World Agricultural Supply and Demand Estimates - October 2009

According to the latest World Agricultural Supply and Demand Estimates report from the World Agricultural Outlook Board, total US meat production for 2009 is raised as higher pork production is expected to more than offset lower beef and turkey production. Weak demand and large supplies of all major meats continue to pressure prices.
calendar icon 9 October 2009
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Livestock, Poultry and Dairy

Total US meat production for 2009 is raised as higher pork production more than offsets lower beef and turkey production. Pork production is raised mainly due to higher third-quarter slaughter and significantly higher weights due to favorable summer weather. The beef production forecast is reduced on lower expected cow slaughter. The turkey production forecast is reduced on slightly lower third-quarter output. Broiler production is unchanged.

Meat production forecasts for 2010 are lowered from last month as higher beef production due to larger feedlot placements in 2009 is more than offset by lower pork and turkey production. The Quarterly Hogs and Pigs report, released on 25 September, indicated producers plan to farrow fewer sows during the remainder of 2009 and into 2010, which, coupled with fewer imports of hogs from Canada results in a lower production forecast. Turkey hatchery data indicates a slower expansion in production during 2010. The broiler production forecast is unchanged from last month.

Red meat and poultry export forecasts for 2009 and 2010 are mostly unchanged from last month. Turkey exports are raised for 2009. Import forecasts for beef for both 2009 and 2010 are reduced reflecting lower expected beef supplies in Oceania. Pork import forecasts are raised slightly for 2009.

Price forecasts for cattle, hogs, broilers and turkeys are lowered for fourth-quarter 2009. Weak demand and large supplies of meat continue to pressure prices. Prices are expected to remain under pressure into next year and 2010 forecasts are reduced from last month. The egg price forecast is unchanged for fourth-quarter 2009 and throughout 2010.

The milk production forecast is raised for 2009 and 2010 as milk per cow is forecast higher and the rate of decline in cow inventories is lowered in 2010. Import forecasts are raised as butterfat and cheese imports are stronger than expected. Stronger world dairy prices and a weak US dollar are expected to increase export demand for US dairy products. The commercial fat basis export forecast is raised for 2010, and on a skim-solids basis, commercial exports are raised for both 2009 and 2010. Net removals reflect adjustments in CCC and Dairy Export Incentive Program (DEIP) activities for nonfat dry milk (NDM), butter, and cheese. Firmer domestic and export demands are expected to support prices for cheese, whey, and NDM. However, butter prices are forecast lower as supplies remain large. Class III prices for 2009 and 2010 are raised from last month and Class IV prices are raised for 2009. The all milk price is forecast at $12.35 to $12.45 per cwt for 2009 and $14.70 to $15.60 for 2010.


US wheat ending stocks for 2009/10 are projected 121 million bushels higher this month as increased production and lower expected use more than offset a 10-million-bushel reduction in carry-in. Production is raised 36 million bushels based on the Small Grains 2009 Summary report. Feed and residual use is lowered 45 million bushels on lower-than-expected disappearance during the June-August quarter as indicated by the September 1 stocks. Exports are projected 50 million bushels lower as larger supplies in major export competitors reduce prospects for US wheat shipments. If realized, 2009/10 ending stocks would be a 9-year high at 864 million bushels. The 2009/10 marketing-year average farm price is projected lower at $4.55 to $5.15 per bushel compared with $4.70 to $5.50 per bushel last month.

Global wheat supplies for 2009/10 are projected 2.2 million tons higher as a 4.4-million-ton increase in world production more than offsets a 2.2-million-ton reduction in beginning stocks. Foreign production is raised 3.4 million tons with increases in several major exporting countries. Production is raised 2.0 million tons for Canada as favourably dry, warm September weather extended the Prairie growing season by as much as 3 weeks boosting yields for this year’s delayed crop. Russia production is increased 1.0 million tons based on higher reported spring wheat yields, particularly in Siberia. Production is raised 0.6 million tons for EU-27 with increases reported for Poland and Hungary. Production is increased 0.5 million tons each for Algeria, Australia, and Kazakhstan. September rains were favorable for flowering and heading wheat in Australia’s western and southern growing areas where higher yields are expected to more than offset losses from sustained dryness and heat in eastern growing areas.

Lower expected production in Brazil and Chile partly offsets rising output elsewhere. Brazil production is lowered 1.0 million tons as continued heavy, late-season rains reduce prospects for yields and quality. Chile production is lowered 0.5 million tons on lower reported area. A number of small, mostly offsetting, production changes are made in Sub-Saharan African countries.

Global wheat trade for 2009/10 is projected higher with much of the increase reflecting higher projected imports by Brazil and exports by Canada. Brazil imports are raised 1.0 million tons. Smaller import increases are also made for Bangladesh, Chile, Saudi Arabia, and Ethiopia. Partly offsetting is a 0.4-million-ton reduction in imports for Algeria. Exports are raised 1.5 million tons for Canada. Exports also are raised 0.5 million tons each for Kazakhstan and Ukraine, and 0.4 million tons for Mexico. These increases more than offset the 1.4-million-ton reduction for the United States. Global consumption is raised 2.1 million tons with higher expected wheat feeding in China, EU-27, Brazil, and Russia; and higher food, seed, and industrial use in Canada, Algeria, and Iran more than offsetting lower feed and residual use in the United States and Ukraine. Global ending stocks are nearly unchanged at 186.7 million tons, up just 0.1 million from last month.

Coarse Grains

US feed grain supplies for 2009/10 are projected higher this month as increased corn and barley production and higher sorghum beginning stocks more than offset lower corn carry-in and reduced sorghum production. September 1 corn stocks, as reported in the September 30 Grain Stocks report, reduced 2009/10 corn beginning stocks as higher corn use for ethanol, sweeteners, starch, and exports boosted June-August use. Corn production for 2009/10 is forecast 63 million bushels higher with a 2.3-bushel-per-acre yield increase more than offsetting a 700,000 acre reduction in harvested area. Total corn supplies are projected 42 million bushels higher.

Total US corn use for 2009/10 is increased 5 million bushels. Feed and residual use is projected 50 million bushels higher reflecting the higher forecast yield and crop. Food, seed, and industrial use is also projected higher, up 5 million bushels, on higher expected use for sweeteners with tight sugar supplies. Offsetting most of the increase in domestic use is a 50-million-bushel reduction in projected exports. Increased supplies of feed grains in Canada and larger world wheat supplies are expected to increase competition for US corn exports. Corn ending stocks for 2009/10 are projected 37 million bushels higher and just below the revised estimate for the 2008/09 marketing year. The 2009/10 marketing-year average farm price projection is unchanged at $3.05 to $3.65 per bushel.

Sorghum supplies for 2009/10 are projected 12 million bushels lower as reduced production more than offsets higher beginning stocks. Production is forecast 26 million bushels lower with reduced area and yields. Beginning stocks are estimated 15 million bushels higher based on the September 1 stocks. Barley supplies for 2009/10 are raised 21 million bushels based on higher estimated production from the Small Grains 2009 Summary report. With a 10-million-bushel reduction in feed and residual as indicated by the September 1 stocks, ending stocks are projected at a 5-year high, up 31 million bushels from last month. Projected 2009/10 farm prices for sorghum, barley, and oats are all unchanged this month; however, the barley and oats ranges are narrowed.

Global coarse grain supplies for 2009/10 are increased 4.7 million tons, mostly reflecting higher corn beginning stocks and increased barley output. Global corn beginning stocks are raised 2.2 million tons with upward revisions to 2008/09 production for Brazil and South Africa, and higher reported stocks for Canada. Barley production is raised 4.4 million tons with higher output in Russia, Algeria, EU-27, the United States, Canada, and Australia. Global corn production for 2009/10 is lowered 1.5 million tons with reductions for China, Russia, and a number of smaller countries only partly offset by increases for the United States, EU-27, Ukraine, Canada, and several Sub-Saharan African countries. China corn production is lowered 5.0 million tons on confirmation that unusual heat and dryness during late July and early August severely hampered corn pollination in the western growing areas of the northeast. Increased harvested area for China partly offsets this month’s yield reduction.

World coarse grain imports and exports are both projected lower for 2009/10 mostly reflecting reduced prospects for US corn exports, down 1.3 million tons, and lower expected corn imports by Canada, down 1.5 million tons. Other mostly offsetting corn trade changes include lower imports for Chile and higher imports for Colombia. Reduced barley exports for EU-27 are partly offset by an increase for Russia. Global coarse grain feeding is raised 3.5 million tons as higher corn feed and residual use for the United States, China, Brazil, EU-27, Mexico, Ukraine, and Colombia are only partly offset by reductions for Canada and Chile. Barley feeding is raised for Russia, Algeria, Ukraine, Australia, and Canada. Global coarse grain ending stocks are nearly unchanged from last month as a 2.9-million-ton reduction in corn stocks is more than offset by a 3.3-million-ton increase in barley stocks. Global barley ending stocks are projected at a five-year high.


US oilseed ending stocks for 2009/10 are projected at 7.7 million tons, up 0.4 million from last month as larger supplies are only partly offset by increased exports. Total US oilseed production is projected at 96.1 million tons, up 0.3 million from last month as higher soybean, sunflower seed, and canola production more than offset lower peanut and cottonseed production. Soybean production is forecast at a record 3.250 billion bushels, up 5 million from last month based on higher yields. The soybean yield is projected at 42.4 bushels per acre, up 0.1 bushels from the previous estimate. Total soybean supplies are forecast up 32 million bushels due to increased crop production and beginning stocks. Soybean exports are raised 25 million bushels to 1.305 billion due to increased supplies, lower prices, and increased global import demand, mainly for China. Soybean ending stocks are projected at 230 million bushels, up 10 million from last month.

Prices for soybeans and soybean meal are projected lower for 2009/10. The US season-average soybean price range is projected at $8.00 to $10.00 per bushel, down 10 cents on both ends of the range. The soybean meal price is projected at $245 to $305 per short ton, down five dollars on both ends of the range. The soybean oil price range is projected at 32 to 36 cents per pound, unchanged from last month.

Global oilseed production for 2009/10 is projected at 425.4 million tons, up 2.6 million from last month. Increased soybean and rapeseed production are only partly offset by lower peanut and cottonseed production. Global soybean production is projected higher with increases for the United States, Argentina, and Paraguay only partly offset by lower production for China. Argentina soybean production is raised 1.5 million tons to 52.5 million due to increased area as producers shift to soybeans from other crops including corn and sunflower seed. China soybean production is lowered 0.5 million tons to 14.5 million due to lower harvested area as producers shifted more area to corn. Global rapeseed production is projected higher mainly on increases for Canada and EU-27. Production in Canada is projected at 10.5 million tons, up 0.5 million based on the most recent survey from Statistics Canada. EU-27 rapeseed production is projected at a record 20.6 million tons, up 0.6 million. Global peanut and cottonseed production are reduced mainly due to lower estimates for both crops for China. Other changes include lower sunflower seed production for Argentina, higher sunflower seed production for EU-27, and higher cottonseed production for India.

Global oilseed stocks for 2009/10 are raised 4.5 million tons to 66.0 million. Soybeans account for most of the change, with increases projected for the United States, Brazil, Argentina, and China. Rapeseed stocks for Canada and EU-27 are also increased. China soybean imports are raised for 2008/09 and 2009/10 to 40.7 million and 39.5 million tons, respectively.

Further Reading

- You can view the full report by clicking here.

October 2009

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