FEED YEARBOOK – SUMMARY April 28, 2006 ERS-FDS-2006 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 text of the yearbook will be available electronically about 1 week following this summary release. ----------------------------------------------------------------- Corn and Sorghum Prices Fall in 2005/06 For 2005/06, total feed grain disappearance is projected at 296 million tons, up from 291 million tons the previous year. Food, seed, and industrial (FSI) use is forecast at a record 82 million tons, and exports are projected at 55 million tons, up from 51 million last year. The growth in utilization will not exceed the growth in supply, and ending stocks are expected to increase. Feed and residual use of the four feed grains plus wheat in September-August 2005/06 is expected to be down 3.5 percent from the 170 million tons used in September-August 2004/05. The grain used per grain consuming animal unit (GCAU) in 2005/06 is 1.79 tons, compared with 2004/05's 1.89 tons. Corn is expected to represent 93 percent of feed and residual use in 2005/06, down nearly 1 percent from 2004/05. Corn production in 2005/06 was 11.1 billion bushels, down from the previous year’s record crop of 11.8 billion bushels, but still the second largest crop. Even though yields were down from the record levels of last year, increased planted and harvested area helped keep production high. Beginning stocks were 2.1 billion bushels, and the total 2005/06 corn supply was up 460 million bushels to 13.2 billion bushels. Corn supplies are projected to be up, but utilization is forecast up less, resulting in increased ending stocks. Forecast total corn utilization is projected to rise 273 million bushels to a record 10.9 billion bushels. Utilization is forecast up for FSI and exports but down for feed and residual. Ending corn stocks for 2005/06 are expected to increase to 2.3 billion bushels, their highest level since 1987/88, and prices are expected to slip to $1.95-$2.05 per bushel. Corn FSI use in 2005/06 is expected to total 3.0 billion bushels, up from 2.7 billion in 2004/05. FSI use is expected to represent 27 percent of total corn use, up 2 percent from 2004/05 and 2003/04. Corn used to make ethanol for all of 2005/06 is forecast at 1.6 billion bushels, up 21 percent from 2004/05. In February (latest data available), ethanol production reported by the Department of Energy (DOE) was 302,000 barrels per day, up from 245,000 in February 2005 as new plants have come on stream. The 2005/06 sorghum crop was 394 million bushels, down from 454 million bushels a year earlier. Lower plantings are responsible for this year-to-year change. Total sorghum supply is 451 million bushels, down from 487 million bushels in 2004/05. Forecasted total sorghum utilization is down in 2005/06. The bulk of this year-over-year decrease comes from lower expected feed and residual use. Forecast sorghum ending stocks are 61 million bushels in 2005/06, up from 57 million a year earlier, and the season average price is projected at $1.70-$1.80 per bushel. The 2005/06 barley crop was 212 million bushels, down from 280 million last year. This decline was caused by lower plantings, harvested area, and yields. Beginning stocks are 128 million bushels, up from 120 million bushels in 2004/05. Estimated total barley supply is 345 million bushels in 2005/06, down from 412 million bushels a year earlier. Total utilization is forecast at 240 million bushels, down from 284 million. The bulk of this year-over-year decrease stems from feed and residual use, as exports are expected to be slightly higher than last year. Ending barley stocks are forecast at 105 million bushels. The 2005/06 season average barley price is forecast at $2.45 to $2.50 per bushel, compared with $2.48 the previous year. The 2005/06 oats supply is forecast at 258 million bushels, down from 268 million bushels a year earlier. Beginning stocks are the primary difference in the supply, down 7 million bushels. Total oats utilization is projected at 206 million bushels, down 4 million bushels from the previous year. Ending 2005/06 stocks are forecast to be 52 million bushels, down from 58 million. The 2005/06 season average oats price is expected to be $1.60 per bushel, compared with $1.48 a year earlier. According to the March 31 Prospective Plantings report, growers intend to plant 78 million acres of corn, down 5 percent from 2005. Sorghum growers intend to plant 6.5 million acres, up 29,000 acres from 2005. Barley growers intend to plant 3.7 million acres in 2006, down 5 percent from a year earlier and the lowest on record. Oats growers intend to plant 4.3 million oats acres, up 78,000 acres from last year. Hay production for 2005 is estimated at 151 million tons, down from 158 million in 2005. Harvested area declined from 61.9 million acres to 61.7 million acres, and yields were down from 2.55 tons per acre to 2.44 tons per acre. Stocks of all hay on farms totaled 105 million tons on December 1, 2005, down 8 percent from the previous year. Prices for all hay are up in 2005/06. According to the March 31 Prospective Plantings report, farmers indicated that they intend to harvest 61.5 million hay acres in 2006, down 171,000 acres from a year earlier. World coarse grain production is expected to drop 5 percent in 2005/06 compared with the previous year. Foreign coarse grain production is forecast down 4 percent as the European Union (EU- 25) dropped 13 percent and the former Soviet Union (FSU-12) fell 12 percent, more than offsetting a record crop in China. Global coarse grain beginning stocks are up 28 percent compared with the previous year, following record 2004/05 production, and the increased 2005/06 beginning stocks offsets most of the production decline, leaving 2005/06 global supplies down only slightly year- to-year. World coarse grain consumption is expected to decline slightly in 2005/06 due to the smaller production and outbreaks of animal diseases, especially avian influenza. Even though global consumption is expected to decline slightly, it will be near record levels, trimming world ending stocks an expected 10 million tons to 168 million, the third lowest in the last 20 years. U.S. corn exports for the October-September 2004/05 trade year are forecast at 50.5 million tons, up 12 percent from the previous year. Competition from Argentina is down due to a smaller corn crop. Moreover, corn exports from China, Brazil, and South Africa are expected to decline. However, large foreign supplies of competitively priced wheat for feeding are displacing U.S. corn. Also avian influenza is expected to slightly reduce world corn trade in 2005/06.