20210514-USDA-USDA_Feed_Outlook_2021.05.14_42页_1mb

Summary of Economic Research Service | Situation and Outlook Report (FDS-21e)

Core Content

This report provides an outlook for U.S. and global feed grain markets for the 2021/22 marketing year. It includes projections for corn, sorghum, barley, and oats, along with an update to the methodology for calculating poultry animal units. The report also covers international trends in coarse grain production and demand, emphasizing the impact of global demand, especially from China, and weather conditions on crop outcomes.

Main Points

U.S. Corn Outlook

• Production: Projected to increase by 6% to 14,990 million bushels for 2021/22, driven by a return to long-term yield trends rather than an increase in planted area.
• Planted Area: Expected to remain relatively flat at 91 million acres, with slight increases in the Northern Plains and Lower Mississippi River States due to strong export demand and high prices.
• Yield: Projected at 179.5 bushels per acre, based on weather-adjusted trend yields since 1988/89.
• Prices: Season-average farm price is projected at $5.70 per bushel, up from $4.35 per bushel in 2020/21.
• Demand: Food, seed, and industrial use is projected to increase by 3%, primarily due to higher ethanol fuel use (up 5%).
• Exports: Expected to be lower than 2020/21 estimates due to recovery in competitor countries (Argentina, Brazil, Ukraine), but still significant by historical standards.
• Ending Stocks: Projected to recover to 10.2% of use, a relatively tight ratio.

U.S. Sorghum Outlook

• Production: Projected to rise to 427 million bushels, an 18% increase from 2020/21.
• Planted Area: Expected to increase by 18% to 6.9 million acres.
• Use: Projected to increase by 10%, with most of the growth attributed to higher exports (350 million bushels).
• Prices: Expected to rise due to higher feed grain prices and strong export demand.
• Ending Stocks: Projected to remain at 2020/21 levels, but with a lower supply and higher use.

U.S. Barley Outlook

• Production: Projected to decline by 2.6% to 161 million bushels.
• Planted Area: Expected to decrease slightly to 2.590 million acres.
• Use: Projected to fall by 5% to 168 million bushels, mainly due to reduced feed and residual use.
• Prices: Average farm price is projected to rise from $4.75 to $5.95 per bushel.
• Ending Stocks: Expected to remain at 80 million bushels, unchanged from 2020/21.

U.S. Oats Outlook

• Production: Projected to decline by 2% to 53 million bushels.
• Planted Area: Expected to decrease to 2.488 million acres.
• Use: Projected to increase by 3%, with higher domestic use (feed and residual, 75 million bushels; food, seed, and industrial, 80 million bushels).
• Prices: Projected to increase from $2.75 to $3.60 per bushel.
• Ending Stocks: Expected to fall by 22% to 31 million bushels.

Poultry Animal Unit Methodology Update

• Change: Beginning in May 2021, the ERS will revise the calculation of poultry inventories to use the Poultry Slaughter report data instead of the Poultry – Production and Value report.
• Impact: This change reduces the poultry GCAU by approximately 50,000 units between 2009/10 and 2019/20, representing minor adjustments in the overall series.
• Benefits: Lower data latency, higher reporting frequency, and better alignment with USDA forecasts.

International Outlook

Global Coarse Grain Production

• Total Production: Projected to reach a record 1,495.9 million tons in 2021/22, up 4% from the previous year.
• Corn Production: Expected to increase by 5.3% globally, with the U.S. corn crop projected at a record 129.0 million tons.
• Sorghum Production: Projected to reach a near-record 65.2 million tons, up 4.6%.
• Barley, Oats, and Rye: Output is projected lower due to reduced area and yield.

Key Drivers of Global Demand

• China: The world's largest foreign producer of coarse grains, continues to be a major driver of demand, supporting high prices for both corn and sorghum.
• Export Demand: Strong global demand and high prices are expected to encourage area expansion in corn and sorghum, especially in Brazil and China.
• Weather Impact: Drought conditions in the U.S. Southwest and Western regions, and in parts of the Middle East, are expected to affect yields and supplies.

Regional Highlights

• South America: Expected to increase coarse grain area by 5.3%, with Brazil and Argentina leading the expansion, supported by high prices and improved yields.
• China: Projected to increase corn area by nearly 2% and output to a new record of 268.0 million tons.
• Europe: The EU is expected to increase coarse grain production by 0.8 million tons, with improved yields in France, Romania, and Bulgaria offset by lower oat and mixed grain production.
• Sub-Saharan Africa: Coarse grain production is expected to rise to a record 129.0 million tons, with Zimbabwe expected to triple its output.

Key Information

• Competition: U.S. corn exports face competition from Argentina, Brazil, and Ukraine, with Brazil's poor second-crop yields providing short-term support.
• Ethanol Demand: Expected to drive increased corn use, with ethanol production and demand recovering as vaccine rates rise and travel resumes.
• Market Fundamentals: Higher feed grain prices and tight supplies are expected to influence both domestic and international markets.
• Data Sources: USDA's National Agricultural Statistics Service (NASS) and Foreign Agricultural Service (FAS) provide key data for production, supply, and demand estimates.
• Methodology Update: The revision to poultry inventory methodology aims to improve accuracy and consistency with USDA livestock forecasts.

Conclusion

The 2021/22 feed grain outlook is characterized by strong global demand, particularly from China, and relatively stable U.S. production levels. While U.S. corn and sorghum production are expected to rise, barley and oats are projected to decline. Prices are anticipated to increase due to strong demand and limited supply, especially in the summer months. The updated poultry inventory methodology aims to enhance the accuracy of feed use projections. Internationally, South America and China are leading the expansion in coarse grain production, while Europe and Sub-Saharan Africa show mixed trends.