OIL CROPS YEARBOOK -- SUMMARY October 22, 1999 October 1999, ERS-OCS-1099 Approved by the World Agricultural Outlook Board ------------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of OIL CROPS YEARBOOK (ERS-OCS-1999) will be available electronically about 2 weeks from the date of this summary. ------------------------------------------------------------------------------- U.S. Farmers Harvested More Soybeans, Peanuts in 1998, But Cottonseed Output Plunged Despite declining prices, soybeans remained relatively attractive compared with other crops in 1998, with U.S. farmers planting a record 72.0 million acres. A late summer dry spell limited pod filling and trimmed the U.S. average yield to 38.9 bushels per acre. Soybean production for 1998 climbed to 2,741 million bushels, 52 million above the previous year's record. Recent expansions in crushing capacity and bumper oilseed crops in South America and Europe cut soybean meal prices and diminished U.S. soybean crush margins. Also, policy changes in China encouraged greater use of oilseed crushing capacity in lieu of imports of meal and oil. U.S. crushing picked up briefly in the summer after the surge in South American exports tailed off, but the 1998/99 crush dipped 5 million bushels from a year earlier to 1,592 million. Despite ample soybean supplies, greater foreign supplies slowed U.S. soybean exports to 812 million bushels, down from 870 million in 1997/98. Slackening demand swelled carryout soybean stocks from 200 million bushels in 1997/98 to 348 million, the largest since 1986/87. The 1998/99 season average price fell to $5.02 per bushel, from $6.47 in 1997/98. The U.S. soybean crop value in 1998/99 dropped nearly $4 billion from the record 1997/98 earnings. However, government disbursements to farmers totaled $882 million in loan deficiency payments (LDPs) and $329 million in marketing loan gains. With an expansion in poultry feed consumption and only a modest slowdown for hogs in 1998/99, domestic disappearance of soybean meal increased to 30.6 million short tons. U.S. soybean meal exports dropped 2 million short tons to 7.3 million. Key elements in the weaker U.S. export volume were sharply intensified competition from Argentina, Brazil, and India and a large reduction in Chinese imports. Crushing for the meal market stabilized while oil exports waned, resulting in a record domestic supply of soybean oil. U.S. soybean oil exports dropped from the 1997/98 record of 3,077 million pounds to 2,425 million. U.S. export shipments to China fell from 1.1 billion pounds in 1997/98 to just 0.5 billion. Limited storage capacity of end users moderated the 1998/99 increase in domestic disappearance to 15,550 million pounds, which helped force prices lower. U.S. soybean oil ending stocks rose to 1,590 million pounds, reversing the declines of the previous 2 years. Soybean oil prices averaged 19.9 cents per pound in 1998/99, down from 25.8 cents the previous season. At 158.4 million metric tons, global soybean production grew only slightly in 1998/99, but was nearly one-fifth larger than 1996/97 output. Consecutive bumper harvests by all the major growing nations pushed expected 1998/99 world ending soybean stocks to 23.8 million tons. World soybean imports in 1998/99 edged up to 39.4 million tons as strong Chinese imports were offset by sluggish demand elsewhere. The ending of preferential treatment for soybean meal helped raise Chinese soybean imports from 2.9 million tons in 1997/98 to 3.7 million. A 7-percent rise in soybean meal imports to 39.9 million tons is the main reason that global soybean trade fell in 1998/99. The tightness of the global edible oil market reversed in 1998/99, with production increasing 4.7 million tons to 81 million. While the growth was an improvement over 1997/98, global consumption rose 4.4 million tons to 80.3 million. Global vegetable oil exports rose modestly from 29.9 million tons in 1997/98 to 30.9 million in 1998/99. U.S. peanut producers planted 1.521 million acres of peanuts in 1998, up 6 percent from a year earlier. Production totaled 3,963 million pounds, in-shell basis, up 12 percent. Average yield per harvested acre was 2,702 pounds, up 199 pounds from the 1997 yield. Food use for peanuts rose 1.8 percent to 2,137 million pounds, in-shell basis. On an in-shell basis, peanuts crushed in 1998/99 totaled 460 million pounds, 15 percent below the previous season. Peanut exports also declined, falling to 561 million pounds from 681 million in 1997/98. With increasing stocks, the 1998/99 U.S. average farm price for peanuts fell to 28 cents per pound from 28.3 cents a year earlier. Despite a decline in crushing, domestic use of peanut oil fell only slightly to 208 million pounds. Lower yields and harvested acreage in 1998 reduced cottonseed production 23 percent to 5.365 million short tons. Cottonseed crush was down 1.166 million short tons from the previous season to 2.719 million, while exports declined 54 percent to 68,000 short tons. Other use of cottonseed, primarily whole seed feeding, was 2.955 million short tons, only 2,000 below the 1997/98 season. Ending stocks as of July 31, 1999 declined 30 percent from the beginning level to 393,000 short tons. The tighter supply situation pushed cottonseed prices up slightly this season. U.S. farmers received an estimated $123 per short ton in 1998/99, up from $121 a year earlier. Farmers in the United States expanded sunflower plantings in 1998 to 3.6 million acres, 0.7 million more than in 1997. Expanded acreage and a record yield pushed national sunflowerseed production to 5,247 million pounds. The U.S. 1998/99 sunflowerseed crush increased to 2,596 million pounds, compared with 2,338 million the year before. Tightness of cottonseed supplies for dairy feeding decreased the discount compared to sunflowerseed, helping raise non-oil sunflowerseed use to 1,853 million pounds. Despite robust domestic and foreign demand, huge supplies reversed the tight 1997/98 carryout of 202 million pounds, swelling yearending sunflowerseed stocks to 508 million in 1998/99. Sunflowerseed prices received by farmers receded from the 1997/98 average of $11.60 per cwt to $10.75. Printed copies of the Oil Crops Situation and Outlook Yearbook will be available in about 2 weeks. For more information, contact Mark Ash (202) 694-5289 (soybeans) or Robert Skinner (202) 694-5313 (peanuts and cottonseed). Copies of the full report will also be available on the ERS web site at www.econ.ag.gov. END_OF_FILE