Feed YEARBOOK -- SUMMARY April 22, 2005 April 2005, ERS FDS-2005 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------------------------------ This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete report will be available electronically about 1 week following the summary release. ------------------------------------------------------------------------------------------------------ Record Corn Crop Leads to Sharp Increase in Feed Grain Ending Stocks in 2004/05 For 2004/05, total feed grain disappearance is projected at 288 million tons, up from 279 million tons last year. All domestic use categories showed year-over-year increases, but exports are expected to decline. Food, seed, and industrial (FSI) use is forecast at a record 76 million tons. A record corn crop led to a rise in feed grain supplies, which are forecast at 350 million tons. The growth in utilization did not exceed the growth in supply, and ending stocks are expected to increase. Feed and residual use of corn, sorghum, barley, oats, and wheat in September-August 2004/05 is expected to be up 4 percent from the 160 million tons used in September-August 2003/04. The grain used per grain consuming animal unit in 2004/05 is 1.85 tons, compared with 2003/04's 1.79 tons. Corn is expected to represent 91 percent of feed and residual use in 2004/05, down nearly 1 percent from 2003/04. Corn production in 2004/05 was a record 11,807 million bushels, up 17 percent from last year’s 10,089 million bushels. A record-high average yield of 160.4 bushels per acre and a 2.7-million- acre increase in harvested area are behind this year-over-year increase. Beginning stocks were 958 million bushels, and the total 2004/05 corn supply was up 1,585 million bushels to 12,775 million bushels. Corn supplies are projected to be up, but utilization is forecast up less, resulting in increased ending stocks. Total corn utilization is forecast to rise 328 million bushels to a record 10,560 million bushels. Utilization is forecast up for all domestic use categories. Ending corn stocks for 2004/05 are expected to increase to 2,215 million bushels, their highest level since 1987/88, and prices are expected to slip to $2.00-$2.10 per bushel. Corn food, seed, and industrial use in 2004/05 is expected to total 2,760 million bushels, up nearly 9 percent from 2,537 million in 2003/04. FSI use would represent 26 percent of total corn use, up 1 percent from 2003/04 and 2002/03. Corn used to make ethanol for 2004/05 is forecast at 1,400 million bushels, up 20 percent from 2003/04. In January (latest data available), ethanol production reported by the U.S. Department of Energy was 241,000 barrels per day, up from 211,000 in January 2004 as new plants have come on-stream. The 2004/05 sorghum crop was 455 million bushels, up nearly 11 percent from 411 million bushels a year earlier. An increase in yield, at 69.8 bushels per acre, led to this year-over-year increase as harvested area declined. Beginning stocks were 34 million bushels. Total sorghum supply is estimated at 488 million bushels, up from 454 million bushels in 2003/04. Forecast total sorghum utilization is nearly unchanged in 2004/05, but domestic use is up. Sorghum ending stocks are expected to be 66 million bushels in 2004/05, up from 34 million a year earlier, and the season average price is projected at $1.65-$1.75 per bushel, down from $2.39 in 2003/04. The 2004/05 barley crop was 279 million bushels--little changed from last year. Although harvested area dropped 4 percent, higher yields kept production constant. Beginning stocks were 120 million bushels, up from 69 million bushels in 2003/04. Estimated total barley supply is 415 million bushels in 2004/05, up from 368 million bushels a year earlier. Total utilization is forecast at 275 million bushels, up from 248 million. All of this year-over-year increase stems from domestic use, as exports are expected to be slightly lower than last year. Ending barley stocks are forecast at 140 million bushels and the largest since 1992/93. The 2004/05 season average barley price is forecast at $2.50 per bushel, down from $2.83 the previous year. The 2004/05 oats supply is forecast at 266 million bushels, down from 285 million bushels a year earlier. The 2004/05 yield was about the same as last year, but area harvested for grain was smaller. Total oats utilization is projected at 212 million bushels, down 8 million bushels from the previous year. Ending 2004/05 stocks are forecast to be 54 million bushels, down from 65 million. The 2004/05 season average oats price is expected to be $1.45 per bushel, compared with $1.48 a year earlier. According to the March 31 Prospective Plantings report, growers intend to plant 81.4 million acres of corn, up almost 1 percent from 2004. Sorghum growers intend to plant 7.4 million acres, down 86,000 acres from 2004, and the lowest recorded since 1929. Barley growers intend to plant 4 million acres in 2005, down 12 percent from a year earlier and the lowest since 1894. Oats growers intend to plant 4.3 million acres, up 4 percent from last year. Hay production for 2004 is estimated at 158 million tons, up fractionally from the 2003 total. Harvested area declined from 63 million acres to 62 million acres, but yields were up from 2.49 tons per acre to 2.55 tons per acre. Stocks of all hay on farms totaled 114 million tons on December 1, 2004, up 3 percent from the previous year. Prices for all hay are up so far in 2004/05, led by increases in alfalfa hay prices. Farmers indicated that they intend to harvest 63 million acres of hay in 2005, up 2 percent from a year earlier. World coarse grain production is expected to increase 10 percent in 2004/05, exceeding 1 billion tons for the first time, led by a record U.S. corn crop. Moreover, foreign coarse grain production is forecast up 7 percent as the European Union, Other Europe, and parts of the former Soviet Union rebound from 2004’s drought. Corn production in China is forecast up 10 percent as growing conditions were generally favorable, and yields are forecast at near-record levels. Global coarse grains beginning stocks were the lowest since 1977/78, limiting the increase in 2004/05 supplies. World coarse grain consumption in 2004/05 is expected to grow over 2 percent due to population growth and, in many regions, improving economic conditions; however, growth will be limited by outbreaks of animal diseases, especially avian influenza. Even though global consumption is forecast to reach record levels, it will be smaller than production, boosting world ending stocks an expected 36 million tons to 169 million, the first increase in 6 years. U.S. corn exports for the October-September 2004/05 trade year are forecast at 45.5 million tons, down 6 percent from the previous year. Competition from Argentina has increased, more than offsetting reduced exports by China. In addition, increased supplies of competitively priced wheat are now used for feeding. Corn exports from Ukraine are forecast up 45 percent, and Romania is expected to re-emerge as a significant exporter. EU-25 corn exports are essentially unchanged because the EU-25 has been slow to develop policies applicable to Hungarian corn. Brazil’s corn exports are expected to drop to about a third of the previous year’s level as production declines. High ocean freight rates are expected to limit the increase in global corn trade.