Adapting to a Changing Climate
22 June 2012



UK - Most scientists agree the UK environment of the future will be different from today - temperature and rainfall (both occurrence and intensity), as well as levels of carbon dioxide and ozone in the atmosphere, will change over the coming years and decades.
 
So while day-length duration will remain constant, we have to anticipate entirely new combinations of conditions. These will not have previously been experienced anywhere in the world by the crops on which we and our farm animals depend. If the levels of food production we'll require in the future are to be secured, steps to adapt to these changes need to be taken now.
 
That's the clear assessment from experts at the Agriculture and Horticulture Development Board (AHDB) in response to the government's recently proposed National Adaptation Programme on climate change, focused on the next 20 years. The response also confirms AHDB's commitment to give farmers and growers practical support on adaptation.

In welcoming the chance to join the Defra-led consultation, the levy board identifies water availability and management as the most immediate concern for UK agriculture in adapting to climate change, since it impacts on arable crops, horticulture and livestock production. Investment will be needed in new infrastructure for water capture and storage, as well as research to discover new ways of increasing water use efficiency in agricultural production systems.
 
Chief Scientist at AHDB, Professor Ian Crute, said: "We're going to need to start developing crop and livestock types and production systems that are well adapted and resilient to the changing combinations of environmental conditions we experience in the future.
 
"Increased and well-targeted investment in the application of crop and livestock genomics is going to be absolutely essential. Soils and the semi-natural ecosystems that impact on agricultural production are also going to be affected by climate change and we need to better understand what these impacts will be and adapt accordingly," he added.
 
"Farmers and growers continuously adapt and innovate in response to change but, certainly, effective new knowledge acquisition and exchange will be essential if the agriculture industry is to adapt to changes in our climate at the appropriate pace. AHDB is committed to helping farmers and growers to adopt practical adaptation measures, making sure that industry advice is consistent and always based on sound evidence.
 
"Our own applied research, such as the evaluation of new crop varieties, will continue and evolve over time to meet these challenges.
 
"I can also see that changes to the way agriculture operates in adapting to new weather conditions will require careful communication with the public, to explain why we need to build more on-farm reservoirs, for example.
 
The AHDB view of adapting to climate change also focuses on soil quality and on new potential challenges to crop and animal health.
 
Insect pests and insect-transmitted plant and animal diseases are a concern. As AHDB sees it, effective surveillance and pre-emptive research will be needed to reduce the risk of exotic diseases and pest outbreaks.
 
With the vital need to up the pace on restoring levels of organic matter content in soils, more thought will need to be given to how such restoration and maintenance will be affected by changes in agricultural practices or temperature-induced increases in the rate of breakdown of organic matter.

China Farm Produce Prices Still Rising
27 June 2012


CHINA - Pork prices rebounded recently, up 0.7 per cent last week, after falling for several months, as the country's pork stockpiling policy helped boost market demand, Shen said at a regular briefing.

China started stockpiling frozen pork in April to help stabilize prices and stem losses by pig producers.
 
Due to booming demand, shrinking supplies and climbing production costs, prices of edible oil and aquatic products rose slightly last week. Retail prices of peanut oil increased 0.3 per cent week-on-week, while the wholesale prices of aquatic products gained 0.7 per cent.
 
Shen Danyang, spokesman for the Ministry of Commerce, said prices of garlic and eggs have begun falling. "The ministry has always attached great importance to the dramatic fluctuations of farm produce prices, and will try to solve the boom-bust problem in agriculture as soon as possible," he added.
 

28 June 2012
USDA Agricultural Prices - June 2012
The preliminary All Farm Products Index of Prices Received by Farmers in June, at 181 percent, based on 1990-1992=100, increased 3 points (1.7 percent) from May. The Crop Index is up 2 points (1.0 percent) and the Livestock Index increased 1 point (0.7 percent).


 

June Farm Prices Received Index Increased 3 Points
 
Producers received higher prices for hogs, oranges, eggs, and broccoli and lower prices for hay, corn, soybeans, and broilers. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of wheat and hay offset the decreased marketing of oranges, corn, cattle, and strawberries.
 
The preliminary All Farm Products Index is up 1 point (0.6 percent) from June 2011. The Food Commodities Index, at 170, increased 4 points (2.4 percent) from last month but decreased 1 point (0.6 percent) from June 2011.
 
Prices Paid Index Unchanged
 
The June Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 215 percent of the 1990-1992 average. The index is unchanged from May but 12 points (5.9 percent) above June 2011. Higher prices in June for complete feeds, concentrates, nitrogen, and supplements offset lower prices for diesel, hay & forages, LP gas, and gasoline.
 


Prices Received by Farmers
 
The June All Farm Products Index is 181 percent of its 1990-1992 base, up 1.7 percent from the May index and 0.6 percent above the June 2011 index.
 
All crops: The June index, at 210, increased 1.0 percent from May and 0.5 percent from June 2011. Index increases for fruits & nuts and commercial vegetables more than offset the index decreases for feed grains & hay, oilseeds, food grains, and potatoes & dry beans.
 
Food grains: The June index, at 213, is 2.3 percent below the previous month and down 12 percent from a year ago. The June price for all wheat, at $6.37 per bushel, is down 30 cents from May and $1.04 below June 2011.
 
Feed grains & hay: The June index, at 265, is down 2.9 percent from last month but 1.1 percent above a year ago. The corn price, at $6.25 per bushel, is down 8 cents from last month and 13 cents below June 2011. The all hay price, at $183 per ton, is down $16.00 from May but $20.00 higher than last June. Sorghum grain, at $9.95 per cwt, is 45 cents below May and 55 cents below June last year.
 
Cotton, Upland: The June index, at 137, is down 2.1 percent from May but unchanged from last year. The June price, at 83.1 cents per pound, is down 1.5 cents from the previous month and 0.2 cent below last June.
 
Oilseeds: The June index, at 245, is down 2.0 percent from May but 3.4 percent higher than June 2011. The soybean price, at $13.70 per bushel, decreased 30 cents from May but is 50 cents above June 2011.
 
Fruits & nuts: The June index, at 179, is up 5.3 percent from May and 13 percent higher than a year ago. Price increases for apples and oranges more than offset price decreases for peaches, strawberries, and lemons.
 
Commercial vegetables: The June index, at 166, is up 5.1 percent from last month but unchanged from June 2011. Price increases during June for broccoli and lettuce more than offset price declines for onions, snap beans, and cucumbers.
 
Potatoes & dry beans: The June index, at 180, is down 3.2 percent from last month and 8.2 percent below June 2011. The all potato price, at $9.89 per cwt, is down 55 cents from May and $1.70 below last June. The all dry bean price, at $43.90 per cwt, is up 60 cents from the previous month and $10.10 above June 2011.
 
Livestock and products: The June index, at 152, is 0.7 percent above last month but down 0.7 percent from June 2011. Compared with a year ago, prices are higher for cattle, broilers, calves, turkeys, and eggs. Prices for milk and hogs are down from last year.
 
Meat animals: The June index, at 161, is up 1.3 percent from last month and 10 percent higher than last year. The June hog price, at $66.90 per cwt, is up $4.10 from May but $2.80 lower than a year ago. The June beef cattle price of $122 per cwt is unchanged from last month but $15.00 higher than June 2011.
 
Dairy products: The June index, at 123, is down 0.8 percent from a month ago and 24 percent lower than June last year. The June all milk price of $16.10 per cwt is 10 cents less than last month and $5.00 lower than June 2011.
 
Poultry & eggs: The June index, at 164, is up 0.6 percent from May and 5.8 percent above a year ago. The June market egg price, at 68.8 cents per dozen, increased 9.4 cents from May and is 0.1 cent above June 2011. The June broiler price, at 52.0 cents per pound, is down 1.0 cent from May but 3.0 cents above a year ago. The June turkey price, at 73.9 cents per pound, is up 1.3 cents from the previous month and 4.4 cents above a year earlier.
 




June 2012

FAO Food Price Index Falls Again
05 July 2012


GLOBAL - The FAO Food Price Index fell for the third consecutive month in June 2012, dipping 1.8 percent from May to its lowest level since September 2010. The four-point drop in June brought the index to 201 points from a revised level of 205 points in May 2012.
 
According to FAO, the index now stands at 15.4 per cent below its peak in February 2011. The average prices of all commodity groups in the Index were below May levels, with the largest drop registered for oils and fats.
 
Continued economic uncertainties and generally adequate food supply prospects kept the index down although growing concerns over dry weather sent prices of some crops higher toward the end of the month.
 
Food commodity prices have started rising again recently, mostly because of adverse weather and this may result in a rebound of the Food Price Index in July.
 
FAO also lowered its forecast for 2012 world cereal production by more than 23 million tonnes from May, which is likely to result in a smaller build-up of global stocks by the end of seasons in 2013.
 
FAO’s new forecast for world cereal production in 2012 stands at 2 396 million tonnes, still a record level and 2 per cent up from the previous high registered last year.
 
Supply and demand situation adequate
 
According to FAO’s latest assessment, the overall supply and demand situation in 2012/13 remains adequate thanks to abundant supplies of rice, a leading food staple, and sufficient exportable supplies of wheat and coarse grains.
 
But grain prices were very volatile in June due to continuing dryness and above-average temperatures in most of the major maize growing regions of the United States. Adverse weather is diminishing prospects of an improvement in the maize supply situation and FAO is monitoring the development closely.
 
High-level event on volatility and speculation
 
The issue of swinging food prices will be discussed by a high-level event on “Food Price Volatility and Price Speculation” to be held at FAO on Friday, 6 July. Speakers will include Leonel Fernández, President of the Dominican Republic who will give a keynote address, and FAO Director-General José Graziano da Silva.
 
“FAO has been actively involved in studying food price volatility and identifying appropriate policy responses,” said Mr Graziano da Silva. “Our analytical work is helping to deepen the understanding of the nature, causes and impacts of volatility and of what governments and other stakeholders can do about it.”
 
The FAO Food Price Index is a measure of the monthly change in average international prices of a basket of 55 food commodities.
 

11 July 2012
USDA World Agricultural Supply and Demand Estimates (WASDE) July 2012



 


LIVESTOCK, POULTRY, AND DAIRY:

The forecast for total meat production in 2012 is raised from last month as higher pork and poultry production more than offsets lower beef production. Although remaining below last year, hatchery data are pointing towards smaller declines in eggs set and heavier bird weights are adding to production. Turkey production is also forecast slightly higher, based on recent production data. Pork production is raised on heavier expected carcass weights. USDA’s Quarterly Hogs and Pigs report will be released on June 29 and provide an indication of producer farrowing intentions for the remainder of the year. Beef production is reduced slightly as lower steer and heifer slaughter more than offsets higher dressed weights and higher cow slaughter. Small changes are made to 2013 beef and pork forecasts, largely reflecting higher expected carcass weights. Broiler and turkey production forecasts for 2013 are unchanged. Offsetting changes are made to 2012 quarterly egg production forecasts but the annual forecasts for 2012 and 2013 are unchanged from last month.

Forecasts for 2012 beef, broiler, and turkey trade are adjusted to reflect first-quarter data. Forecasts for 2013 are unchanged from last month. Pork exports for 2012 are raised from last month on the strength of trade data to date with a slight increase in forecast exports for 2013. The cattle and turkey price forecasts for 2012 are unchanged from last month, but hog and broiler prices are reduced, reflecting larger production. Egg prices for 2012 are raised as recent prices have been stronger than expected. Prices for 2013 are unchanged.

The milk production forecast for 2012 is raised as cow numbers are expected to decline more slowly. The production forecast for 2013 is unchanged. Export forecasts are raised for both 2012 WASDE-507-5 and 2013 on expected strength in cheese and nonfat dry milk (NDM) sales. Imports on a skimsolids basis are reduced slightly on lower expected imports of several dairy products.

NDM and whey prices for 2012 are forecast lower than last month on higher production and weaker demand. However, the cheese price is raised at the low end of the range on stronger demand and the butter price range is narrowed. The Class III price forecast is lowered from last month as the weaker whey price more than offsets the slightly higher forecast cheese price and the Class IV price is lowered on the weaker NDM price. The all milk price forecast for 2012 is lowered to $16.85 to $17.25 per cwt. The all milk price for 2013 remains unchanged from last month at $17.25 to $18.25 per cwt.



WHEAT:

Projected U.S. wheat supplies for 2012/13 are lowered 51 million bushels with reduced carryin and lower forecast winter wheat production. Beginning stocks are lowered 40 million bushels with a 10-million-bushel increase in food use and a 30-million-bushel increase in exports for 2011/12. The increase in 2011/12 food use reflects higher-thanexpected flour milling during the January-March quarter as reported by the North American Millers’ Association. Exports are increased based on the strong pace of U.S. shipments during the final weeks of the old-crop marketing year.

U.S. all wheat production for 2012/13 is projected at 2,234 million bushels, down 11 million, with lower forecast winter wheat production and small reductions in forecast durum wheat production for Arizona and California. Winter wheat production is forecast 10 million bushels lower with reductions for Hard Red Winter (HRW) and Soft White Winter wheat. The largest production declines are in the HRW states of Nebraska and Colorado, but higher production for Oklahoma is partly offsetting. With reduced supplies and higher expected prices, feed and residual use is lowered 10 million bushels. Ending stocks for 2012/13 are projected 41 million bushels lower. The projected range for the 2012/13 season average farm price is raised 10 cents on both ends to $5.60 to $6.80 per bushel. This remains well below the record $7.25 per bushel projected for 2011/12.

Global wheat supplies for 2012/13 are lowered 7.0 million tons with beginning stocks lowered 1.5 million tons and world production expected down 5.5 million tons. Higher 2011/12 global consumption, fueled by increased global trade, reduces carryin for 2012/13. World production for 2012/13 is lowered reflecting reduced crop prospects in several exporting countries including Russia, EU-27, Turkey, and the United States. Russia production is reduced 3.0 million tons due to a continuation of spring dryness in key winter wheat producing areas and indications of crop development problems resulting from winter freeze damage. EU-27 production is reduced 1.0 million tons with reduced acreage in Germany, Poland, and Spain, only partly offset by higher expected yields in France and Bulgaria. Production is also lowered 1.0 million tons for Turkey as winter frost damage and disease problems reduce yields across the central growing areas on the Anatolia Plateau. Output is reduced 0.2 million tons for Syria as yield prospects decline for non-irrigated wheat in the country’s northeast.

Global wheat consumption for 2012/13 is lowered 4.6 million tons with reduced prospects for wheat feeding and food use. Wheat feeding is lowered for EU-27, Russia, and Turkey. Larger corn supplies and increased corn feeding more than offset the reduction for EU-27. Wheat food use is lowered for India, Bangladesh, and Indonesia. Increases in food use for Morocco and Turkey are partly offsetting. Global wheat exports are reduced 1.6 million tons WASDE-507-2 with a 2.0-million-ton reduction for Russia and 0.3-million-ton reductions for both Argentina and Turkey. India exports are raised 1.0 million tons as market conditions improve the competitiveness of private exports. World ending stocks for 2012/13 are projected at 185.8 million tons, down 2.4 million from last month.

COARSE GRAINS:

U.S. feed grain supplies for 2012/13 are virtually unchanged as adjustments to 2011/12 balance sheets are largely offsetting and projected 2012/13 production and use are unchanged on the month. Projected 2012/13 season average price ranges for corn, sorghum, barley, and oats are all unchanged.

Adjustments to corn usage for 2011/12 reflect the latest ethanol production and trade data. Corn used to produce ethanol in 2011/12 is projected 50 million bushels higher. Weekly ethanol production has increased since mid-April after gradually declining from the record levels of late December. The higher corn use projection assumes slightly lower ethanol production during the June-August quarter as compared with the same period last year. Corn exports are projected 50 million bushels lower as shipments and sales continue to fall off of the pace needed to reach last month’s projection. Tight domestic supplies and increased competition, especially from Brazil, are also expected to reduce U.S. export prospects during the summer months. Projected corn ending stocks for 2011/12 are unchanged, as is the 2011/12 season average farm price which remains at $5.95 to $6.25 per bushel.

Changes to the 2011/12 balance sheets for sorghum, barley, and oats are driven by the latest trade data and also mostly offsetting. Sorghum exports for 2011/12 are projected 10 million bushels lower, but offset by a 10-million-bushel increase in expected feed and residual use. Projected barley imports are raised 4 million bushels and exports are lowered 3 million bushels boosting ending stocks 7 million bushels. Oats ending stocks are projected 10 million bushels lower with projected imports lowered 15 million bushels and feed and residual use reduced 5 million bushels. Projected 2011/12 farm prices for all three feed grains are unchanged.

Global coarse grain supplies for 2012/13 are projected 4.8 million tons higher with increases in corn beginning stocks and production. Global corn beginning stocks are increased 1.6 million tons mostly reflecting higher 2011/12 production for Brazil and China. Brazil corn production is raised 2 million bushels for 2011/12. Despite lower reported area for the main season crop, the rapid expansion in area and nearly ideal weather for the second season (safrinha) crop is boosting Brazil’s corn production prospects to a record 69 million tons. Much of the expansion in safrinha corn has been in the Central West region, where corn is planted in January and a pronounced dry season typically begins by early May. This year’s rainy season extended through early June providing an additional 4 to 6 inches of beneficial rainfall for filling corn. China’s 2011/12 corn production is raised 1.0 million tons in line with recent revisions to official government estimates.

World corn production for 2012/13 is increased 4.2 million tons this month with increases in China, EU-27, and FSU-12. China production for 2012/13 is raised 2.0 million tons based on higher reported corn area as land planted to soybeans declines. EU-27 corn production is increased 1.1 million tons mostly on higher area and yields for Hungary. Production is up 0.8 million tons for Russia and 0.3 million tons for Belarus both on higher reported area. World barley production is lowered, however, with a 0.5-million-ton reduction for Turkey and 0.2- million-ton reduction for Syria.

Global 2012/13 coarse grain trade is projected higher this month on increased imports and exports of corn. Corn imports are raised for EU-27 and Indonesia. Corn exports are WASDE-507-3 increased for Russia and Belarus, both reflecting higher expected production and supplies. Higher imports and production support increased corn feeding in EU-27. Higher beginning stocks and production in China boost prospects for feeding, but a partly offsetting reduction in industrial use limits the increase in corn consumption. Russia corn feeding is lowered 0.3 million tons reflecting slower expected year-to-year growth in feed grain consumption with rising feeding efficiencies in pork and poultry production. Global corn consumption is increased 2.4 million tons. Global corn ending stocks are projected 3.4 million tons higher. Of the increase, 2.0 million tons are for China and 1.0 million tons are for Brazil.

RICE:

 A reduced 2011/12 U.S. rice ending stocks forecast results in a tighter supply outlook for 2012/13. Beginning stocks for 2012/13 are reduced 4.5 million cwt to 29.5 million—down 39 percent from the previous year, and the lowest beginning stocks since 2004/05.

Production and imports for 2012/13 are unchanged at 183.0 million cwt and 22.0 million, respectively. On the 2012/13 use side, domestic and residual use is lowered 1.0 million cwt to 122.0 million because of an expected decline in rice used in the brewing of beer—a trend observed in recent years. Monthly data recently released by the U.S. Department of the Treasury confirm the downward trend in 2011/12. Rice used in the brewing of beer through March is down 11 percent in 2011/12. The 2012/13 export forecast is lowered 2.0 million cwt to 87.0 million because of reduced exportable supplies—all in long-grain rice. U.S. 2012/13 ending stocks are projected at 25.5 million cwt, down 1.5 million from last month.

Smaller projected 2011/12 U.S. imports along with larger exports reduce 2011/12 ending stocks by 4.5 million cwt. U.S. rice imports for 2011/12 are projected at 20.0 million cwt, down 0.5 million from a month ago based on U.S. Bureau of the Census data through March. The pace of imports has slowed in recent months. Rice exports for 2011/12 are raised 4.0 million cwt to 101.0 million because of a significant pickup in sales and shipments in April and early May, and an increase in food-aid. Rough rice exports for 2011/12 are reduced 4.0 million cwt to 31.0 million based on Bureau of the Census data through April and export sales data through the end of May. Conversely, milled rice exports are raised 8 million cwt (roughequivalent basis) to 70 million with large shipments to Asia.

Rough rice price forecasts for 2012/13 are unchanged from last month. The 2012/13 longgrain U.S. season average farm price is projected at $14.50 to $15.50 per cwt, combined medium- and short-grain rice price is $17.25 to $18.25 per cwt, and the all rice price is $15.30 to $16.30 per cwt. The midpoint of the 2011/12 all rice, long-grain, and combined medium- and short-grain prices are unchanged from a month ago, however, the price range is narrowed 10 cents on each end of the range for each.

Global 2012/13 rice supply and use is little changed from a month ago. Global rice production is projected at a record 466.5 million tons, up less than 100,000 tons from last month. Global 2012/13 exports are raised nearly 1.0 million tons mainly due to an increase for India, now forecast at 7.0 million, up 1.0 million from last month, but down 1.0 million from revised 2011/12. India’s 2011/12 exports are raised to a record 8.0 million tons. Import 2012/13 forecasts are raised for Iran and several African countries. Global consumption for 2012/13 is raised 1.0 million tons, primarily due to larger consumption for Iran, Vietnam, and several African countries. Global ending stocks for 2012/13 are projected at 104.2 million tons, down 0.7 million from last month, due primarily to a reduction for India.

OILSEEDS:

This month’s U.S. soybean supply and use projections for 2012/13 include lower beginning and ending stocks and reduced use. Lower beginning stocks reflect increased export and crush projections for 2011/12. Soybean exports for 2011/12 are raised 20 million bushels to 1.335 billion bushels reflecting increased global import demand, led mainly by WASDE-507-4 higher projected imports for China. Soybean crush is raised 15 million bushels mostly due to stronger domestic soybean meal use. Soybean ending stocks for 2011/12 are projected at 175 million bushels, down 35 million. With reduced supplies for 2012/13, soybean exports are projected at 1.485 billion bushels, down 20 million. Soybean crush is also projected lower due to reduced domestic soybean meal use. Ending stocks for 2012/13 are projected at 140 million bushels, down 5 million from last month.

Soybean, meal, and oil price projections for 2012/13 are unchanged this month. The U.S. season average soybean price is projected at $12.00 to $14.00 per bushel. Soybean meal and oil prices are projected at $335 to $365 per ton and 52.5 to 56.5 cents per pound, respectively.

Global oilseed production for 2012/13 is projected at 470.8 million tons, down 0.7 million from last month, mainly due to lower soybean and cottonseed production. China’s soybean production is reduced 0.5 million tons due to lower area as producers shift planting decisions toward corn. Brazil’s cottonseed production is also reduced due to lower area planted to cotton as world prices have declined in recent weeks. Other changes include reduced rapeseed production for EU-27, increased rapeseed production for Russia, increased sunflowerseed production for EU-27, and reduced cottonseed production for Australia and Egypt. Brazil’s 2011/12 soybean production is increased 0.5 million tons to 65.5 million while Argentina soybean production is reduced 1 million tons to 41.5 million.

SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is increased 341,000 short tons, raw value, compared with last month. The increase is due to higher beginning stocks and imports from Mexico. Mexico’s exports of sugar estimated for 2011/12 and projected for 2012/13 are increased due to higher production for both years. Production data for Mexico’s 2011/12 season are nearly complete, while the increase for 2012/13 is based on a favorable growing season since February.

COTTON:

 This month’s U.S. cotton estimates for 2011/12 and 2012/13 show small revisions in trade, which leave 2012/13 ending stocks unchanged from last month. The 2012/13 production estimate of 17.0 million bales also is unchanged, pending further information about planted area and weather developments. Exports for 2011/12 are raised by 200,000 bales, reflecting recent strong sales and shipments, while exports for 2012/13 are reduced by 200,000 bales, due to lower expected foreign import demand. Domestic mill use is unchanged. The projected range for the 2012/13 season average price received by producers is 60 to 80 cents per pound, 5 cents below last month on each end. The world 2012/13 cotton projections include lower production, consumption, and trade relative to last month, with beginning and ending stocks projected slightly higher. World production is down 1.4 million bales, as the southern hemisphere producers of Brazil, Australia, and Argentina are expected to make further cuts in area in response to the recent sharp drop in cotton prices. World consumption is reduced about 1.0 million bales, as decreases for China and Thailand are partially offset by an increase for India. With world prices falling, China’s reserve floor price will make it increasingly difficult for mills there to be competitive producers of yarn. China’s 2012/13 imports also are reduced due mainly to larger estimated beginning stocks, accounting for most of the almost 700,000-bale reduction in world trade. World ending stocks projected at a record 74.5 million bales are raised 1 percent from last month, with China expected to hold 42 percent of the total.

The most significant revisions to the world 2011/12 cotton estimates include an increase of nearly 1.8 million bales in China’s imports, reflecting the continued strong pace of deliveries, and corresponding increases in exports for India, Brazil, Australia, the United States, and Malaysia. India’s balance sheet also is revised to reflect recent indications of higher consumption; a residual has been added for each year beginning in 2006/07 to offset a deficit in stocks that would otherwise result from the available statistics for production, consumption, and trade.

Global Feed Industry Voices Alarm at Rising Feed Costs
26 July 2012

GLOBAL - The International Feed Industry Federation (IFIF) has voiced an urgent concern that the rise in feed and food costs will continue unabated for the foreseeable future, in large part due to the diversion of feed and food grains and oilseeds into biofuels. This will result in critical pressure on feed manufacturers worldwide and higher prices for consumers.

“The dramatic drought in the US has highlighted once again the rising prices of feed and food and it is clear that the production of biofuels is in direct competition with food supplies by using land and water that would otherwise be used to grow crops for human or animal consumption”, said Alexandra de Athayde, IFIF Executive Director.

Mrs de Athayde added: “If no virgin food or feed crops were used to produce fuel, we believe prices would come down again. Current policies aimed at subsidizing the production of grains and oilseeds based biofuels harm the consumer and threaten the sustainability of the feed and food chain globally.”

 “The global challenge we face is to feed 9 billion people by 2050 and to do so sustainably. IFIF calls upon governments to reconsider subsidizing grains based biofuels in order to ensure we can use all of our feed and food production for human and animal consumption so that we meet current and future demands of 60 per cent more food by 2050.”

3M Syrians Need Food, Crops and Livestock Assistance
02 August 2012

SYRIA - Close to three million people are in need of food, crops and livestock assistance, according to a recent assessment carried out by the United Nations and the Syrian government.

According to the FAO, of this number, around 1.5 million people need urgent and immediate food assistance over the next 3 to 6 months, especially in areas that have seen the greatest conflict and population displacement. Close to a million people need crop and livestock assistance such as seeds, food for animals, fuel and repair of irrigation pumps. Further scaling up of food and livelihoods assistance will be required over the next 12 months as the people needing nutritional support are expected to reach 3 million.
 
The findings are based on a Joint Rapid Food Security Needs Assessment mission conducted in June 2012 by the UN Food and Agriculture Organization (FAO), the UN World Food Programme (WFP) and Syria's Ministry of Agriculture and Agrarian Reform.
 
The joint mission's final report says the Syrian agricultural sector has lost a total of $1.8 billion this year as a result of the on-going crisis. This includes losses and damages to crops, livestock and irrigation systems. Strategic crops, such as wheat and barley, have been badly affected as well as cherry and olive trees, and vegetable production.
 
"While the economic implications of these losses are quite grave, the humanitarian implications are far more pressing," said WFP Representative in Syria Muhannad Hadi. "The effects of these major losses are first, and most viciously, felt by the poorest in the country. Most of the vulnerable families the mission visited reported less income and more expenditure - their lives becoming more difficult by the day," he said.
 
The assessment reports that as many as three million people are in need of assistance over the next 12 months. Large numbers of rural people of the central, coastal, eastern, northeastern and southern governorates were found to have totally or partially lost their farming assets and livestock-based livelihoods and businesses due to the on-going political crisis and insecurity, coupled with a prolonged drought.
 
Among those farmers needing immediate assistance, around one third of the rural population, 5 to 10 per cent are reported to be female-headed households.
 
"The most vulnerable families in Syria depend entirely or partly on agriculture and farm animals for food and income. They need emergency support, like seeds, repairs to irrigation systems, animal feed and healthcare," said Abdulla BinYehia, FAO Representative in Syria. "If timely assistance is not provided, the livelihood system of these vulnerable people could simply collapse in a few months' time. Winter is fast approaching and urgent action is needed before then."
 
Farmers have been forced to either abandon farming or leave standing crops unattended due to the unavailability of labour, the lack of fuel and the rise in fuel costs, and insecurity, as well as power cuts affecting water supply. Harvesting of wheat has been delayed in the Governorates of Daar'a, Rural Damascus, Homs and Hama. There is, thus, a great risk of losing part of the crop if there is further delay in providing assistance to these farmers.
 
The assessment mission also found that deforestation was on the rise with farmers turning back to the forest for fire wood due to unavailability of cooking gas and fuel. Some irrigation channels have also been clogged and damaged due to lack of labour and inaccessibility.
 
Far-reaching effects
 
Particular attention needs to be given to female-headed households and migrant workers, small farmers, Bedouins and herders. The livelihood of the migrant labourers in their places of origin is at serious threat due to lack of employment opportunities and fast depletion of their income. The sharp drop in remittances to rural households was also another blow to an already vulnerable population, especially in the northeastern and northern governorates.
 
Daar'a Governorate counted on remittances of nearly 200,000 migrant workers, reported the return of nearly 70 per cent of its labour force. A few families said they still have their men in Lebanon but were unable to send any remittance due to unemployment there.
 
With less or no income and very little savings, high recurring expenses, many mouths to feed, and fast depleting resources, these families are cutting the size and number of meals, eating cheaper lower quality food, buying food on credit, taking children out of school and sending them for work, selling livestock and other assets, and cutting back medical and education expenses.
 
Mr Hadi said that during the mission visit to Al Hassakeh "even the richest family in a village reported having food stock for only one more month."
 
WFP launched an emergency operation that started in October 2011 to cover the food needs of vulnerable people affected by the events in Syria. The operation progressively scaled up, reaching 540,000 people in July and aims to reach 850,000 people this month. WFP plans to further expand the operation as access to the affected areas allows. WFP's Syria operation is facing a funding shortfall of around $62 million on an overall budget of $103 million.
 
FAO has provided support since December 2011 to 9,052 small herders and farmers' households, representing some 82,000 people. FAO estimates that now around $38 million are required immediately for the next six months to help 112,500 rural households, or about 900,000 people, to ensure the autumn planting for cereals and keep livestock alive or replace lost ones.
 

USDA Agricultural Prices

Reports» USDA Agricultural Prices» USDA Agricultural Prices - 31 July 2012

02 August 2012
USDA Agricultural Prices - 31 July 2012
The preliminary All Farm Products Index of Prices Received by Farmers in July, at 193 percent, based on 1990-1992=100, increased 11 points (6.0 percent) from June. The Crop Index is up 20 points (9.4 percent) but the Livestock Index decreased 1 point (0.7 percent).



July Farm Prices Received Index Advanced 11 Points

Producers received higher prices for corn, wheat, soybeans, and hogs and lower prices for cattle, grapes, broilers, and broccoli. In addition to prices, the overall index is also affected by the seasonal change based on a 3-year average mix of commodities producers sell. Increased monthly movement of wheat, grapes, grain sorghum, and hay offset the decreased marketing of milk, potatoes, cantaloupes, and corn.
 
The preliminary All Farm Products Index is up 10 points (5.5 percent) from July 2011. The Food Commodities Index, at 178, increased 7 points (4.1 percent) from last month and increased 3 points (1.7 percent) from July 2011.
 
Prices Paid Index Up 1 Point
 
The July Index of Prices Paid for Commodities and Services, Interest, Taxes, and Farm Wage Rates (PPITW) is 215 percent of the 1990-1992 average. The index is up 1 point (0.5 percent) from June and 11 points (5.4 percent) above July 2011. Higher prices in July for feed grains, concentrates, nitrogen, and LP gas offset lower prices for feeder cattle, feeder pigs, diesel, and potash & phosphate.


 

Prices Received by Farmers
 
The July All Farm Products Index is 193 percent of its 1990-1992 base, up 6.0 percent from the June index and 5.5 percent above the July 2011 index.
 
All crops: The July index, at 233, increased 9.4 percent from June and is 10 percent above July 2011. Index increases for feed grains & hay, food grains, and oilseeds more than offset the index decreases for fruits & nuts, commercial vegetables, and potatoes & dry beans.
 
Food grains: The July index, at 275, is 23 percent above the previous month and 17 percent above a year ago. The July price for all wheat, at $8.31 per bushel, is up $1.61 from June and $1.21 above July 2011.
 
Feed grains & hay: The July index, at 302, is up 12 percent from last month and 15 percent above a year ago. The corn price, at $7.36 per bushel, is up 99 cents from last month and is $1.03 above July 2011. The all hay price, at $184 per ton, is up $1.00 from June and up $14.00 from last July. Sorghum grain, at $12.00 per cwt, is $2.44 above June and up $1.60 from July last year.
 
Cotton, Upland: The July index, at 126, is down 1.6 percent from June and 7.4 percent below last year. The July price, at 76.6 cents per pound, is down 0.7 cent from the previous month and 5.9 cents below last July.
 
Oilseeds: The July index, at 278, is up 12 percent from June and 17 percent higher than July 2011. The soybean price, at $15.60 per bushel, increased $1.70 from June and is $2.40 above July 2011.
 
Fruits & nuts: The July index, at 156, is down 14 percent from June and 16 percent lower than a year ago. The price decreases for peaches and oranges more than offset the price increases for pears and apples.
 
Commercial vegetables: The July index, at 150, is down 6.2 percent from last month and 8.0 percent below July 2011. Price declines for tomatoes, broccoli, and lettuce more than offset price increases during July for snap beans, onions, and celery.
 
Potatoes & dry beans: The July index, at 179, is down 0.6 percent from last month and 23 percent below July 2011. The all potato price, at $9.76 per cwt, is down 17 cents from June and $4.43 lower than last July. The all dry bean price, at $43.80 per cwt, is down 40 cents from the previous month but $9.60 higher than July 2011.
 
Livestock and products: The July index, at 151, is 0.7 percent below last month and down 2.6 percent from July 2011. Compared with a year ago, prices are higher for cattle, broilers, eggs, hogs, turkeys, and calves. The price for milk is lower than last year.
 
Meat animals: The July index, at 158, is down 2.5 percent from last month but 3.9 percent higher than last year. The July hog price, at $73.80 per cwt, is up $3.60 from June and $2.10 higher than a year ago. The July beef cattle price of $116 per cwt is down $5.00 from last month but $5.00 higher than July 2011.
 
Dairy products: The July index, at 127, is up 2.4 percent from a month ago but 24 percent lower than July last year. The July all milk price of $16.60 per cwt is up 40 cents from last month but down $5.20 from July 2011.
 
Poultry & eggs: The July index, at 159, is down 1.9 percent from June but 6.0 percent above a year ago. The July market egg price, at 76.3 cents per dozen, increased 7.5 cents from June and is 7.9 cents above July 2011. The July broiler price, at 49.0 cents per pound, is down 2.0 cents from June but 2.0 cents above a year ago. The July turkey price, at 72.4 cents per pound, is down 1.5 cents from the previous month but up 4.9 cents from a year earlier.


 

USDA Feed Outlook

Reports» USDA Feed Outlook» Feed Outlook - August 2012

15 August 2012
Feed Outlook - August 2012
US feed grain supplies for 2012/13 are projected sharply lower again this month with corn production forecast 2.2 billion bushels lower and sorghum production forecast 92 million bushels lower, according to the USDA Feed Outlook.




The forecast US corn yield is reduced 22.6 bushels per acre to 123.4 bushels as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. Sorghum production is also forecast lower this month due to drought. Total US corn supplies for 2012/13 are projected down 2.0 billion bushels at a 9-year low. The large reduction in forecast corn supplies this month is expected to result in record-high prices, which will ration demand and lower use. Corn use is projected 1.5 billion bushels lower with large cuts in feed and residual use; food, seed and industrial use; and exports. Ending stocks are forecast down 533 million bushels to 650 million bushels, the lowest since 1995/96. Record corn prices for 2012/13 reduce projected foreign corn imports and use this month, but a record corn crop in China and 2 years of large crops in Brazil support some growth in foreign corn feed use in 2012/13.
 






US Feed Grain Supply Prospects Plunge
 
Forecast US feed grain beginning stocks in 2012/13 are raised 3.0 million tons from last month but are down 3.5 million tons from the previous year, an 11-percent reduction. US feed grain production is forecast at 285.9 million metric tons, 57.9 million below last month and 37.7 million below the 2011/12 estimate. Compared with volumes in 2011/12, production is down sharply for corn but up for sorghum, barley, and oats. This month saw sharp declines in projected production for corn and sorghum and slight gains for barley and oats. Feed grain supply is projected at 318.7 million metric tons this month, 53.5 million short of last month’s projection and 39.7 million below 2011/12.

 Total 2012/13 feed grain use is projected 39.4 million metric tons lower from last month and 30.2 million short of 2011/12. This month’s reduction reflects lower estimates for feed and residual disappearance; food, seed, and industrial (FSI) use; and exports for corn and sorghum due to rationing on higher prices. Sharply lower forecast use for fuel ethanol is accompanied by declines in most other FSI categories. FSI is projected at 155.1 million metric tons in 2012/13, compared with 169.0 million in 2011/12. Exports are forecast at 35.8 million metric tons, down 8.6 million from the previous estimate and 5.2 million below last season.
 



The US Census Bureau issued revised numbers for calendar 2011, affecting trade estimates this month for corn and sorghum in 2010/11 and for barley and oats in 2011/12. Imports are raised slightly for 2010/11 and 2011/12 and are projected up 1.4 tons for 2012/13, with notable increases for corn and barley. Marketing year exports for feed grains in 2010/11 are raised slightly to 50.7 million metric tons, mostly reflecting a large upward revision for sorghum shipments. In 2011/12, estimated exports are raised for barley and lowered for oats based on the latest Census data, as the marketing year is over. Sorghum and corn export forecasts (the 2011/12 marketing year ends at the end of August) are also adjusted based on the pace of shipments, with corn down 10 times as much as sorghum is increased. Feed grain exports for 2011/12 are projected 1.1 million metric tons lower to 41.0 million. Ending stocks for 2011/12 are up 3.0 million metric tons to 28.7 million. Exports projected for 2012/13 are lowered 8.6 million metric tons to 35.8 million, as tight supplies and high prices affect the export market. When converted to a September – August marketing year, feed and residual use for the four feed grains plus wheat in 2012/13 is projected to total 113.1 million tons, down from 132.2 million last month and down 12 percent from the 2011/12 forecast of 128.0 million. Corn is estimated to account for 92 percent of total feed and residual use in 2012/13, up from 90 percent in 2011/12.

 Projected grain-consuming animal units (GCAUs) for 2012/13 are lower than last month at 92.1 million. Estimated GCAUs for 2011/12 are also lower on the month at 93.4 million compared with July’s estimate of 93.7 million. For 2012/13, feed and residual use per animal unit is projected at 1.23 tons, down from last month’s 1.42 tons due to lower cattle carcass weights and lower hog numbers and the impact of tight feed supplies and higher prices.
 
As Drought Continues, Forecast Yield Is Lowered 23 Bushels per Acre
 
The NASS August 10 Crop Production report forecast U.S. 2012/13 corn yields 22.6 bushels per acre lower at 123.4 bushels, compared with last month’s forecast of 146 bushels. As forecast, the 2012/13 corn yield would be the lowest since 1995/96. The yield reduction, combined with lower expected harvested acres, down 1.5 million acres from last month’s projection, results in a crop of 10,779 million bushels, 2,191 million bushels lower than July’s projection and 1,580 million below last season. This forecast would result in the lowest production since 2006/07. Harvested acreage for 2012/13 is forecast at 87.4 million acres for grain, up 3.4 million from the previous year. Unusually high temperatures and well below average precipitation across much of the Corn Belt in July sharply reduced yield prospects, despite the early planted crop. As of August 5, only 23 percent of the corn crop was rated in good-to-excellent condition in the 18 major corn-producing States, down 37 percentage points from a year ago. Fifty percent of the crop was in the very poor-to-poor range, compared with 48 percent the previous week and 16 percent at this point last season, a year when yields fell below trend. Corn conditions are extremely variable, with crops in close proximity having very different yield potential.
 
U.S. Corn Use Expected To Slip
 
Tight supplies and higher prices are expected to force rationing among corn users. Total US corn use for 2012/13 is forecast down 1,495 million bushels to 11,225 million this month as a result of decreased feed and residual use, FSI use, and exports. Total FSI is projected 470 million bushels lower with corn for ethanol lowered 400 million bushels, along with declines in most other FSI categories. Feed and residual use is projected 725 million bushels lower, one of the largest declines ever, reflecting livestock producers’ reactions to record-high corn prices and reduced residual disappearance with a smaller crop. U.S. exports are reduced by 300 million bushels as high prices dampen demand and foreign feeders shift to more competitively priced corn and wheat from foreign producers.
 
Total corn use for 2011/12 is forecast down 115 million bushels to 12,490 million bushels this month. Food, seed, and industrial use (FSI) is reduced 65 million bushels to 6,390 million bushels. Lower use for ethanol, down 50 million bushels to 5,000 million, plus a 15-million-bushel reduction for corn used to produce glucose and dextrose, results in the lower FSI use projection. U.S. exports for 2011/12 are reduced 50 million bushels to 1,550 million. Reductions in use leave ending stocks for 2011/12 up 118 million bushels over last month’s projection. Corn prices received by farmers for 2012/13 are projected at a record $7.50-$8.90 per bushel, up more than $2.00 on both ends of the range this month. The marketing year average reflects higher prices for corn, with tighter ending stocks and tight U.S. feed grain supplies. The 2011/12 corn price range is raised $0.10 cents on the low end for an estimated range of $6.20-$6.30 per bushel.
 
U.S. Sorghum Production Lower
 
A sharp reduction in forecast yield and lower harvested acreage resulted in a reduced forecast for 2012/13 U.S. sorghum production this month. At 248 million bushels, forecast production is down 92 million from last month, but is 33 million bushels above last year’s crop estimate. Based on August 1 conditions, yield is lowered by 16.3 bushels per acre this month and is projected 6.0 bushels per acre below the last season’s historically low yield. Hot dry weather in Texas, Kansas, and Oklahoma has reduced prospects for the 2012 sorghum crop. As of August 5, 25 percent of the U.S. sorghum crop was rated good to excellent, compared with 27 percent last season and 66 percent in 2009/10.

 Total use of sorghum in 2012/13 is projected down 80 million bushels this month to 250 million reflecting tight supplies. Feed and residual is cut 30 million bushels to 70 million as high prices reduce feed demand by livestock producers. Sorghum FSI use is lowered 10 million bushels to 80 million, with lower expected use for fuel ethanol. Export prospects are reduced 40 million bushels to 100 million as demand from Mexico is expected to remain strong, but high prices and tight supplies limit shipments. U.S. ending stocks are projected at 25 million bushels, 12 million bushels lower than last month’s projection and slightly less than forecast for the previous season.
 



Total use for sorghum in 2011/12 is forecast at 215 million bushels, unchanged from last month. Feed and residual use remains forecast at 75 million bushels. Sorghum used for ethanol is expected lower during the summer quarter, with tightening supplies cutting marketing year FSI use 5 million bushels to 85 million. Exports are raised 5 million bushels to 55 million, reflecting stronger-than-expected recent shipments. Ending stocks for 2010/11 are virtually unchanged this month at 27 million bushels.

 Sorghum prices received by farmers for 2012/13 are projected higher with surging corn prices. The projected farm price range, is raised $2.00 on the low end of the range and $2.40 on the high end or the range resulting in a spread of $7.00 to $8.40. The 2011/12 average sorghum farm price is narrowed $0.05 on each end of the range to $6.05-$6.15 per bushel.
 
U.S. Barley Production Prospects Increase Slightly
 
U.S. barley production for 2012/13 is forecast at 221 million bushels, up 4 million from last month and up 65 million from 2011/12. Based on August 1 conditions, producers expect yields to average 67.6 bushels per acre, up 1.3 bushels from last month. Production is expected to recover from last season’s record lows on higher harvested acreage, which is partly offset by a lower yield as compared with last year. Area harvested for grain is forecast at 3.3 million acres, unchanged from last month’s forecast and up from 2.2 million last season. On August 5, 61 percent of this year’s U.S. crop was rated in good-to-excellent condition, compared with 72 percent a year ago.
 



Total projected barley supplies in 2012/13 are raised 14.3 million bushels this month to 306 million, as a result of higher production due to improved yields and higher expected imports. Domestic use is projected at 235 million bushels, 25 million bushels over last month. Exports are unchanged from last month’s projection of 10 million bushels. With gains in supply more than offset by higher use, this month’s ending stocks are projected down 11 million bushels to 61 million, compared with 60 million estimated in 2011/12.

 U.S. Census Bureau revisions for calendar year 2011 increase barley exports for 2010/11 slightly. Exports for 2011/12 are raised 2 million bushels this month based on the latest trade data and revisions. Imports are raised 2 million bushels for 2011/12 to 16 million based on the same data.

 Prices received by farmers for barley in 2012/13 are expected to average $5.75- $6.75 per bushel, raised 45 cents on both ends of the range this month. This compares with $5.35 per bushel reported for 2011/12. Although prices for feed barley are expected to increase largely in line with those for corn and sorghum, price gains will be moderated for malting barley, as much of the crop is produced under contract at prices established earlier in the year.
 



Early Maturing Oat Crop Is Second Smallest on Record
 
Earlier than normal plantings combined with persistent heat in June and July contributed to an early maturing 2012/13 oat crop. As of August 6, fully 87 percent of the oat crop in the nine major producing States had been harvested, up 14 percent from the previous week and up 43 percent over the same time last year.

 Despite reports of droughty conditions in several of the major oat-growing areas of the United States, on July 22, the oat crop was rated as 59 percent good to excellent- -a modest improvement over conditions observed during the same time period last year. Just 12 percent of the crop in the nine-State area was rated as poor to very poor, compared with 24 percent for the same week in 2011/12.

 Improved quality and increased plantings contributed to growth in the 2012/13 production estimates. The total oat crop is forecast to be 67 million bushels, an increase of 24 percent over last year’s weak harvest of just 5 million bushels. Even with significant year-to-year growth, the 2012/13 oat crop will be the second smallest on record. The 2011/12 crop was the smallest crop ever recorded.

 Harvested acreage is forecast to total 1.09 million acres, an increase of 16 percent relative to last year’s harvested acreage of 0.94 million acres. Over the last 10 years, an average of 1.50 million acres of oats has been harvested; this year’s improved harvest acreage figures are still well below trend but are consistent with a 30-year decline in oat acreage.

 Average yields are forecast at 61.0 bushels per acre, a modest increase over the July forecast of 59.8 bushels and an increase of 3.9 bushels over the 2011/12 estimate. Irrigation is contributing to yield gains in several States, including Texas, where a record high-yield of 54.0 bushels per acre is forecast.

 Total 2012/13 oats supplies are raised slightly to a projected 217 million bushels. This compares to an estimated 215 million bushels for 2011/12. Projected oats use for 2012/13 is raised 5 million bushels to 164 million. Oats imports are projected at 95 million bushels, unchanged this month.
 



Revised U.S. Census Bureau figures for calendar year 2011 and the latest monthly data reduce 2011/12 oats exports 15 percent from last month to 2.43 million bushels. This compares to a revised estimate of 2.85 million bushels for 2010/11. Census data lower the 2011/12 oats import estimate 1 million bushels to 94.1 million. This is up from 85.1 million for 2010/11.

 Projected FSI use for 2012/13 remains unchanged from July and is identical to the previous year’s estimate of 76 million bushels. With tight feed grain supplies and high corn prices, 2012/13 feed and residual use of oats is forecast up 5 million bushels this month to 85 million. The increase in use more than offsets the increase in production, trimming projected 2012/13 ending stocks 4 million bushels to 53 million. This is down slightly from the previous year.

 Tightening domestic feed grain supplies are contributing to a higher anticipated average farm price for oats. At the projected range of $3.50-$4.50 per bushel, the 2012/13 season-average price is up $0.51 at the mid-point, compared with the previous year’s estimate of $3.49 per bushel. The average farm price for the 5 years prior to 2012/13 is $2.76 per bushel.
 
Poor Hay Crop Prompts Federal Response
 
Prolonged drought conditions continue to contribute to low soil moisture levels in many parts of the country and have resulted in the lowest hay production estimates seen in the U.S. since 1953. This year’s forecast harvest of 120.3 million tons (all hay) follows the meager harvest of 131.1 million tons 2011/12. In response to the poor hay crop, Secretary Vilsack has opened approximately 3.8 million acres of Conservation Reserve Program (CRP) lands, including higher yielding CP25 lands, for emergency haying and grazing.

 Hay yields have been adversely affected by the drought and the all-hay yield is anticipated to be 2.09 short tons per acre, down from 2.36 in 2011. The 2012/13 all hay yield is about 14 percent smaller than the 10-year average yield of 2.42 tons per acre. Harvested acres for 2012/13 are forecast at 57.57 million acres, up slightly (1.94 million acres) from last year’s estimate and down very slightly from the July forecast.

 Alfalfa hay production is forecast at 54.9 million tons, down more than 10 million tons relative to last year’s production of 65.3 million tons. Based on August 6 crop conditions, yields are expected to average 2.92 tons per acre, down 0.48 tons per acre from last year. If realized, this will be the lowest yield since 1988, when alfalfa yields were estimated at 2.59 tons/acre. Harvested area is forecast at 18.8 million acres, nominally changed from July and down only slightly from last year’s harvested area estimate of 19.2 million acres.

 Other hay production is forecast at 65.4 million tons, and is very similar to realized production from the 2011/12 crop. Based on early August conditions, other hay yields are expected to average 1.69 tons per acre, a slight decrease from last year’s estimate of 1.81 tons per acre and the lowest yield since 1988 when a yield of 1.48 tons per acre was realized. Harvested area, forecast at 38.8 million acres, is unchanged from July but up 2.34 million acres from last year.

 For the sixth year in a row, roughage-consuming animal units (RCAUs) are estimated to be down. RCAUs are expected to total 67.03 in 2012/13, a decline from the 2011/12 estimate of 67.91. With hay production dropping significantly, available supplies per RCAU also declined from 1.94 tons in 2011/12 to 1.79 tons in 2012/13. This is the lowest hay supply per RCAU ratio in more than 25 years. Scarce hay supplies have driven prices higher. The July 2012 all-hay price was $184 per ton, compared to the July 2011 price of $170 per ton. July alfalfa prices have also increased from $189 per ton last year to $198 in 2012. The July estimate for hay other than alfalfa and alfalfa mixtures is $143 per ton, up from $133 in June 2012 and up significantly from the July 2011 price of $119 per ton.
 

Foreign Coarse Grain Production Decline Adds to U.S. Drop
 
World coarse grain production for 2012/13 is projected down 62.2 million tons this month to 1,121.4 million, with the United States accounting for 93 percent of the drop. However, foreign coarse grain production is forecast down 4.3 million tons to 835.4 million. Expected foreign corn production is down 0.6 million tons this month to 575.2 million, as several large changes are mostly offsetting. Foreign barley production prospects are down 1.2 million tons to 126.0 million, as reduced prospects for Russia and the EU are partly offset by increased output in Ukraine. Foreign millet production is cut 2.5 million tons to 30.9 million, and sorghum production is trimmed 0.3 million tons to 52.9 million due to a subpar monsoon in India. Oats, rye, and mixed grain are each up slightly this month.

 Changes to foreign production prospects stem from two distinct causes. Recent weather developments have confirmed above or below trend yields in several countries. And some countries, especially in the Southern Hemisphere, are responding to recent price increases with expanded planting intentions.

 EU 2012/13 corn production is forecast down 3.9 million tons this month to 61.5 million, as drought and blistering temperatures struck across key areas of the Balkans into Italy. Corn conditions along the Danube in Romania and Bulgaria had been particularly good due to ample rains in May, but dryness in June was exacerbated by extreme heat in July, devastating corn pollination. Dryness and high temperatures extended across Romania, into Hungary and Serbia, and westward into northern Italy. However, in France, growing conditions have been mostly favorable with mild temperatures and good soil moisture during pollination. EU corn production this month is projected down 2.3 million tons for Romania, 1.5 million for Hungary, 0.9 million for Italy, and 0.3 million for Bulgaria; it is increased 1.0 million for France (with some smaller adjustments in other countries). EU barley production is reduced 0.7 million tons this month to 52.9 million, mostly due to reduced prospects in Spain, where harvest reports confirm the effects of extended dryness. Ample rains across northern and parts of central Europe boost prospects slightly for rye, oats, and mixed grain.

 Serbia’s (not part of the EU) 2012/13 corn production is cut 1.5 million tons to 5.5 million, Croatia’s is reduced 0.4 million to 1.7 million, and Bosnia’s is trimmed 0.2 million to 0.5 million. Europe’s dryness and scorching temperatures extended eastward from Romania across Moldova, into southern Ukraine, and across into Russia, especially around Rostov. Corn in north-central Ukraine has had milder temperatures and somewhat better soil moisture, but the poor condition of the corn in southern and eastern Ukraine supports a 3.0-million-ton reduction in 2012/13 production to 21.0 million. Russia’s corn crop is cut 0.8 million tons to 7.0 million, and Moldova’s corn crop prospects are reduced 0.4 million tons this month to 1.0 million. Russia’s dryness extends through parts of the Volga, across the Urals into Kazakhstan and Siberia. Spring barley prospects are reduced 1.0 million tons in Russia, to 14.5 million, and rye is trimmed 0.3 million to 2.7 million. Kazakh barley prospects are trimmed 0.3 million tons to 1.5 million. However, harvest reports in Ukraine support increased barley production, up 0.6 million tons to 6.6 million, and rye, up 0.2 million to 0.65 million, as growing conditions in western and northern parts of the country have been favorable.
 



In India, the late onset of the monsoon and reduced water supplies for irrigation have caused a reduction in coarse grain planted area. Corn production prospects are cut 2.0 million tons to 20.0 million, millet is cut 2.5 million to 10.0 million, sorghum is trimmed 0.3 million to 6.4 million, and the barley harvest is reduced slightly.

 Turkey reported barley yields lower than expected, reducing production 0.3 million tons to 5.5 million. Dryness in parts of Ontario supports a small reduction in corn yields for Canada, trimming production 0.25 million tons to 12.75 million.

 Excessive rains in North Korea trimmed corn yield prospects, reducing production 0.1 million tons to 1.45 million. Declining production prospects are partly offset by increased production expected in some countries due to better than average weather. The 2012/13 corn production forecast for China is raised 5.0 million tons to a record 200.0 million on expectations of enhanced yield prospects. Favorable precipitation and temperatures during June and July in the Northeast, particularly in the provinces of Heilongjiang, Jilin, and Inner Mongolia, are the primary basis for the increase. Figure 10 illustrates the deviation from normal June and July rainfall for the three aforementioned provinces weighted by harvested area. These provinces accounted for 30 percent of Chinese corn area in 2010.

 Corn production prospects in Mexico are increased 0.5 million tons this month to 21.5 million, as favorable rains boosted soil moisture and attractive prices encouraged increased area planted. Algeria’s barley crop was reported up 0.2 million tons to 1.8 million, with increased yields.

 Several Southern Hemisphere countries are expected to respond to high corn prices with increased planted area. In Argentina, corn area is expected to increase 6 percent in 2012/13, as corn prices are attractive. Previous USDA forecasts assumed a 6-percent decline in corn area planted, as producers were expected to shift to soybeans. It is unclear what, if any, effect the government’s export policy changes this month. Corn production is increased 3.0 million tons to 28.0 million, and barley expands 0.4 million tons to 5.8 million. Also, 2010/11 corn production is raised 1.6 million tons this month as exports and estimated domestic use indicate larger production.
 



Brazil’s corn production response to high international prices is expected to vary depending on region and cropping cycles. For the first or main-season crop in southern Brazil, soybean area is expected to expand at the expense of corn plantings. However, this is expected to be more than offset by the increased incentive to double crop corn after soybeans in Parana, and in regions where soybeans and corn doubled-cropped area is expanding, especially Mato Grosso and parts of the Northeast. Total corn area for 2012/13 is projected up 5 percent yearto- year, boosting production prospects 3.0 million tons this month to 70.0 million. Also, government estimates of the recently harvested second-crop corn for 2011/12 showed sharply higher than expected yields, as late rains extended into the dry season and boosted yields. Production for 2011/12 is up 2.8 million tons this month to a record 72.8 million tons. This is the first year that second-crop corn in Brazil has been bigger and higher yielding than the first crop.

 South Africa is expected to respond to high prices and tight supplies with an increase in planted area, boosting projected corn production 0.5 million tons to 13.5 million.
 

Increased 2012/13 Beginning Stocks Limit Drop in Supplies
 
Global coarse grain beginning stocks for 2012/13 are up 5.8 million tons this month to 168.5 million. About half of the increase is in foreign stocks, up 2.8 million tons to 139.8 million. The most important change is for corn in Brazil, up 2.8 million tons to 15.9 million due to increased 2011/12 production. Other changes to 2012/13 beginning stocks are smaller and offsetting. Coarse grain beginning stocks are up 0.5 million tons each for the EU and Argentina and are increased 0.3 million for Egypt, but are cut 0.5 million for Australia, 0.4 million for Mexico, and 0.3 million each for Canada and Indonesia.

 Despite the severe U.S. production problems in 2012/13, projected world coarse grain supplies are only down 2 percent year-to-year to 1,289.9 million tons, and are less than a half percent less than in 2010/11. However, estimated global coarse grain use has increased for each of the last 9 years, and it will take record-high prices to reverse that growth in 2012/13.
 
High Prices To Reduce Global Coarse Grain Use
 
World coarse grain use in 2012/13 is projected down 43.1 million tons this month, a 4-percent reduction. Much of the reduction is in forecast U.S. use, but foreign consumption is projected down 12.3 million tons as high prices shrink demand. The reaction of foreign demand to the U.S. corn production shortfall is muted by several factors: (1) several countries, such as China and Brazil, have domestic production and stocks that cushion their domestic market from the full impact of international prices, (2) some countries, such as China, have tariff barriers and import quotas that limit the transmission of international prices, (3) economic growth and increased incomes is some countries support increased meat demand despite higher prices, (4) for the past several years, sustained, relatively high grain prices have encouraged importers to diversify the countries they import from, and (5) foreign export competitors have increased production and market share, leaving importers less dependent on U.S. corn. Each country has unique coarse grain supply and demand characteristics, making it uncertain how much and when the demand in that country will adjust to international prices.

 Global coarse grain use in 2012/13 is expected to decline for the first time since 2002/03, slipping 0.7 percent to 1,137.8 million tons. World feed and residual use is forecast to increase year-to-year 1.4 million tons to 659.9 million, while food, seed, and industrial use declines 9.3 million tons to 477.9 million. Foreign feed use in 2012/13 is projected at 551.3 million tons, down 10.5 million from the previous month’s forecast but still up 12.7 million tons from feed use projected for 2011/12, when foreign feed-quality wheat was in ample supply in several countries. Some foreign consumers of feed, such as those in China, do not face price increases as steep as those in the United States because their internal market is at least partly isolated from world prices. In other countries, like Brazil, large domestic production limits internal price increases. In countries like Japan, consumers are accustomed to paying higher prices for meat, and derived demand for grain feed use may be relatively price inelastic.

 EU 2012/13 coarse grain use is projected down 3.9 million tons this month to 149.0 million, with reduced feed and residual accounting for 3.4 million tons of the decline. Reduced corn production is expected to cause a shift in feed use to wheat, up 1.0 million tons this month, but most of the drop is expected to be caused by reduced meat production as financial losses cause a reduction in previously stagnating animal production.

 India’s expected coarse grain disappearance is reduced 3.7 million tons this month due to reduced production. Feed and residual is expected to be down significantly, 1.1 million tons, as poultry and egg production is constrained by high grains and protein meal prices. However, most of the decline, 2.6 million tons, is in food, seed, and industrial use, with coarse grain food use concentrated among the rural poor. Wheat food use is increased 1.3 million tons, offsetting half of the decline. Russia’s coarse grain consumption is forecast down 1.6 million tons this month to 26.6 million, with 1.3 million in reduced feed and residual. Meat production growth is expected to stumble as numerous small pork producers in regions with grain production shortfalls are forced to reduce production.

 Japan’s corn feed use forecast for 2012/13 is reduced 0.5 million tons as the previously forecast rebound in corn feeding is no longer expected to be as strong, with sharply higher feed prices.

 Canada’s coarse grain use for 2012/13 is reduced 0.5 million tons this month as high grain prices trim meat production prospects. Food and industrial use of corn is projected higher this month based on upward revisions for 2011/12 industrial use. South Korea’s and Vietnam’s corn feed use are each reduced 0.5 million tons and Israel is trimmed 0.4 million as these countries are expected to import more wheat for feeding and less corn. There are also reductions in forecast coarse grain use this month for Indonesia, Turkey, Serbia, Croatia, Syria, Ukraine, Peru, Colombia, and Algeria.

 Argentina’s expected coarse grain domestic use is increased 0.6 million tons this month, mostly due to expanded barley processing to support malt exports.
 
U.S. Stocks Sharply Lower; Brazil, China, and Argentina Increased
 
Global coarse grain ending stocks projected for 2012/13 are cut 13.4 million tons this month to 152.1 million. The U.S. accounts for the entire reduction as foreign stocks are forecast up 0.8 million tons to 132.9 million. While several foreign countries are expected to react to record world corn prices by drawing down stocks to cushion the effect of prices on use, in Brazil, China, and Argentina, increased production is projected to support increased stocks.

 In Brazil, record 2011/12 corn production and near-record prospects for 2012/13 support corn supplies. Moreover, high interior transport costs to move corn to ports and competition with bumper 2012/13 soybean supplies for space in congested ports are expected to limit corn exports, leaving significant stocks of corn in interior locations like Mato Grosso at the end of the local 2012/13 marketing year (March 2014). Coarse grain ending stocks are forecast up 3.8 million tons this month to 17.1 million.

 Argentina is expected to move much of its corn surplus into exports, but the sharply increased production still boosts expected 2012/13 ending stocks of coarse grain 0.8 million tons this month to 3.0 million.

 China, with a record corn harvest in 2012/13, is expected to increase coarse grain stocks even with reduced imports. Coarse grain stocks are up 2.0 million tons this month to 61.0 million.

 Egypt, with higher estimated 2011/12 corn imports, is expected to hold higher stocks in 2012/13, as beginning stocks are increased 0.3 million tons this month to 1.3 million and ending stocks are up 0.1 million to 1.1 million.

 However, several countries are projected to respond to higher world prices and/or reduced local production prospects by holding lower ending stocks in 2012/13. EU coarse grain ending stocks are projected down 0.9 million tons this month to 10.0 million, less than 40 percent of the level estimated 3 years earlier. India, with large government stocks of wheat and rice, is expected to let coarse grain stocks dwindle, down 0.9 million tons this month to 0.8 million. Serbia, with corn production devastated by drought, is projected to pull coarse grain stocks to minimal levels, down 0.75 million tons this month to 0.35 million. With tight U.S. supplies of corn and sorghum, Mexico is expected to rebuild coarse grain stocks less than previously projected, with 2012/13 ending stocks prospects down 0.6 million tons this month to 1.7 million. Ukraine, with reduced corn production this month, is projected to hold lower coarse grain ending stocks, down 0.6 million to 2.3 million. Ending stocks prospects are down 0.5 million tons each for Australia and Canada, as increased export prospects for 2011/12 in Australia, and for both 2011/12 and 2012/13 for Canada, trim stocks. Smaller reductions in coarse grain ending stocks are projected this month for Russia, Indonesia, Moldova, Colombia, Algeria, and others.
 
U.S. Corn Exports, World Trade Prospects Severely Cut
 
With U.S. production prospects withered by drought, U.S. corn exports for the October-September trade year 2012/13 are cut 6.5 million tons this month to 33.5 million (a reduction of 300 million bushels to 1.3 billion bushels for the September- August local marketing year). This is the lowest level of U.S. corn exports since 1993/94, when global corn trade was 47 percent less than projected for 2012/13. World corn trade is forecast down 6.6 million tons this month to 90.9 million, as some other major corn export competitors also suffered production problems.

 Ukraine’s corn export prospects are down 1.5 million tons to 12.5 million; the EU is cut in half, down 1.0 million tons to 1.0 million; Serbia is reduced 0.5 million to 1.3 million; Croatia is down 0.75 to 0.25; and Moldova is trimmed 0.25 million to 0.1 million. Offsetting most of the non-U.S. reductions are increased corn exports projected in 2012/13 for Argentina, up 2.0 million tons to 17.5 million; Brazil, up 0.5 million to 13.0 million, South Africa, up 0.3 million to 2.3 million; and Canada, up 0.2 million to 1.0 million. These countries are expected to have sufficient supplies to respond to higher corn price prospects with increased exports.

 High corn prices are expected to limit imports for several countries. China’s projected imports are cut 3.0 million tons to 2.0 million as the price of foreign corn landed in southern China is expected to be unattractive compared to corn produced in China. Some of the previously bought corn for delivery to China in 2012/13 may be sold back to U.S. exporters or diverted to non-Chinese destinations with a significant profit for the Chinese trader, as those contracts were made when prices were significantly lower. EU corn import prospects are cut 2.0 million tons to 3.0 million as grain prices in the EU are not expected to be as strong as the increase in global corn prices. Corn imports are reduced 0.5 million tons each for Indonesia, Japan, South Korea, Morocco, Mexico, and Vietnam. South Korea and Vietnam are expected to replace corn with imports of feed-quality wheat. Japan is not expected to increase the portion of corn in compound feed as previously forecast. In Mexico, disease problems in poultry and the high corn prices are expected to reduce corn demand, and in Indonesia, high prices will limit imports. Israel is also expected to switch to feed quality wheat, trimming corn imports 0.35 million tons. There are smaller import reductions for Colombia, Peru, and Algeria.

 The United States is expected to emerge as a significant corn importer in 2012/13. Imports, while small compared to exports, are projected up 1.2 million tons to 1.9 million (up 45 million bushels for the local marketing year to 75 million bushels). Corn seed imports are expected to increase as local seed production in several areas has been hurt by drought. The routine imports of corn from Canada are expected to increase, and some imports from other origins, such as Brazil, are expected to enter feed deficit regions such as North Carolina or California.

 There are small increases in projected corn imports this month for Libya, where imports for both 2011/12 and 2012/13 are returning to traditional levels faster than expected, and for Croatia, with corn production stricken by drought.

 U.S. corn exports for 2011/12 are reduced 1.0 million tons to 39.0 million (down 50 million bushels to 1.55 billion bushels for the local marketing year). The pace of sales and shipments has been exceptionally slow in recent weeks as increased prices have made U.S. corn unattractive compared to competitors’ supplies. From October 2011 through June 2012 Census corn exports reached 34.7 million tons, down just 10 percent from the previous year, but in July 2012, corn exports according to Grain Inspections reached only 2.3 million tons, down more than 40 percent from a year ago. Moreover, at the end of July, Corn Outstanding Sales for shipment during the current marketing year were also down 40 percent from last year at this time.

 However, world corn trade for 2011/12 is estimated up 1.5 million tons this month to a record 98.5 million. The strong pace of recent shipments boosts Argentina’s exports 1.5 million tons to 16.0 million. Ukraine’s corn exports are up 0.5 million tons to a record 14.5 million. The pace of recent exports also supports small increases for 2011/12 for South Africa, Canada, the EU, and Serbia. The recent pace has boosted 2011/12 imports for Mexico, up 0.7 million tons to 11.2 million; Egypt, up 0.5 million to 5.5 million; and South Korea, up 0.5 million to 7.5 million.

 However, there are reductions to 2011/12 corn imports for Indonesia and Syria. U.S. corn imports for 2011/12 are raised 0.1 million tons to 0.65 million (up 3 million bushels to 25 million bushels for the local marketing year). Corn imports have been unexceptional in 2011/12, consisting of mostly of routine shipments of seed and cross-border trade with Canada.
 
U.S. 2012/13 Sorghum Export Prospects Cut, Barley Imports Raised
 
U.S. sorghum exports for 2012/13 are severely reduced this month, down 1.0 million tons to 2.5 million (down 40 million bushels to 100 million bushels for the local marketing year). The sharply reduced U.S. sorghum production forecast this month limits U.S. export potential. Mexico’s imports are cut by the same amount. U.S. sorghum exports for 2011/12 are estimated up slightly this month as July 2012 export inspections to Mexico were larger than expected. U.S. exports are up 0.1 million tons to 1.4 million (up 5 million bushels to 55 million bushels). Mexico’s imports are raised to 1.2 million tons.

 U.S. barley imports are raised slightly this month for both 2011/12 and 2012/13. The October-September trade year imports are up 0.1 million tons to 0.4 million for 2011/12 and are projected up 0.2 million tons to 0.5 million for 2012/13 (local June- May 2011/12 is up 2 million bushels to 16 million and 2012/13 is projected up 10 million bushels to 25 million).

 Other changes to projected 2012/13 are severely reduced this month, down 1.0 million tons to 2.5 million (down 40 million bushels to 100 million bushels for the local marketing year). The sharply reduced U.S. sorghum production forecast this month limits U.S. export potential. Mexico’s imports are cut by the same amount. U.S. sorghum exports for 2011/12 are estimated up slightly this month as July 2012 export inspections to Mexico were larger than expected. U.S. exports are up 0.1 million tons to 1.4 million (up 5 million bushels to 55 million bushels). Mexico’s imports are raised to 1.2 million tons.

 U.S. barley imports are raised slightly this month for both 2011/12 and 2012/13. The October-September trade year imports are up 0.1 million tons to 0.4 million for 2011/12 and are projected up 0.2 million tons to 0.5 million for 2012/13 (local June- May 2011/12 is up 2 million bushels to 16 million and 2012/13 is projected up 10 million bushels to 25 million).

 Other changes to projected 2012/13 world barley trade were small, but Australia’s 2011/12 exports are revised up 0.5 million tons this month to 5.0 million, confirming it as the world’s largest barley exporter that year.
 
August 2012

 
Published by USDA Economic Research Service

10 August 2012
USDA WASDE - August 2012



 

WHEAT: U.S. wheat supplies for 2012/13 are raised 54 million bushels with higher forecast production and an increase in projected imports. Production is forecast 44 million bushels higher with increased yields for winter wheat, durum, and other spring wheat. Feed and residual use is projected 20 million bushels higher, reflecting the tighter supply situation for corn. Ending stocks for 2012/13 are projected 34 million bushels higher. The projected range for the 2012/13 seasonaverage farm price is raised substantially to $7.60 to $9.00 per bushel, compared with $6.20 to $7.40 per bushel last month, as tighter foreign wheat supplies and sharply higher corn prices raise price prospects for the remainder of the marketing year.

Global wheat supplies for 2012/13 are projected 2.1 million tons lower mostly reflecting a 3.7- million-ton reduction in foreign production. A small increase in 2012/13 world beginning stocks is partly offsetting with 2011/12 updates to trade and use for a number of countries. Lower expected production in the FSU-12 accounts for most of this month’s decline in world output. Production is lowered 6.0 million tons for Russia on reduced area and yield prospects due to July heat and dryness across most of the spring wheat growing areas. Spring wheat in adjoining areas of Kazakhstan was also affected by the same adverse weather reducing production prospects 2.0 million tons. Other reductions this month include a 0.8-million-ton reduction for Turkey based on lower reported yields, a 0.5-million-ton reduction for Argentina reflecting lower expected area, a 0.3- million-ton reduction for Syria, and a 0.2-million-ton reduction for EU-27. Production is raised 2.9 million tons for India, 2.0 million tons for Ukraine, and 0.4 million tons each for Canada and Uzbekistan.

Global wheat consumption for 2012/13 is raised 3.2 million tons as a number of countries are expected to shift some of their livestock and poultry feeding from corn to wheat. Wheat feeding is raised 1.0 million tons each for EU-27 and Ukraine, 0.5 million tons each for South Korea and Vietnam, 0.3 million tons for Israel, and 0.2 million tons each for India and Thailand. Partly offsetting is a 0.5-million-ton reduction for Russia with lower expected production.

Global wheat imports for 2012/13 are raised with increases for several countries, in part, to support higher wheat feeding. Imports are raised 0.5 million tons each for EU-27, South Korea, and Vietnam, and raised 0.3 million tons for Israel. Imports are also raised 0.3 million tons for Brazil. Global 2012/13 exports are raised, but much of the shift among countries also reflects reduced export prospects for Russia, which is lowered 4.0 million tons. Exports are raised 2.0 million tons for Ukraine, 1.0 million tons each for Canada and EU-27, 0.5 million tons each for Australia, Brazil, and Pakistan. Exports are lowered 0.7 million tons for Argentina, 0.5 million tons for Turkey, and 0.2 million tons for Uruguay. World ending stocks for 2012/13 are projected 5.3 million tons lower at 177.2 million.

COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected sharply lower again this month with corn production forecast 2.2 billion bushels lower and sorghum production forecast 92 million bushels lower. The forecast U.S. corn yield is reduced 22.6 bushels per acre to 123.4 bushels as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. As forecast, the 2012/13 corn yield would be the lowest since 1995/96. Corn area harvested for grain is also lowered, down 1.5 million acres from the last month’s forecast that was based on the June Acreage report. The U.S. sorghum yield is forecast 16.3 bushels per acre lower at 48.6 bushels as drought stressed sorghum from the Central Plains to the Corn Belt. Sorghum harvested area is also lowered slightly.

U.S. corn production for 2012/13 is forecast at 10.8 billion bushels, the lowest since 2006/07. Relatively small increases in carryin and imports only partly offset this month’s substantial reduction in crop size. Ending stocks for 2011/12 are projected 118 million bushels higher with lower expected exports, reduced corn use for ethanol, and a small increase in imports. Imports for 2012/13 are also raised, up 45 million bushels to 75 million, reflecting strong domestic corn prices and competitively priced foreign supplies. Total U.S. corn supplies for 2012/13 are projected down 2.0 billion bushels and at a 9-year low.

This month’s large reduction in U.S. corn supplies and the sharply higher price outlook are expected to further reduce 2012/13 corn usage. Total use is projected 1.5 billion bushels lower and at 11.2 billion would be a 6-year low. The biggest reduction again this month is for feed and residual disappearance, projected down 725 million bushels. Food, seed, and industrial (FSI) use is also projected lower, down 470 million bushels, mostly reflecting a 400-million-bushel reduction in corn used to produce ethanol. Reductions in other food and industrial uses account for the remainder of the FSI decline. Ending stocks for 2012/13 are projected at 650 million bushels, 533 million lower and the smallest carryout since 1995/96. The 2012/13 season-average farm price for corn is projected at a record $7.50 to $8.90 per bushel, up sharply from the $5.40 to $6.40 per bushel projected in July. Projected farm prices for the other feed grains are also raised.

Global coarse grain supplies for 2012/13 are reduced 56.5 million tons mostly reflecting the forecast 55.7-million-ton reduction in the U.S. corn crop. Larger 2012/13 corn beginning stocks in the United States and Brazil partly offset lower U.S. and foreign coarse grain production. Brazil corn beginning stocks are raised 2.8 million tons based on higher reported production for 2011/12.

Foreign corn production for 2012/13 is mostly unchanged with increases for China, Argentina, Brazil, Mexico, and South Africa mostly offset by reductions for EU-27, Ukraine, India, Serbia, Russia, Croatia, Moldova, and Canada. Foreign sorghum production is lowered 0.3 million tons with a reduction for India. Reductions in barley production in FSU-12, EU-27, and Turkey lower global barley production 1.1 million tons. A 2.5-million-ton reduction in India millet output also lowers world coarse grain supplies.

Global 2012/13 corn trade is projected sharply lower this month in response to tighter U.S. supplies and higher prices. Corn imports are lowered for China, EU-27, Indonesia, Japan, South Korea, Mexico, Vietnam, Israel, Colombia, Peru, and Syria. In addition to the United States, corn exports are reduced for Ukraine, EU-27, and Serbia. Partly offsetting are export increases for Argentina, Brazil, South Africa, and Canada. Global corn consumption is projected 38.9 million tons lower with the United States accounting for more than three-fourths of the reduction. Foreign corn feeding drops 8.8 million tons with only part of the decline offset by higher wheat feeding. Corn feeding is lowered for EU-27, India, Canada, Japan, South Korea, Russia, Ukraine, Vietnam, Israel, and Indonesia. Global corn ending stocks are projected 10.8 million tons lower with increases for China, Brazil, and Argentina only partly making up for the large reduction in the United States and smaller reductions in a number of other countries.

RICE: U.S. total rice supplies for 2012/13 are projected at 244.4 million cwt, down 2.5 million from last month. Projected beginning stocks, imports, and production are each lowered from a month ago. USDA's first survey-based forecast of the 2012/13 U.S. rice crop is 190.0 million cwt, down 1.0 million from last month's projection, but up nearly 3 percent from the previous year. Average all rice yield is forecast at 7,196 pounds per acre, down 39 pounds per acre from last month’s projection, but up nearly 2 percent from last year. Long-grain production is forecast at 132.1 million cwt, down 1 percent from last month, while combined medium- and short-grain production is forecast at 57.9 million, up less than 1 percent from a month ago. The all rice import projection is lowered 0.5 million cwt to 21.0 million due in part to an expected slower pace of long-grain imports from South and Southeast Asia, a continuation of the trend observed in 2011/12. All rice beginning stocks for 2012/13 are lowered 1.0 million cwt to 33.5 million because of an increase in the 2011/12 export estimate to 102.0 million.

U.S. total rice use for 2012/13 is projected at 216.0 million cwt, down 2.0 million cwt from last month. All rice domestic and residual use is lowered 2.0 million cwt to 124.0 million, all in longgrain. The all rice export projection is unchanged at 92.0 million cwt, however, the rough rice component is raised 1.0 million and offset by a 1.0 million reduction in combined milled- and brownexports (rough-equivalent basis). The long-grain and combined medium- and short-grain export projections are unchanged at 60.0 million cwt and 32.0 million, respectively. U.S. all rice ending stocks for 2012/13 are projected at 28.4 million cwt, down 0.5 million from last month, and 15 percent below the previous year.

The 2012/13 long-grain U.S. season-average farm price is projected at $13.50 to $14.50 per cwt, up 50 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $15.50 to $16.50 per cwt, unchanged from a month ago. The 2012/13 all rice price is projected at $14.10 to $15.10 per cwt, up 30 cents per cwt on each end of the range. A smaller crop and tighter supplies, particularly for long-grain rice, are expected to support prices. The all rice stocks-to-use ratio at 13.2 percent in 2012/13 is the lowest since 2007/08, and the long-grain rice stocks-to-use ratio at 10.6 percent is the lowest since 2003/04.

Lower projected global 2012/13 total supply more than offsets a slight decrease in total use resulting in an expected decrease in ending stocks. Global production is lowered 1.9 million tons to 463.2 million, due primarily to forecast reductions for India, Brazil, and North Korea, which are partially offset by increases for China and South Korea. Beginning stocks are increased 0.8 million tons due to a 1.0-million-ton increase for India, which is partially offset by reductions for Brazil and Indonesia. World consumption is reduced 0.4 million tons. A 1.0-million-ton increase in China offsets an identical reduction for India. Consumption forecasts are also lowered for Brazil, North Korea, and the United States, partially offset by an increase for Indonesia. Global trade is changed little from a month ago. Global ending stocks for 2012/13 are projected at 101.8 million tons, down 0.7 million from last month, and a decrease of 3.2 million from the previous year. The largest stocks reductions for 2012/13 are for Brazil and Indonesia, each just over 0.3 million tons.

OILSEEDS: U.S. oilseed production for 2012/13 is projected at 83.4 million tons, down 9.4 million from last month, as a lower soybean production estimate is only partly offset by higher crops of peanuts and cottonseed. Soybean production for 2012/13 is projected at 2.7 billion bushels, down 358 million due to lower harvested area and yields. Harvested area is projected at 74.6 million acres, down 0.7 million from the July projection. The first survey-based soybean yield forecast of 36.1 bushels per acre is 4.4 bushels below last month’s projection and 5.4 bushels below last year’s yield. Soybean supplies for 2012/13 are projected 12 percent below last month to a 9-year low on lower production and reduced beginning stocks. Soybean exports are reduced 260 million bushels to 1.11 billion bushels. Soybean crush is also reduced as higher prices reduce domestic use and prospective exports for both soybean meal and oil. Soybean ending stocks are projected at 115 million bushels, down 15 million.

U.S. changes for 2011/12 include increased soybean crush and exports and reduced ending stocks. Crush is increased 15 million bushels to 1.69 billion reflecting increased exports and domestic use of soybean meal. Soybean exports are increased 10 million to 1.35 billion bushels reflecting strong shipments in recent weeks. Soybean ending stocks are projected at 145 million bushels, down 25 million.

Soybean and product prices for 2012/13 are all raised to record levels this month, reflecting the impact of sharply reduced soybean and corn production. The U.S. season-average soybean price is projected at $15.00 to $17.00 per bushel, up $2.00 on both ends. Soybean meal prices are projected at $460 to $490 per short ton compared with $365 to $395 last month. Soybean oil prices are projected at 53 to 57 cents per pound, up 0.5 cents on both ends.

Global oilseed production for 2012/13 is projected at 457.3 million tons, down 8.5 million tons from last month. Reductions for soybeans, sunflowerseed, peanuts, and cottonseed are only partly offset by increased rapeseed production. Lower soybean production is projected for the United States, Canada, and EU-27 due to lower yields resulting from hot, dry weather. Soybean production is raised for Brazil and Paraguay as producers are expected to respond to sharply higher prices with increased plantings. Brazil’s soybean production is projected up 3 million tons at a record 81 million. Sunflowerseed production is reduced for EU-27, Ukraine, and Moldova due to the effects of hot, dry weather during the reproductive stage of the crops. Other changes include higher rapeseed production for EU-27 and Ukraine, lower rapeseed production for China and Australia, lower peanut production for India and Indonesia, and lower cottonseed production for India.

Global oilseed and meal production, trade, and consumption for 2012/13 are all reduced this month reflecting the impact of reduced oilseed supplies and higher prices. Projected soybean imports for China are reduced 1.5 million tons to 59.5 million as domestic soybean stocks contribute a larger component of soybean meal consumption. Soybean exports for Brazil and Argentina are forecast higher but only partly offset a reduction for the United States.

SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 251,000 short tons, raw value, compared with last month. Carry-in stocks are reduced mainly due to data revisions in Sweetener Market Data, which lower 2011/12 ending stocks. Imports from Mexico are decreased due to higher sugar consumption and carryout stocks in Mexico. Total use is unchanged.

COTTON: The U.S. 2012/13 cotton supply and demand estimates include larger production and ending stocks compared with last month. Production is raised 651,000 bales to 17.7 million, up nearly 4 percent, based on USDA’s first crop survey. Domestic mill use is unchanged. Exports remain forecast at 12.1 million bales, despite the larger supply, due to reduced import demand by China. Ending stocks are now forecast at 5.5 million bales, equal to 35 percent of total use. The range for the marketing year average price received by producers is narrowed 1 cent on each end to 61 to 79 cents per pound.

This month’s world 2012/13 cotton estimates also show larger supplies and ending stocks. Beginning stocks are raised nearly 2.0 million bales in China as a result of adjustments to 2011/12 which both increase imports and reduce consumption. The higher China stocks are partially offset by lower beginning stocks in Australia, Malaysia, Pakistan, and others, resulting in a net global increase of 1.1 million bales. World production is raised 300,000 bales, as increases for the United States, China, Burkina Faso, and Mali are partially offset by lower production for India, Brazil, Argentina, and others. World consumption is reduced 820,000 bales, due mainly to reductions for China and Pakistan. World trade is reduced slightly, as lower imports by China are partially offset by small increases for several countries. World stocks are raised to 74.7 million bales, including an increase of nearly 2.4 million bales in stocks held by China; lesser increases for the United States, Pakistan, and Uzbekistan are about offset by decreases for India, Australia, and Brazil. Projected China stocks of 34.2 million bales account for 46 percent of the world stocks forecast, and assume a net increase in China’s national cotton reserve of about 20 percent during 2012/13.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2012 total red meat and poultry production is raised from last month but the forecast for 2013 is reduced as higher feed prices are expected to pressure producer returns. Beef production is raised from last month for both 2012 and 2013 due to higher expected placements in feedlots and increased dairy cow slaughter in late 2012 and during 2013. Carcass weights are forecast higher based on recent weight trends, but higher feed prices are expected to temper the increase and carcass weights are expected to be lower in 2013 compared to 2012. Pork production is reduced from last month for both 2012 and 2013. The reduction for 2012 reflects lower slaughter in the third quarter and lighter expected carcass weights through the year. As a result of high feed prices and recent hot weather, forecast pig crops are lowered in the second half of 2012 with declines continuing into 2013. Pork production is forecast lower in 2013 due to a combination of smaller hog supplies and lower expected carcass weights. Broiler production is raised in 2012 as production in the second quarter was higher than forecast last month and hatchery data points to higher than previously forecast levels of production in the third quarter. However, high feed costs are expected to result in lower broiler production in 2013. Turkey production is forecast lower in 2012 on lower second-quarter production. The production forecast for 2013 is reduced as feed prices squeeze producer returns. The egg production forecast is lowered for both 2012 and 2013.

Beef imports are reduced for 2012 based in part on weaker second-quarter data but are unchanged for 2013. Beef exports are reduced for both 2012 and 2013 as exports have slowed and tight supplies of pork and poultry are expected to support domestic beef demand. Pork and poultry exports are reduced for both 2012 and 2013.

Cattle prices are reduced from last month with the expectation of larger fed cattle marketings in both 2012 and 2013. However, prices are likely to remain strong in 2013 as total meat supplies are tight. Hog prices are raised in both years due to smaller hog supplies. Broiler prices are reduced in 2012 due to larger expected supplies and somewhat weaker demand, but for 2013, tighter supplies are expected to help support higher prices. Turkey and egg price forecasts are raised on lower production.

Milk production forecasts for 2012 and 2013 are reduced from last month as higher forecast feed prices are expected to pressure producer returns and encourage a more rapid decline in the cow herd. Milk per cow is also reduced due to tighter feed supplies. Imports for 2012 are raised on both a fat and skim-solids basis and are raised on a fat basis for 2013. Exports are raised for 2012 but exports for 2013 are reduced from last month on tighter supplies. Ending stocks are reduced. Product prices are forecast higher for 2012 and 2013 as tighter supplies support prices. With higher product prices, both Class III and Class IV price forecasts are raised. The all milk price is forecast at $17.55 to $17.75 per cwt for 2012 and $17.80 to $18.80 per cwt for 2013.
 

Meeting the Greatest Global Farming Challenge
21 August 2012


ANALYSIS - The world is facing the greatest farming challenge of all time with a booming global population and a potential quadrupling of the number of people who will be able to afford to eat high quality diets.
 
This was the message from Dennis Avery, the director of the Center for Global Food Issues, to the 58th International Congress of Food Science and Technology in Montreal, Canada.
 
In his keynote speech, ‘The Future for Healthful Meat’, Mr Avery said that food demand and probably meat demand as well will double by 2050.
 
And he questioned how such a massive growth in demand for food and meat will be met without “displacing huge tracts of wildlife habitat and its dependent species for more low yield farming and pastures”.
 
Mr Avery said to meet the goals and needs of a growing population, there should be an end to subsidies and mandates for corn ethanol and biofuels, more high yield farming research aimed at rapidly tripling the food productivity of the land now in farming and opening direct conversation between farmers and consumers on the merits of intensified farming to protect wildlife.
 
“The reality is that the world population is set to stabilize, probably at about eight billion people, after another 34 per cent increase, and probably about 2045,” said Mr Avery.
 
“Affluence will instead become the biggest factor in 2050’s food requirements. I estimate seven billion affluent people then, instead of today's 1.5 billion.
 
“The current ‘minor’ crises over American mortgage subsidies and European overspending need to be corrected – and I predict the correction will be painful. However, capitalism and science are then poised to produce very large increases is global incomes, both in the West and in the emerging economies. There should be no reason that the Chinese cannot have dairy products and beef to go along with their pigs and poultry. There is no reason why India should not have the poultry and ice cream they crave. Africa, too, should be able to have its Green Revolution, finally. This will not come overnight, but it will almost certainly come.

“There will even be a pet challenge as people have greater affluence and fewer children. I predict that India and China will eventually add hundreds of millions more cats and dogs to their households – none of them vegetarian.”
 
Mr Avery told the Congress that the real challenge for farmers and their support institutions in the next 40 years will be to save the world's wildlife and wildlands as well as feeding a population of eight to nine billion.
 
He said the key will be to triple food yields from the current crop and pasture lands and to do this the farming sector will have to invest in intensification.
 
“This will be very difficult, because at the moment, the affluent publics think they want ‘organic’, ‘natural’, ‘local’ food production – the very opposite of high-yield wildlands conservation. They have been carefully taught this misconception by the intellectual elite, which was actually worried about overpopulation. Now that the world’s population growth is nearly over, we can put that worry behind us,” he said.
 
Mr Avery also attacked governments, largely in the developed world, for diverting grain and oilseed crops from the food bank to produce fuel.
 
“Food prices have shot up in recent years, severely damaging the markets for meat, milk and eggs. The real reason is simple. The United States, the European Union, Canada, and Indonesia decided – suddenly – to divert a major portion of their grain and oilseed crops to making auto fuel instead of food,” he said.
 
“This food diversion produced lots of inflation in food prices, but little gain in energy supplies. One-third of the US corn crop in 2011 went into ethanol production, but the true net energy gain from ethanol is only about 108 gallons worth of gasoline per acre. This means an acre of corn can fuel about seven family cars for a week instead of feeding a family for a year. Ethanol represents a pitiful solution to the energy crisis and carries with it an increased risk of hunger for the world.”
 
He said the diversion of land use and grains to energy production rather than food was made on a false premise that it is greener and is reducing global warming.
 
“Today’s high food prices have given us a peek at the world’s impending food reality with current government policies-expensive food and massive losses in global wildlife habitat – unless we shift the ‘renewable fuels’ resources back to food production,” he said.
 
Mr Avery forecast that, in future, food production will be stimulated by more industrial fertiliser and will also see more and safer pesticides and veterinary medicines. Crops will also rely more on irrigation systems.
 
However, he added that the consumer has to be convinced that this is the right way to go.
 
He predicted that biofuels will be “crowded out of the market” in favour of meat, milk and eggs.
 
“They will be pushed out by public discontent,” he said.
 
With food production having to rise by 70 per cent to meet the growth in population, meat consumption is expected to rise from 270 million tonnes a year to 470 million tonnes – an increase of 42 per cent.
 
“I expect an even higher rate of market growth for both poultry and pork than the USDA and FAO predict in the years ahead,” Mr Avery told the congress.

“In pork, I am impressed that China believes its massive pork consumption will double again as its rural incomes rise.
 
“I am impressed that the leader of China is saying he wants to provide milk for each school child, in a nation where milk has not been widely available until recently.
 
“I am impressed with the demonstrated demand growth for milk in India, and the potential for that to continue. And, with the potential sales growth for ice cream throughout the developing countries as they get electricity.

“I further believe the FAO is underestimating the meat and livestock product demand increase, probably believing that higher costs for meat and livestock production will sharply limit demand growth.”
 
He forecast that incomes will rise sharply to meet the prospective rise in meat and food prices.
 
Furthermore, higher incomes and their related luxury market potential will stimulate production efficiencies, and attract new farming, processing and infrastructure capacity investments to meet the potential demand.

FAO Food Price Index Holds Steady
07 September 2012

GLOBAL - The FAO Food Price Index averaged 213 points in August 2012, unchanged from July.
 
Presenting the Index at a press conference at FAO headquarters in Rome, Director-General José Graziano da Silva said: “This is reassuring. Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further,” he added.

The FAO Food Price Index spiked six per cent in July after three months of decline.
 
The new Index showed international prices of cereals and oils and fats changed little in August but sugar prices fell sharply, compensating for rising meat and dairy prices.

Although still high, the FAO Index currently stands 25 points below its peak of 238 points in February 2011 and 18 points below its August 2011 level. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
 
The FAO Cereal Price Index averaged 260 points in August, the same as in July, with some increases in wheat and rice offsetting a slight weakening in maize. Deteriorating crop prospects for maize in the United States and wheat in the Russian Federation initially underpinned export quotations, but prices eased towards the end of the month following heavy rains in areas hardest hit by drought in the United States and the announcement that the Russian Federation would not impose export restrictions. Renewed import demand sustained international rice quotations.

Tightening supply-demand balance

Latest forecasts also confirm a significant tightening of global grain supply-demand balance in the 2012/13 marketing season. FAO's Cereal Supply and Demand Brief, published together with the Food Price Index, said global cereal production will not be sufficient to fully cover expected utilization in 2012/13, pointing to a larger draw-down of global cereal stocks than earlier anticipated.
 
FAO's latest forecast for world cereal production in 2012 stands at 2 295 million tonnes, down 52 million tonnes, or 2.2 per cent, from the record in 2011. This forecast is some 4 per cent below the estimate in FAO's previous report in July, largely reflecting the worsening of maize production prospects in the United States because of the widespread and severe drought.
 
Global cereal utilization in 2012/13 is forecast at 2 317 million tonnes, down marginally from the previous season and 2 per cent below the 10-year trend. High grain prices are seen as curbing demand, especially for production of fuel ethanol from maize.
Coarse grains


World production of coarse grains - maize, barley, sorghum, millet, rye and oats - is projected at 1 148 million tonnes, down 17 million tonnes, or 1.5 per cent, on 2011. The anticipated fall mainly reflects a smaller maize crop, which is expected to decline to 864 million tonnes in 2012, 20 million tonnes less than in 2011.
 
The FAO's forecast for world wheat production has also been downgraded from July. Global wheat production is anticipated to reach 663 million tonnes in 2012, down 15 million tonnes, or 2 per cent, from the previous forecast. Wheat output in the Russian Federation is forecast to decline by 29 per cent to 40 million tonnes compared to 2011, while production also looks set to fall sharply in Kazakhstan and Ukraine, by 47 per cent and 37 per cent respectively. By contrast, United States' wheat production is seen as increasing by 13.5 per cent to an above-average level of 61.7 million tonnes while record harvests are also expected in India and China.
Other food commodities
Regarding other food commodity prices, the FAO Oils/Fats Price Index averaged 226 points in August, unchanged from July. Gains in soybean oil prices and strengthening quotations for sunflower and rapeseed oils were offset by persistent weakness in palm oil values.
 
The FAO Meat Price Index averaged 170 points in August, up 4 points, or 2.2 per cent, from July. All meat prices rose, but most of the momentum came from the grain-intensive pig and poultry sectors. The August price increase follows three consecutive months of declines.
 
The FAO Dairy Price Index averaged 176 points in August, up 3 points, or 1.6 per cent, from July, sustained by increases in the prices of skim milk powder, casein, butter and whole milk powder, while cheese prices remained stable. Much of the recent strength stems from firming demand combined with production constraints in areas affected by drought and rising feed costs.
 
The FAO Sugar Price Index averaged 297 points in August, down 27.7 points, or 8.5 per cent, from July, and 97 points, or 25 per cent, from August last year. This month's sharp fall in sugar prices reflects an improved production outlook amid more favourable weather conditions in Brazil, the world's largest sugar exporter, supportive of sugarcane harvests, and recovering monsoon rains in India.

USDA WASDE - September 2012



 

WHEAT: The 2012/13 U.S. wheat balance sheet is unchanged this month; however, small by-class adjustments are made to projected exports and stocks. Projected exports for Hard Red Winter wheat are lowered 25 million bushels with Hard Red Spring and White wheat exports raised 15 million bushels and 10 million bushels, respectively. Corresponding changes are made to projected ending stocks for these three classes. The projected range for the 2012/13 season-average farm price is lowered to $7.50 to $8.70 per bushel compared with $7.60 to $9.00 per bushel last month. Prices reported for the summer months, when producers typically market nearly half the crop, have remained well below cash bids and futures prices, suggesting substantial forward pricing by producers earlier in the year.

Global wheat supplies for 2012/13 are projected 3.1 million tons lower mostly due to lower expected production in Russia. An increase in foreign beginning stocks partly offsets the projected 4.1-millionton reduction in world wheat output. Beginning stocks are raised for Canada and Egypt, but lowered for Argentina. Production for Russia is reduced 4.0 million tons with lower reported area and reduced yields as harvest results confirm additional drought and heat damage to both the winter and spring wheat crops. Production is also lowered 0.5 million tons for adjoining Kazakhstan, which experienced the same adverse drought and heat during July and August that affected spring wheat in the central and eastern growing regions of Russia. EU-27 production is lowered 0.5 million tons mostly reflecting lower expected yields in the United Kingdom. Ukraine production is raised 0.5 million tons based on higher reported yields. Production for Afghanistan is raised 0.4 million tons mostly on higher reported area.

Global wheat consumption for 2012/13 is lowered 2.6 million tons mostly on lower wheat feed and residual use in Russia and Kazakhstan. Food use is also lowered slightly for both countries with additional reductions projected for food use in Egypt and Nigeria. Food use is raised for Afghanistan, Iran, and Libya.

Global wheat trade for 2012/13 is lowered slightly this month with imports reduced for China, Egypt, EU-27, Israel, and Nigeria. Import increases for Turkey and Iran limit the global decline in trade. Exports are reduced 2.0 million tons for Ukraine based on the recent agreement between government officials and grain traders to limit shipments because of concerns about tightening domestic supplies. Higher expected exports for Brazil, EU-27, and Turkey mostly make up for the Ukraine reduction.

World ending stocks for 2012/13 are projected 0.5 million tons lower with changes to a number of countries. The largest declines in stocks are for Russia, EU-27, China, Brazil, and Argentina. The largest increases are for Ukraine, Canada, Iran, and Turkey.

COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected higher this month with a reduction in forecast corn production more than offset by higher projected corn carryin. U.S. corn production is lowered 52 million bushels with the national average yield forecast 0.6 bushels per acre lower at 122.8 bushels. Lower yields and production in the Corn Belt and Central Plains are partly offset by increases elsewhere, particularly across the South where an early harvest is boosting available supplies.

U.S. corn supplies for 2012/13 are projected 108 million bushels higher as an increase in expected beginning stocks more than offsets lower production this month. Exports for 2011/12 are lowered 10 million bushels reflecting the slowing pace of shipments during August. Feed and residual use for 2011/12 is lowered 150 million bushels based on the record level of crop maturity and harvest progress as of September 1. State-level crop progress reports indicate that nearly 11 percent of the 2012 corn crop was harvested before the September 1 start of the 2012/13 marketing year. Based on state-by-state production forecasts from the September 12 Crop Production report, nearly 1.2 billion bushels of new-crop corn are estimated to have been available for use before the end of the old-crop 2011/12 marketing year. This is up more than 700 million bushels from a year ago. Early new-crop corn use is expected to displace use of 2011 old-crop corn and boost old-crop inventories on September 1. As a result, early new-crop usage reduces the feed and residual calculation in the balance sheet. (For a more complete discussion see Westcott and Norton, Implications of an Early Corn Crop Harvest for Feed and Residual Use Estimates, FDS-12F-01, Economic Research Service, USDA, July 2012, www.ers.usda.gov/media/828975/fds12f01.pdf .)

Total U.S. corn use for 2012/13 is raised this month with higher expected feed and residual disappearance more than offsetting lower projected exports. Feed and residual disappearance is projected 75 million bushels higher, in part reflecting higher expected September-December disappearance with the expected rise in early new-crop usage during the 2011/12 marketing year. Exports for 2012/13 are projected 50 million bushels lower with increased competition from lowerpriced South American supplies. Ending stocks for 2012/13 are projected 83 million bushels higher at 733 million. The projected range for the corn season-average farm price is lowered 30 cents on both ends of the range to $7.20 to $8.60 per bushel.

Global coarse grain supplies for 2012/13 are projected 4.0 million tons lower despite higher beginning stocks of corn in the United States and barley in Canada. Reduced corn production prospects for EU-27, Serbia, and Canada add to the decline in the United States to reduce world corn output 8.0 million tons. Higher barley production for EU-27 and Canada mostly offset reductions in oats, barley, rye, and millet production in Russia. Corn production is lowered 4.4 million tons for EU-27 with yield reductions for France, Italy, Romania, and Hungary as extended drought and heat in August further reduced production prospects across southern Europe. Serbia production is also lowered 1.2 million tons reflecting the same adverse weather conditions. Canada corn production is lowered 1.1 million tons based on the latest survey results from Statistics Canada. Global 2012/13 corn exports are lowered 1.8 million tons this month with the largest reduction for the United States. Corn exports are also lowered for Serbia and EU-27. Partly offsetting these reductions is a 1.0-million-ton increase for Brazil exports. Lower barley exports from Russia are more than offset with increases for Canada, Ukraine, and EU-27. Foreign coarse grain consumption is lowered mostly on lower corn usage. Corn feeding is lowered 4.0 million tons for the EU-27, 1.0 million tons for Canada, and 0.4 million tons for Serbia. Corn feeding is raised 0.8 million tons for Egypt. Barley feeding is raised 1.0 million tons for EU-27, 0.9 million tons for Canada, and 0.2 million tons for Iran. Barley feeding is lowered 0.5 million tons for Ukraine, and 0.2 million tons for Russia. Global corn ending stocks are projected 0.6 million tons higher with the increase for the United States partly offset by a reduction for Brazil.

RICE: U.S. 2012/13 rice supplies are increased 12.4 million cwt or 5 percent because of increases in beginning stocks and production. U.S. rice production in 2012/13 is forecast at 196.3 million cwt, up 6.3 million from last month due to both an increase in harvested area and yield. Harvested area is estimated at 2.68 million acres, up 37,000 acres. The average yield is estimated at a record 7,334 pounds per acre, up 138 pounds per acre from last month, with large increases in Arkansas and Mississippi. Long-grain rice production is forecast at 138.3 million cwt, up 6.2 million from last month. Combined medium- and short-grain production is forecast at 58.1 million cwt, up slightly from a month ago. All rice beginning stocks for 2012/13 are raised 7.6 million cwt from last month to 41.1 million (rough-equivalent basis) based on USDA’s Rice Stocks report released on August 27. The import projection is lowered 1.5 million cwt to 19.5 million, all in long-grain, as the increase in production and stocks will reduce imports.

Domestic use and exports are raised for 2012/13. Domestic and residual use is increased 2.0 million cwt to 126.0 million, largely because of a substantial increase in supplies, particularly for long-grain rice. All rice exports for 2012/13 are projected at 100.0 million cwt, up 8.0 million cwt from last month, all in long-grain rice. Larger supplies, particularly for long-grain rice, will likely pressure prices and make U.S. rice more competitive. All rice ending stocks for 2012/13 are projected at 30.9 million cwt, up 2.4 million from last month, but down 10.2 million from 2011/12.

The long-grain season-average farm price range is projected at $12.50 to $13.50 per cwt, down $1.00 per cwt on both ends of the range from last month compared to $13.40 per cwt for 2011/12. The combined medium- and short-grain farm price range is projected at $16.50 to $17.50 per cwt, up $1.00 per cwt on each end of the range from last month compared to a revised $16.50 per cwt for 2011/12. The 2012/13 all rice season-average farm price is forecast at $13.70 to $14.70 per cwt, down 40 cents per cwt on each end of the range from last month compared to a revised $14.30 per cwt for 2011/12. Larger supplies of long-grain rice will pressure prices and tighter supplies of combined medium- and short-grain rice will support prices.

Projected global 2012/13 rice supplies are raised more than the increase in use, resulting in a net increase in ending stocks from a month ago. Beginning stocks are raised 0.7 million due mostly to increases for Indonesia, Brazil, and the United States. Global rice production is projected at a near record 464.2 million tons, up 1.0 million tons from last month, primarily due to larger expected crops in China, the Philippines, EU-27, and the United States. China’s 2012/13 rice crop is increased 1.0 million tons to a record 143.0 million, as harvested area and average yield are raised. Global consumption is raised 1.3 million tons from a month ago to a record 467.7 million tons due to increases for China, the Philippines, and a number of smaller changes for other countries. Global exports are raised from a month ago largely due to an increase in the United States, which is partially offset by a decrease for Burma. Global ending stocks for 2012/13 are projected at 102.2 million tons, up 0.4 million from last month, but down 3.5 million from the previous year. Stocks are raised for Brazil, China, Indonesia, the Philippines, and the United States, and lowered for Sri Lanka and Pakistan.

OILSEEDS: U.S. oilseed production for 2012/13 is projected at 82 million tons, down 1.4 million from last month. Lower soybean and cottonseed production is only partly offset by an increase for peanuts. Soybean supplies for 2012/13 are reduced due to lower forecast production and beginning stocks. Soybean production is projected at 2.634 billion bushels, down 58 million due to lower yields in the Midwest. Soybean exports are reduced 55 million bushels to 1.055 billion mainly due to reduced supplies. Soybean crush is reduced 15 million bushels to 1.5 billion, the lowest since 1996/97. The reduction reflects lower projected soybean meal exports and domestic soybean meal consumption. Although soybean ending stocks are projected unchanged at 115 million bushels, they would fall to a 9-year low. Other changes for 2012/13 include reduced soybean oil production and ending stocks.

Soybean crush for 2011/12 is increased 15 million bushels to 1.705 billion reflecting higher-thanexpected crush reported for July. Soybean exports are increased 10 million to 1.36 billion. Residual use is lowered 10 million bushels reflecting the impact of early harvest of the 2012/13 crop in the South. Ending stocks are projected at 130 million bushels, down 15 million from last month. Other changes for 2011/12 include increased soybean oil production, exports, and ending stocks and increased domestic disappearance of soybean meal.

 The U.S. season-average soybean price for 2012/13 is projected unchanged at $15.00 to $17.00 per bushel. Soybean meal prices are projected at $485 to $515 per short ton, up $25.00 on both ends of the range. Soybean oil prices are projected at 54 to 58 cents per pound, up 1 cent on both ends of the range.

Global oilseed production for 2012/13 is projected at 453.1 million tons, down 4.2 million from last month. Reductions for soybeans, sunflowerseed, and rapeseed are only partly offset by increased peanut and cottonseed production. In addition to the United States, projected soybean production is reduced for Ukraine and Canada. Early harvest results for Ukraine indicate a lower yield in part reflecting unusually hot temperatures during the growing season. Lower soybean production for Canada is based on the most recent crop survey results reported by Statistics Canada. Rapeseed production for Canada is reduced 0.9 million tons to 15.4 million based on lower yields and harvested area reported by Statistics Canada. At this level the crop is record large. Rapeseed production is also raised for the 2011 crop based on the latest Statistics Canada estimates. Other changes include higher rapeseed production for EU-27, lower sunflowerseed production for Russia, Ukraine, and EU-27, and lower cottonseed production for Brazil.

SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 36,000 short tons, raw value, compared with last month, as lower carryin stocks more than offset increased imports. Lower total imports in 2011/12, reflecting pace-to-date estimates, reduce that year’s ending stocks by 141,000 tons. Imports for 2012/13 are increased to reflect the announced refined sugar tariff rate quota. For Mexico, higher 2012/13 carryin stocks offset lower projected production reflecting lowerthan-expected government estimates of sugarcane harvest area.

COTTON: The 2012/13 U.S. cotton supply and demand estimates include slightly lower production and exports, resulting in lower ending stocks compared with last month. Beginning stocks are raised marginally, reflecting a revision to estimated U.S. 2011/12 ending stocks. The 2012/13 production estimate is reduced 3 percent, due mainly to lower estimated production for Texas and Mississippi, partially offset by increases for the Southeast. Domestic mill use is unchanged from last month, but exports are slightly lower due both to lower U.S. production and a reduction in total world imports. Ending stocks are now estimated at 5.3 million bales, equivalent to 35 percent of total use. The forecast range of 62 to 78 cents per pound for the marketing-year average price received by producers is narrowed 1 cent on each end.

An increase of nearly 2 million bales in world 2012/13 ending stocks is mainly attributable to sharply higher beginning stocks. Prior year adjustments for China, India, and Australia account for most of the increase in beginning stocks. For China, higher-than-expected 2011/12 imports and lower consumption are raising stocks by 1.3 million bales. For India, changes to the 2010/11 and 2011/12 balance sheets mainly reflect revisions published recently by India’s Cotton Advisory Board and raise stocks by 400,000 bales. World 2012/13 ending stocks are now projected at 76.5 million bales, including a revision to the India residual. Projected world stocks include 35.5 million bales for China. World 2012/13 production is lowered 82,000 bales from last month, as increases for India and the African Franc Zone are more than offset by reductions for Brazil and the United States. World consumption and imports are reduced 600,000 bales, as lower demand by China is partially offset by increases for Pakistan and others; exports are reduced for Australia, India, and the United States. The decrease in China’s consumption is consistent with the 2011/12 reduction. China’s consumption is expected to fall 2.5 percent from last season due to the government’s price support, reserve, and stock policies.

LIVESTOCK, POULTRY, AND DAIRY: The forecasts for 2012 and 2013 red meat and poultry production are reduced from last month as lower expected pork and poultry production more than offsets a higher beef production forecast. Beef production is raised in 2012 as higher fed beef and cow slaughter is forecast. The 2013 forecast is raised as higher forecast placements in second-half 2012 will result in larger fed cattle supplies in the first part of 2013. The pork production forecast for 2012 is reduced due to a slightly slower expected pace of slaughter in the third quarter and slightly lower carcass weights in the second half of the year. Pork production is reduced for 2013 as carcass weights are tempered. USDA will release the Quarterly Hogs and Pigs report on September 28, providing an indication of producer farrowing intentions into early 2013. Broiler production is reduced in both 2012 and 2013 as producer returns are expected to be pressured by higher soybean meal prices. Turkey production is raised fractionally for 2012, but the forecast for 2013 is reduced as soybean meal prices are forecast higher. Egg production is forecast lower for both 2012 and 2013 as hatching egg production is expected to reflect reduced demand from the broiler sector. Beef imports are reduced for 2012 based on the current pace of imports, but are unchanged for 2013. Beef exports are unchanged for 2012, but the forecast for 2013 is lowered as supplies will remain relatively tight and tighter poultry supplies are expected to support domestic demand. Pork exports are reduced for both years on weaker expected demand from Asia. Poultry export forecasts are unchanged for both 2012 and 2013.

Cattle prices for 2012 are raised from last month on stronger second-half demand, but the forecast for 2013 is unchanged despite higher forecast production as demand remains relatively strong. Pork prices for 2012 are forecast lower, largely reflecting current prices, but prices for 2013 are unchanged from last month. Broiler price forecasts are raised for both years as supplies are lower. Turkey and egg prices are forecast lower for 2012, reflecting current prices; forecasts for 2013 are unchanged.

 The 2012 milk production forecast is reduced slightly from last month, reflecting a slower rate of growth in milk per cow in the second half of the year. The production forecast for 2013 is unchanged from last month. Skim-solids imports are raised, but the export forecast is unchanged. Product prices are forecast higher for 2012 as the milk production forecast is reduced and demand is somewhat stronger. With higher product prices, both the Class III and Class IV price forecasts are raised. For 2013, the butter price forecast is reduced slightly on weaker expected demand but forecasts for other products are unchanged. Thus, the Class II price forecast is unchanged but the Class IV price is lowered. The all milk price is forecast at $17.80 to $18.00 per cwt for 2012 and $17.85 to $18.85 per cwt for 2013.