World Agricultural Supply and Demand Estimates - March 2010

Carcase weights appear lower likely due to winter weather causing stress to cattle, according to the USDA World Agricultural Supply and Demand Estimates. Tighter meat supplies are expected to push beef prices up. Milk production is likely to increase fractionally, as the number of cows slaughtered and herd reduction falls.
calendar icon 14 March 2010
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Total US meat production for 2010 is reduced as lower pork and turkey production more than offset higher broiler production. Beef production is little changed as higher first-quarter steer and heifer slaughter is offset by lower carcase weights. Winter weather has stressed cattle in many parts of the country which is reflected in lighter carcase weights. Pork production is lowered as slaughter in the first and second quarters are reduced and weights during the first quarter have been lighter than expected. USDA will release the Quarterly Hogs and Pigs report on March 26, which will provide an indication of producer responses to moderating feed prices and improved hog prices. The turkey production forecast is reduced. Relatively weak turkey prices in 2009 reduced incentives to expand production and hatchery data continues to point to lower production in 2010. Broiler production is forecast higher as hatchery and slaughter data point to larger production in the first quarter.

Export forecasts are unchanged from last month for the major meats. Although the recent resolution of pork sanitary issues will permit exports to Russia, exports to that market will be limited by import quotas.

Cattle, hog, and poultry price forecasts are raised for 2010 as tighter meat supplies are forecast this month.

The milk production forecast is raised for 2010 with milk production expected to be fractionally above 2009. Cow slaughter is relatively low and January milk cow numbers were higher than expected. The pace of herd reduction is slowed from last month. Dairy exports on both a fat and skim-solids basis for 2010 are lowered, due to slightly weaker-than-expected international demand during the early part of the year. Imports for 2009 are adjusted to reflect December trade. Fat and skim-solids ending stocks are forecast higher for 2010 as production is increased and exports are reduced. Cheese prices are reduced as higher stocks are expected to pressure prices. Butter price forecasts are raised slightly on the strength of current demand although higher milk supplies and weaker cheese prices may encourage higher butter production pressuring prices later in the year. Nonfat dry milk (NDM) prices are forecast lower as export demand lags. Whey prices are raised slightly reflecting recent market strength. The Class III price is reduced as weaker cheese prices more than outweigh gains in whey prices. The Class IV price forecast is lowered reflecting weaker NDM prices which more than offset higher butter prices. The all milk price for 2010 is forecast at $15.55 to $16.15 per cwt.


The US cotton estimates for 2009/10 include higher domestic mill use and lower ending stocks this month. Production and exports are unchanged. Domestic mill use is raised 100,000 bales to 3.5 million, reflecting higher consumption in the months of November through January. Ending stocks are forecast at 3.2 million bales, 20.6 percent of total use. The range for the marketing-year average price received by producers is raised 1.5 cents on the lower end and 0.5 cents on the higher end to 60.5 to 65.5 cents per pound.

A combination of slightly lower production and slightly higher consumption is reducing forecast world cotton 2009/10 ending stocks from last month. Production is reduced for China and Uzbekistan, but raised for Brazil and Turkmenistan. Consumption estimates are raised for Turkey, Vietnam, and the United States, partially offset by a reduction for Pakistan, which is based on a recent policy change to limit yarn exports. World trade is raised 2 percent, reflecting higher imports by China, Turkey, and Vietnam, which more than offset a decrease for Pakistan. World stocks are reduced nearly 700,000 bales, a decline of just over 1 percent from last month.


US wheat ending stocks for 2009/10 are projected 20 million bushels higher as a reduction in expected food use pushes ending stocks to 1 billion bushels. Projected food use is lowered 20 million bushels based on the latest mill grind data from the US Bureau of Census. High flour extraction rates for a second straight year are reducing the amount of grain needed to produce flour. At the same time, declining per capita consumption is reducing demand for flour and wheat. Exports of all wheat are unchanged, but hard red winter wheat exports are raised 10 million bushels with an offsetting reduction for white wheat. By-class adjustments reflect the pace of export sales and shipments to date. The projected marketing-year average farm price is raised 5 cents on both ends of the range to $4.80 to $5.00 per bushel as prices received by producers remain stronger than expected.

Global wheat supplies for 2009/10 are projected 2.1 million tons higher mostly reflecting higher beginning stocks in Russia and higher production in Argentina. Beginning stocks are raised 2.1 million tons for Russia with historical revisions to estimated feed use. Partly offsetting are small reductions in 2009/10 beginning stocks for a number of other countries reflecting minor revisions to 2008/09 supplies and usage. Argentina production for 2009/10 is raised 0.6 million tons on higher reported area. Partly offsetting is a 0.3-million-ton reduction in Saudi Arabia production based on lower reported area and yields. A number of other smaller changes leave global production up 0.6 million tons this month.

Global wheat imports and exports for 2009/10 are both raised this month. Imports are raised 0.4 million tons for Bangladesh and 0.3 million tons for South Korea with smaller increases for a number of other countries. Partly offsetting are small reductions in imports for Israel, Mexico, Tunisia, and Colombia. Exports are raised 0.5 million tons for Argentina and 0.2 million tons each for Brazil, India, and Serbia. Most of the trade adjustments this month reflect the pace of reported shipments to date. Global 2009/10 wheat consumption is raised 1.2 million tons with a 1.0-million-ton increase in China wheat feeding and a 0.8-million-ton increase in India food use. The reduction in US food use is partly offsetting. Global ending stocks are projected 0.9 million tons higher with larger stocks in Russia and the United States only partly offset by reductions elsewhere. At 196.8 million tons, 2009/10 world stocks are up 73.5 million tons or 60 percent from the recent low in 2007/08.


US feed grain supplies for 2009/10 are projected slightly lower with a downward revision in estimated corn production and a reduction in projected barley imports. Corn production is lowered 20 million bushels based on updated estimates of yields for Illinois and Minnesota, and harvested area for Michigan. US corn production remains a record at the revised estimate of 13.1 billion bushels. US corn exports are lowered 100 million bushels as larger foreign supplies increase competition. US corn ending stocks for 2009/10 are projected 80 million bushels higher with the downward revision in production more than offset by reduced export prospects.

The projected 2009/10 marketing-year average farm price for corn is lowered 20 cents on the top end of the range to $3.45 to $3.75 per bushel. Projected farm prices are also lowered for sorghum and oats. The all barley farm price is projected higher at $4.40 to $4.60 per bushel compared with $4.25 to $4.55 per bushel last month. Farmer marketings of higher priced malting barley make up a larger-than-normal share of total barley sales, compared with feed barley, boosting the weighted average price for all barley.

Global coarse grain supplies for 2009/10 are projected 5.7 million tons higher this month mostly reflecting larger global corn supplies. Coarse grain beginning stocks are raised 1.0 million tons with more than half of the increase from corn as an upward revision for 2008/09 production in Argentina and lower 2008/09 exports for South Africa boost world corn carryin for 2009/10. World coarse grain production for 2009/10 is raised 4.7 million tons with higher corn and sorghum production more than offsetting lower barley, rye, and mixed grain output.

World corn production for 2009/10 is raised 5.9 million tons with Argentina production increased 3.8 million and South Africa production increased 2.0 million. Harvested area and yield are raised for both countries as abundant soil moisture and lack of stressful heat during the past month supported crops through critical stages of development. Partly offsetting is a 0.5-million-ton reduction for India corn and the lower US corn production estimate. Global sorghum production is raised 0.6 million tons with increases for Argentina and India outweighing a reduction for Australia. Global barley production is lowered 1.2 million tons with reductions for China, Argentina, and Mexico. Lower world rye and mixed grain production reflect reductions for EU-27.

Global coarse grain imports and exports for 2009/10 are largely unchanged, but major shifts among exporters mostly reflect larger corn supplies in Argentina and South Africa. Corn exports are raised 2.5 million tons for Argentina and 1.0 million tons for South Africa. Corn exports are also raised 0.5 million tons for India. Mostly offsetting are corn export reductions of 1.0 million tons for Brazil and 2.5 million tons for the United States. Global corn exports are raised 0.7 million tons, but a 0.6-million-ton reduction in global barley exports is nearly offsetting. Barley exports are lowered for EU-27 and Argentina. Global consumption of coarse grains and corn, in particular, are little changed, raising ending stocks with the increase in production. Global corn ending stocks for 2009/10 are projected 6.1 million tons higher with increases in most of the world’s major corn exporting countries, including the United States, Argentina, South Africa, and Brazil.


No changes are made on the supply side of the US 2009/10 rice supply and use balance. On the use side, domestic and residual use is unchanged from a month ago; however, all rice exports for 2009/10 are lowered 1 million cwt to 100 million. Rough exports are raised 2 million cwt, while combined milled and brown exports (on a rough-equivalent basis) are lowered 3.0 million. Long-grain exports are lowered 1.0 million cwt to 69.0 million, while combined medium- and short-grain exports are unchanged at 31.0 million. All rice ending stocks are projected at 40.8 million cwt, 1.0 million above last month, and up 10.4 million from 2008/09.

The 2009/10 long-grain season-average price is projected at $12.70 to $13.20 per cwt, down 20 cents on each end of the range from last month. The combined medium- and short-grain price is projected at $17.45 to $17.95 per cwt, down 5 cents on each end of the range. The all rice season-average price is forecast at $13.90 to $14.40 per cwt, down 15 cents on both ends of the range. The price projections are based on the National Agricultural Statistics Service reported prices through mid-February and expected prices the remainder of the marketing year. Global prices have weakened over the last month due in part to a softening in import demand and an increase in available supplies of the major exporters.

Global 2009/10 rice production, consumption, trade, and ending stocks are increased from last month. The 4.0-million-ton increase in world production to 440.3 million is due mostly to increases for India and Bangladesh, up 2.5 million and 1.6 million, respectively. The production changes for both India and Bangladesh are based on information received in March from the Agricultural Counselor’s office in New Delhi and official in-country statistics. Small production increases are made in the European Union, Cuba, and Malaysia. Production is lowered slightly in Venezuela, Chile, and the Philippines. World consumption is projected at a record 440.6 million tons, up 3.4 million from last month, and up 1 percent from 2008/09. The increase in consumption is due mostly to increases for India, Bangladesh, and China. Vietnam’s 2009/10 exports are raised to 5.75 million tons, while China’s exports are lowered to 0.85 million. Imports are raised for the Philippines, Malaysia, Nigeria, and South Africa, but lowered for Saudi Arabia and India. Global ending stocks are lowered 1.6 million tons to 90.9 million due mostly to a reduction in China’s stocks. China’s 2009/10 ending stocks are estimated at 40.8 million tons, down 4.4 million from a month ago, and down about 0.5 percent from 2008/09. The changes in China’s supply and use balance for 2008/09 and 2009/10 are based mostly on a report from the Agricultural Counselor’s office in Beijing. The report raised domestic consumption in 2008/09 and 2009/10 by 4.0 million tons and 1.0 million, respectively. Partially offsetting the decline in China’s stocks are increases for India, Bangladesh, Malaysia, and the Philippines.


US soybean ending stocks for 2009/10 are projected at 190 million bushels, down 20 million from last month. Soybean production is estimated at 3.359 billion bushels, down 2 million from the January estimate as reported in the March Crop Production report. Soybean exports are raised 20 million bushels to a record 1.420 billion reflecting the strong export pace to date. Soybean crush is raised 10 million bushels to 1.730 billion based on a lower projected soybean meal extraction rate. Total soybean meal use remains unchanged as higher projected exports are offset by reduced domestic disappearance. Soybean oil stocks are projected higher due to increased production and lower domestic food use. Soybean oil used for biodiesel is unchanged at 2.2 billion pounds despite a drop in production in January resulting from the loss of the $1.00 per gallon blending tax credit at the end of 2009. Offsetting production gains are expected later in the year as diesel suppliers increase blending to meet biodiesel mandates.

The US season-average soybean price range for 2009/10 is narrowed to $8.95 to $9.95 per bushel. The soybean meal price is projected at $280 to $310 per short ton compared with $270 to $320 previously. The soybean oil price is projected at 33.5 to 36.5 cents per pound, unchanged from last month.

Global oilseed production for 2009/10 is projected at 435.3 million tons, up 1.6 million tons from last month. Higher projections for soybeans, peanuts, rapeseed, and palm kernel are only partly offset by lower cottonseed and sunflowerseed production. Global soybean production is raised 0.9 million tons to 255.9 million. Soybean production for Brazil is projected at a record 67 million tons, up 1 million from last month based on higher yields and harvested area. Soybean production for Paraguay is reduced due to lower harvested area. Global cottonseed production is reduced mostly due to reductions for China and Uzbekistan. Other changes include increased rapeseed production for Australia, increased peanut and sunflowerseed production for China, increased palm kernel production for Indonesia, and reduced sunflowerseed production for South Africa. Palm oil production was increased for Indonesia for both 2008/09 and 2009/10.

Global oilseed ending stocks for 2009/10 are projected at 71.8 million tons, up 0.9 million from last month. Soybeans account for most of the change with increases for Argentina, Brazil, and India only partly offset by lower projected US stocks.


Projected 2009/10 sugar supply is decreased 30,000 short tons, raw value, from last month, due to lower cane sugar production for Texas. On the use side, deliveries of sugar are reduced 50,000 tons, based on pace to date.

For Mexico, projected 2009/10 sugar supply is increased 50,000 metric tons, raw value, from last month. Production is decreased 200,000 tons based on continued reports of weather-reduced sugar yields. Imports are increased 250,000 tons based on the import quota announced by Mexico in February. On the use side, consumption of sugar is reduced 300,000 tons to account for increased substitution by corn-based sweeteners. Mexico's ending stocks of sugar are increased 350,000 tons.

March 2010

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