World Agricultural Supply and Demand Estimates - May 2009

Total U.S. meat production for 2010 is projected to be fractionally above 2009 as declines in red meat production are more than offset by increases in poultry. Beef production declines on tighter supplies of cattle, according to the World Agricultural Supply and Demand Estimates, produced by the USDA's World Agricultural Outlook Board.
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LIVESTOCK, POULTRY, AND DAIRY: Smaller calf crops through 2009 are expected to result in a smaller pool of cattle outside feedlots during 2010. Marketable cattle supplies may be further reduced if producers begin rebuilding herds by retaining calves for addition to the breeding herd. Pork production in 2010 is forecast slightly lower than 2009. Pork production is below 2009 levels in first half 2010 as producers are expected to farrow fewer sows in late 2009. However, improved returns during late 2009 are likely to stimulate farrowings in 2010 which coupled with higher carcass weights will push second half 2010 production higher. Both broiler and turkey production for 2010 are forecast higher as producers respond to improved returns. Egg production is forecast higher as production builds upon the expansion expected to begin during the second half of 2009.

The total meat production forecast for 2009 is raised from last month as higher expected beef and broiler production more than offset lower pork and turkey. Beef production is raised to reflect higher expected fed and non-fed cattle slaughter. Pork production is reduced on lower slaughter partly due to fewer hog imports. Broiler production is raised as higher-than-expected first quarter production more than offsets a slightly weaker second quarter. Turkey production is decreased due to lower-than-expected first quarter production.

Beef and pork exports for 2010 are forecast higher as the global economic situation improves. Broiler exports are forecast lower due to tight early year supplies.

The 2009 beef export forecast is reduced from last month as economic weakness limits export growth. The pork export forecast is raised from last month reflecting stronger-than-expected estimated export growth in the first quarter that carries into early second quarter. However, stronger export growth in the second quarter is dampened due to A/H1N1 influenza concerns as a combination of foreign bans on pork imports as well as pork consumption reductions in some countries is expected to limit export growth. However, trade disruptions and consumption declines are expected to be relatively short-lived.

Cattle and hog prices are forecast higher for 2010 due to tighter supplies and improved domestic and export demand. Broiler, turkey, and egg prices for 2010 are forecast higher as increases in production are modest and demand improves.

Most livestock and poultry prices for 2009 are lower than last month as demand lags because of economic weakness. Hog prices in the second quarter have also been pressured by concerns about A/H1N1 influenza.

Milk production is forecast to decline in 2010 as the sector responds to weak 2009 returns. Cow numbers are forecast to decline from 2009 although the pace of decline will slacken during the year as returns improve. Growth in milk per cow is expected to improve slightly in 2010. Commercial exports are forecast to increase as the global economy improves. Domestic disappearance of fat and skim solids reflect tightening supplies and improved exports. Product prices are forecast higher as demand improves and supplies tighten. With firmer cheese and whey prices, the Class III price is forecast to rise above 2009. Likewise, stronger butter and nonfat dry milk (NDM) prices will push Class IV prices above 2009. The 2010 all milk price is forecast at $14.70 to $15.70 per cwt.

Forecast milk supply for 2009 is lowered slightly from last month primarily reflecting weaker expected growth in milk per cow. Cheese prices are lowered but butter and whey price forecasts are raised. The NDM price forecast is unchanged. The Class III price forecast is lowered slightly as the weaker cheese prices more than offsets the higher whey price. The Class IV price forecast is unchanged. The milk price is forecast to average $11.85 to $12.35 per cwt.

WHEAT: The 2009/10 outlook for U.S. wheat is for reduced supplies and use as lower production more than offsets higher beginning stocks and reduced export prospects outweigh expected gains in domestic use. Total production is projected at 2,026 million bushels, down 19 percent from last year on reduced area and lower expected yields. The survey-based forecast of winter wheat production is down 20 percent with sharply lower yields expected in the Southern Plains on extended dryness and early April freeze damage. Spring wheat production is also expected lower with less intended acreage as reported in the Prospective Plantings and significant planting delays, especially in North Dakota and Minnesota where yields are expected below trend levels. Durum and other spring wheat production is projected at 524 million bushels, down 17 percent from 2008/09, based on 10-year harvested-to-planted ratios and trend yields adjusted for late seeding in the Northern Plains. U.S. wheat supplies are projected down 4 percent despite the highest carryin since 2002/03.

Total U.S. wheat use for 2009/10 is projected down 4 percent as lower exports and feed and residual use more than offset higher expected food use. Food use is projected at 955 million bushels, up 33 million bushels from the revised projection for 2008/09 as flour extraction rates fall to more normal levels in 2009/10. Feed and residual is projected at 240 million bushels, down 10 million bushels from the 2008/09 projection. Exports are projected at 900 million bushels, down 11 percent from this month’s higher projection for 2008/09 as large global supplies limit export opportunities. Despite lower expected use and higher beginning stocks, ending stocks are projected down 5 percent at 637 million bushels. The season-average farm price for all wheat is projected at $4.70 to $5.70 per bushel, well below the record $6.85 for 2008/09.

Global wheat production for 2009/10 is projected at 657.6 million tons, down 4 percent from last year’s record, but still the second largest if realized. Reduced output in major exporting countries such as EU-27, Ukraine, Russia, and Canada are only partly offset by increases in Argentina and Australia. Despite reduced area projected for Argentina, trend yields for 2009/10 allow for a significant recovery from last year’s drought-reduced crop. A recovery from last year’s drought in North Africa and much of the Middle East boosts production prospects in this region supporting world production. Production is projected slightly lower for Brazil and India, while China’s production is unchanged.

Global wheat imports and exports for 2009/10 are both projected lower reflecting reduced demand in North Africa, the Middle East, and South Asia. World wheat consumption is projected to increase 1 percent, but world wheat feeding is projected 3 percent lower with reduced overall output and less low quality wheat expected from the Black Sea region. Global stocks are projected at 181.9 million tons, up 9 percent from 2008/09 and the highest in 8 years.

COARSE GRAINS: The 2009/10 outlook for U.S. feed grains is for slightly lower production, rising use, and tighter ending stocks. Corn production for 2009/10 is projected at 12.1 billion bushels, down 11 million bushels from 2008/09 as lower plantings more than offset higher expected yields. Harvested area is projected at 77.8 million acres based on historical abandonment and derived demand for silage. The yield is projected at 155.4 bushels per acre, 1.5 bushels below the 1990-2008 trend based on the slow pace of planting in the eastern Corn Belt as reported in Crop Progress. The projected yield assumes a mid-May planting progress well below the 10-year average and just below last year’s delayed progress. Corn supplies, projected at 13.7 billion bushels, are down 35 million from 2008/09. Lower 2009/10 beginning stocks reflect this month’s 50-million-bushel increases in both ethanol corn use and exports for 2008/09.

Total U.S. corn use for 2009/10 is projected up 3 percent from the current year with higher expected food, seed, and industrial (FSI) use and exports more than offsetting a decline in projected feed and residual use. FSI use is projected 7 percent higher with a 350-million-bushel rise in ethanol corn use accounting for most of the increase. Ethanol use, at 4.1 billion bushels, reflects the rising Federal biofuels mandate and improved blending incentives as higher gasoline prices increase demand for ethanol. Ethanol producer returns, however, will remain under pressure as excess production capacity weighs on producer margins. Exports are projected up 9 percent as world corn trade and feeding are expected to recover modestly in 2009/10, partly reflecting a reduction in global supplies of low-cost feed quality wheat. Domestic corn feed and residual use is projected down 2 percent with reduced animal numbers and increased availability of distiller’s grains. U.S. corn ending stocks for 2009/10 are projected down 28 percent to 1.1 billion bushels as use is expected to exceed production by 470 million bushels. The season-average farm price is projected at $3.70 to $4.50 per bushel compared with the record $4.20 reported for 2007/08 and the $4.10 to $4.30 projected for 2008/09.

Global coarse grain production for 2009/10 is projected down 16.7 million tons, but world supplies are projected up at 1,265.1 million with a 23.8-million-ton increase in beginning stocks. Global corn supplies are projected at 924.7 million tons, 6.5 million higher despite a 2.7-million-ton reduction in output as beginning stocks are up sharply. Global corn production at 785.1 million tons would be the third highest on record. Corn production for 2009/10 is projected higher for Argentina and Brazil, but lower for China, EU-27, and Ukraine. Global production of barley, oats, rye, and sorghum are all projected lower in 2009/10. World coarse grain imports and exports are projected higher with rising trade in corn only partly offset by lower trade in barley. Global coarse grain consumption is projected higher mostly on higher corn consumption. Global corn feeding and food, seed, and industrial use are both expected higher in 2009/10 with growth in foreign feeding and U.S. ethanol production. World corn ending stocks are projected at 128.2 million tons, down 8 percent from 2008/09.

RICE: Larger U.S. 2009/10 rice supplies, combined with a modest increase in use, will boost projected ending stocks and lower farm prices. U.S. rice production is projected at 224.0 million cwt, 10 percent above 2008/09. Planted area in 2009 is estimated at 3.18 million acres, up 6 percent from 2008. Harvested area is estimated at 3.16 million acres. Average rice yield is projected at 7,082 pounds per acre, up 3 percent from the previous year, but down 2 percent from the 2007/08 record. Imports for 2009/10 are projected at 21.0 million cwt, up nearly 17 percent from the previous year. Beginning stocks in 2009/10 are estimated at 23.2 million cwt, down 21 percent from 2008/09.

U.S. 2009/10 domestic and residual use is projected at 132.0 million cwt, 2 percent below the 2008/09 record. Exports are projected at 97.0 million cwt, 4 percent above revised 2008/09. Despite a significant increase in U.S. supplies, competition for export markets will be keen as competitor supplies are expected to be large. Import markets, particularly in Africa and the Middle East, will be very competitive as major exporters are expected to relax export restrictions. Thailand is expected to release large supplies of rice from the government’s intervention program. U.S. ending stocks in 2009/10 are projected at 39.2 million cwt, 69 percent above revised 2008/09.

The all rice season-average price for 2009/10 is forecast at $10.50 to $11.50 per cwt compared to a revised $15.75 to $16.25 for 2008/09. The long-grain price is projected at $9.50 to $10.50 per cwt compared to a revised $14.60 to $15.10 for the previous year. The combined medium- and short-grain price is projected at $15.50 to $16.50 per cwt, compared to a revised $20.90 to $21.40. Large domestic and global supplies and lower international prices will pressure U.S. prices.

Global 2009/10 rice production is projected at a record 448.1 million tons, up 4.5 million from 2009/10. World disappearance (consumption and residual) is projected at a record 443.2 million tons, up 8.7 million. Large crops are projected for most of Asia including record crops in Bangladesh, Cambodia, India, Indonesia, the Philippines, and Thailand; and a near-record in Burma and Vietnam.

Global exports in 2009/10 are expected to be up about 1.0 million tons from the prior year. India's 2009/10 exports are projected at 4.0 million tons, up 1.5 million from revised 2008/09. It is assumed that India will ease its export restrictions. Global ending stocks are expected to increase 5.5 percent from 2008/09 to 94.7 million tons. The stocks-to-use ratio for 2009/10 at 21.4 percent is up from last year's 20.7 percent, and the highest since 2002/03.

OILSEEDS: U.S. oilseed production for 2009/10 is projected at 94.5 million tons, up 6 percent from 2008/09 with soybean production accounting for most of the increase. Cottonseed production is also projected higher, while peanuts, sunflowerseed, and canola production are projected down. Soybean production is projected at 3.2 billion bushels, up 236 million from 2008/09 reflecting a small increase in harvested area and a trend yield of 42.6 bushels per acre. Soybean supplies are projected at 3.3 billion bushels, up 5 percent from 2008/09 as smaller beginning stocks partly offset increased production.

Soybean crush for 2009/10 is projected to increase 2 percent to 1.675 billion bushels reflecting a small increase in domestic meal use and higher exports. Domestic soybean oil consumption is projected to increase 1 percent as biodiesel expansion is partly offset by a small decline in food use. Soybean oil used for biodiesel production is projected at 2.2 billion pounds, up 300 million from the revised 2008/09 estimate of 1.9 billion. Reduced South American supplies, due to drought in Argentina, Paraguay, and southern Brazil, are projected to push U.S. soybean exports to a record 1.26 billion bushels. Ending stocks are projected at 230 million bushels, resulting in a relatively low stocks-to-use ratio at 7 percent.

The U.S. season-average soybean price for 2009/10 is projected at $8.45 to $10.45 per bushel compared with $9.85 in 2008/09. Soybean meal prices are forecast at $260 to $320, compared with $305 per ton for 2008/09. Soybean oil prices are projected at 32.5 to 36.5 cents per pound compared with 32.5 cents for 2008/09.

Global oilseed production for 2009/10 is projected at a record 422.1 million tons, up 25.9 million from 2008/09. Foreign oilseed production is projected at 327.6 million tons, up 20.4 million. Global soybean production is projected to increase 14 percent to 241.7 million tons. The Argentina crop is projected at 51 million tons, up 17 million from the revised estimate for the 2008/09 crop based on increased harvested area and a return to trend yields. The Brazil crop is projected at 60 million tons, up 3 million from 2008/09 based on a 3-percent increase in harvested area. China soybean production is projected at 15.6 million tons, down 0.4 million from 2008/09 due to reduced area. Global production of high-oil content seeds is projected to decline 2 percent from 2008/09 as lower projected yields more than offset higher area for sunflowerseed and rapeseed. Lower rapeseed production for Canada and Ukraine more than offsets increases for China, EU-27, India, and Australia. Lower sunflowerseed production for Russia, Ukraine, and EU-27 more than offsets an increase for Argentina. Despite higher global oilseed production, 2009/10 supplies are up just 4 percent reflecting lower beginning stocks.

Global protein meal consumption is projected to increase 3 percent in 2009/10. Protein meal consumption is projected to increase 4 percent in China, accounting for 32 percent of global protein consumption gains. Global soybean trade is projected at 75.3 million tons, up 2.1 million from 2008/09. China imports are projected to account for just over half of world trade at 38.1 million tons.

Global vegetable oil consumption is projected to increase 3.8 percent in 2009/10 led by increases for China, India, and EU-27. Global vegetable oil stocks are projected to decline 6 percent from 2008/09.

SUGAR: Projected U.S. sugar supply for fiscal year 2009/10 of 11.1 million short tons, raw value, is down 923,000 tons from 2008/09, as lower beginning stocks and imports more than offset higher production. Higher beet sugar production is due to increased area, while higher cane sugar production results from improved yields mainly in Florida. Imports under the sugar tariff rate quota (TRQ) are put at 1.2 million short tons to reflect the minimum U.S. import commitments and a projected TRQ shortfall of 150,000 tons. The Secretary of Agriculture will announce the actual TRQ level at a later date. Projected imports from Mexico at 165,000 tons are down 950,000 from 2008/09. Total use of 10.8 million tons is marginally lower. Year-ending stocks are projected at 289,000 tons.

Mexico=s 2009/10 sugar supply is projected at 6.96 million metric tons, raw value, down 610,000 tons from 2008/09, mainly due to lower carry-in stocks. Production is projected at 5.5 million tons, down 50,000 from 2008/09 due to a continuation of reduced input use. To meet demand, Mexico’s imports are increased 135,000 tons to 535,000. Mexico’s exports are projected at 150,000 tons, down 715,000 tons reflecting expected tight supplies. Ending stocks are projected at 1.16 million tons.

COTTON: The 2009/10 U.S. cotton projections include lower supplies, offtake, and ending stocks compared with 2008/09. Beginning stocks of 6.8 million bales are about one-third below 2008/09. Production is projected at 13.25 million bales, a slight increase from 2008, based on planted area in the Prospective Plantings, combined with historical average abandonment and yields. Domestic mill use is reduced a marginal 50,000 bales. Exports are reduced 12 percent to 11.0 million bales, as a result of lower supplies in the United States and competition from surpluses in other cotton-producing countries. Ending stocks are projected at 5.6 million bales, an 18-percent reduction from the beginning level and 39 percent of total use. The 2009/10 average price received by producers is projected to range from 48 to 60 cents per pound.

A combination of slightly lower production and higher consumption is expected to reduce world stocks in 2009/10. World production is forecast at 106.5 million bales, 1.3 percent below the current season, as decreases in China, Central Asia, and Brazil are anticipated to more than offset increases in India, Australia, and the United States. World consumption is projected at 113.5 million bales, a growth rate of just over 3 percent, reflecting both a modest recovery in world economic growth and a replenishment of cotton and yarn inventories held by mills. World trade is expected to rise 15 percent, owing partly to increased imports by China. World ending stocks are projected to fall 7 percent.

A slight decrease in U.S. 2008/09 production relative to last month reflects USDA’s final production estimate. This season’s domestic mill use is reduced based on recent activity, but exports are unchanged, raising ending stocks to 6.8 million bales. The forecast average price received by producers of 48 to 50 cents per pound is narrowed 1 cent on each end of the range. Lower 2008/09 world production and higher consumption are reducing ending stocks by 1.1 million bales compared with last month. Production is reduced in Turkey, Uzbekistan, and others, while consumption is raised in India, Bangladesh, Egypt, and Turkey, but lowered in Brazil and the United States.

Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.

Further Reading

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May 2009

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