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Economic Research Service Feed Outlook Summary (August 14, 2015)

Core Content

This document presents the USDA Economic Research Service (ERS) August 14, 2015, feed outlook, providing forecasts and analyses for U.S. and global feed grain production, use, and prices for the 2015/16 marketing year. It includes updates on corn, sorghum, barley, and oats, as well as hay and coarse grain production and trade outlooks.

Main Points

U.S. Corn Outlook

• Yield Forecast: The August survey-based corn yield is 2.0 bushels per acre above the July trend-based projection, at 168.8 bushels per acre.
• Production: 2015/16 corn production is forecast at 13.7 billion bushels, up 156 million from the previous month.
• Domestic Use: Increased by 40 million bushels to 6,625 million, driven by higher use in food, seed, and industrial sectors.
• Feed and Residual Use: Projected at 5,300 million bushels, up 25 million from the previous month, matching the level of the previous year.
• Exports: Reduced by 25 million bushels to 1,850 million, due to increased competition from South American supplies.
• Ending Stocks: Forecast to rise by 115 million bushels to 1,713 million, the highest since 2009/10.
• Prices: Season-average farm price projected down 10 cents to $3.35 to $3.95 per bushel, with the midpoint at $3.65, the lowest since 2009/10.

Sorghum Outlook

• Yield Forecast: Increased by 7 bushels per acre to 74.6 bushels per acre, the highest on record.
• Production: Forecast at 573 million bushels, up 68 million from the July estimate, the highest since 1999/2000.
• Exports: Projected to rise 40 million bushels to 430 million, a record high, driven by trade policies and demand from China.
• Ending Stocks: Up to 39 million bushels, more than twice the level of the previous year.
• Prices: Season-average farm price trimmed to $3.90 per bushel, a 15-cent decrease from July, with a range of $3.75 to $4.05.

Barley Outlook

• Imports: Reduced by 5 million bushels to 20 million, due to lower Canadian barley supply.
• Exports: Increased by 5 million bushels to 14.3 million, supporting a 3 million bushel reduction in ending stocks to 80 million.
• Prices: Midpoint all barley price at $4.60 per bushel, unchanged from the previous month.

Oats Outlook

• Yield Forecast: Increased by 1.4 bushels per acre to 70.0 bushels per acre.
• Production: Forecast at 85 million bushels, the highest since 2009/10.
• Ending Stocks: Up 2 million bushels to 234 million, with no changes in stocks or imports.
• Prices: Midpoint at $2.35 per bushel, a 5-cent decrease from July, the lowest since 2009/10.

Hay Outlook

• Alfalfa and Other Hay Production: Combined up 2% from 2014, with average yields at 3.39 and 2.09 tons per acre, respectively.
• Total Hay Production: Forecast at 142.1 million tons, up from 139.8 million in 2014.
• Pasture and Range Conditions: Improved, with 55% of acres rated "good" to "excellent," up from 50% the previous year.
• Prices: June all-hay price at $162 per ton, down 20% from $197 per ton in June 2014, mainly due to lower alfalfa prices.

International Outlook

Global Coarse Grain Production

• Total Production: Forecast at 1,276.7 million tons, up 1.8 million tons from the previous month.
• Corn Production: Slight decline of 1.5 million tons to 985.6 million, offset by higher barley and sorghum output.
• Barley Production: Up 1.6 million tons to 139.4 million.
• Sorghum Production: Up 1.9 million tons to 69.0 million.
• Rye Production: Down 0.2 million tons to 13.8 million.
• Oats Production: No changes reported for millet or mixed grain.

Key Country Updates

• China: Record corn production at 225.0 million tons, but reduced by 4.0 million tons due to dry conditions.
• EU: Corn production down 3.5 million tons to 62.3 million, with rye and barley also reduced.
• Serbia: Corn production cut 1.0 million tons to 5.7 million due to drought.
• Moldova: Corn production down 0.2 million tons to 1.0 million.
• Canada: Barley production down 1.0 million tons to 6.5 million, the lowest since 1967/68.
• Ukraine: Coarse grain production up 3.3 million tons to 36.4 million, with record barley and corn yields.
• Brazil: Corn production up 2.0 million tons to 84.0 million, with record second-crop yields.
• Argentina: Corn production up 1.5 million tons to 26.5 million, boosting 2015/16 ending stocks.
• Russia: Coarse grain production up 0.5 million tons to 39.3 million, supported by favorable weather.

Global Trade and Stocks

• World Coarse Grain Supplies: Up 4.8 million tons to 1,509.0 million, with the U.S. contributing the largest increase.
• World Coarse Grain Use: Slightly reduced to 1,282 million tons, with increased FSI use in the U.S. and reduced use in Japan, Venezuela, and Ukraine.
• World Ending Stocks: Up 5.4 million tons to 227.4 million, with the U.S. and Brazil showing the most significant increases.
• Corn Trade: Up 1.5 million tons to 126.8 million, with the EU expected to become the largest importer due to production shortfalls.

Key Insights

• U.S. Corn Production has reached a record level, driven by favorable growing conditions.
• Export competition from South America is expected to intensify, affecting U.S. market share.
• Sorghum exports are projected to reach a record high, with China as the primary destination.
• Hay production is expected to rise due to improved pasture and range conditions.
• Global coarse grain supplies are increasing, with significant contributions from China, Brazil, and Ukraine.
• Prices are generally lower due to increased supply and reduced demand in certain regions.