World Agricultural Supply and Demand Estimates – August 2011

Meat and poultry supplies are expected to remain stable while corn, wheat and oilseed supplies this month are forecast to be down, according to the August World Agricultural Supply and Demand Estimates.
calendar icon 15 August 2011
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Livestock, Poultry and Dairy

Small changes are made to the 2011 forecast of total red meat and poultry production. Beef production is reduced slightly. Although fed cattle slaughter is raised to reflect the large number of cattle placed in feedlots during the second quarter due to drought in the Southern Plains, second-half carcass weights have been reduced. The pork production forecast is lowered due to the expected short-term effect of recent hot, humid weather on third-quarter hog weights. For the year, broiler production is unchanged from last month. Production in June was higher than expected which offsets a sharper expected decline in second-half production. Turkey production is raised as higher forecast turkey prices are expected to moderate the expected decline in second-half production. The egg production forecast is reduced slightly from last month.

For 2012, beef production is reduced due to slower carcass weight growth and slightly lower later year slaughter. Higher feed prices are expected to slow the pace of later year marketings as cattle are kept on forage longer. Pork production is lowered as tight feed supplies pressure hog weights. Broiler production is forecast lower as the stronger second-half production declines carry into the first part of 2012. Turkey production is expected to grow more slowly as higher feed prices partly offset higher turkey prices. Egg production is reduced from last month on higher feed prices.

Beef imports are forecast higher in 2011 as demand for processing meat remains relatively strong. Beef exports are raised for both 2011 and 2012. A favourable exchange rate is expected to support exports to a number of countries. Likewise, pork export forecasts are raised for both 2011 and 2012. A favourable exchange rate and relatively strong demand for pork in Asia are expected to boost exports. US pork imports are reduced slightly in both years. No change is made to broiler exports for either 2011 or 2012 but turkey exports in 2011 are expected to be slightly stronger.

Cattle prices are forecast slightly lower for the third quarter but subsequent forecasts are unchanged. Hog prices are forecast higher for both 2011 and 2012 as stronger export demand in both years support prices. Broiler prices are lowered in both 2011 and in the first part of 2012 as supplies remain relatively large.

The milk production forecast for 2011 is reduced. Although the July Cattle report indicated that producers are holding relatively large numbers of dairy replacement heifers which supports a higher forecast dairy herd, recent hot, humid weather and relatively high priced feed may constrain the growth in milk per cow. Milk production is forecast higher for 2012, reflecting a larger herd in the first part of 2012 but slightly slower growth in milk per cow. Commercial exports for 2011 are forecast higher on the strength of butterfat exports. Imports are lowered reflecting lower imports of cheese and milk proteins. Trade forecasts for 2012 are unchanged.

Cheese, butter, and whey prices are forecast higher for 2011, but non-fat dry milk (NDM) is forecast lower. Tighter milk supplies are expected to support higher product prices but softening international prices will likely weigh on US NDM markets. The Class III price is raised, based on higher forecast cheese and whey prices, but lower forecast NDM prices will outweigh higher butter prices and the Class IV price forecast is reduced. For 2012, NDM prices are forecast lower on expected weaker early-year demand but cheese prices are forecast slightly higher. Forecast butter and whey prices are unchanged from last month. The Class III price is raised reflecting higher forecast cheese prices but lower NDM prices result in a reduced forecast for the Class IV price. The all milk price forecast is raised to $20.30 to $20.50 per cwt for 2011 and $17.80 to $18.80 per cwt for 2012.


US wheat supplies for 2011/12 are lowered 30 million bushels this month as higher forecast winter wheat production is more than offset by lower area and production for durum and other spring wheat. Total use for 2011/12 is lowered 30 million bushels with a reduced outlook for exports more than offsetting an increase in expected feed and residual use. Exports are projected down 50 million bushels with increased competition, particularly from FSU-12 countries, where production prospects are raised. Projected feed and residual use is raised 20 million bushels, reflecting a continuation of competitive prices for feed-quality wheat and lower projected corn supplies. Ending stocks are nearly unchanged. The 2011/12 season-average farm price for all wheat is projected at $7.00 to $8.20 per bushel, up from last month’s range of $6.60 to $8.00 per bushel supported by higher projected prices for corn.

Small changes are made to 2009/10 and 2010/11 supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census. These revisions result in adjustments to feed and residual use in both years.

Global wheat supplies for 2011/12 are projected 11.4 million tons higher with higher beginning stocks and a sharp increase in production. World wheat production for 2011/12 is raised 9.7 million tons with increases in FSU-12, India, China and EU-27 more than offsetting a reduction for Argentina. Russia production for 2011/12 is raised 3.0 million tons on harvest reports for winter wheat and continued favourable weather in most of the country’s spring wheat areas. Ukraine production is increased 3.0 million tons on higher-than-expected yields; however, heavy rains during harvest have reduced this year’s crop quality. Kazakhstan production is increased 1.0 million tons on abundant spring and early summer rainfall. India wheat production is up 1.9 million tons based on the latest official government estimates. China production is raised 1.5 million tons based on the latest official government indications. Production is increased 1.4 million tons for EU-27 with increases for France, Romania and Bulgaria. Harvest results from France indicate yields were hurt less by prolonged spring dryness than early reports had suggested. Partly offsetting is a 1.5-million-ton reduction in expected production for Argentina as the latest planting progress reports suggest less acreage increase this year.

The 2011/12 outlook for world wheat trade and consumption this month is shaped by growing supplies of wheat, especially in FSU-12 and EU-27, and tighter supplies of corn in the United States. Imports are raised 3.0 million tons with increases for South Korea, Algeria, Indonesia, Syria and Kenya. World wheat feeding is increased 4.9 million tons with higher expected feeding in EU-27, China, Canada, South Korea and the United States. Exports are raised 4.0 million tons for Russia and 1.5 million tons for Ukraine, more than offsetting reductions of 1.5 million tons for Argentina, 1.4 million tons for the United States and 1.0 million tons for Canada. World wheat ending stocks for 2011/12 are projected 6.7 million tons higher at 188.9 million tons. Stocks are expected to decline slightly from 2010/11 with higher usage but remain 62.9 million tons above their recent low in 2007/08.

Coarse Grains

US feed grain supplies for 2011/12 are projected lower this month with sharp drops in forecast corn and sorghum production. Corn production for 2011/12 is forecast 556 million bushels lower with a reduction in harvested area and lower expected yields. The national average yield is forecast at 153.0 bushels per acre, down 5.7 bushels from last month’s projection as unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.

Total projected corn use for 2011/12 is reduced 340 million bushels. Feed and residual use is projected 150 million bushels lower reflecting the smaller crop and higher expected prices. Corn use for ethanol is projected 50 million bushels lower with tighter supplies and lower forecast gasoline consumption for 2011 and 2012. Projected corn exports for 2011/12 are reduced 150 million bushels with wheat feeding expected to increase. Ending stocks are projected 156 million bushels lower at 714 million. The stocks-to-use ratio is projected at 5.4 per cent, compared with last month’s projection of 6.4 per cent. The season-average farm price is projected at $6.20 to $7.20 per bushel, up 70 cents on each end of the range.

Other significant 2011/12 feed grain changes include a sharp reduction in the forecast sorghum yield and production with prolonged drought and excessive heat in the central and southern Plains. Sorghum exports are projected 20 million bushels lower. Domestic use is also projected lower with a 10-million bushel reduction in food, seed and industrial use and a 25-million bushel reduction in feed and residual use.

Small changes are made to 2009/10 feed grain supplies and usage reflecting the latest revisions to trade estimates from the US Bureau of Census and revisions for 2010 calendar year ethanol production from the Energy Information Administration. Estimated feed and residual use for 2009/10 is adjusted based on these revisions.

Global coarse grain supplies for 2011/12 are projected lower with a 3.6-million ton increase in beginning stocks more than offset by a 14.0-million ton reduction in output. The decline in global production is driven by reduced corn and sorghum production in the United States with foreign corn, barley and oats production all expected higher. Corn production is raised for Brazil, Ukraine and EU-27 but lowered for Egypt. Barley production is raised for Ukraine and Argentina but lowered for EU-27. World oats production is raised slightly with an increase for EU-27. World rye production is reduced with a smaller expected crop for EU-27.

Global coarse grain exports for 2011/12 are lowered slightly as reduced US corn and sorghum exports are mostly offset by higher expected foreign corn and barley shipments. Corn exports are increased 1.0 million tons for Ukraine, 0.5 million tons for Argentina and 0.5 million tons for Canada making up more than half of the reduction in US exports. Barley exports are increased 0.7 million tons for Ukraine, 0.5 million tons for EU-27 and 0.4 million tons for Argentina with the bulk of those increases to Saudi Arabia.

Global coarse grain consumption is projected down 8.4 million tons with most of this resulting from lower world corn feed and residual use. More than half of the reduction is from lower corn and sorghum feed and residual use in the United States. Corn feeding in lowered for EU-27, Canada and South Korea as rising supplies of competitively priced feed quality wheat displace corn usage. World corn ending stocks are projected down 1.1 million tons with increases for Brazil and EU-27 mostly offsetting the US reduction.


US oilseed production for 2011/12 is projected at 91.7 million tons, down 4.7 million from last month. Soybean, canola and sunflower seed production are all projected lower. Soybean supplies for 2011/12 are reduced as lower forecast production is only partly offset by higher beginning stocks. Soybean production for 2011/12 is projected at 3.056 billion bushels, down 169 million due to lower harvested area and yields. Harvested area is projected at 73.8 million acres, down 0.5 million (using rounded data) mainly reflecting reductions for South Dakota. The first survey-based yield forecast of 41.4 bushels per acre is 2.0 bushels below last month's trend yield projection and 2.1 bushels below last year's yield. Soybean ending stocks are projected at 155 million bushels, down 20 million from July as reduced supplies are only partly offset by reduced exports and crush. Soybean exports are reduced 95 million bushels to 1.4 billion mainly due to the lower crop and increased projected supplies in South America this fall. Soybean crush is reduced 20 million bushels on lower domestic soybean meal use.

US changes for 2010/11 include reduced soybean crush and exports and increased ending stocks. Crush is reduced five million bushels to 1.645 billion reflecting reduced soybean meal exports. Soybean exports are reduced 25 million bushels to 1.495 billion reflecting lower-than-expected shipments in recent weeks. Soybean ending stocks are projected at 230 million bushels, up 30 million from last month.

Soybean and product prices for 2011/12 are all higher this month. The US season-average soybean price is projected at $12.50 to $14.50 per bushel, up 50 cents on both ends of the range. Soybean meal prices are projected at $355 to $385 per short ton, up $10.00 on both ends of the range. Soybean oil prices are projected at 54.5 to 58.5 cents per pound, up 0.5 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 451.4 million tons, down 4.1 million tons from last month mostly due to a reduction in the US soybean crop. Reductions for soybeans, rapeseed and cottonseed are only partly offset by increased sunflower seed and peanut production. Lower soybean production is projected for the United States, China and Ukraine. China’s production is projected at 14 million tons, down 0.3 million due to reduced harvested area. Brazil's soybean production is projected at 73.5 million tons, up one million tons due to higher expected yield. Production for Brazil’s 2010/11 crop is also raised this month to a record 75.5 million tons based on record yields. Rapeseed production is reduced for Ukraine and Belarus, reflecting lower yield prospects for both countries. Other changes include higher sunflower seed production for EU-27, higher rapeseed production for Australia, higher peanut production for China and lower cottonseed production for Brazil.


US total rice supplies for 2011/12 are projected at 257.2 million cwt, up 0.6 million from last month. Increases in both forecast beginning stocks and production more than offset a reduction in imports. USDA's first survey-based forecast of the 2011/12 US rice crop is 188.1 million cwt, up 1.1 million from last month's projection but down 23 per cent from the record 2010/11 crop. Average yield is forecast at 7,114 pounds per acre, up 55 pounds per acre from last month’s projection, and up six per cent from last year. Area harvested, at 2.64 million acres, is reduced slightly from a month ago. Long-grain production is forecast at 124.2 million cwt, up 0.7 million from last month, while combined medium- and short-grain production is forecast at 63.9 million, up 0.4 million from a month ago. The all rice import projection is lowered 1.0 million cwt to 18.0 million due in part to an expected slower pace of long-grain imports from South Asia.

US total rice use for 2011/12 is projected at 224.0 million cwt, down 3.0 million cwt from last month. Although all rice domestic and residual use is unchanged from last month at 127.0 million cwt, the long-grain projection is lowered 2.0 million to 94.0 million and the combined medium- and short-grain forecast is raised the same amount to 33.0 million. The export projection is lowered 3.0 million cwt from a month ago to 97.0 million based entirely on a decrease in combined medium- and short-grain exports. An increase in competition from both Australia and Egypt is expected in medium-grain markets in North Africa, the Middle East and Oceania. The long-grain export projection is unchanged from a month ago at 66.0 million cwt, and the combined medium- and short-grain estimate is lowered to 31 million. US all-rice ending stocks for 2011/12 are projected at 33.2 million cwt, up 3.6 million from last month, but down 35 per cent from the previous year.

The 2011/12 long-grain US season-average farm price is projected at $12.70 to $13.70 per cwt, up 70 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $14.50 to $15.50 per cwt, down $1.50 per cwt on each end of the range. The 2011/12 all rice price is projected at $13.20 to $14.20 per cwt, unchanged from a month ago. Higher prices are expected in Thailand due to a government intervention programme, which will provide support to global long-grain prices. Larger exportable supplies of medium-grain rice in both Australia and Egypt are expected to pressure global medium-grain rice prices.

Lower projected global 2011/12 total use more than offsets a slight increase in total supplies resulting in an expected increase in ending stocks. The increase in beginning stocks of nearly 0.7 million tons is primarily due to increases for India and Indonesia, which is partially offset by a reduction for Pakistan. Global production is lowered slightly due primarily to forecast reductions for Indonesia as well as North and South Korea, which is partially offset by an increase for Egypt and the United States. On the use side, global consumption is lowered 1.1 million tons, leading to an increase in projected global ending stocks. Domestic consumption is lowered for Pakistan and North Korea. Global exports are up from a month ago due to increases for Brazil, Egypt, India and Pakistan that are partially offset by reductions for Thailand and the United States. Global imports are up for Indonesia and China. Global ending stocks for 2011/12 are projected at 97.9 million tons, up 1.7 million from last month, largely the result of an upward revision for Thailand.

Further Reading

- You can view the full report by clicking here.

August 2011

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