Oil Crops YEARBOOK -- SUMMARY October 22, 2003 October 2003, ERS OCS-2003S 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. October 22, 2003 Smaller U.S. Soybean Crop Strengthened 2002/03 Prices, Curtailed Domestic Use The 2002 soybean harvest was determined to be 2,749 million bushels from 72.4 million acres harvested. Record levels for domestic crushing and exports in the preceding year had reduced 2002/03 beginning stocks to 208 million bushels, compared with 248 million a year earlier. Together, they cut the 2002/03 supply by 179 million bushels from 2001/02 to 2,962 million. U.S. soybean exports to most countries (excluding China) declined in 2002/03, slipping to 1,045 million bushels from the record 2001/02 exports of 1,063 million. Processors could defend profit margins from rising soybean costs only by scaling back operating time at oil mills, which reduced the 2002/03 crush to 1,616 million bushels from 1,700 million in 2001/02. Even with use rationed in the final quarter, season-ending stocks dropped to 169 million bushels from 208 million in 2001/02. The depletion of supplies strengthened the 2002/03 national average farm price to $5.53 per bushel from $4.38 in 2001/02. The season average price for soybean meal rose to $182 per short ton versus $168 per ton in 2001/02. Heavier usage of distillers grains and corn gluten helped limit the domestic consumption of soybean meal in 2002/03, which fell 3 percent to 32.2 million short tons. Greater domestic consumption and foreign production of soybean meal depressed U.S. soybean meal exports to 6.05 million tons in 2002/03 from 7.5 million in 2001/02. Even with a smaller output of soybean oil, large carryover stocks allowed U.S. soybean oil exports to remain relatively high at 2,250 million pounds. Total soybean oil demand declined a modest 103 million pounds in 2002/03. However, a reduction in the supply by nearly 1 billion pounds sharply cut the ending stocks from 2,359 million to 1,564 million pounds for the smallest carryout in 4 years. The season average price strengthened to 22.0 cents per pound compared with a 2001/02-average of 16.5 cents. Domestic cottonseed output for 2002 dropped 17 percent from the previous year to 6.2 million short tons. The shortfall raised the season average farm price for cottonseed to $100 per ton from $93 in 2001/02. Consequently, cottonseed crushing fell to 2.5 million short tons in 2002/03 from 2.8 million in 2001/02. Domestic cottonseed oil output slumped in 2002/03 to a modern era low of 740 million pounds. A high price premium stifled both domestic and export demand for cottonseed oil, which plummeted to 652 million and 110 million pounds, respectively. U.S. sunflowerseed production in 2002 fell more than one-fourth to 2,490 million pounds. Although sunflower planting declined only 2 percent in 2002, harvested acreage fell 15 percent. The season average farm price for sunflowerseed (all types) climbed to 12.2 cents per pound, its highest level in 9 years. A severe 805-million pound reduction in the oil-type sunflowerseed supply led to domestic processors consuming only 703 million pounds, the least since 1978/79. Sunflowerseed oil exports, which dropped by three-fourths to 110 million pounds, bore the brunt of the supply shortage, although domestic consumption also fell to 268 million pounds, down 28 percent from 2001/02. World oilseed production rose to 328.9 million metric tons for 2002/03, from 324.4 million the previous year. Soybean production gained 11.9 million metric tons to 196.4 million, more than offsetting production declines for other oilseeds. Larger crops from Brazil and Argentina accounted for nearly all of the soybean increase. Brazilian soybean production surged to 52.5 million tons in 2002/03, up from 43.5 million the year before. Argentine soybean production rose to 35.5 million tons in 2002/03 from 30.0 million in 2001/02. China’s 2002/03 soybean imports soared to 20.3 million tons from 10.4 million in 2001/02 after an extension of the transition period for its import regulations on biotech crops.