce stocks prior to entry into the World Trade Organization. These sales boosted forecast 2001/02 exports from 1 million ton last month to 4 million. This is partly offset by reduced exports forecast for Canada, Romania, and Ukraine. Forecast foreign corn consumption increased about 2 million tons this month. Increased production boosted this months forecast consumption 1.0 million ton in Eastern Europe. Canadas smaller corn and barley crops have resulted in larger imports and consumption of corn. This more than offsets reduced corn consumption forecasts for South Korea and the former Soviet Union. Reduced global corn production and larger consumption are projected to reduce world corn stocks to 118.5 million tons, the lowest since 1984/85, when China is thought to have increased stock holding. The 37 million-ton year-over-year drop in global corn ending stocks is the largest since 1988/89. Most of the worlds corn stocks are held by the United States or China. For example, in 1998/99 these two largest producers accounted for 87 percent of estimated global corn stocks. Both countries have had below-trend yields in 2001/02, and are expected to reduce stocks sharply. Chinas corn stocks are forecast below 60 million tons for the first time since 1986/87. However, that is still 75 percent greater than U.S. corn stocks. FOREIGN BARLEY AND RYE PRODUCTION UP THIS MONTH While the supply and demand of world corn tightened this month, other coarse grains did not. Forecast 2001/02 global barley production increased nearly 3 million tons, with Russia and Ukraine each up 1.5 million. Forecast production also increased slightly for the European Union (EU) and Eastern Europe, but drought-reduced prospects were reported for Canada and Turkey. While the forecast of 2001/02 barley trade remained nearly unchanged from last month, several offsetting changes were made. EU and Canada barley export forecasts were reduced, while exports by Ukraine and Russia were increased. The EU is expected to use more barley as feed because of reduced wheat production, limiting barley export availabilities. Global 2001/02 barley ending stocks are forecast up almost 1.7 million tons this month with most of the increase in the former Soviet Union. While up from a month ago, forecast 2001/02 barley ending stocks are down from a year earlier and are the lowest since the mid-1990s. Forecast world rye production in 2001/02 was increased over 1 million tons this month, with favorable conditions in Russia and Germany. Most of the increased production is expected to boost ending stocks. Global 2001/02 coarse grain ending stocks are a forecast 157 million tons, down almost 3 million from last month and 35 million from last year, and the lowest since 1995/96. We mourn and remember the innocent victims of terrorism. **************************************************************************** * Information Contacts: Allen Baker (202) 694-5290 * * William Chambers (202) 694-5312 * * International: Edward Allen (202) 694-5288 * * The next Feed Outlook will be released October 14, 2001. * ***************************************************************************** New Electronic Outlook Report from the Economic Research Service For several months, a wide range of ideas have emerged in the farm bill debate on how best to address the needs of farmers and other constituencies. A recently released ERS report, Feed Grains: Background and Issues for Farm Legislation, provides information on topics important to the debate, including market conditions, policy proposals, WTO considerations, and the interactions between policy and markets. This online-only report, http://www.ers.usda.gov/publications/fds-0701-01/, is the first of the occasional Feed Grains Outlook supplements that will provide timely analysis on specific topics. Readers will no longer have to wait for the Feed Situation and Outlook Yearbook for all of the in-depth reports and special articles on the feed grain sector. Table 1--Feed Grains: Marketing year supply and disappearance 1/ ----------------------------------------------------------------------------- Year/ Beg. Produc- Im- Supply FSI Feed & Ex- Total End. Farm Qtr. stocks tion ports resid. ports disp. stks. price ----------------------------------------------------------------------------- CORN ------------------------Million bushels--------------------- $/bu 1999/00 Sep-Nov 1,787 9,431 4 11,221 459 2,189 534 3,182 8,039 1.71 Dec-Feb 8,039 --- 3 8,043 447 1,526 468 2,441 5,602 1.91 Mar-May 5,602 --- 6 5,607 512 1,059 451 2,021 3,586 2.05 Jun-Aug 3,586 --- 2 3,588 496 890 485 1,871 1,718 1.64 Mkt. yr.1,787 9,431 15 11,232 1,913 5,664 1,937 9,515 1,718 1.82 2000/01 Sep-Nov 1,718 9,968 1 11,687 465 2,194 506 3,165 8,522 1.76 Dec-Feb 8,522 --- 1 8,523 464 1,600 416 2,480 6,043 1.97 Mar-May 6,043 --- 3 6,046 523 1,143 456 2,122 3,924 1.90 Mkt. yr.1,718 9,968 7 11,693 1,965 5,850 1,940 9,755 1,938 1.85 2001/02 Mkt. yr.1,938 9,238 10 11,186 2,050 5,800 1,975 9,825 1,361 1.95-2.35 SORGHUM 1999/00 Sep-Nov 65 595 0 660 18 228 65 311 349 1.45 Dec-Feb 349 --- 0 349 18 29 77 124 226 1.57 Mar-May 226 --- 0 226 13 22 64 99 127 1.82 Jun-Aug 127 --- 0 127 6 6 50 62 65 1.64 Mkt. yr. 65 595 0 660 55 284 256 595 65 1.57 2000/01 Sep-Nov 65 470 0 535 17 195 62 274 261 1.72 Dec-Feb 261 --- 0 261 11 11 72 94 167 1.94 Mar-May 167 --- 0 167 4 25 63 93 75 1.80 Mkt. yr. 65 470 0 535 35 235 245 515 20 1.88 2001/02 Mkt. yr. 20 537 0 558 45 225 240 510 48 1.95-2.35 ----------------------------------------------------------------------------- Table 1--Feed Grains: Marketing year supply and disappearance, (cont.) 1/ ----------------------------------------------------------------------------- Year/ Beg. Produc- Im- Supply FSI Feed & Ex- Total End. Farm Qtr. stocks tion ports resid. ports disp. stks. price ----------------------------------------------------------------------------- BARLEY ----------------------Million bushels--------------------- $/bu 1999/00 Jun-Aug 142 280 6 428 44 79 9 132 295 2.18 Sep-Nov 295 --- 5 300 39 24 10 73 228 2.04 Dec-Feb 228 --- 9 237 37 23 7 67 170 2.14 Mar-May 170 --- 7 178 52 10 4 66 111 2.19 Mkt. yr. 142 280 28 450 172 136 30 338 111 2.13 2000/01 Jun-Aug 111 318 7 436 44 90 8 142 294 2.28 Sep-Nov 294 --- 5 299 39 6 25 70 229 1.95 Dec-Feb 229 --- 8 237 37 22 16 75 162 2.10 Mar-May 162 --- 9 171 52 4 8 65 106 2.08 Mkt. yr. 111 318 29 458 172 123 58 352 106 2.11 2001/02 Mkt. yr. 106 324 35 465 172 125 30 327 138 2.10-2.50 OATS 1999/00 Jun-Aug 81 146 22 249 17 84 0.6 101 148 1.05 Sep-Nov 148 --- 34 182 16 32 0.3 49 134 1.08 Dec-Feb 134 --- 23 157 14 40 0.2 55 102 1.22 Mar-May 102 --- 20 122 21 24 0.7 46 76 1.31 Mkt. yr. 81 146 99 326 68 180 1.8 250 76 1.12 2000/01 Jun-Aug 76 149 21 246 17 79 0.4 96 150 1.03 Sep-Nov 150 --- 37 187 16 27 0.5 43 144 1.04 Dec-Feb 144 --- 28 172 14 48 0.5 62 110 1.22 Mar-May 110 --- 20 130 21 36 0.4 57 73 1.27 Mkt. yr. 76 149 106 331 68 189 1.7 259 73 1.10 2001/02 Mkt. yr. 73 133 105 311 68 165 2.0 235 76 1.15-1.45 ----------------------------------------------------------------------------- Totals may not add due to rounding. 1/ Corn and sorghum are on a September 1 to August 31 marketing year. Barley and oats are on a June 1 to May 31 marketing year. Source: U.S. Department of Agriculture, Economic Research Service. Table 2--Feed and residual use of wheat and coarse grains ----------------------------------------------------------------------------- Year Feed Total Animal Feed/ Beginning Corn Sorg. Barley Oats Grains Wheat grains Units animal September 1 unit ----------------------------------------------------------------------------- ------------ Million metric tons --------------- Mil. Tons 1999/00 Sep-Nov 55.6 5.8 0.5 0.6 62.5 -0.2 62.3 Dec-Feb 38.8 0.7 0.5 0.6 40.6 0.8 41.4 Mar-May 26.9 0.6 0.2 0.4 28.1 -0.3 27.8 Jun-Aug 22.6 0.1 2.0 1.2 25.9 8.6 34.5 Mkt. yr. 143.9 7.2 3.2 2.8 157.1 8.8 165.9 88.8 1.87 2000/01 Sep-Nov 55.7 5.0 0.1 0.5 61.3 -0.6 60.7 Dec-Feb 40.7 0.3 0.5 0.8 42.2 0.1 42.3 Mar-May 29.0 0.6 0.1 0.6 30.4 -0.1 30.2 Mkt. yr. 148.6 6.0 2.2 3.0 159.8 6.1 165.9 89.4 1.86 2001/02 Mkt. yr. 147.3 5.7 2.2 2.6 157.8 6.8 164.6 90.1 1.83 ----------------------------------------------------------------------------- Source: U.S. Department of Agriculture, Economic Research Service. Table 3--Cash feed grain prices ----------------------------------------------------------------------------- Corn, Corn, Sorghum, Sorghum, Barley, Barley, Oats, No. 2, No. 2, No. 2, Yel No. 2, No. 2, No. 3 or No. 2, Yel, Yel, Texas Yel, feed, better, Heavy Ctrl. Gulf South Gulf Duluth Malting, white, IL ports Panhandle ports Minn. Minn. 1/ 1/ 1/ 1/ 2/ 2/ 2/ ----------------------------------------------------------------------------- Mkt. yr. $/bu $/bu $/cwt $/cwt $/bu $/bu $/bu 97/98 2.45 2.78 4.72 4.76 1.90 2.50 1.70 98/99 1.97 2.35 3.78 3.97 1.23 2.30 1.34 99/00 3/ 1.86 2.23 3.36 3.79 NQ NQ 1.26 Monthly: 2000: May 2.15 2.43 3.49 4.27 NQ NQ NQ Jun 1.83 2.13 3.00 3.60 NQ NQ NQ Jul 1.53 1.91 3.37 3.34 NQ NQ NQ 2001: May 1.78 2.14 3.86 4.29 1.50 2.41 NQ Jun 1.76 2.11 4.01 4.06 1.50 NQ NQ Jul 3/ 1.92 2.30 4.28 4.22 1.49 NQ NQ ----------------------------------------------------------------------------- 1/ Marketing year beginning September 1. 2/ Marketing year beginning June 1. 3/ Preliminary. NQ = No quote. Source: U.S. Department of Agriculture, Agricultural Marketing Service. Table 4--Selected feed and feed by-product prices ----------------------------------------------------------------------------- Soybean Cotton- Corn Corn Meat & Dists.' Wheat Alfalfa meal seed gluten gluten bone dried midlgs, farm 44% slv. meal, feed, meal, meal, grains, Kansas price Decatur, 41% slv. IL IL Central Lawrence- City IL Memphis pts. pts. U.S. burg, IN 1/ 1/ 1/ 1/ 1/ 1/ 1/ 2/ ----------------------------------------------------------------------------- ------------------------------$/ton---------------------------------- Mkt. yr. 97/98 186.55 150.40 69.65 290.45 192.56 109.76 76.30 107.00 98/99 130.56 109.86 59.87 234.76 137.32 84.87 54.74 88.10 99/00 158.15 124.00 52.89 237.31 163.13 82.93 53.13 80.20 Monthly: 2000: May 180.10 123.25 51.10 240.00 181.33 92.00 49.16 95.00 Jun 170.18 130.63 48.80 223.75 174.64 76.00 49.00 85.70 Jul 156.84 131.88 45.25 218.75 173.45 81.00 42.53 84.50 2001: May 155.58 137.50 52.10 231.00 136.78 88.40 42.93 113.00 Jun 163.10 126.88 54.75 237.50 152.85 75.00 53.28 103.00 Jul /3 183.90 120.20 59.30 205.50 182.69 75.00 63.60 105.00 ----------------------------------------------------------------------------- 1/ Marketing year beginning September 1. 2/ Marketing year beginning May 1. 3/ Preliminary. NQ=No quote. Source: U.S. Department of Agriculture, Agricultural Marketing Service and National Agricultural Statistical Service. Table 5--Corn: Food and industrial uses ----------------------------------------------------------------------------- Glucose ---Alcohol--- Cereals and Bev. & other Total Year HFCS dex. Starch Fuel & Mfg products F&I ----------------------------------------------------------------------------- Million bushels 1999/00 Sep-Nov 129.3 56.7 63.6 131.7 31.8 46.0 459.2 Dec-Feb 119.4 49.6 60.0 138.3 33.3 46.0 446.6 Mar-May 141.7 57.1 63.7 147.9 34.9 46.5 491.9 Jun-Aug 149.2 58.4 63.8 147.8 29.7 46.5 495.4 Mkt year 539.5 221.9 251.1 565.8 129.7 185.0 1,893.0 2000/01 Sep-Nov 126.0 56.2 63.4 142.9 31.8 44.9 465.1 Dec-Feb 118.4 49.9 59.2 158.0 33.3 44.9 463.7 Mar-May 144.6 56.5 62.0 161.3 34.8 45.3 504.5 Mkt year 545.1 220.0 250.0 620.0 130.0 180.6 1,945.6 2001/02 Mkt year 555.0 225.0 255.0 680.0 131.0 184.0 2,030.0 ----------------------------------------------------------------------------- Source: U.S. Department of Agriculture, Economic Research Service. Table 6--Wholesale corn milling product and by-product prices ----------------------------------------------------------------------------- Corn meal, Brewers' Sugar, HFCS, 42% Corn starch, yellow, grits, destrose, tank cars, fob Midwest New York Chicago Midwest Midwest 3/ ----------------------------------------------------------------------------- $/cwt $/cwt cents/lb cents/lb $/cwt Mkt. yr. 1/ 98/99 15.06 11.00 24.24 8.04 12.28 99/00 15.05 10.91 16.38 9.18 12.39 00/01 2/ 15.84 11.74 16.83 9.25 12.44 Monthly 2000: May 15.90 11.80 16.38 9.25 13.06 Jun 15.29 10.25 16.38 9.25 13.36 Jul 14.72 11.07 16.38 9.25 12.76 Aug 14.62 10.52 16.38 9.25 12.04 2001: May 15.70 11.60 16.88 9.50 12.64 Jun 15.62 11.52 16.88 9.50 12.40 Jul 16.13 12.03 16.88 9.50 12.16 Aug 2/ 15.98 11.88 16.88 9.50 12.31 -- --------------------------------------------------------------------------- 1/ Marketing year beginning September 1. 2/ Preliminary. 3/ Bulk-industrial, unmodified. Source: Milling & Baking News Table 7--U.S. imports by country of origin ----------------------------------------------------------------------------- Country/region ------1999/2000- ------2000/2001---- 2001/2002 Mkt. yr. June Mkt. yr. June June ----------------------------------------------------------------------------- OATS --------------------Thousand tons--------------------- Canada 1,287 45 1,466 58 30 Finland 125 24 103 0 28 Sweden 276 65 257 0 0 Total 1/ 1,703 134 1,827 58 58 BARLEY, MALTING Canada 543 40 585 48 84 Total 1/ 543 40 585 48 84 BARLEY, OTHER 2/ Canada 60 2 51 4 0 Total 1/ 60 2 51 4 0 ----------------------------------------------------------------------------- 1/ Totals may not add due to rounding. 2/ Mainly consists of barley for feeding, and also includes seed barley. Source: Bureau of the Census Table 8--U.S. feed grain exports by selected destinations 1/ ----------------------------------------------------------------------------- Country/region ------1998/99--- ------1999/2000---- 2000/2001 Mkt. yr. Sep.-June Mkt. yr. Sep.-June Sep.-June ----------------------------------------------------------------------------- CORN Japan 15,224 12,496 15,149 12,833 12,050 Taiwan 4,365 3,529 5,036 4,333 3,892 Mexico 5,387 4,776 4,832 4,172 4,942 Egypt 3,586 2,880 3,790 2,678 2,817 S. Korea 6,462 5,052 3,134 2,562 2,052 Colombia 1,512 1,281 1,782 1,477 1,287 Saudi Arabia 1,182 1,043 1,164 936 797 Venezuela 1,288 1,032 1,073 848 860 Algeria 955 760 1,042 776 1,041 Dominican Republic 777 641 1,003 812 817 Canada 867 588 982 699 2,080 Turkey 692 580 874 779 497 Israel 399 323 695 563 572 Iran 0 0 611 551 144 Morocco 599 432 604 465 382 Syria 354 205 603 421 382 Chile 486 392 542 517 33 Tunisia 441 363 519 410 367 Sub-Saharan Africa 441 297 511 481 113 Former USSR 405 245 491 486 96 Peru 674 587 458 430 116 EU 192 192 141 86 13 China 259 204 58 58 0 East Europe 12 12 35 35 0 Others 3,667 2,887 3,967 3,042 3,498 Total 50,228 40,798 49,098 40,450 38,848 SORGHUM Mexico 3,103 2,487 4,824 3,995 4,397 Japan 1,362 1,197 1,123 1,023 759 EU 197 197 181 179 0 Others 237 228 239 185 170 Total 4,899 4,109 6,366 5,381 5,327 --------------------------------------------------------- ------1999/2000- ------2000/2001---- 2001/2002 Mkt. yr. June Mkt. yr. June June BARLEY --------------------------------------------------------- Japan 391 85 388 22 62 Mexico 104 6 113 4 1 Jordan 50 0 0 0 0 Saudi Arabia 0 0 416 0 0 Taiwan 5 0 57 0 0 Other 107 4 279 3 11 Total 657 95 1,253 30 74 ----------------------------------------------------------------------------- 1/ Totals may not add due to rounding. Source: Bureau of the Census END_OF_FILE