OIL CROPS YEARBOOK -- SUMMARY October 27, 1997 October 1997, OCS-1097 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. The complete text of the OIL CROPS YEARBOOK (OCS-1997) will be available in about a week. Printed copies of the full report will be available from the ERS-NASS Order Desk. Call, toll free, 1-800-999-6779 and ask for Stock number OCS-1997. Visa and MasterCard accepted. ------------------------------------------------------------------------------- NOTICE: The ERS Information Center was closed October 24, 1997, the date this summary was released, for relocation of its offices to 1800 M St., N.W., Room 3100, Washington, D.C. 20036-5831. As a result, it was not possible to make the summary available electronically until today. The ERS Information Center's new phone number is 202-694-5050. The remainder of the agency will move by November 7. ------------------------------------------------------------------------------- Farmers Saw Strong Soybean Prices in 1996/97 Despite Large Crop Due to saturated soils in the eastern Corn Belt, many U.S. farmers were unable to finish planting corn in 1996 and switched to soybeans. U.S. soybean area planted ultimately jumped to 64.2 million acres, the largest since 1984. A fortuitous absence of freezing weather enabled even the most vulnerable, late planted fields in the eastern Corn Belt to mature well into October. The final U.S. average yield reached a surprisingly good 37.6 bushels per acre, second only to the record 41.4 bushels in 1994. With a relatively large area harvested, the exceptional yield produced the second largest U.S. soybean crop at 2,382 million bushels. Although 1996/97 supplies were up 60 million bushels from 1995/96, soybean prices climbed even higher, because of heavy domestic and foreign demand for soybeans and soybean products. The season average farm price was $7.38 per bushel, the highest since 1988/89. Ample supplies permitted the 1996/97 domestic crush to reach a record 1,436 million bushels and soybean exports to reach 882 million bushels. With a relatively small 1996/97 carryin of 183 million bushels, the record 1996/97 offtake drew down year ending stocks to 132 million bushels, the smallest since 1976/77. Large supplies also promoted domestic and foreign demand of soybean meal and oil in 1996/97. U.S. soybean meal exports increased from 6.0 million short tons in 1995/96 to 6.9 million, as China dramatically stepped up its imports. Domestic meal disappearance rose 2 percent to 27.2 million short tons. Already high-priced soybean meal became even more costly, rising to an average $270 per ton, versus $236 in 1995/96. Lower soybean oil prices, averaging 23.5 cents per pound, encouraged a robust 6-percent increase in domestic disappearance to 14,215 million pounds. U.S. exports of soybean oil also rebounded, more than doubling from 1995/96 to 2,050 million pounds. Starting in 1996, U.S. farmers had more choices in idling land or planting alternative crops, including soybeans. The Federal Agricultural Improvement and Reform Act, enacted in April 1996, established farm policy through 2001/02, and eliminated annual acreage reduction programs and planting requirements for program commodities, which sometimes held down acreage planted to oilseeds. Greater planting flexibility began replacing continuous corn production with more half corn-half soybean rotations. Loan rates for oilseeds were set at 85 percent of the average price for the preceding 5 years (excluding the high and low years). With this change, loan rates for oilseeds are determined just as those for other program crops. Attractive soybean prices and better farm finances in 1996 prompted record soybean planting in Brazil. Good weather improved Brazilian yields from the previous year, producing a record harvest of 26.5 million tons. Aided by a quick harvest and elimination of differential export taxes, Brazilian soybean exports dramatically increased in spring 1997, more than doubling from the previous year to 8.0 million tons. A severe drought in Argentina led to the smallest soybean yields in the previous 8 years, dropping production to just 11.5 million tons. Lower 1996/97 world rapeseed production of 30.6 million metric tons tightened the world oilseed situation. U.S. cottonseed production in 1996 was 7.144 million short tons. High prices for competing feeds in 1996/97 helped boost the average price received by farmers for cottonseed to $130 per ton and the farm value of the 1996 cottonseed crop to $929 million, a record. Despite a larger supply in the 1996/97 season (August-July), cottonseed crush fell 22,000 short tons from the previous season to 3.86 million. With much higher prices paid for seed and about a $6 drop in the oil-and-meal values of products, crushing was not as attractive a year earlier. Cottonseed oil prices averaged about 1 cent per pound lower at 25.58 cents and cottonseed meal remained about unchanged from the previous year at $192 per short ton. Other uses of cottonseed, primarily whole seed feeding, rose 276,000 short tons to 3.162 million. Despite a drop in 1996 planted peanut area of 136,000 acres to 1.402 million, the lowest since the 1982 season, U.S. peanut production rose 5.8 percent to 3.661 billion pounds, in-shell basis. The increase was due to a 16-percent rise in average yields to 2,653 pounds per harvested acre, the highest since 1985. USDA announced a national peanut poundage quota for the 1996 marketing year of 1.1 million short tons (2.2 billion pounds), in-shell basis, well below the 1.35 million short tons for the 1995 season. With a lower quota support rate in the 1996 season, $610 per short ton versus $678.36 the previous season, the average price received by farmers for peanuts averaged lower at 28.5 cents per pound, down from 29.3 cents in the 1995 season. U.S. peanut food use rose 1.8 percent to 2.029 billion pounds, in-shell, the first increase since the 1991 season. U.S. sunflower plantings were 2.6 million acres, down 26 percent from the previous year. All of the decline was in oil-type sunflowers, as non-oil type acreage was unchanged at 568,000 acres. Although acreage dropped, national average sunflowerseed yield improved to 1,435 pounds per acre, 21 percent above the 1995 average. Given this yield and 2.5 million acres harvested, sunflowerseed production fell to 3,587 million pounds in 1996. Despite ample seed supplies, crushings totaled 1,861 million pounds, down 8 percent from 1995/96. U.S. sunflowerseed oil production dropped to 849 million pounds, the lowest in 3 years. Sunflowerseed prices increased slightly to $11.80 per hundredweight from $11.50 in 1995/96. U.S. export shipments of sunflowerseed oil slipped to 739 million pounds. For more information, call Scott Sanford 202-219-0835. END_OF_FILE