OIL CROPS YEARBOOK -- SUMMARY October 23, 2000 October 2000, ERS-OCS-2000 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 text of OIL CROPS YEARBOOK (ERS-OCS-2000) will be available electronically about 2 weeks from the date of this summary. --------------------------------------------------------------------------- Oilseed Exports Surge in 1999/2000 from Robust China Demand U.S. farmers planted 73.7 million acres of soybeans in 1999, up from the 1998 record of 72.0 million. After mid-July, the Mid-Atlantic, Delta, and Southeast regions suffered from little rain and intense heat, cutting the national average soybean yield to 36.6 bushels per acre. The 1999 U.S. soybean crop was 2,654 million bushels on a harvested area of 72.4 million acres. The United States exported a record 973 million bushels in 1999/2000, surpassing the former 1981/82 record of 929 million bushels. With a smaller harvest and record exports, U.S. ending stocks of soybeans fell to 288 million bushels compared with the 1998/99 carryout of 348 million. Domestic soybean crushing declined from 1,590 million bushels in 1998/99 to 1,579 million in 1999/2000, as depressed oil prices perpetuated very narrow crush margins. The national soybean price averaged $4.65 per bushel in 1999/2000, which was the lowest since the 1972/73 average of $4.37 and well below the $5.26 national loan rate. For the 1999 crop, farmers received $2.1 billion worth of loan deficiency payments (LDP) on 2,319 million bushels of soybeans. Despite substantially lower import demand for soybean meal by the European Union and China, purchases by other importers in Asia and the Middle East supported U.S. exports at 7.3 million short tons, up modestly from 1998/99. The slowdown in domestic soybean crushing buoyed soybean meal prices in 1999/2000 to $168 per short ton, up from the 1998/99 average of $138.50. Higher meal prices, a contraction in hog production, and slower poultry output trimmed 1999/2000 domestic disappearance 0.7 percent to 30.45 million tons. Exports of U.S. soybean oil plunged to 1,375 million pounds in 1999/2000, from 2,371 million the previous year. A steady 3-percent expansion in domestic disappearance to 16,100 million pounds helped absorb some of the surplus. But the slump in exports caused 1999/2000 year ending soybean oil stocks to accumulate to 1,970 million pounds, nearly 30 percent more than the previous year. The global glut of vegetable oils depressed the 1999/2000 national average price of soybean oil to 15.6 cents per pound, down from 19.9 cents in 1998/99 and the lowest since 1986/87. Dry weather trimmed world soybean production 2 percent in 1999/2000 to 157.2 million metric tons. Global soybean imports grew 18 percent in 1999/2000 to 47.6 million tons. But global soybean meal consumption increased only 2 percent in 1999/2000, compared with 7 percent the previous season. With greater domestic production and moderate consumption growth, world soybean meal imports declined 0.2 million tons in 1999/2000 to 39.2 million. China's soybean crush soared 18 percent in 1999/2000, which combined with a decline in domestic soybean output, swelled China's soybean imports to 9.7 million tons, from 3.9 million in 1998/99. The resulting gain in China's 1999/2000 domestic meal production more than replaced the 0.9-million-ton decline in soybean meal imports to 0.5 million tons. Global vegetable oil supplies for 1999/2000 swelled 6 percent to a record 92.2 million tons, mostly from palm and rapeseed oils. World trade in soybean oil declined about 10 percent to 7.1 million tons. Increasing reliance on imports of soybeans and rapeseed shrank Chinese soybean oil imports from 0.95 million to 0.6 million tons. Despite higher import tariffs, much lower world palm oil prices encouraged a 3-percent increase in Indian palm oil imports to 3.1 million tons in 1999/2000. Malaysia's 1999/2000 exports surged 9 percent to 8.8 million tons, yet, stocks also rose to a record 1.4 million tons. A southern drought caused acreage abandonment and below-average U.S. cotton yields in 1999, which resulted in reduced cottonseed production of 6.4 million short tons. Nevertheless, larger cottonseed supplies permitted 1999/2000 crushing to recover to 3.1 million tons from the previous year's slide to 2.7 million. Continuing a trend that started in 1998/99, cottonseed feeding (at 3.5 million tons) exceeded crushing demand of 3.1 million tons. Cottonseed prices declined from the 1998/99 average of $129 per ton to $90. Despite relatively attractive potential returns for sunflowers in 1999, persistent rains during planting caused little change in U.S. acreage at 3.6 million acres. Wet weather during flowering promoted disease, reducing the national average sunflowerseed yield to 1,262 pounds per acre, the poorest since 1995. U.S. sunflowerseed production, at 4,342 million pounds, dropped 18 percent from the bumper 1998 harvest. With tighter seed supplies and very weak oil prices, sunflowerseed crushing in 1999/2000 declined 3 percent to 2,510 million. Exports of sunflowerseed oil for 1999/2000 fell to 675 million pounds. U.S. farm prices averaged $7.45 per hundredweight, well below the $9.30 marketing loan rate and the lowest since 1986/87. Consequently, farmers received $120 million of loan deficiency payments on 80 percent of 1999 sunflowerseed production. Printed copies of the Oil Crops Situation and Outlook Yearbook will be available in about 2 weeks. The report contains a special article `An Assessment of a `Futures Method' Model for Forecasting Season-Average Farm Prices for Soybeans.' For more information, contact Mark Ash 202-694-5289. The text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE