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World Agricultural Supply and Demand Estimates - April 2009

18 April 2009

US meat production together with corn and wheat stocks are expected to be lower this month according to the World Agricultural Supply and Demand Estimates report from the World Agricultural Outlook Board.

LIVESTOCK, POULTRY, AND DAIRY: Total U.S. meat production for 2009 is forecast lower this month as a slight increase in beef output is more than offset by lower pork and poultry production. The beef production forecast is raised from last month due to a combination of heavier expected steer and heifer weights and higher expected cow slaughter. The pork production forecast is lowered as hog slaughter to date has been lower than expected. In addition, the March 31 Quarterly Hogs and Pigs report indicated fewer sows farrowing during the first half of the year which will result in a smaller pig crop to slaughter during the second half. Broiler production forecasts are lowered as hatchery data point to continued reductions in eggs set and chicks placed. Hatchery supply flocks are below last year, implying little prospect for recovery until later in the year. Turkey production is also forecast lower as there are no indications that flocks will expand before mid-year. The total egg production forecast is reduced due to lower expected first-quarter table egg production, and lower forecast hatching egg production, which reflects reduced forecasts for broilers.

Export forecasts for 2009 for major meats are lowered slightly. Exports of beef and turkey are forecast lower but the pork export forecast is raised. Broiler exports are unchanged. Beef imports are raised but imports for pork are unchanged.

The cattle price forecast is about unchanged from last month. Hog prices are raised as tighter hog supplies are expected. Broiler prices are lowered as demand is expected to remain weak.

Milk production forecasts for 2009 are lowered from last month. Cow numbers for 2009 are forecast lower, as producers are expected to liquidate herds in response to poor returns. The recently announced Cooperatives Working Together (CWT) herd buyout is expected to encourage a more rapid reduction in cow numbers by encouraging producers to reduce herds. Milk per cow growth is slowed from last month reflecting poor returns. Import forecasts are unchanged from last month, but commercial exports are lowered due to reduced butter exports. CCC net removals are reduced as strengthening prices through the year will result in lower sales of dairy products to the CCC.

Milk price estimates for 2009 are raised. Forecasts for all dairy products are up from last month. Reductions in milk supplies are expected to support product prices. As a result of higher product prices, the Class III and Class IV price forecasts are raised from last month. The all milk price is also forecast higher this month at $11.85 to $12.35 per cwt.

WHEAT: U.S. wheat ending stocks for 2008/09 are projected 16 million bushels lower this month as an increase in imports is more than offset by higher projected domestic use. Imports are projected 5 million bushels higher mostly reflecting the pace of hard red spring and durum wheat imports from Canada. Seed use is raised 1 million bushels based on producer intentions as reported in the March 31 Prospective Plantings. Feed and residual use is projected 20 million bushels higher as the March 1 stocks indicated higher-than-expected use during the December-February quarter. Durum exports are projected slightly higher with an offsetting reduction for hard red winter wheat. The 2008/09 season-average farm price is projected up 10 cents on the lower end of the range to $6.80 to $6.90 per bushel. This is well above the previous record of $6.48 per bushel in 2007/08.

Global wheat supplies for 2008/09 are nearly unchanged this month as a 2.4-million-ton reduction in world production is mostly offset by a 2.2-million-ton increase in world beginning stocks. Production is revised 1.0 million tons lower for both Algeria and Ethiopia, and 0.4 million and 0.3 million lower, respectively, for Egypt and Chile. Partly offsetting is a 0.2-million-ton increase for Brazil. Beginning stocks for 2008/09 are raised 1.3 million tons for Argentina on upward revisions to 2006/07 and 2007/08 production. Beginning stocks are also raised 0.5 million tons for Ethiopia with smaller increases for Uruguay, Algeria, and Paraguay. Global wheat supplies, projected at a record 804.4 million tons, are up 67.2 million from 2007/08.

World wheat trade for 2008/09 is projected higher this month. Higher projected imports for Middle Eastern and North African countries boost expected shipments for EU-27 and FSU-12 exporters. Imports are projected 0.5 million tons higher for Iran, 0.4 million tons higher for Egypt, 0.3 million tons higher for Tunisia, and 0.2 million tons higher each for Libya and Turkey. Imports are also raised 0.5 million tons for EU-27 and 0.3 million tons for Bangladesh. Partly offsetting is a 0.3-million-ton import reduction for South Korea. Exports are raised 1.5 million tons for EU-27, 1.0 million tons for Ukraine, and 0.5 million tons for Russia. Exports are also raised 1.0 million tons for Argentina and 0.4 million tons for Uruguay. Partly offsetting are reductions for Canada and Brazil, down 1.5 million tons and 0.2 million tons, respectively. Global exports, at a record 128.0 million tons, are projected 2.7 million higher than last month and 11.1 million higher than in 2007/08.

World wheat consumption for 2008/09 is projected lower with reductions in feeding in EU-27 and South Korea and lower food use in Ethiopia only partly offset by higher projected use in the United States. Global ending stocks are projected 2.3 million tons higher with the largest increases for Canada, EU-27, Ethiopia, and Iran. Stocks are also projected higher for Brazil, Argentina, Tunisia, and others. The largest reductions in stocks are projected for Ukraine, Algeria, and Russia.

COARSE GRAINS: U.S. corn ending stocks for 2008/09 are projected 40 million bushels lower this month as higher expected feed and residual use more than offsets a reduction in food, seed, and industrial use. Feed and residual use is raised 50 million bushels as March 1 stocks indicated higher-than-expected disappearance during the December-February quarter. Food, seed, and industrial use is lowered 10 million bushels with lower projected use for starch (other than for fuel and beverage alcohol) more than offsetting higher expected use for sweeteners. Corn use for starch is projected down 10 percent from 2007/08 as declining demand for construction materials and paper products reduce demand for starch. The 2008/09 season-average farm price for corn is projected at $4.00 to $4.40 per bushel, up 10 cents on both ends of the range. This compares with the 2007/08 record of $4.20 per bushel.

Feed and residual use for 2008/09 is lowered 5 million bushels each for barley and oats as March 1 stocks indicated lower-than-expected December-February disappearance. Barley exports are also lowered slightly based on the pace of exports to date. Projected ending stocks for both commodities are raised accordingly. The season-average farm price for barley is projected at $5.20 to $5.30 per bushel, up 10 cents on the lower end of the range. Marketings for 2008/09 reflect a larger-than-normal share of higher priced malting barley. The oats farm price range is narrowed 5 cents on both ends of the range to $3.10 to $3.20 per bushel. The projected sorghum farm price is raised 10 cents on both ends of the range to $3.15 to $3.45 per bushel.

Global coarse grain supplies for 2008/09 are projected 2.7 million tons lower this month with lower sorghum, barley, and corn production. Much of the reduction is based on lower production estimates for these crops in Ethiopia as the historical series is revised to reflect a change in officially reported statistics for the country. Though reduced from last month=s estimates, 2008/09 featured bumper crops for Ethiopia. World sorghum production is lowered 1.3 million tons as 0.7-million-ton reductions for Argentina and Ethiopia and a 0.2-million-ton reduction for China are only partly offset by increases for Burkina Faso and Mexico. Argentina sorghum production is projected lower as additional dryness and heat during March further reduced yield prospects. World barley production is lowered 0.7 million tons with a 0.6-million-ton reduction for Ethiopia and a 0.1-million-ton reduction for China. World corn production is lowered 0.7 million tons with 0.5-million-ton reductions for Ethiopia, Chile, and Vietnam, and a 0.4-million-ton reduction for Iran. Partly offsetting is higher projected production for Brazil. Brazil corn production is raised 1.0 million tons reflecting higher indicated yields for the primary summer (southern hemisphere) crop now being harvested.

World corn exports for 2008/09 are projected 1.2 million tons higher this month. Exports are raised 0.5 million tons for Ukraine and 0.4 million tons for Russia with smaller increases for Croatia and Thailand. Imports are raised for Chile, Iran, Venezuela, and Vietnam, but reduced for Mexico, Indonesia, and Thailand. Lower corn imports for these countries reflect lower expected feeding. An increase in projected sorghum feed use for Mexico is partly offsetting. Corn feed use is also lowered for Iran, Chile, and Vietnam. Global corn feed use, however, is nearly unchanged with the projected increase for the United States. Global corn ending stocks for 2008/09 are projected 1.3 million tons lower. Stocks are projected 1.0 million tons higher for Brazil but 1.0 million tons lower for the United States. Other major reductions are for Ukraine, Russia, Iran, and Vietnam.

RICE: No changes are made on the supply side of the U.S. 2008/09 rice supply and use balance sheets. On the use side, domestic and residual use is estimated at a record 135 million cwt, 6 percent above last month, and 9 percent above 2007/08. Long-grain domestic and residual use is estimated at a record 104 million cwt, nearly 10 percent above the March estimate, while combined medium- and short-grain domestic and residual use is estimated at 31 million cwt, down 3 percent from last month. The change in the 2008/09 domestic and residual use estimate is based largely on the March 1 Rice Stocks report released by the National Agricultural Statistics Service (NASS) on March 31. NASS reported all rice stocks on a rough-equivalent basis at 98.0 million cwt, down 13 percent from a year earlier, and the lowest stocks since 2003/04.

The all rice export projection is unchanged at 94 million cwt, however, long-grain exports are lowered 1.0 million, while combined medium- and short-grain exports are raised 1.0 million. Although export sales have picked up in recent weeks, the slow pace of shipments to date, along with the tight supply situation for long-grain rice, implies some outstanding sales may not get shipped by the end of the marketing year. All rice ending stocks are projected at 22.2 million cwt, 27 percent below last month and the lowest stocks since 1998/99. Long-grain stocks are estimated at 12.3 million cwt, down 39 percent from last month and the lowest stocks since 2003/04. Combined medium- and short-grain stocks are estimated at 8.6 million cwt, unchanged from last month.

The all rice season-average farm price for 2008/09 is forecast at $15.75 to $16.75 per cwt, up 25 cents per cwt on both ends of the range from a month ago. The combined medium- and short-grain farm price range is projected at $21.25 to $22.25 per cwt, up 75 cents on each end of the range from a month ago, while the long-grain farm price range is projected at $14.50 to $15.50 per cwt, unchanged from last month. This month’s increase in the all rice price is based on monthly farm prices reported by NASS and price expectations for the remainder of the marketing year. Monthly prices reported by NASS through mid-March show a strengthening of the combined medium- and short-grain price and a weakening of the long-grain price.

Global 2008/09 production, consumption, trade, and ending stocks are nearly unchanged from a month ago. The slight increase in world production is due to a number of country-level adjustments in production based largely on recently received annual reports from overseas USDA offices. The most notable changes were increases in production for Brazil and Vietnam that are partially offset by reductions for Cote d’Ivoire and the Philippines. Global ending stocks are projected at 86.1 million tons, nearly unchanged from last month, but up 7.6 million from the previous year.

OILSEEDS: U.S. soybean exports for 2008/09 are increased 25 million bushels to a record 1.21 billion reflecting strong year-to-date shipments and outstanding sales, and prospects for reduced export competition from South America as the Argentina soybean crop continues to deteriorate. Soybean crush is reduced 5 million bushels to 1.635 billion due to persistent weakness in domestic soybean meal demand. Seed use is raised reflecting expected plantings for 2009 reported in the March 31 Prospective Plantings report. U.S. soybean ending stocks are reduced 20 million bushels to a projected 165 million, the lowest since 2003/04.

Price forecasts for soybeans, soybean oil, and soybean meal are all raised. The U.S. season-average soybean price range for 2008/09 is projected at $9.25 to $10.05 per bushel compared with $8.85 to $9.85 per bushel last month. Soybean oil prices are forecast at 30 to 32 cents per pound, compared with the previous range of 28.5 to 31.5 cents per pound. The soybean meal price range is narrowed to $280 to $300 per short ton compared with $265 to $305 last month.

Global oilseed production for 2008/09 is projected at 403.5 million tons, down 4.2 million tons from last month. Lower soybean, cottonseed, and sunflowerseed production are only partly offset by increased rapeseed and peanut projections. Global soybean production is reduced 4.5 million tons to 218.8 million, with Argentina accounting for most of the reduction. Soybean production for Argentina is projected at 39.0 million tons, down 4 million due to lower harvested area and yields. Despite rain in much of the main growing area in early March, hot, dry conditions returned in most of the country, leaving yield prospects below last month. Soybean production is also reduced for Paraguay and India. Soybean production for Brazil remains unchanged at 57 million tons. Global rapeseed production is raised 0.4 million tons to a record 57.9 million due to higher projected output in India. Other changes include reduced sunflowerseed production for Paraguay and reduced cottonseed production for Turkey.

Global 2008/09 oilseed ending stocks are reduced 4.1 million tons to 58.6 million due mostly to lower soybean stocks in Argentina, Brazil, and the United States.

SUGAR: Projected 2008/09 U.S. sugar supply is increased 274,000 short tons, raw value, from last month, mainly due to increased imports. Production changes were largely offsetting. Beet sugar production is increased on processors= indications of an early start to the 2009-crop harvest in September. Sugarcane processors in Florida indicate per-acre sugarcane tonnage and extraction are lower than expected last month. Imports from Mexico are increased 320,000 tons, to 1 million tons, based on the strong pace to date. Based on the slow pace to date, imports for re-export are reduced 45,000 tons and deliveries to users under the re-export products program are reduced 35,000 tons. Ending stocks are increased 309,000 tons to 1.29 million, or 11.9 percent of use.

For Mexico, 2008/09 beginning stocks are increased to 1.6 million metric tons, raw value, to reflect information from the U.S. Embassy in Mexico. Sugar imports by Mexico have been increased 285,000 tons to meet domestic demand, putting ending stocks at 1.2 million tons, or 20 percent of domestic use.

COTTON: This month’s U.S. 2008/09 cotton estimates include marginally lower supplies combined with larger offtake, resulting in a 600,000-bale reduction in forecast ending stocks. The production estimate is lowered 206,000 bales from last month based on USDA’s final Cotton Ginnings report, released March 25, 2009. Domestic mill use is lowered 100,000 bales to 3.65 million, as mill use reported for February fell sharply. However, exports are raised 500,000 bales, reflecting recent strong export sales and shipments. Ending stocks are now estimated at 6.7 million bales, or 41.5 percent of total use. The forecast season-average price range of 47 to 51 cents per pound is narrowed 1 cent on each end of the range.

The world cotton estimates for 2008/09 include lower consumption and higher ending stocks compared with last month. World production is reduced marginally, due mainly to adjustments for the United States and Iran. World consumption is reduced 1.2 percent, due to decreases for China and others. China’s consumption is lowered 1.0 million bales, accounting for three-fourths of the drop in world consumption, based on a sharp slowdown in net textile exports beginning in January. World trade shows marginal decreases, as imports are reduced for Pakistan, Thailand, and others. World exports also are reduced marginally, including sharply lower exports forecast for India, which are partially offset by increases for the United States and Brazil. World ending stocks of 63.4 million bales are slightly above both last month’s estimate and the beginning level.

Further Reading

- You can view the full report by clicking here.

April 2009

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