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World Agricultural Supply and Demand Estimates - August 2010

18 August 2010

USDA Foreign Agricultural Service

Whilst slaughter of cattle is expected to increase, lower carcase weights mean that beef production is expected to be slightly lower than estimated. Milk production is expected to increase, as herds increase and cows productivity increases, according to the USDA World Agricultural Supply and Demand Estimates for August 2010.

Livestock, Poultry and Dairy

Total US meat production forecasts for 2010 and 2011 are reduced slightly from last month. Beef production for 2010 is reduced on slightly lower estimated second quarter output and forecast lighter average carcase weights in the third quarter that more than offset slightly higher slaughter. For 2011, beef production is unchanged but is shifted between quarters as more cattle are expected to be marketed in the first part of the year. Pork production in late 2010 and 2011 is reduced on lower expected imports of live swine from Canada. Broiler meat and turkey production for 2010 reflects slightly higher estimated second quarter production. Forecast poultry meat production for the remainder of 2010 and 2011 is unchanged. Cattle, hog, and poultry prices are little changed from last month.

Beef imports are raised for 2010 based on the current pace of imports and weakening domestic cow slaughter. Export forecasts for beef, pork, and broilers are raised, partly reflecting strong recent shipments. Stronger demand from a number of markets is expected to support higher exports through the remainder of this year and into next year.

Forecast milk production for 2010 and 2011 is raised from last month. Producers continue to add cows to the herd and the rate of growth in milk per cow has increased. Exports for 2010 and 2011 are raised sharply as June exports were strong, global supplies remain relatively tight, and demand in a number of markets is expected to support higher than previously forecast sales. However, sales in 2011 will be dampened by increased competition.

Strong demand for butter and cheese resulted in higher forecast prices for 2010 but the prices for nonfat dry milk (NDM) and whey are lowered from last month. The Class III price forecast for 2010 is raised as the higher cheese price more than offsets the lower whey price, but the Class IV price forecast is reduced as the lower NDM price more than offsets the higher butter price. For 2011, cheese, NDM, and whey price forecasts are reduced but butter is raised. For 2011, the Class III and Class IV price forecasts are lowered. The all milk price is forecast to average $15.90 to $16.10 per cwt for 2010 and $15.55 to $16.55 per cwt for 2011.

Wheat

US wheat ending stocks for 2010/11 are lowered this month as higher expected exports more than offset an increase in forecast production and lower projected feed and residual use. Production is forecast 49 million bushels higher mostly reflecting higher yields for durum and other spring wheat, especially in the Northern Plains. Winter wheat production is also raised slightly as higher yields in the Northern Plains and Pacific Northwest more than offset reductions in the eastern Corn Belt. Feed and residual use is lowered 10 million bushels as rising values have priced wheat out of feed rations. Exports are projected 200 million bushels higher with declines in foreign production, particularly in the FSU-12, reducing global supplies and making US wheat competitive in key Middle East and North Africa markets. US ending stocks are projected 141 million bushels lower from last month, and down 21 million from 2009/10. The 2010/11 season-average farm price is projected at $4.70 to $5.50 per bushel, up 50 cents on both ends of the range.

Several changes are made to US supply and use estimates for 2009/10 based on the latest US Bureau of Census trade and mill grind data and revisions. Exports are raised 16 million bushels and imports are raised 4 million bushels. Food use is lowered 3 million bushels. Thus, feed and residual is estimated 10 million bushels lower.

Global wheat supplies for 2010/11 are reduced sharply with world production lowered 15.3 million tons, mostly on reductions for FSU-12 and EU-27 countries. Production for Russia is lowered 8.0 million tons as continued extreme drought and record heat during July and early August have further reduced summer crop prospects. Kazakhstan production is lowered 2.5 million tons reflecting the same adverse weather conditions as in Russia. Ukraine production is lowered 3.0 million tons as heavy summer rains damaged maturing crops and hampered harvesting in western and southern growing areas. Harvest results also support indications that producers reduced input use in response to limits on available capital. EU-27 production is lowered 4.3 million tons with yields reduced for northwestern Europe on untimely heat and dryness. Yields are lowered for southeastern Europe as heavy rains from the same weather pattern that affected Ukraine reduced output. Production is also lowered for Algeria, Brazil, Uruguay, Belarus, and Croatia. Partially offsetting are increases for India, the United States, Australia, and Uzbekistan.

World wheat imports and exports are reduced sharply as tighter supplies and higher prices reduce projected global consumption. Imports are projected 5.7 million tons lower as higher prices reduce demand in a number of countries. Exports are lowered 12.0 million tons for Russia partly reflecting the recent announcement banning exports through December. Also limiting Russia export prospects is higher expected wheat feeding with drought-reduced forage and coarse grain crops and policy goals aimed at increasing domestic meat production. Exports for Kazakhstan and Ukraine are lowered 2.0 million tons each with sharply lower production. Higher exports from other countries partly offset FSU-12 declines. Exports are raised 1.2 million tons for China, 1.0 million tons each for Australia and EU-27, and 0.9 million tons for Turkey. The 5.4-million-ton increase projected for US exports is expected to offset the largest share of the decline from FSU-12.

Global ending stocks are projected 12.3 million tons lower. At 174.8 million tons, world stocks are projected 49.9 million tons higher than in 2007/08 when prices soared to record levels.

Coarse Grains

Projected US feed grain supplies for 2010/11 are raised this month as higher forecast production for corn and sorghum more than offset lower corn carryin. Beginning stocks for corn are projected 52 million bushels lower reflecting higher expected exports, corn use for sweeteners and starch, and a small reduction in projected imports for 2009/10. Corn production for 2010/11 is forecast 120 million bushels higher. The survey-based yield forecast of 165.0 bushels per acre is up 1.5 bushels from last month’s projection and 0.3 bushels above last year’s record.

Domestic corn use for 2010/11 is raised 30 million bushels reflecting higher expected corn use for sweeteners and starch. Exports are projected 100 million bushels higher as tighter foreign supplies of wheat and coarse grains raise prospects for US corn shipments. Despite higher production, ending stocks are projected down 61 million bushels at 1.3 billion, the lowest in 4 years. The season-average farm price is raised 5 cents on each end of the range to $3.50 to $4.10 per bushel. Similar price increases are projected for the other feed grains.

Other 2010/11 feed grains changes include higher sorghum and barley production with higher forecast yields. Sorghum feed and residual use is projected 15 million bushels higher with larger supplies. Sorghum exports are raised 10 million bushels with higher expected demand from Mexico.

Global coarse grain supplies for 2010/11 are projected 10.6 million tons lower with reduced foreign production more than offsetting higher US output. More than half of the reduction in foreign coarse grain production is for barley. Barley production is lowered 3.0 million tons for Russia as extended drought and extreme heat sharply reduce yield potential for spring barley. EU-27 barley production is lowered 1.5 million tons on untimely dryness and heat in northwest Europe and excessive rains in eastern Europe. Barley production is lowered 1.5 million tons for Ukraine, 0.6 million tons for Algeria, and 0.5 million tons for Kazakhstan. Global corn production is lowered 0.8 million tons with Russia and Ukraine each lowered 1.5 million tons and EU-27 lowered 1.0 million tons. These reductions more than offset higher production in the United States. Global rye and oats production are lowered 1.3 million tons and 0.7 million tons, respectively, on reductions for Russia, EU-27, and Ukraine.

Global coarse grain imports are raised this month with increases for corn in China, EU-27, South Korea, and Israel, supporting higher expected corn feeding in each country. In EU-27, South Korea, and Israel, corn is expected to replace higher priced wheat in feed rations. Barley feeding is also raised for EU-27 replacing wheat. By contrast, coarse grain feeding is lowered 3.7 million tons for Russia with wheat expected to partly replace barley, corn, oats, and rye in livestock and poultry feeding. Offsetting reduced coarse grain exports from Ukraine and Russia are higher barley exports from EU-27 and Australia and higher corn exports from the United States. Global coarse grain ending stocks are lowered 8.1 million tons with corn ending stocks down 1.9 million. EU-27 barley ending stocks are down 4.0 million tons accounting for most of the rest. Coarse grain and corn ending stocks are both expected to remain well above their recent lows in 2006/07.

Rice

US total rice supplies for 2010/11 are projected at a record 299.8 million cwt, down 9.6 million from last month, but up 29.9 million from the previous year. Beginning stocks, imports, and production are lowered from a month ago. US beginning stocks for 2010/11 are lowered 4.5 million cwt to 33.9 million because of changes made to the 2009/10 supply and use balance. USDA's first survey-based forecast of the 2010/11 US rice crop is a record 245.9 million cwt, down 4.1 million from last month's projection, but up 26.0 million from 2009/10. Average yield is forecast at 7,039 pounds per acre, down 118 pounds per acre from last month’s trend-based projection, and a decrease of 46 pounds per acre from last year. Area harvested at 3.5 million acres is unchanged from a month ago. Long-grain production is forecast at a record 187.2 million cwt, down 2.8 million from last month, while combined medium- and short-grain production is forecast at 58.6 million, down 1.4 million from a month ago. The import projection is lowered 1.0 million cwt to 20.0 million based mostly on the revised estimate for 2009/10, indicating slower growth.

US total rice use for 2010/11 is projected at a record 243.0 million cwt, up 1.0 million cwt from last month, and an increase of 7.0 million from 2009/10. Domestic and residual use is unchanged from last month. The export projection is raised 1.0 million cwt from last month to 114.0 million based mostly on large food aid announcements for shipment early in the marketing year. The makeup of the export projection is changed from last month, as the combined milled- and brown-rice export projection is raised 5.0 million cwt, and the rough rice export projection is lowered 4.0 million cwt. The long-grain export projection is raised 1.0 million cwt to 80.0 million, and the combined medium- and short-grain estimate is unchanged from a month ago. US rice ending stocks for 2010/11 are estimated at 56.8 million cwt, down 10.6 million from last month, but up 22.9 million from the previous year, and the highest stocks since 1985/86. The all rice and by-class prices for 2010/11 are unchanged from a month ago.

The US 2009/10 export estimate is raised 4.0 million cwt to 109.0 million based on US Census data through June and US Export Sales data through 29 July. Long-grain exports are raised 2.5 million cwt to 74.5 million, and combined medium- and short-grain exports are raised 1.5 million to a record 34.5 million. Additionally, the 2009/10 import estimate is lowered 0.5 million cwt to 19.5 million, based on Census data through June. The changes in 2009/10 trade led to a corresponding reduction in 2009/10 ending stocks.

Projected global 2010/11 total supplies are raised from a month ago primarily due to an increase in beginning stocks, while production and imports are nearly the same as last month. The increase in beginning stocks of 5.5 million tons is due primarily to an increase in India’s 2009/10 rice crop combined with a reduction in estimated domestic and residual use—both estimates are based on a recently received report from the Agricultural Counselor’s office in New Delhi. India’s 2009/10 rice crop is estimated at 89.1 million tons, up 1.6 million from last month, and domestic consumption and residual is estimated at 85.4 million, down 3.9 million from the July estimate. Global rice production for 2010/11 is projected at a record 459.2 million tons, nearly the same as a month ago. Global consumption is raised from a month ago largely due to an increase for India. World ending stocks for 2010/11 are projected at 97.5 million tons, up 0.9 million from last month, largely the result of upward revisions for Bangladesh, Burma, India, and Turkey.

Oilseeds

US oilseed production for 2010/11 is projected at 103.3 million tons, up 2.6 million from last month as higher soybean and cottonseed production are only partly offset by lower peanut production. Soybean yields are forecast at 44.0 bushels per acre, 1.1 bushels above last month=s trend yield projection, and equal to last year=s record yield. The first survey-based forecast of US soybean production is a record 3.4 billion bushels, 88 million above the July projection, and 74 million above last year=s crop. Projected soybean exports are raised 65 million bushels to 1.435 billion. The sharp increase in exports reflects strong export sales, especially to China, stronger projected import demand for China, and reduced soybean stocks in South America at the beginning of the 2010/11 marketing year. China soybean imports are raised to 49.5 and 52 million tons, respectively for 2009/10 and 2010/11. Soybean crush is raised 5 million bushels to 1.65 billion reflecting a small increase in domestic soybean meal demand. Soybean ending stocks are projected at 360 million bushels, unchanged from July.

Soybean and product prices all increased this month. The US season-average soybean price for 2010/11 is projected at $8.50 to $10.00, up 40 cents on both ends of the range. Soybean meal prices are projected at $250 to $290 per short ton, up $10.00 on both ends of the range. Soybean oil prices are projected at 36.5 to 40.5 cents per pound, up 2.5 cents on both ends of the range.

Global oilseed production for 2010/11 is projected at 439.7 million tons, down 1 million from last month. Reductions for sunflowerseed and rapeseed are mostly offset by higher soybean production. Sunflowerseed production is reduced by 1 million tons each for Russia and Ukraine. Persistent drought and excessive heat in July and early August sharply reduced yield potential for both countries. Rapeseed production is reduced for EU-27, Russia, Ukraine, and Belarus. Higher global soybean production reflects the larger US crop. Other changes include higher rapeseed production for Australia, lower sunflowerseed production in EU-27, lower cottonseed production for Pakistan, and increased cottonseed production for India.

US changes for 2009/10 include increased soybean crush and exports and lower ending stocks. Crush is raised 5 million bushels to 1.75 billion reflecting increased domestic soybean meal disappearance. Soybean exports are increased 10 million to a record 1.47 billion bushels. Soybean ending stocks are projected at 160 million bushels, down 15 million from last month. Soybean oil ending stocks are raised to 3.18 billion pounds reflecting sharply lower projected use for methyl ester production.

Sugar

Projected US sugar supply for fiscal year 2010/11 is increased 506,000 short tons, raw value, from last month, due to higher beginning stocks, production, and imports. Production is increased 100,000 tons due to higher than expected forecast US sugarbeet yields. Imports are increased 185,000 tons to reflect lower tariff rate quota (TRQ) shortfall and the announced refined specialty sugar quota. Sugar use is increased 200,000 tons in line with the increase for 2009/10.

For 2009/10, US supplies are increased 341,000 tons, due to higher beginning stocks, production, and imports. Beginning stocks are increased 35,000 tons due to revisions in Sweetener Market Data. Cane sugar production is increased 6,000 tons based on processor reports. Imports are increased 300,000 tons: 50,000 tons less TRQ shortfall, 50,000 tons more re-export imports, and 200,000 tons from Mexico and high-tier imports. These import increases are driven by tight US supplies. Total use is increased 120,000 tons, reflecting revised estimates in Sweetener Market Data. Ending stocks are increased 221,000 tons.

For Mexico, 2010/11 ending stocks are lowered 95,000 metric tons, raw value, due to lower beginning stocks. Mexico's 2009/10 production is decreased slightly while exports are increased 90,000 tons; sugar use is unchanged.

Further Reading

- You can view the full report by clicking here.

August 2010

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