FEED OUTLOOK February 12, 1999 February 1999, ERS-FDS-0299 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- FEED OUTLOOK is issued eleven times a year by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. Electronic release only; no published copies are available. --------------------------------------------------------------------------- HIGHLIGHTS o U.S. Corn Export Forecast Increased 25 Million Bushels; World Trade Up o Corn Ending Stocks Projected at 1,786 Million Bushels o USDA Livestock Revisions Change Index of Roughage Consuming Animal Units OUTLOOK FOR FEED GRAINS SHOWS LITTLE CHANGE There were few changes in 1998/99 U.S. supply and use forecasts this month. The most important of these was a 25-million bushel increase in corn exports discussed below. The U.S. corn import forecast was also raised 2 million bushels to 12 million, reflecting larger shipments from Canada. Changes for the other feed grains were small this month. Forecast U.S. sorghum exports were reduced 10 million bushels to 185 million, largely because of expectations of weaker sales to Japan. This is down from 212 million bushels in 1997/98, and the lowest since 1985/86. In addition, the forecast of U.S. oats imports was increased 5 million bushels because of prospects for larger imports from Scandinavia. U.S. feed grain supplies in 1998/99 are up nearly 8 percent from the year before to 312 million metric tons due to larger carryin stocks and higher production. Total use is forecast to rise 4 percent to 261 million tons as domestic use charges to a record for the second straight year and exports increase modestly from the depressed level of 1997/98. With the increase in supply outstripping gains in use, stocks will build again, and ending stocks are projected at 51 million tons, the highest since 1992/93. Feed grain prices remain weak and are not expected to strengthen significantly in the next few months. PROJECTION OF CORN ENDING STOCKS REDUCED Ending stocks of corn in 1998/99 are projected at 1,786 million bushels, down 23 million from last month. This reflects the 25 million bushel increase in exports and 2-million-bushel rise in imports. However, compared with the year before, stocks are expected to be 37 percent higher. The ratio of stocks to use is projected at 19.2 percent, up from 14.9 in 1997/98. Incorporation of final November trade data into the corn balance sheet led to virtually no change in quarterly disappearance estimates for September-November. Feed and residual use of corn was 2,129 million bushels, up 5 percent from the same period the year before, and record high for any quarter. Food, seed, and industrial (FSI) use, estimated at 444 million bushels, was record high for the September-November quarter. HISTORICAL LIVESTOCK REVISIONS CHANGE RCAU'S With the release of the 1997 Census of Agriculture, the National Agricultural Statistics Service has revised its livestock and poultry numbers. There are still some reports to be released but those released last month have changed the indexes for grain consuming animal units (GCAU's)and roughage consuming animal units (RCAU's). For instance, the roughage consuming animal units for 1996/97 increased 370,000 units (less than 1 percent), 1997/98 increased 410,000 units (rounding up to 1 percent), and 1998/99 increased 700,000 units (almost a 1-percent increase from last month). In January, hay stocks for December 1, 1998, were reported at 112 million tons, up from 103 million the year before. Using the revised RCAU's, hay stocks per RCAU in 1998/99 are 1.5 tons, up from 1.4 tons in 1997/98. The 1998/99 December 1 hay stocks per RCAU are approaching the record high of 1.6 tons in 1987/88, and are the third highest on record. Plentiful stocks per RCAU help explain the weakness in hay prices relative to last year. In January 1999, prices received by farmers for all hay were $78.80 per ton, down from $94.70 in January 1998. Given current estimates of livestock numbers and hay stocks, hay prices will likely remain weak during the remainder of the marketing year. FEED AND RESIDUAL USE REMAINS STRONG Feed and residual use of the four feed grains plus wheat in 1998/99 is expected to increase 1 percent from the 164 million metric tons used in September 1997-August 1998. Feed and residual use in September-November 1998 was up 4 percent from a year earlier. Corn accounted for 94 percent of feed and residual use in September-November 1998 and is expected to represent 87 percent of feed and residual use for all of 1998/99. The index of grain consuming animal units (GCAU's) for 1998/99 is expected to be nearly the same as 1997/98's 88 million. The grain used per GCAU in 1998/99 would be 1.90 tons, up 2 percent from 1997/98. In the index components in 1998/99, GCAU's for hogs, broilers and layers are up from the previous year. The total number of cattle on feed on January 1, 1999, was 13.2 million head, down from 13.6 million the previous year. In the first half of 1998, the calf crop was down 1 percent from the same period a year earlier but in the second half, the calf crop was down 2 percent. Feeder cattle supplies outside feedlots were down less than 1 percent on January 1. Thus, placements of cattle on feed are likely to be down slightly in 1999 compared with 1998 and feed needs would be slightly less. Pork production in 1999 is expected to decline less than 1 percent from the 19 billion pounds produced in 1998, which was up 10 percent from 1997. Hog farmers responding to the December 1997 survey indicated that they intended to decrease the number of sows farrowing in December 1998-May 1999 by 4 percent relative to the prior year. If these intentions are realized, feed needs could be reduced in the fall of 1999, after the end of the 1998/99 feeding year. Broiler and egg production in 1999 are expected to increase from the expected 1998 levels and maintain strong demand for feed grains. Broiler production is expected to increase 6 percent from 1998 as producers respond to strong domestic demand. In 1999, turkey production may decline 1 percent from the 5.2 billion pounds produced in 1998. Egg producers are expected to produce 6.8 billion dozen eggs in 1999, up 2 percent from 1998. With these increases in production, feed needs by the poultry sector are likely to remain strong. The total number of dairy cows on January 1, 1999, was 9.1 million head, down 1 percent from 1998. Dairy cow numbers are expected to continue to trail the previous year during 1999. But with increased production per cow, milk production in 1999 is expected to total 159.9 billion pounds, up from 156.9 billion in 1998. Thus, with the increased milk production per cow, feed use by the dairy industry will continue strong. U.S. CORN EXPORT PACE STRONG, 1998/99 FORECAST INCREASED THIS MONTH U.S. 1998/99 corn exports are forecast to reach 1,725 million bushels, up 25 million bushels this month. For September through the end of January, according to U.S. Export Sales, exports shipments were almost 20 percent ahead of last year, while outstanding sales were up almost 30 percent. Shipments to South Korea more than doubled. U.S. corn exports are forecast up 15 percent from last year, when the U.S. share of world trade dropped because of increased competition from Argentina, China, and Eastern Europe. This year, the U.S. share of global corn trade is expected to increase as these key competitors reduce exports. WORLD CORN TRADE UP 1.3 MILLION TONS THIS MONTH The United States is not the only corn exporter with a strong pace of corn export shipments during the first months of 1998/99. Hungary has shipped corn, especially to European destinations, at a strong pace, boosting the export forecast 400,000 tons to 1.2 million. In neighboring Romania, the production estimate was increased, and the early season exports supported this month's doubling of the corn export forecast to 400,000 tons. However, these export forecasts remain below a year ago. Record corn production in Canada, concentrated in Ontario, is leading to increased shipments to grain-deficit areas in the United States. This month, Canada's corn exports and U.S. corn imports are forecast up 200,000 tons. However, Canada is still expected to be a net importer of corn from the United States. Import forecasts were increased this month for several countries that have been purchasing corn at a faster pace than expected. South Korea's imports are up 500,000 tons this month to 7 million tons. Although domestic demand for meat has declined because of South Korea's macroeconomic problems, increased pork exports to Japan and credits to purchase corn from China and the United States have slowed the decline in corn imports. Japan's corn import forecast was also raised 500,000 tons this month because of faster than expected purchases, partly because of a switching from sorghum to corn. (The 1998/99 U.S. sorghum export forecast dropped 200,000 tons this month). Import forecasts for Malaysia and China also increased this month because of the pace of purchases, but prospects for Brazilian corn imports were reduced by devaluation and macroeconomic problems. World corn trade at 63 million tons in 1998/99 is now expected to be about the same as a year earlier, but remains 7 percent less than the 1994/95-96/97 average, and about 25 percent less than the 1980/81 record. **************************************************************** Information Contacts: Pete Riley (202) 694-5308 Allen Baker (202) 694-5290 International: Edward Allen (202) 694-5288 Data Coordinator: Jenny Gonzales (202) 694-5296 The next Feed Outlook will be released March 15, 1999. Note: The table that contained transportation data, (Table 3- Grain shipments and rates) has been eliminated because the data series has been discontinued. For available transportation data, refer to Table 37 in the Agricultural Outlook magazine, published 10 times a year by ERS and available on the ERS website at www.econ.ag.gov. For more transportation data and information, see the Grain Transportation Report, published weekly by USDA, AMS, available on the Internet at www.ams.usda.gov/tmd/grain.htm *************************************************************** 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 1996/97 Sep-Nov 426 9,233 3 9,662 383 1,890 487 2,759 6,903 2.87 Dec-Feb 6,903 --- 2 6,905 394 1,492 525 2,411 4,494 2.66 Mar-May 4,494 --- 4 4,498 465 1,105 431 2,001 2,497 2.77 Jun-Aug 2,497 --- 4 2,500 450 814 353 1,617 883 2.49 Mkt. yr. 426 9,233 13 9,672 1,692 5,302 1,795 8,789 883 2.71 1997/98 Sep-Nov 883 9,207 2 10,092 429 2,036 380 2,845 7,247 2.53 Dec-Feb 7,247 --- 1 7,248 418 1,510 380 2,308 4,940 2.55 Mar-May 4,940 --- 4 4,944 464 1,089 350 1,904 3,040 2.45 Jun-Aug 3,040 --- 2 3,042 470 870 394 1,734 1,308 2.12 Mkt. yr. 883 9,207 9 10,099 1,782 5,505 1,504 8,791 1,308 2.43 1998/99 Sep-Nov 1,308 9,761 4 11,073 444 2,129 450 3,023 8,050 1.91 Mkt. yr.1,308 9,761 12 11,081 1,870 5,700 1,725 9,295 1,786 1.80-2.10 SORGHUM 1996/97 Sep-Nov 18 795 0 814 15 276 56 346 467 2.45 Dec-Feb 467 --- 0 467 15 119 59 193 274 2.26 Mar-May 274 --- 0 274 10 85 61 155 119 2.41 Jun-Aug 119 --- 0 119 6 37 29 72 47 2.27 Mkt. yr. 18 795 0 814 45 516 205 766 47 2.34 1997/98 Sep-Nov 47 634 0 681 18 239 49 307 374 2.26 Dec-Feb 374 --- 0 374 18 38 83 139 235 2.24 Mar-May 235 --- 0 235 12 71 55 139 96 2.16 Jun-Aug 96 --- 0 96 6 17 24 47 49 2.08 Mkt. yr. 47 634 0 681 55 365 212 632 49 2.21 1998/99 Sep-Nov 49 520 0 569 15 180 41 235 334 1.68 Mkt. yr. 49 520 0 569 45 275 185 505 64 1.55-1.85 ------------------------------------------------------------------------------ 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 1996/97 Jun-Aug 100 392 9 501 44 136 7 187 314 3.11 Sep-Nov 314 --- 8 322 39 25 12 76 246 2.74 Dec-Feb 246 --- 8 254 37 38 7 82 173 2.55 Mar-May 173 --- 11 184 53 18 4 75 109 2.33 Mkt. yr. 100 392 37 529 172 217 31 419 109 2.74 1997/98 Jun-Aug 109 360 12 482 44 87 24 155 327 2.31 Sep-Nov 327 --- 7 334 39 12 39 90 244 2.45 Dec-Feb 244 --- 8 252 37 29 6 72 180 2.42 Mar-May 180 --- 13 193 53 16 5 74 119 2.26 Mkt. yr. 109 360 40 510 172 144 74 390 119 2.38 1998/99 Jun-Aug 119 352 7 479 44 101 8 153 326 2.02 Sep-Nov 326 --- 7 333 39 24 8 71 262 1.97 Mkt. yr. 119 352 30 502 172 185 30 387 115 1.90-2.00 OATS 1996/97 Jun-Aug 66 153 6 226 24 69 1.0 94 132 2.08 Sep-Nov 132 --- 39 171 22 22 0.8 45 126 1.84 Dec-Feb 126 --- 28 154 20 37 0.3 58 96 1.79 Mar-May 96 --- 24 120 29 24 0.4 53 67 1.88 Mkt. yr. 66 153 97 317 95 153 2.5 250 67 1.96 1997/98 Jun-Aug 67 167 19 253 24 74 0.4 98 155 1.62 Sep-Nov 155 --- 38 193 22 26 0.7 49 144 1.54 Dec-Feb 144 --- 26 170 20 38 0.5 59 111 1.59 Mar-May 111 --- 15 127 29 23 0.5 53 74 1.60 Mkt. yr. 67 167 98 332 95 161 2.1 258 74 1.60 1998/99 Jun-Aug 74 167 28 269 24 83 0.5 107 162 1.15 Sep-Nov 162 --- 36 198 22 32 0.4 54 143 1.08 Mkt. yr. 74 167 105 346 95 165 2.0 262 84 1.10-1.20 ------------------------------------------------------------------------------ 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. 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 1996/97 Sep-Nov 48.0 7.0 0.5 0.4 56.0 -2.1 53.9 Dec-Feb 37.9 3.0 0.8 0.6 42.4 0.8 43.2 Mar-May 28.1 2.1 0.4 0.4 31.0 -0.7 30.4 Jun-Aug 20.7 0.9 1.9 1.1 24.6 9.6 34.2 Mkt. yr. 134.7 13.1 3.6 2.6 154.0 7.7 161.7 85.3 1.89 % Change 12.6 74.8 -17.9 1.0 14.9 24.8 15.3 0.4 14.9 1997/98 Sep-Nov 51.7 6.1 0.3 0.5 58.5 -3.1 55.5 Dec-Feb 38.3 1.0 0.6 0.6 40.6 -0.0 40.5 Mar-May 27.7 1.8 0.3 0.4 30.2 0.3 30.5 Jun-Aug 22.1 0.4 2.2 1.3 26.0 11.6 37.6 Mkt. yr. 139.8 9.3 3.4 2.8 155.3 8.8 164.1 87.8 1.87 % Change 3.8 -29.2 -5.4 6.6 0.8 14.1 1.5 2.8 -1.3 1998/99 Sep-Nov 54.1 4.6 0.5 0.6 59.7 -2.0 57.7 Mkt. yr. 144.8 7.0 4.6 2.7 159.0 7.5 166.5 87.7 1.90 % Change 3.5 -24.7 32.0 -1.3 2.4 -14.9 1.5 -0.0 1.5 ------------------------------------------------------------------------------ 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 $/bu 94/95 2.34 2.78 4.75 4.62 2.02 2.75 1.36 95/96 3.91 4.30 7.30 7.19 2.67 3.69 2.28 96/97 2.74 3.07 5.02 5.03 2.32 3.18 2.03 97/98 2.45 2.78 4.72 4.76 1.90 2.50 1.70 Monthly: 1997: Sep 2.61 2.88 4.81 4.69 2.29 2.74 1.78 Oct 2.66 3.05 4.91 5.16 2.05 2.74 1.75 Nov 2.70 2.98 4.91 5.09 1.98 NQ 1.65 Dec 2.60 2.89 4.82 5.02 1.66 NQ 1.71 1998: Sep 1.78 2.18 3.83 3.84 NQ NQ 1.30 Oct 1.94 2.43 4.01 4.00 NQ NQ 1.29 Nov 2.09 2.47 4.14 4.15 NQ NQ 1.32 Dec 2.08 2.42 3.94 4.12 NQ NQ 1.31 ------------------------------------------------------------------------------ 1/ Marketing year beginning September 1. 2/ Marketing year beginning June 1. NQ = No quote. Table 4--Selected feed and feed by-product prices ------------------------------------------------------------------------------ Soybean Cotton- Corn Corn Meat & Dists.' Wheat Alfalfa meal seed gluten gluten bone dried midlgs, farm 44% slv. meal, feed, meal, meal, grains, Kansas price Decatur, 41% slv. IL IL Central Lawrence- City IL Memphis pts. pts. U.S. burg, IN 1/ 1/ 1/ 1/ 1/ 1/ 1/ 2/ ------------------------------------------------------------------------------ ------------------------------$/ton----------------------------------- Mkt. yr. 94/95 151.77 112.64 82.77 221.95 170.51 106.70 65.04 92.10 95/96 217.27 186.12 116.47 319.35 222.07 151.37 118.08 87.20 96/97 260.37 191.47 93.05 341.50 272.44 142.87 91.18 101.80 97/98 186.55 150.40 69.65 290.45 192.56 109.76 76.30 107.00 Monthly: 1997: Sep 265.70 192.00 81.10 355.00 272.10 130.00 80.30 106.00 Oct 216.00 189.10 73.75 343.75 260.40 128.75 89.40 106.00 Nov 231.60 189.10 73.25 351.25 221.10 133.00 101.50 107.00 Dec 214.90 190.50 78.20 350.50 226.60 125.80 91.70 102.00 1998: Sep 126.90 115.60 51.50 210.00 133.40 NQ 43.90 89.10 Oct 129.40 106.50 56.90 227.50 141.30 75.00 49.00 88.10 Nov 139.30 107.90 66.10 313.10 154.00 74.00 60.00 85.00 Dec 139.60 119.75 74.40 291.00 151.20 78.00 68.10 81.40 ------------------------------------------------------------------------------ 1/ Marketing year beginning September 1. NQ = No quote. 2/ Marketing year beginning May 1. 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 1996/97 Sep-Nov 113.2 60.0 55.0 91.9 29.0 33.6 382.6 Dec-Feb 110.7 56.3 55.1 106.2 33.0 33.2 394.4 Mar-May 134.8 64.0 59.5 119.2 34.0 33.9 445.4 Jun-Aug 145.1 65.5 59.1 111.4 34.0 33.9 449.0 Mkt year 503.8 245.8 228.6 428.7 130.0 134.6 1,671.5 1997/98 Sep-Nov 122.8 63.4 59.6 116.1 33.2 34.0 429.1 Dec-Feb 116.8 56.2 56.7 122.2 32.8 33.6 418.3 Mar-May 139.4 60.7 58.3 118.3 33.5 34.4 444.5 Jun-Aug 153.4 64.7 58.9 124.6 33.5 34.4 469.4 Mkt year 532.3 244.9 233.5 481.1 133.0 136.5 1,761.2 1998/99 Sep-Nov 127.6 60.5 57.8 132.4 30.6 34.8 443.7 Mkt year 560.0 240.0 235.0 550.0 125.0 139.7 1,849.7 ------------------------------------------------------------------------------ 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/ 94/95 13.22 10.67 25.62 12.27 12.43 95/96 17.79 14.21 25.50 13.01 15.98 96/97 16.94 12.85 25.50 13.15 13.83 97/98 2/ 15.94 11.85 28.08 7.77 13.55 Monthly 1997: Oct 16.73 12.63 25.50 8.30 13.70 Nov 16.50 12.40 25.50 8.30 13.80 Dec 16.26 12.16 25.50 8.30 14.05 Jan 16.02 11.92 25.50 8.50 13.63 1998: Oct 14.89 10.99 30.65 7.40 11.71 Nov 15.07 10.97 30.65 7.65 11.32 Dec 14.91 10.81 30.65 7.83 11.32 Jan 2/ 15.10 11.00 30.65 7.95 11.17 ------------------------------------------------------------------------------ 1/ Marketing year beginning September 1. 2/ Preliminary. 3/ Bulk-industrial, unmodified. Table 7--U.S. imports by country of origin ------------------------------------------------------------------------------ Country/region ------1996/97--- ------1997/98------ 1998/99 Mkt. yr. Jun-Nov Mkt. yr. Jun-Nov Jun-Nov ------------------------------------------------------------------------------ OATS --------------------Thousand tons--------------------- Canada 1,440 779 1,282 910 770 Finland 99 0 161 51 111 Sweden 140 0 176 22 212 Total 1/ 1,680 779 1,696 983 1,094 BARLEY, MALTING Canada 608 294 733 362 247 Total 1/ 609 294 733 362 247 BARLEY, OTHER 2/ Canada 191 81 112 68 66 Total 1/ 192 81 143 68 66 ------------------------------------------------------------------------------ 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 ------1996/97--- ------1997/98------ 1998/99 Mkt. yr. Sep-Nov Mkt. yr. Sep-Nov Sep-Nov ------------------------------------------------------------------------------ CORN Japan 14,821 3,412 14,497 3,913 3,339 Taiwan 5,482 1,215 3,758 1,151 1,118 Former USSR 184 59 23 22 0 South Africa 81 0 0 0 0 Sub-Saharan Africa 272 41 336 32 68 EU 1,704 145 135 3 129 Egypt 2,292 640 1,808 572 693 Canada 833 285 1,423 385 251 China 53 53 212 0 154 East Europe 385 312 19 19 0 Algeria 869 265 861 263 231 S. Korea 5,369 1,968 3,484 602 1,172 Mexico 3,155 1,064 4,116 647 1,281 Others 10,081 2,886 7,444 2,017 2,977 Total 45,581 12,344 38,117 9,628 11,412 SORGHUM Mexico 2,111 578 3,222 473 573 Japan 2,102 569 1,650 700 380 Others 948 270 463 73 35 Total 5,161 1,417 5,334 1,246 988 ---------------------------------------------------------- ------1996/97--- ------1997/98------ 1998/99 Mkt. yr. Jun-Nov Mkt. yr. Jun-Nov Jun-Nov BARLEY ---------------------------------------------------------- Saudi Arabia 88 32 922 908 0 Israel 28 28 0 0 0 Jordan 50 50 53 53 0 Japan 175 93 290 211 237 Mexico 182 129 124 68 50 Taiwan 35 35 94 60 0 Other 220 61 135 76 64 Total 779 428 1,617 1376 351 ------------------------------------------------------------------------------ 1/ Totals may not add due to rounding. Source: Bureau of the Census END_OF_FILE