FEED OUTLOOK FDS-0395 United States Department of Agriculture Economic Research Service ------------------------------------------------------------------------------- Approved by the World Agricultural Outlook Board March 13, 1995 ------------------------------------------------------------------------------- HIGHLIGHTS o Corn Export Forecast Raised o Corn and Sorghum 5-Month Deficiency Payment Rates Announced o Transportation Demand Remains Strong This month's focus remains largely on trade and crop developments in the Southern Hemisphere. Changes in the supply and disappearance of U.S. feed grains were limited to corn, with projected ending stocks down 48 million bushels from last month to 1,610 million bushels. Projected corn exports are up 50 million bushels and imports up 2 million. Estimates of grain stocks on March 1, 1995, will be released at 8:30 am. ET on March 31, along with Prospective Plantings for 1995 crops. The forecast range for the season average farm price of corn was narrowed by 5 cents on each end to $2.15 to $2.25 per bushel. The sorghum price range was narrowed by the same amount to $2.00 to $2.10. With a large share of marketings already completed, the forecasts of barley and oats prices were narrowed to $2.01 and $1.21 per bushel, respectively. U.S. CORN EXPORT PROSPECTS STRENGTHEN Projected U.S. corn exports increased 50 million bushels this month to 2 billion bushels (50.8 million tons) due to deteriorating crop prospects in South Africa, as well as continued strong global import demand for U.S. corn. In South Africa, continued dry weather reduced corn yield prospects, and forecast production is down 2 million tons from last month to 5 million tons. This would be the second lowest crop since 1983/84. Declining crop prospects and a sharp drawdown in stocks is expected to trigger imports of 500,000 tons by South Africa in 1994/95 (October-September). The shortfall is expected to lead to even higher imports in October-September 1995/96. No reduction was made this month in South Africa's 1994/95 corn exports, which have come from old crop supplies. In addition to import demand by South Africa, 1994/95 import requirements for other southern African countries, particularly Zambia, are projected to rise sharply. In Argentina, however, where the harvest is just beginning, crop conditions continue to be favorable. No changes in the Argentine forecast were made this month. The pace of export sales of U.S. corn continues strong. U.S. export sales (outstanding sales plus accumulated exports) as of February 28 were more than double last year's level and approximately 16 percent above the average since 1981/82. Underpinned by unusually strong import demand by South Korea and China, U.S. corn sales to Asia account for nearly three-quarters of total commitments to date. This compares to the average of the previous 6 years of 54 percent. F.o.b. Gulf prices remained relatively stable through February at $107 per ton. Present export prices are $10 above the post-harvest lows of $96 in September and October, but still $17 below the price at this time last year. U.S. SORGHUM EXPORTS UNCHANGED DESPITE IMPROVED OUTLOOK IN AUSTRALIA Despite a more optimistic outlook for Australian sorghum production, U.S. sorghum exports are projected unchanged at 5.6 million tons. In Australia, abundant rainfall late in the season has broken the drought and is boosting the crop forecast to 900,000 tons. This is up from 650,000 tons last month, and only slightly lower than the previous year's production. The higher than expected sorghum harvest and declining farm gate prices are expected to drop Australia's sorghum import requirements from the 500,000 tons previously forecast to 250,000, most of which has already been shipped from the United States. Higher sorghum imports by Japan, however, are likely to more than offset the drop in projected imports by Australia. Strong sorghum imports by Japan to date have led to a 300,000-ton shift of forecast corn imports to sorghum. 1994/95 DEFICIENCY PAYMENT RATE ANNOUNCED The weighted average market price received by producers in September-January was $2.11 per bushel for corn, and $1.95 for sorghum. The 5-month deficiency payment rates announced by USDA are $.4275 per bushel for corn and $.4425 for sorghum. If an advanced deficiency payment was received, the rates will be reduced by $.20 for corn or $.23 for sorghum. Market prices were higher than the loan rates, and thus were used in the calculation. The 5-month payment rate is based on 75 percent of the difference between the target price and the lesser of the 5-month price plus 7 cents or the projected 12-month price. For both corn and sorghum, the 5-month price plus 7 cents is below the projected 12-month price. The final deficiency payment rate will be determined at the end of the marketing year, and any additional payments will be made in October 1995. The total deficiency payment rate will be no less than $.57 per bushel for corn and $.59 per bushel for sorghum. TRANSPORTATION DEMAND CONTINUES STRONG The large projected use of grain and soybeans has significantly boosted demand for all transportation. Shipments to ports for export held demand for barge service well above seasonal levels in January and were the cause of much of the increased rail grain shipments during January and February 1995. As good weather returns, rail and barge shipments are expected to rise even further. The upper Mississippi river was closed by ice in January. Still, barge shipments of grain on the Illinois and Mississippi rivers totaled 2.4 million short tons, 60 percent above January 1994. The Illinois river accounted for nearly all this volume, 2.3 million short tons, 64 percent above January 1994. Shipments on the Ohio river averaged 332,000 short tons per week, up 124 percent from the prior year. Preliminary indications are that barge shipments of grain declined somewhat during February. Shipments through lock and dam 27 averaged 385,000 short tons per week, down 43 percent from January and down 26 percent from a year earlier. Volume on the Ohio averaged 300,000 short tons, 10 percent below January, but 43 percent above the prior year. Rail shipments averaged 28,299 cars per week in January, 7 percent above January 1994, and 1 percent above December. February rail volume rose to 29,292 cars per week, 3 percent above the 10-year average and 16 percent above February 1994. During February rail grain shipments for export averaged 6,316 cars per week greater than in 1994. Since total railed grain was up only 4,151 cars per week, it appears that rail traffic for domestic users actually decreased from 1994. This was also the case in January. The Bureau of Labor Statistics' rail rate index for grain (December 1984=100) rose fractionally in January to 117.1. The Bureau of Labor Statistics' barge rate index for grain (December 1984=100) slipped since the October peak of 185.5, to 170.8 for January 1995. This is 11 percent above December and 88 percent above the 1991/92-1993/94 average for the month. Barge rates appear to have remained near January levels during February. ****************************************************************************** * Information Contacts: * * * * Pete Riley (202) 501-8512 T.Q. Hutchinson (202) 219-0353 * * Allen Baker (202) 219-0839 Nancy Morgan (202) 501-8511 * * * * The next Feed Outlook will be released April 12, 1995. * ****************************************************************************** Table 1--Feed Grains: Marketing year supply and disappearance 1/ ------------------------------------------------------------------------------- Year/ Beg. Produc- Im- Supply FSI Feed & Ex- Total End. Farm Qtr. stocks tion ports resid. ports disp. stks. price ------------------------------------------------------------------------------- CORN -------------------------Million bushels--------------------- $/bu 1992/93 Sep-Nov 1,100 9,477 1 10,578 360 1,825 488 2,672 7,906 2.04 Dec-Feb 7,906 --- 1 7,907 350 1,416 463 2,229 5,678 2.00 Mar-May 5,678 --- 2 5,680 403 1,157 411 1,971 3,709 2.13 Jun-Aug 3,709 --- 3 3,712 399 899 301 1,599 2,113 2.19 Mkt. yr. 1,100 9,477 7 10,584 1,511 5,296 1,663 8,471 2,113 2.07 1993/94 Sep-Nov 2,113 6,336 5 8,455 378 1,705 435 2,518 5,937 2.34 Dec-Feb 5,937 --- 8 5,945 371 1,248 330 1,949 3,996 2.71 Mar-May 3,996 --- 6 4,002 419 954 270 1,642 2,360 2.67 Jun-Aug 2,360 --- 1 2,361 420 798 293 1,511 850 2.35 Mkt. yr. 2,113 6,336 21 8,470 1,588 4,704 1,328 7,620 850 2.50 1994/95 Sep-Nov 850 10,103 2 10,955 410 2,015 449 2,875 8,081 2.09 Mkt. yr. 850 10,103 7 10,960 1,700 5,650 2,000 9,350 1,610 2.15-2.25 SORGHUM 1992/93 Sep-Nov 53 875 0 928 2 266 56 324 604 1.85 Dec-Feb 604 --- 0 604 1 67 101 170 434 1.86 Mar-May 434 --- 0 434 3 80 87 170 265 1.89 Jun-Aug 265 --- 0 265 2 56 32 90 175 2.07 Mkt. yr. 53 875 0 928 8 469 277 753 175 1.89 1993/94 Sep-Nov 175 534 0 709 2 222 39 263 446 2.22 Dec-Feb 446 --- 0 446 2 108 60 170 276 2.59 Mar-May 276 --- 0 276 3 82 64 148 128 2.37 Jun-Aug 128 --- 0 128 2 41 38 81 48 2.10 Mkt. yr. 175 534 0 709 8 453 202 662 48 2.31 1994/95 Sep-Nov 48 655 0 703 2 215 64 280 422 1.95 Mkt. yr. 48 655 0 703 8 400 220 628 75 2.00-2.10 ------------------------------------------------------------------------------- Table 1--Feed Grains: Marketing year supply and disappearance, (cont.) 1/ ------------------------------------------------------------------------------- Year/ Beg. Produc- Im- Supply FSI Feed & Ex- Total End. Farm Qtr. stocks tion ports resid. ports disp. stks. price ------------------------------------------------------------------------------- BARLEY -----------------------Million bushels--------------------- $/bu 1992/93 Jun-Aug 129 455 7 590 43 110 18 172 418 2.16 Sep-Nov 418 --- 2 420 37 14 22 73 347 1.92 Dec-Feb 347 --- 1 348 37 45 22 104 244 2.01 Mar-May 244 --- 2 246 54 23 18 95 151 2.02 Mkt. yr. 129 455 11 595 171 192 80 444 151 2.04 1993/94 Jun-Aug 151 398 3 552 43 92 15 150 403 1.95 Sep-Nov 403 --- 11 413 38 27 15 80 333 2.03 Dec-Feb 333 --- 24 357 38 83 12 133 224 2.10 Mar-May 224 --- 34 258 56 40 24 119 139 2.16 Mkt. yr. 151 398 71 621 175 241 66 482 139 1.99 1994/95 Jun-Aug 139 375 24 538 43 122 20 186 352 2.00 Sep-Nov 352 --- 14 366 38 30 19 87 279 2.03 Mkt. yr. 139 375 60 574 175 225 70 470 104 2.01 OATS 1992/93 Jun-Aug 128 294 15 437 31 111 1.0 142 295 1.29 Sep-Nov 295 --- 12 307 29 33 2.1 64 242 1.30 Dec-Feb 242 --- 11 253 27 50 1.4 78 175 1.40 Mar-May 175 --- 17 192 39 39 1.3 79 113 1.46 Mkt. yr. 128 294 55 477 125 233 5.7 364 113 1.32 1993/94 Jun-Aug 113 207 17 337 32 84 1.5 118 219 1.35 Sep-Nov 219 --- 35 254 30 30 0.7 60 194 1.33 Dec-Feb 194 --- 31 225 27 51 0.5 79 147 1.42 Mar-May 147 --- 24 170 36 28 0.2 65 106 1.40 Mkt. yr. 113 207 107 427 125 193 3.0 321 106 1.36 1994/95 Jun-Aug 106 230 20 356 32 104 0.2 136 220 1.17 Sep-Nov 220 --- 34 254 30 32 0.2 62 192 1.15 Mkt. yr. 106 230 100 435 125 200 1.0 326 109 1.21 ------------------------------------------------------------------------------- Totals may not add due to rounding. 1/ Corn and sorghum are on a September 1 to August 31 marketing year. Barley and oats are on a June 1 to May 31 marketing year. Table 2--Feed and residual use of wheat and coarse grains ------------------------------------------------------------------------------ Year Feed Total Animal Feed/ Beginning Corn Sorg. Barley Oats Grains Wheat grains Units animal September 1 unit ------------------------------------------------------------------------------ -------------------Million ---------------------- Mil. Tons 1992/93 Sep-Nov 46.3 6.8 0.3 0.5 53.9 -2.2 51.7 Dec-Feb 36.0 1.7 1.0 0.7 39.4 0.1 39.5 Mar-May 29.4 2.0 0.5 0.6 32.5 -2.0 30.4 Jun-Aug 22.8 1.4 2.0 1.2 27.5 8.1 35.5 Mkt. yr. 134.5 11.9 3.8 3.0 153.2 3.9 157.2 82.8 1.90 % Change 8.6 25.3 -23.4 -7.9 8.2 -37.3 6.3 2.5 3.69 1993/94 Sep-Nov 43.3 5.6 0.6 0.4 50.0 -1.0 48.9 Dec-Feb 31.7 2.7 1.8 0.7 37.0 1.1 38.1 Mar-May 24.2 2.1 0.9 0.4 27.6 -0.6 26.9 Jun-Aug 20.3 1.0 2.7 1.5 25.5 10.3 35.7 Mkt. yr. 119.5 11.5 5.9 3.1 140.0 9.7 149.6 84.3 1.77 % Change -11.2 -3.4 56.4 3.0 -8.6 145.3 -4.8 1.8 -6.5 1994/95 Sep-Nov 51.2 5.5 0.7 0.5 57.8 -0.9 56.9 Mkt. yr. 143.5 10.2 4.63 2.9 161.2 4.72 165.9 85.2 1.95 % Change 20.1 -11.6 -21.7 -5.4 15.2 -51.2 10.9 1.1 9.7 ------------------------------------------------------------------------------ Table 3--Grain shipments and rates ------------------------------------------------------------------------------- 1992/93 ---------1993/94---------- ----1994/95---- Mkt. Yr. Mkt. Yr. Sep-Jan January Sep-Jan January ------------------------------------------------------------------------------- Barge shipments 1/ 2.5 2.8 2.9 1.5 2.8 2.4 (Million ton/month) Barge rate index 2/ 108.9 93.6 104.4 85.9 164.5 170.8 (Dec 1984 = 100) Railcar loadings 3/ 28.0 25.4 27.3 26.5 28.4 28.3 (1,000 cars/week) Rail rate index 2/ 113.8 115.2 115.6 116.1 116.4 117.1 (Dec 1984 = 100) ------------------------------------------------------------------------------- 1/ Illinois & Mississippi rivers. Includes soybeans and all grains. Source: U.S. Army Corps of Engineers 2/ Source: Bureau of Labor Statistics 3/ Includes soybeans and all grains. Source: Association of American Railroads. Table 4--Cash feed grain prices ------------------------------------------------------------------------------ Corn, Corn, Sorghum, Sorghum, Barley, Barley, Oats, No. 2, No. 2, No. 2, No. 2, No. 2, No. 3 or No. 2, Yel, Yel, Yel, Yel, feed, better, Heavy Ctrl. Gulf Texas Gulf Duluth Malting, white, IL ports high pl. ports Minn. Minn. 1/ ------------------------------------------------------------------------------ Mkt. yr. $/bu $/bu $/cwt $/cwt $/bu $/bu $/bu 1992/93 2.12 2.46 4.02 4.27 2.11 2.37 1.58 1993/94 2.55 2.85 4.95 4.91 2.05 2.48 1.55 Monthly 1993/94 Oct 2.27 2.68 4.63 4.55 2.01 2.26 1.56 Nov 2.63 2.94 5.18 5.15 2.16 2.48 1.51 Dec 2.81 3.08 5.51 5.43 2.14 2.57 1.56 Jan 2.89 3.22 5.53 5.52 2.15 2.55 1.57 1994/95 Oct 1.92 2.44 4.25 4.19 1.95 2.81 1.44 Nov 2.04 2.43 4.33 4.42 2.04 2.90 1.41 Dec 2.17 2.61 4.49 4.59 2.00 2.81 NQ Jan 2.22 2.72 4.44 4.63 2.02 2.81 2.08 ------------------------------------------------------------------------------ 1/ Reporting point changed from Texas High Plains to South Panhandle starting January 1991. Table 5--Selected feed and feed by-product prices ------------------------------------------------------------------------------- Soybean Cotton- Corn Corn Meat & Dists.' Wheat Alfalfa meal seed gluten gluten bone dried midlgs, farm 44% slv. meal, feed, meal, meal, grains, Kansas price Decatur, 41% slv. IL IL Kansas Lawrence- City IL Memphis pts. pts. City burg, IN 1/ ------------------------------------------------------------------------------- -------------------------------$/ton--------------------------------- Mkt. yr. 1992/93 180.80 159.22 95.95 284.60 220.93 122.84 69.69 78.20 1993/94 181.82 168.36 88.62 286.61 206.81 123.79 81.51 89.30 Monthly 1993/94 Oct 180.60 173.10 80.90 296.20 205.80 121.25 78.50 88.90 Nov 195.70 181.00 85.30 305.75 219.25 127.00 91.00 87.80 Dec 192.50 180.00 90.50 316.25 228.40 130.00 85.75 89.70 Jan 185.90 170.30 92.40 309.40 215.30 130.00 104.10 90.50 1994/95 Oct 156.40 134.40 89.25 226.90 184.60 121.25 69.00 91.60 Nov 150.90 120.50 86.85 232.50 172.70 124.00 67.90 92.50 Dec 145.40 114.20 84.30 239.40 163.10 120.75 71.30 92.50 Jan 145.10 106.75 82.20 230.50 176.25 105.60 60.00 92.10 ------------------------------------------------------------------------------- 1/ Reporting point changed from Kansas City to Central U.S. starting December 1 Table 6--Corn: Food, alcohol, and industrial uses ------------------------------------------------------------------------------ HFCS Glucose & Starch ---Alcohol--- Cereal Total dextrose Fuel Bev. ------------------------------------------------------------------------------ million bushels 1992/93 Sep-Nov 92.3 54.5 58.8 104.4 20.7 29.2 359.8 Dec-Feb 88.4 47.2 57.7 107.5 20.5 28.9 350.1 Mar-May 110.4 55.1 59.3 110.9 21.2 29.6 386.5 Jun-Aug 123.0 57.7 62.2 102.8 21.0 29.6 396.3 Mkt. Yr. 414.0 214.5 238.0 425.5 83.3 117.3 1,492.7 1993/94 Sep-Nov 98.2 55.8 61.7 112.2 20.7 29.4 378.1 Dec-Feb 95.0 49.6 57.6 119.3 20.5 29.1 371.1 Mar-May 117.7 56.8 61.6 112.4 20.9 29.7 399.2 Jun-Aug 131.3 60.9 62.7 114.3 20.9 29.7 419.7 Mkt. Yr. 442.2 223.1 243.5 458.3 83.0 118.0 1568.1 1994/95 Sep-Nov 104.2 58.8 62.6 134.5 20.7 29.2 409.9 Mkt. Yr. 465.0 230.0 250.0 535.0 83.0 117.5 1680.5 ------------------------------------------------------------------------------ Totals may not add due to rounding. Table 7--Wholesale corn milling product and by-product prices ------------------------------------------------------------------------------ Corn meal, Brewers' Sugar, HFCS, 42% Corn yellow, grits, destrose, tank cars, starch, New York Chicago Midwest Midwest fob Midwest ------------------------------------------------------------------------------ $/cwt $/cwt cents/lb cents/lb $/cwt Mkt. yr. 1991/92 13.51 9.90 24.50 15.23 11.03 1992/93 13.39 9.68 24.50 13.30 10.70 1993/94 14.49 10.98 25.44 14.63 12.61 Monthly 1993 Oct 14.33 10.58 24.50 15.02 11.36 Nov 14.97 11.22 24.50 12.99 11.56 Dec 15.28 11.53 24.50 12.85 12.46 Jan 15.40 11.65 25.25 12.95 13.31 1994 Oct 12.93 10.38 26.00 12.80 11.78 Nov 12.92 10.37 25.88 12.80 11.39 Dec 12.97 10.42 25.50 11.68 11.54 Jan 1/ 13.04 10.49 25.50 11.53 11.96 ------------------------------------------------------------------------------ 1/ Preliminary. Table 8--U.S. feed grain exports by selected destinations 1/ ------------------------------------------------------------------------------ Country/region ------1992/93------ ------1993/94------ 1994/95 Mkt. yr. Sep-Dec Mkt. yr. Sep-Dec Sep-Dec ------------------------------------------------------------------------------ CORN --------------------Thousand tons--------------------- Japan 14,138 4,638 12,214 5,055 4,848 Taiwan 5,333 2,104 5,077 2,097 1,986 Former USSR 4,721 2,380 2,909 2,820 333 South Africa 2,354 1,632 12 11 0 Sub-Saharan Africa 3,955 2,768 394 82 160 EU 1,378 288 1,765 312 394 Egypt 1,397 262 1,553 774 822 Canada 1,247 589 603 158 361 East Europe 1,103 87 48 48 67 Algeria 1,076 306 1,176 430 601 S. Korea 991 622 508 85 1,991 Mexico 506 327 1,468 109 1,696 Others 3,951 739 9,463 2,655 3,372 Total 42,150 16,740 37,191 14,635 16,631 SORGHUM Mexico 4,147 1,076 2,942 541 973 Japan 1,922 811 1,640 787 866 Others 809 360 432 86 332 Total 6,878 2,247 5,014 1,414 2,171 ---------------------------------------------------------- ------1992/93------ ------1993/94------ 1994/95 Mkt. yr. Jun-Dec Mkt. yr. Jun-Dec Jun-Dec BARLEY ---------------------------------------------------------- Saudi Arabia 579 499 344 5 0 Israel 263 136 335 266 427 Jordan 195 96 205 199 51 Others 711 37 550 352 458 Total 1,748 768 1,433 822 936 ------------------------------------------------------------------------------ Totals may not add due to rounding. Source: Bureau of the Census Table 9--U.S. oats imports by country of origin ------------------------------------------------------------------------------ Country/region ------1992/93------ ------1993/94------ 1994/95 Mkt. yr. Jun-Dec Mkt. yr. Jun-Dec Jun-Dec ------------------------------------------------------------------------------ Canada 625 351 1,011 711 764 Finland 119 23 526 321 330 Sweden 116 116 303 120 26 Other 87 65 0 0 0 Total 947 555 1,840 1,152 1,120 ------------------------------------------------------------------------------ Totals may not add due to rounding. Source: Bureau of the Census