The USDA released the latest World Agriculture Supply and Demand Estimates Report on May 12th at 11 AM Central Time. You can view the findings pertinent to Wisconsin agriculture below. The full report can be viewed here.
LIVESTOCK, POULTRY, AND DAIRY: Total U.S. red meat and poultry production for 2021 is projected to be above 2020 as the sector continues to recover from the impacts of COVID-19 in 2020. Beef production is forecast higher as cattle placements in 2020 are expected to shift toward the latter part of the year and be marketed and slaughtered in 2021. Heavier carcass weights are also expected to support higher production. Pork production is expected to increase as the sector recovers from the slaughter adjustments of 2020. Broiler production is expected to surpass 2020 levels on expectations of improved returns. Turkey and egg production are forecast higher as producers respond to favorable prices in 2020. For 2020, the total red meat and poultry production forecast is reduced from last month as the sector adjusts to COVID-19 and economic uncertainty. Beef production is reduced as lower expected cattle slaughter more than offsets heavier carcass weights. Pork production is forecast lower on a slower expected pace of slaughter. However, heavier hog carcass weights are expected to partially offset lower production. Broiler and turkey production are lowered from last month as producers respond to weaker demand and adjustments to the pace of slaughter due to COVID-19. Egg production for 2020 is also reduced from last month.
Red meat and poultry exports are expected to increase in 2021 on expanding production and an expected increase in global demand. For 2020, export forecasts for beef and pork are reduced on slower expected export growth due to economic weakness and reduced supplies. Broiler exports are raised on current trade data and firm demand; the turkey export forecast is virtually unchanged.
For 2021, fed cattle, hog, and broiler prices are forecast higher on stronger expected demand, despite larger production. The 2021 turkey price forecast is fractionally below 2020. Egg prices in 2021 are forecast lower on supply pressure. For 2020, fed cattle prices are forecast lower on current prices and weak demand. Hog prices are raised from last month on current prices and improved demand expectations as the year progresses. Broiler prices are forecast lower on current prices, while turkey and egg price forecasts are raised.
Milk production for 2021 is forecast higher than 2020 on stronger expected growth in milk per cow, despite a slightly smaller dairy cow herd. Commercial exports on a fat basis are about the same as 2020 while skim-solids basis exports are forecast higher than 2020 on relatively firm demand. Imports on both a fat basis and skim-solid basis are forecast above 2020. With improved domestic and export demand, all dairy products prices are forecast higher in 2021. Both Class III and Class IV prices are forecast higher on stronger product prices. The 2021 all milk price is forecast higher at $15.00 per cwt.
COARSE GRAINS: The U.S. feed-grain outlook for 2020/21 is for record high production and domestic use, greater exports, and larger ending stocks. The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and a return to trend yield. The yield projection of 178.5 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period. Despite WASDE-600-2 beginning stocks that are down slightly from a year ago, total corn supplies are forecast record high at 18.1 billion bushels.
Total U.S. corn use in 2020/21 is forecast to rise relative to a year ago with increases for domestic use and exports. Food, seed, and industrial (FSI) use is projected to rise 245 million bushels to 6.6 billion. Corn used for ethanol is projected to increase from the 2019/20 COVID-19 reduced levels, based on expectations of a rebound in U.S. motor gasoline consumption. Sorghum FSI for 2020/21 is lower as expectations of increased sorghum import demand from China reduce available domestic supplies. Corn feed and residual use is projected higher mostly reflecting a larger crop and lower expected prices.
U.S. 2020/21 corn exports are forecast to rise 375 million bushels to 2,150 million, driven by growth in world corn trade. U.S. market share is expected to increase from the 2019/20 multi-year low, but remains below the average level seen during 2015/16 to 2019/20 with expected competition from Argentina, Brazil, and Ukraine.
With total U.S. corn supply rising more than use, 2020/21 U.S. ending stocks are up 1.2 billion bushels from last year and if realized would be the highest since 1987/88. Stocks relative to use at 22.4 percent would be the highest since 1992/93. With larger stocks relative to use, the season-average farm price is projected at $3.20 per bushel, down 40 cents from 2019/20 and the lowest since 2006/07.
The global coarse grain outlook for 2020/21 is for record production and use and larger ending stocks. World corn production is forecast record-high, with the largest increases for the United States, Brazil, Ukraine, Mexico, and Canada. Global corn use is expected to grow 4 percent, with foreign consumption up 3 percent. Global corn imports are projected to increase 4 percent. Notable forecast increases in corn imports include the EU, Egypt, Mexico, Iran, Morocco, and Vietnam. Global corn ending stocks are up from a year ago, as a decline in foreign stocks is more than offset by an increase for the United States. Excluding China and the United States, ending stocks are up 4 percent relative to a year ago.
For China, total coarse grain imports are forecast at 18.3 million tons, up 1.3 million from 2019/20 but below the 2014/15 record of 25.7 million tons. Since 2001/02, China’s largest individual coarse grain import total occurred during 2014/15 with 10.2 million tons of sorghum. Over that same time period realized corn imports reached a high of 5.5 million tons. Expectations are for robust demand from China in 2020/21, with 7.0 million tons of corn, 6.0 million of barley, and 5.0 million of sorghum imports from all sources.
WHEAT: The initial outlook for 2020/21 U.S. wheat is for smaller supplies, decreased domestic use, lower exports, and reduced stocks. Supplies are decreased by 121 million bushels from 2019/20 on lower carry-in stocks and smaller production. The 2020/21 U.S. wheat crop is projected at 1,866 million bushels, down 3 percent from last year on lower yields offsetting higher harvested acreage. The all-wheat yield is projected at 49.5 bushels per acre, down 2.2 bushels from last year. The first 2020 NASS survey-based winter wheat production forecast of 1,255 million bushels is down 4 percent from 2019, on lower Hard Red Winter and White Winter production. Total 2020/21 domestic use is projected down nearly 3 percent on reduced feed and residual use as record-large 2020/21 corn supplies are expected to displace wheat for feeding. Higher food use is partially offsetting as 2020/21 is projected up 2 million bushels to 964 million, up from a revised 2019/20 estimate of 962 million, which was raised 7 million this month. The NASS Flour Milling Products report, issued on May 1, indicated an unusually large volume of wheat was ground for flour in the first quarter of 2020. Exports for 2020/21 are projected at 950 million bushels, down 20 million from the revised 2019/20 exports. Greater global 2020/21 export competition is expected for the United States with several major exporters projected having larger supplies. Projected 2020/21 ending stocks are 69 million bushels lower than last year at 909 million. The projected season-average farm price is $4.60 per bushel, unchanged from last year as the outlook for low U.S. corn prices is expected to restrain 2020/21 U.S. wheat prices.
The initial outlook for 2020/21 international wheat is for larger supplies, increased trade, greater consumption, and higher ending stocks. Foreign supplies are projected to increase 23.2 million tons to 982.4 million as several major exporters (Argentina, Australia, Canada, and Russia) are projected to have higher production for 2020/21. Australia is projected with the largest increase from last year to 24.0 million tons, up 8.8 million as it recovers from a multi-year drought. Conversely, the EU is projected to decline nearly 12 million tons to 143 0 million on lower harvested area and yields. Ukraine production is also projected lower at 28.0 million tons, but this would still be the second-largest production on record.
Projected 2020/21 global trade is 4.6 million tons, or more than 2 percent higher, at a record-high 188.0 million on greater exportable supplies. Imports are projected to rise, primarily on increased demand by China, Algeria, Morocco, the EU, Iraq, and Uzbekistan. Russia is projected as the 2020/21 leading world wheat exporter at 35.0 million tons with Argentina, Australia, and Canada also projected higher while the EU, Ukraine, and United States are lower. Projected 2020/21 world consumption is increased 4.9 million tons to a record-large 753.5 million as higher food, seed, and industrial use more than offsets reduced feed use on greater global corn supplies. Projected 2020/21 world ending stocks increased 5 percent to a record-large 310.1 million tons with China accounting for 52 percent of the total.
Leave a Reply