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13 August 2015

USDA WASDE - 13 August 2015USDA WASDE - 13 August 2015

USDA World Agricultural Supply & Demand Estimates

WHEAT: Projected U.S. wheat supplies for 2015/16 are lowered on a smaller crop and reduced imports. An increase in spring wheat production is more than offset by decreases for Hard Red Winter, Soft Red Winter, and White Wheat. Hard Red Spring wheat yields in North Dakota are forecast to be a record. Projected imports are lowered 5 million bushels on the larger U.S. Hard Red Spring crop and lower Canadian production. All wheat exports for 2015/16 are projected 25 million bushels lower at 925 million on a slow pace to date and increased foreign supplies. Ending stocks are raised 8 million bushels to 850 million, the largest since 2010/11.

The season-average farm price is lowered 10 cents on the low end and 20 cents on the high end to $4.65 to $5.55 per bushel. Global wheat supplies for 2015/16 are raised 2.2 million tons primarily on increased production in the FSU and Turkey. A 2.4-million-ton reduction in global beginning stocks partially offsets the production increase; EU accounts for over 60 percent of the reduction.

World wheat production is projected at a record. Crop conditions in the spring wheat areas of Russia and Kazakhstan continue to be excellent. Winter wheat production in Russia and Ukraine is better than expected, particularly considering last autumn’s drought. A 1-million-ton reduction for Canada, due to drought conditions in the western prairies, is partially offsetting. Argentina production was lowered 0.4 million tons to 11.1 million. World exports are lower with the biggest decreases for Canada (smaller crop), Argentina (smaller crop and lower carryin), and the United States. Global imports are also down with the biggest changes being a 1-million-ton reduction for Iran offset by a 1-million-ton increase for Morocco. Iran’s imports are reduced as a result of a newly imposed import duty and the Morocco change is from a Foreign Agricultural Service GAIN report. Global use is up slightly, supported by increased feed and residual use for EU, Russia, and Ukraine. With supplies growing faster than use, global ending stocks are raised 1.7 million tons to a record 221.5 million tons.

COARSE GRAINS: Projected 2015/16 U.S. feed grain supplies are increased this month with higher forecast corn, sorghum, barley, and oats production. Corn production is forecast at 13.7 billion bushels, up 156 million from the July projection, with the season’s first survey-based corn yield forecast at 168.8 bushels per acre, 2.0 bushels higher than last month’s trend-based projection. Corn supplies for 2015/16 are projected at a record 15.5 billion bushels, up 154 million from last month with a small reduction in beginning stocks. Projected ending stocks for 2014/15 decline 6 million bushels with higher expected use. Increased use for sweeteners is partly offset by reductions in other categories of food and industrial use and an increase in imports.

Total U.S. corn use for 2015/16 is projected 40 million bushels higher as increased domestic usage is expected to more than offset a reduction in exports. Feed and residual use is projected 25 million bushels higher with the larger crop and lower expected prices. Food, seed, and industrial use is projected up 40 million bushels with use for ethanol production raised 25 million bushels on the latest forecast for gasoline consumption by the Energy Information Administration. Exports are projected 25 million bushels lower with larger supplies in Brazil and Argentina expected to increase WASDE-544-2 competition for U.S. corn in world markets.

U.S. corn ending stocks for 2015/16 are projected 114 million bushels higher. The season-average corn price received by producers is projected 10 cents lower on both ends to $3.35 to $3.95 per bushel. This would be down 5 cents, at the midpoint, from the $3.65 to $3.75 per bushel expected for 2014/15. Global coarse grain supplies for 2015/16 are projected 4.8 million tons higher with a 3.0-million-ton increase in beginning stocks and a 1.8-million-ton increase in global coarse grain production. Foreign corn beginning stocks are up 3.6 million tons with increases in 2014/15 production for Brazil and Mexico and increases in 2014/15 imports for China, EU, South Korea, and Mexico. Argentina corn production is also raised for 2014/15.

Foreign corn production for 2015/16 is reduced 5.5 million tons with reductions for China, EU, and Serbia, only partly offset by increases for Brazil, Ukraine, and Russia. Global barley production is higher this month with increases for Ukraine and Morocco outweighing a reduction for Canada. Global 2015/16 coarse grain consumption is lowered slightly with a reduction in global corn use driven by reductions in corn feeding for EU, China, and Ukraine. Higher wheat feeding is expected for EU and Ukraine, and higher sorghum feeding for China. Global coarse grain trade is higher with corn imports raised for EU, barley imports raised for Saudi Arabia, and sorghum imports raised for China. Corn exports are raised for Ukraine, Brazil, and Russia with larger crops. Corn exports are reduced for Serbia, EU, and the United States. Barley exports are raised for Ukraine, but lowered for Canada. Sorghum exports are raised for the United States with the larger crop. Global coarse grain ending stocks for 2015/16 are raised this month with a 5.1-million-ton increase for corn mostly on higher stocks in the United States, Brazil, and Mexico.

RICE: U.S. 2015/16 total rice supplies are projected at 278.4 million cwt, nearly unchanged from last month. Lower production more than offsets larger carryin stocks and imports. The first surveybased forecast of the U.S. 2015/16 rice crop is 205.0 million cwt, down 2.0 million from last month and 7 percent below the previous year. Average all rice yield is forecast at 7,472 pounds per acre, down 72 pounds per acre from last month’s projection, and 1 percent below last year. Area harvested is unchanged at 2.74 million acres. Long-grain production is forecast at 149.0 million cwt and combined medium- and short-grain production at 56.0 million.

The all rice import projection is 25.5 million cwt, up 0.5 million from last month—with the increase in long-grain. U.S. 2015/16 total rice use is projected at 236.0 million cwt, 4.0 million below last month, but 3 percent above the previous year. Total domestic and residual use is lowered 1.0 million cwt to 129.0 million due mostly to a smaller crop and a lower residual component. Exports are forecast at 107.0 million cwt, down 3.0 million from last month, and 6 percent above last year. The decrease is due to reduced supplies and strong competition with Southeast Asian exporters.

Long-grain and combined medium- and short-grain exports are projected at 74.0 million and 33.0 million, respectively. U.S. all rice ending stocks for 2015/16 are projected at 42.4 million cwt, up 4.0 million from last month, but 11 percent below the previous year. The 2015/16 U.S. long-grain rice season-average farm price is projected at $11.50 to $12.50 per cwt, up 60 cents per cwt on each end of the range from last month. Combined medium- and shortgrain price is projected at $17.80 to $18.80 per cwt, unchanged from a month ago.

The California and Other States medium- and short-grain prices are unchanged from a month ago at a midpoint of $21.00 per cwt and $14.80 per cwt, respectively. The 2015/16 all rice price is projected at $13.40 to $14.40 per cwt, up 40 cents per cwt on each end of the range. The projected decrease in global 2015/16 total use of rice is greater than the drop in total supply resulting in an increase in world ending stocks. Global rice production is lowered 1.7 million tons to 478.7 million, still a record, due primarily to forecast reductions for Argentina, Cambodia, Iraq, South Korea, Thailand, and the United States.

Thailand’s 2015/16 rice crop is lowered 1.0 million tons to 18.0 million, attributed mostly to an abnormally low rainfall in important growing areas, including the Central Region. Planted area has been lowered by 3 percent due to restrictions on irrigation water availability imposed by the government of Thailand because of low reservoir levels. Global beginning stocks for 2015/16 are increased 1.1 million tons due mostly to a 1.0-million-ton increase in Thailand. Thailand’s 2014/15 exports are reduced by 1.0 million tons to 9.0 million due to the slow pace of sales. World 2015/16 consumption is reduced 1.0 million tons to 487.8 million, still a record. Consumption is lowered in Bangladesh, India, and the United States. Global trade is lowered 0.4 million tons due mostly to a reduction in exports from Cambodia and the United States. Global 2015/16 ending stocks are projected at 90.8 million tons, up 0.3 million from last month.

OILSEEDS: U.S. oilseed production for 2015/16 is projected at 115.4 million tons, up 0.4 million from last month as a higher soybean production forecast offsets lower cottonseed and peanut crops. Soybean production for 2015/16 is projected at 3.916 billion bushels, up 31 million as a higher yield offsets a lower harvested area. Harvested area is revised down 0.9 million acres from the July estimate to 83.5 million mainly on lower acreage in Missouri.

The first survey-based soybean yield forecast of 46.9 bushels per acre is 0.9 bushels above last month’s projected trend and 0.9 bushels below last year’s record yield. Soybean supplies for 2015/16 are projected 16 million bushels above last month based on the higher production forecast. Forecast U.S. soybean exports are lowered by 50 million bushels to 1.725 billion, as a result of slow export sales commitments. Soybean crush is raised 20 million bushels based on expected higher domestic use of soybean meal and soybean oil. Soybean ending stocks are projected at 470 million bushels, up 45 million from last month. The U.S. season-average soybean price for 2015/16 is forecast at $8.40 to $9.90 per bushel, down 10 cents at the midpoint from last month. Soybean meal prices are forecast at $310 to $350, down 5 dollars at the midpoint. Soybean oil prices are forecast at 29.5 to 32.5 cents per pound, down 1 cent at the midpoint. U.S. changes for 2014/15 include increased soybean crush, which is raised 15 million bushels to 1.845 billion reflecting higher domestic use and exports of soybean meal. With higher expected domestic use, the forecast of season-ending soybean stocks are reduced to 240 million bushels.

Global oilseed production for 2015/16 is projected at 529.1 million tons, down 2.7 million tons from last month. Reductions for rapeseed, sunflowerseed, cottonseed, and peanuts more than offset an increase in soybean production. Soybean production is projected up 1.1 million tons with higher crops for the United States and Ukraine. Rapeseed production is reduced 2.6 million tons as hot and dry weather curtailed yields in Canada and the EU, while harvested area is lowered for Ukraine, Belarus, and Australia. Other changes include lower EU sunflowerseed production, and reduced cottonseed production for India and China. Projected 2015/16 global soybean ending stocks are lowered 4.9 million tons to 86.9 million with a higher crush for China, the EU, and the United States. Despite this month’s reduction, global soybean stocks remain record high. Projected soybean imports for China in 2015/16 are increased 1.5 million tons to 79 million and up from a revised 2014/15 forecast of 77 million. Soybean exports for Brazil and Argentina are projected higher due to growth in global trade.

SUGAR: Beginning stocks for 2015/16 are increased 91,482 short tons, raw value (STRV) due to increases in 2014/15 production (53,500) and imports (37,982) with no change in 2014/15 total use. Total 2015/16 sugar production is projected at 8.800 million STRV, an increase of 35,000 over last month. The entire increase is attributable to increased cane sugar production in Florida based on the crop forecast made in the National Agricultural Statistics Service’s (NASS’s) August 2015 Crop WASDE-544-4 Production.

Beet sugar for the 2015/16 August-July crop year is forecast at 5.163 million STRV, an increase of 45,000 based on NASS’s sugarbeet crop forecast and an upward revision to projected sucrose content to 17.5 percent based on processors’ reports. National yield is forecast at a record 29.9 tons/acre, the same as projected last month. Area harvested is up 4,000 acres from a previous forecast to 1.144 million acres. Due to the early start to the harvest, the entire increase in sugar is expected in August and September adding a net 45,000 STRV to 2014/15 production, now estimated at 4.825 million. Imports for 2015/16 are projected at 3.369 million STRV based on an upward projection of high-tier tariff imports to 15,000 and a very small revision to imports from Mexico resulting from a difference in rounding made by the Commerce Department in estimating the Target Quantity of U.S. Sugar Needs as defined in the CVD Suspension Agreement. With no change in total use, ending stocks are projected at 1.780 million STRV, implying an ending stocksto-use ratio of 14.6 percent. Mexico beginning stocks for 2015/16 are estimated at 836,774 metric tons (MT), down 190,616 from last month because of an upward estimate of 2014/15 deliveries for consumption to 4.441million MT. Production for 2015/16 is unchanged at 6.0 million.

Deliveries for 2015/16 are increased by 192,477 MT to 4.501 million MT. It is assumed that per capita sweetener consumption is unchanged from 2014/15 at 49.4 kilograms and that consumption of high fructose corn syrup (HFCS) is the same as that estimated for 2014/15; i.e., 1.420 million MT, dry weight. Ending stocks for 2015/16 are forecast residually at 832,564 MT, down 31.5 percent from last month. The implied stocks-to-consumption ratio is 18.5 percent.

LIVESTOCK, POULTRY, AND DAIRY: The forecasts for total meat production in 2015 and 2016 are lowered from last month. Beef production for 2015 and 2016 is lowered due to a combination of slower marketings of fed cattle and reduced cow slaughter.

Pork production forecasts for 2015 and 2016 are unchanged. Broiler production for 2015 is lowered from last month as growth in the number of eggs set and chicks placed has slowed. Weaker forecast broiler prices are expected to limit production growth as well. No change is made to 2016 production. Turkey production is raised for 2015 based on hatchery data. Egg production for 2015 is lowered based on second quarter production but no change is made to the forecasts for the remainder of 2015 and 2016.

The beef export forecasts for 2015 and 2016 are lowered from last month on the relative strength of the dollar and expectations of weak demand. Beef imports are raised on strength in demand for processing-grade beef. Pork and broiler imports and exports are adjusted to reflect June trade data. The turkey export forecast is reduced for 2015 and 2016 as supplies remain tight. Cattle prices for 2015 and 2016 are reduced from last month on weaker demand. Hog prices are reduced for 2015 as supplies are large. Broiler prices are lowered for both 2015 and 2016 on competition from relatively lower red meat prices. Turkey prices for 2015 are raised from last month on tighter supplies. Egg prices for both 2015 and 2016 are raised from last month on tight supplies and prices to date.

The milk production forecast for 2015 is unchanged from last month, but weaker milk prices in late 2015 and 2016 result in lower production for 2016 than forecast last month. Exports are reduced as competition in world markets is expected to be robust in both 2015 and 2016 and relatively strong domestic demand will likely encourage increased imports. Stocks at the end of 2015 are forecast higher than last month as a result of increased imports and reduced exports. Skim stocks for the end of 2016 are also forecast higher than last month. Larger domestic supplies as a result of increased imports and weaker exports are expected to pressure product prices in 2015.

Forecast prices for butter, cheese, nonfat dry milk (NDM) and whey are lowered from last month. Price forecasts for 2016 for cheese, whey, and NDM are WASDE-544-5 reduced. However, domestic demand strength and expectations that milk will flow away from butter and NDM production in 2016 support an increase in the butter price forecast. NDM prices are expected to be pressured by continued competition in international markets. Class III and Class IV prices are reduced from last month for both 2015 and 2016. The all milk price is forecast at $16.75 to $16.95 per cwt for 2015 and $16.40 to $17.40 per cwt for 2016.

COTTON: This month’s 2015/16 U.S. cotton estimates include sharply lower supplies, disappearance, and ending stocks relative to last month. Production for the 2015 crop is reduced 10 percent to 13.1 million bales, based on this season’s first production field survey, which indicates lower planted area, higher abandonment, and a lower average yield compared to last month’s expectations. Beginning stocks are reduced 500,000 bales due to higher-than-expected 2014/15 exports; in addition, the 2014/15 ending stocks estimate includes a preliminary reduction based on reported stocks in public warehouses. U.S. ending stocks for 2014/15 will be revised further as more data becomes available. Domestic mill use for 2015/16 is reduced marginally, but exports are lowered 800,000 bales due to the lower production. Ending stocks of 3.1 million bales would be 23 percent of total use. The range for the marketing year average price is raised to 58 to 72 cents per pound, for a midpoint of 65 cents, which is up 3 cents from last month. Projected 2015/16 world cotton stocks are reduced nearly 3 million bales this month, due mainly to lower estimated production in the world’s major cotton-producing countries. In addition to the U.S. reduction, production is lowered 1.0 million bales in China based on lower reported area and extreme heat in Xinjiang, and 0.5 million bales in India based on lower-than-expected plantings to date. Production is also reduced for Uzbekistan, but is raised for Brazil, Australia, and Pakistan. World consumption and trade are raised, due to multiple, mostly offsetting, changes, the largest of which incorporates historical and current increases to imports and consumption for Bangladesh (see for detailed explanations of revisions for Bangladesh and other countries). World ending stocks are now projected at 105.2 million bales.

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