OIL CROPS YEARBOOK October 28, 1997 October 1997, OCS-1997 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- OIL CROPS YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. This release contains only the text of the OIL CROPS YEARBOOK--tables and graphics are not included. Printed copies of this yearbook are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #OCS-1997, $21. ERS-NASS accepts MasterCard and Visa. ----------------------------------------------------------------------------- Summary Farmers Saw Strong Soybean Prices in 1996/97 Despite Large Crop Due to saturated soils in the eastern Corn Belt, many U.S. farmers were unable to finish planting corn in 1996 and switched to soybeans. U.S. soybean area planted ultimately jumped to 64.2 million acres, the largest since 1984. A fortuitous absence of freezing weather enabled even the most vulnerable, late planted fields in the eastern Corn Belt to mature well into October. The final U.S. average yield reached a surprisingly good 37.6 bushels per acre, second only to the record 41.4 bushels in 1994. With a relatively large area harvested, the exceptional yield produced the second largest U.S. soybean crop at 2,382 million bushels. Although 1996/97 supplies were up 60 million bushels from 1995/96, soybean prices climbed even higher, because of heavy domestic and foreign demand for soybeans and soybean products. The season average farm price was $7.38 per bushel, the highest since 1988/89. Ample supplies permitted the 1996/97 domestic crush to reach a record 1,436 million bushels and soybean exports to reach 882 million bushels. With a relatively small 1996/97 carryin of 183 million bushels, the record 1996/97 offtake drew down year ending stocks to 132 million bushels, the smallest since 1976/77. Large supplies also promoted domestic and foreign demand of soybean meal and oil in 1996/97. U.S. soybean meal exports increased from 6.0 million short tons in 1995/96 to 6.9 million, as China dramatically stepped up its imports. Domestic meal disappearance rose 2 percent to 27.2 million short tons. Already high-priced soybean meal became even more costly, rising to an average $270 per ton, versus $236 in 1995/96. Lower soybean oil prices, averaging 23.5 cents per pound, encouraged a robust 6- percent increase in domestic disappearance to 14,215 million pounds. U.S. exports of soybean oil also rebounded, more than doubling from 1995/96 to 2,050 million pounds. Starting in 1996, U.S. farmers had more choices in idling land or planting alternative crops, including soybeans. The Federal Agricultural Improvement and Reform Act, enacted in April 1996, established farm policy through 2001/02, and eliminated annual acreage reduction programs and planting requirements for program commodities, which sometimes held down acreage planted to oilseeds. Greater planting flexibility began replacing continuous corn production with more half corn-half soybean rotations. Loan rates for oilseeds were set at 85 percent of the average price for the preceding 5 years (excluding the high and low years). With this change, loan rates for oilseeds are determined just as those for other program crops. Attractive soybean prices and better farm finances in 1996 prompted record soybean planting in Brazil. Good weather improved Brazilian yields from the previous year, producing a record harvest of 26.5 million tons. Aided by a quick harvest and elimination of differential export taxes, Brazilian soybean exports dramatically increased in spring 1997, more than doubling from the previous year to 8.0 million tons. A severe drought in Argentina led to the smallest soybean yields in the previous 8 years, dropping production to just 11.5 million tons. Lower 1996/97 world rapeseed production of 30.6 million metric tons tightened the world oilseed situation. U.S. cottonseed production in 1996 was 7.144 million short tons. High prices for competing feeds in 1996/97 helped boost the average price received by farmers for cottonseed to $130 per ton and the farm value of the 1996 cottonseed crop to $929 million, a record. Despite a larger supply in the 1996/97 season (August-July), cottonseed crush fell 22,000 short tons from the previous season to 3.86 million. With much higher prices paid for seed and about a $6 drop in the oil-and-meal values of products, crushing was not as attractive a year earlier. Cottonseed oil prices averaged about 1 cent per pound lower at 25.58 cents and cottonseed meal remained about unchanged from the previous year at $192 per short ton. Other uses of cottonseed, primarily whole seed feeding, rose 276,000 short tons to 3.162 million. Despite a drop in 1996 planted peanut area of 136,000 acres to 1.402 million, the lowest since the 1982 season, U.S. peanut production rose 5.8 percent to 3.661 billion pounds, in-shell basis. The increase was due to a 16-percent rise in average yields to 2,653 pounds per harvested acre, the highest since 1985. USDA announced a national peanut poundage quota for the 1996 marketing year of 1.1 million short tons (2.2 billion pounds), in-shell basis, well below the 1.35 million short tons for the 1995 season. With a lower quota support rate in the 1996 season, $610 per short ton versus $678.36 the previous season, the average price received by farmers for peanuts averaged lower at 28.5 cents per pound, down from 29.3 cents in the 1995 season. U.S. peanut food use rose 1.8 percent to 2.029 billion pounds, in-shell, the first increase since the 1991 season. U.S. sunflower plantings were 2.6 million acres, down 26 percent from the previous year. All of the decline was in oil-type sunflowers, as non-oil type acreage was unchanged at 568,000 acres. Although acreage dropped, national average sunflowerseed yield improved to 1,435 pounds per acre, 21 percent above the 1995 average. Given this yield and 2.5 million acres harvested, sunflowerseed production fell to 3,587 million pounds in 1996. Despite ample seed supplies, crushings totaled 1,861 million pounds, down 8 percent from 1995/96. U.S. sunflowerseed oil production dropped to 849 million pounds, the lowest in 3 years. Sunflowerseed prices increased slightly to $11.80 per hundredweight from $11.50 in 1995/96. U.S. export shipments of sunflowerseed oil slipped to 739 million pounds. Farm Legislation Alters Oilseeds Production Incentives On April 4, 1996, President Clinton signed the Federal Agricultural Improvement and Reform Act, which establishes farm policy through 2001/02. The new law eliminated annual acreage reduction programs and planting requirements for program commodities, which sometimes held down acreage planted to oilseeds. Producers' payments are now made on 85 percent of a farm's contract acreage and program yield. Farmers are allowed to plant any crop (excluding fruits and vegetables) on this acreage without risking future government payments. The 0-85/92 program, which permitted planting of minor oilseeds on program acres, was eliminated. However, the new flexibility provisions gave farmers the same freedom to idle land or plant alternative crops, including soybeans. High grain and soybean prices in the spring likely brought more acreage into production than was idled under the 0-85/92 program in 1995. Greater planting flexibility is replacing continuous corn production with more half corn-half soybean rotations. It may also shift more rice acres in the Delta to soybean production. Loan rates for oilseeds were set at 85 percent of the average price for the preceding 5 years (excluding the high and low years). With this change, loan rates for oilseeds are determined just as those for other program crops. However, the rates cannot fall below $4.92 per bushel for soybeans or exceed $5.26. Under the new formula, the 1996 rate was $4.97 per bushel and with high prices again in 1996, the loan rate was $5.26 by 1997. The loan rate for 1995 was $4.92. This change provides greater security to some farmers and may marginally increase soybean acreage, most likely in the South. Similarly, the minimum and maximum loan rates are $8.90 and $9.30 per hundredweight, respectively, for sunflowerseed, canola, rapeseed, safflowerseed, flaxseed, and mustard seed. In another influential provision for oilseeds, the new farm legislation reauthorized the Conservation Reserve Program (CRP). The act capped CRP enrollment at 36.4 million acres. It also permits, with 60 days notice to USDA, withdrawal of less environmentally sensitive acreage that has been enrolled in the program for at least 5 years. Previously, USDA announced that it would only grant early release for CRP acres that would have expired in September 1996 and that are not highly erodible or otherwise environmentally sensitive. For contracts expiring in 1996, farmers also had the option to extend for 1 year. Given the compressed period available to complete the paperwork and the extra preparation necessary to return the land to crop production, USDA analysts estimated that only about 1 million former CRP acres were made available for crop production in 1996, with just a small boost to soybean acreage. Beyond 1996, the impact will undoubtedly increase net soybean acreage. Potential increases in plantings are subject to how farmers evaluate their expected future returns from farming the land eligible for CRP versus the rental rates, which are to be based on the land's fair market value. Programs for export credit guarantees, foreign food assistance (PL-480), and the Export Enhancement Program (which includes vegetable oils) were also extended. Funding rates for EEP were set just below the amount permitted under the recently reformed General Agreement on Tariffs and Trade (GATT). The law also establishes the National Canola and Rapeseed Board, an organization formed to fund research and promote food and industrial uses of canola and rapeseed. The research is to be funded by assessments on producers' marketings. U.S. Soybean Situation Wet Weather Expands 1996 Soybean Acreage In the March 1996 Prospective Plantings report, U.S. farmers intended to plant 62.5 million acres of soybeans. Despite higher soybean prices, even tighter wheat and corn markets favored higher grain acreage at the expense of soybeans. However, due to saturated soils in the eastern Corn Belt, many farmers were unable to finish planting corn and were compelled to switch to soybeans. Soybean farmers in Ohio, Indiana, and Illinois had only planted 28, 31, and 36 percent, respectively, by early June. Drying soils in the last half of June finally allowed producers to complete planting their remaining fields to soybeans. U.S. soybean area planted ultimately jumped to 64.2 million acres, the largest since 1984. Farmers in Illinois, Indiana, Ohio, Iowa, North and South Dakota, Minnesota, Michigan, and Wisconsin planted record soybean acreage. While farmers in the eastern Corn Belt were compelled to plant so many soybeans because of the weather, producers in the western Corn Belt were adding soybeans to their rotations for economic reasons. Southern soybean area was also higher than 1995 because of lower expected cotton returns and nearly 700,000 more acres double cropped with wheat. Missouri farmers defied this trend by planting 400,000 fewer soybean acres in 1996, mostly so they could boost their corn and sorghum acreage. Missouri's 1996 soybean acreage of 4.1 million acres was the State's lowest since 1972. Beneficial rains between late July and early September fell on Midwestern soybean fields during the critical pod filling stage. However, with the late start, the question became whether the crop would mature enough before fall frosts arrived. Below normal summer temperatures persisted, slowing development of the late-planted fields and sacrificing yield potential. But a fortuitous absence of freezing weather enabled even the most vulnerable, late planted fields in the eastern Corn Belt to mature well into October. The final U.S. average yield settled to a surprisingly good 37.6 bushels per acre, second only to the 1994 record of 41.4 bushels. With a relatively large area harvested, the exceptional yield produced the second largest U.S. soybean crop at 2,382 million bushels. Although 1996/97 supplies were up 60 million bushels from 1995/96, soybean prices climbed even higher, because of heavy domestic and foreign demand for soybeans and soybean products. The season average farm price was $7.38 per bushel, the highest since 1988/89. Cash soybean prices weakened in the summer when consumption slowed and a very favorable outlook for the new 1997 crop emerged. The unique combination of a large harvest and strong prices in 1996/97 generated a record value of soybean production (about $17.6 billion) for U.S. farmers. With a relatively small 1996/97 carryin of 183 million bushels, the record 1996/97 offtake drew down year ending stocks to 132 million bushels, the smallest since 1976/77. To further supplement U.S. supplies, the first-ever shipment of soybeans from Brazil to the United States arrived at the Gulf of Mexico in June 1997. These uncommon imports were made possible by a historically wide price differential between the Gulf and Brazilian ports. Cumulative 1996/97 soybean imports were 9 million bushels, but accounted for only 0.4 percent of total supplies. While the later than usual harvest held down domestic crushing and export shipments in September and October, the abundant new-crop supplies and falling prices ultimately accelerated these uses. Ample supplies permitted 1996/97 domestic crush to reach a record 1,436 million bushels and soybean exports to reach 882 million bushels. U.S. soybean exports in November were 152 million bushels, the largest volume ever for a single month. However, price rationing began to slow the rapid offtake by April. A lack of foreign competition, due to diminished Brazilian supplies, also aided U.S. soybean exports from October through February. Attractive soybean prices and better farm finances in 1996 prompted record soybean planting in Brazil. Good weather improved Brazilian yields from the previous year, producing a record harvest in 1997. Aided by a quick harvest, Brazilian soybean exports dramatically increased in spring 1997, more than doubling from the previous year. U.S. export shipments slowed to a trickle in July and August to just a few major countries as U.S. supplies dwindled in comparison to Brazil. The upheaval in Taiwan's swine industry curtailed U.S. soybean exports to Taiwan. The outbreak of foot-and-mouth disease in Taiwan's hog sector will force at least a 2-year ban on its pork exports (because the meat can carry the virus). Japan, the world's largest pork importer and Taiwan's major trading partner, will turn to the United States as the principal source to fill the gap. U.S. hog prices rallied and domestic production will accelerate in response. Consequently, domestic soybean meal consumption benefited, but at the expense of U.S. soybean exports to Taiwan. However, these declines were more than offset by robust demand from other Asian countries, especially China. Shipments to China were more than three times the volume of the preceding season. Soybean Meal Prices Soar Livestock producers responded to high feed prices in 1996 by keeping fewer hogs for breeding. The reduced swine herd in 1997, excess packing capacity, enduring pork export demand, and smaller beef supplies kept pork prices firm. Lower corn prices increased feed intakes, while hog slaughter was down and slaughter weights up. This means that hogs were feeding longer, driving up soybean meal consumption. Poultry production also resumed its growth. Rapid growth in poultry exports to China, Russia, and Mexico helped maintain high broiler prices. Domestic meal disappearance in 1996/97 rose 2 percent to 27.2 million short tons. Greater soybean supplies enabled U.S. exporters to sell more soybean meal abroad. U.S. soybean meal exports rose from 6.0 million short tons in 1995/96 to 6.9 million. China dramatically stepped up its imports of soybean meal. A smaller 1996 soybean area harvested resulted in no growth in Chinese production from 1995, while consumption for animal feeds soared. Smaller cottonseed, rapeseed, and peanut crops also contributed to higher Chinese import needs. Chinese soybean meal imports were 3.3 million metric tons in 1996/97, up from 0.9 million in 1995/96 and negligible before then. Once a significant exporter, China exported only 25,000 tons as domestic needs prevailed. Although Asian demand for U.S. soybean meal stayed robust, imports by the EU (still the largest import market) declined in 1996/97. Already high-priced soybean meal became even more costly, rising to an average $270 per short ton, versus $236 in 1995/96. Soybean Oil Demand Accelerates The crush for meal market increased soybean oil supplies and placed additional pressure on U.S. oil prices. While soybean oil content was below average, maximum extraction rates were likely sacrificed because of the large throughput. With ample carryin stocks of 2.0 billion pounds and an outturn of 15.7 billion pounds, supplies reached a record 17.8 billion pounds. Greater supply availability promoted domestic and foreign demand in 1996/97. Lower soybean oil prices encouraged domestic disappearance, which rose a robust 6 percent from 1995/96 to 14,215 million pounds. U.S. exports of soybean oil also rebounded, more than doubling from 1995/96 to 2,050 million pounds. Strength in U.S. soybean oil exports did not develop until later in the marketing year. China's imports of soybean oil from South America were strong in the fall but switched when prices favored U.S. supplies. Greater world production of grains in 1996/97, and less high-oil content oilseeds, tightened world supplies of rapeseed and sunflower oils. Increasing demand in China, Latin America, the Middle East, and North Africa also drove world soybean oil trade upward. Soybean oil, along with palm oil, was priced at a larger average discount to canola and sunflowerseed oils, particularly in fall 1996 to spring 1997. U.S. soybean oil prices declined to an average 22.5 cents per pound, even though total demand was 1.8 billion pounds higher. World Oilseed Situation World oilseed production in 1996/97, at 257.2 million metric tons, remained nearly unchanged from 1995/96. The tightness in the world oilseeds market generally did not develop because of soybeans, but from production shortfalls of other oilseeds. World soybean production increased 6 percent, but was nearly offset by reductions in the output of rapeseed (down 12 percent), sunflowerseed (8 percent), and cottonseed (4 percent). The overall increase in the production of soybeans was fueled mostly by a 10-percent increase in the United States and a 13-percent increase in Brazil. China and Argentina experienced reductions. Soybeans' share of world oilseed production increased from 49 percent to 51 percent and accounted for more than 77 percent of global oilseed trade. World oilseed crush mirrored the production trend in 1996/97 and remained almost unchanged at 217.9 million tons (up 0.4 million). International trade of oilseeds increased 5 percent to 46.7 million tons, resulting in a substantial 24-percent decrease in global ending stocks. These very low world oilseed stocks (16.2 million tons) are expected to trigger a substantial supply response in 1997/98 in several countries. Global Soybean Production Rises World soybean production in 1996/97 increased to 131.4 million tons, but was still short of the record 137.7 million tons in 1994/95. Foreign soybean production increased 2 percent overall to 66.5 million tons. Stronger prices and better farm finances raised Brazilian soybean area 8 percent in 1996/97. Although dry conditions constrained yields in southern Brazil, excellent conditions in other regions produced an overall improvement in yields. The 1996/97 Brazilian soybean crop increased 12 percent to 26.5 million tons, a new record. In Argentina, despite the higher area devoted in soybeans in 1996/97 (up 4 percent), a severe drought led to the lowest yields in the previous 8 years, dropping production to 11.5 million tons, 0.9 million less than the preceding season. A greater proportion of soybeans was planted as a second crop following wheat. That substantially increased the number of fields that were developing pods during a very dry April. China's soybean production in 1996/97 remained unchanged at 13.5 million tons. The planted area that shifted from soybeans to coarse grains in 1993/94 remained with feed grains, despite burgeoning domestic consumption of soybeans and soybean products. China's supply response to the increased demand has come through imports, making China a net importer of soybeans for 3 consecutive years. The government's pro-grain policies, coupled with the existing interprovincial trade barriers, means that China will likely remain a net importer of soybeans for some time. India's 1996/97 soybean output was a disappointing 4.1 million tons, down from 4.5 million the year before. Despite a record harvested area, Indian soybean yields were at a 10-year low. A late monsoon that delayed planting and damaging harvesttime rains in Madhya Pradesh (India's major soybean producing state) were chief reasons for the yield losses. Other Oilseeds Foreign sunflowerseed production fell 8 percent in 1996/97 to 22.1 million tons. The decline was mostly due to a large reduction in Russia (down 33 percent to 2.8 million tons), and in Argentina, where the crop declined 7 percent to 5.2 million tons. World production of rapeseed in 1996/97 fell 12 percent from the previous season to 30.6 million metric tons. China, Canada, Eastern Europe, and the EU all experienced reductions. The largest reduction was experienced by the European Union as farmers chose to plant more wheat and coarse grains after the elimination of the set-aside programs. Rapeseed production in the EU fell 14 percent to 7.1 million tons, and by 5 percent in China to 9.2 million tons. Timely January rains helped produce record yields in India, raising production to a record 6.3 million tons. World cottonseed production also slipped in 1996/97, to 34.2 million tons. Sharply lower cotton area in China and poorer yields in the Newly Independent States and Pakistan offset production increases in the United States and India. World peanut production was up 1 percent in 1996/97 to 26.7 million tons. A record Indian harvest more than compensated for a slight drop in Chinese output. World Oilseed Trade Increases International trade in oilseeds increased in 1996/97 by 2.2 million metric tons to 46.7 million, principally due to increased soybean exports. Global soybean import demand grew 13 percent in 1996/97 as competing oilseeds (sunflower and rapeseed) were in short supply. During the 1996/97 marketing year, changes in agricultural policies in several countries, such as the European Union and China, led to changes in planting patterns away from oilseeds and toward other commodities such as feed and food grains. A large drop in rapeseed supplies, low vegetable oil prices, and ample oil stocks reduced EU rapeseed crushings in 1996/97, helping to shrink the existing oil surplus. Reduced crushings also exacerbated the EU protein meal situation, keeping prices very high relative to feed wheat. As a result, the EU imported 15.1 million tons of soybeans in 1996/97, up 6 percent from the previous year. In 1996, Brazil passed legislation exempting exports of raw materials and semi-manufactured products from state sales taxes. Previously, the differential export taxes--which included maximum taxes of 13 percent on soybeans, 11.1 percent on soybean meal, and 8 percent on soybean oil--provided Brazilian farmers a great incentive to sell soybeans to crushers rather than for export. The elimination of the tax on soybeans not only filtered down in the form of higher prices at the farm, but it also erased the advantage that domestic processors possessed over exporters. Interstate sales taxes still exist, putting domestic processors at a disadvantage to foreign buyers. These reforms made Brazil more competitive with the United States in the world soybean market, instead of favoring Brazilian exports of soybean products. Brazilian soybean exports soared to a record 8.0 million tons, well above the 1995/96 volume of 3.5 million. However, Brazilian crushers were unable to operate their facilities at the same level in 1996/97, as foreign buyers outbid them for the limited supplies. The sharp increase in exports reduced availability of supplies for domestic crushing, which fell to 20.1 million tons from 21.6 million in 1995/96. On the other hand, a poor harvest dropped Argentine 1996/97 soybean exports to 750,000 tons, compared with 2.1 million a year earlier. China, the third largest producer of soybeans, was exporting as much as 1.1 million tons in 1993/94 to nearby Asian markets. In 1996/97, China was a net importer, taking as much as 2.2 million tons, up 175 percent from 1995/96. The Asian markets formerly supplied by China are today supplied mostly by the United States. Mexico's 1996/97 soybean production fell to 175,000 tons. A severe drought and declining acreage yielded the smallest Mexican soybean harvest in almost 30 years. With a new crushing facility that began operating in the spring, Mexican soybean imports surged to 3.1 million tons. Situation for Other U.S. Oil Crops U.S. Cottonseed Prices Surged in 1996/97 Season The 1996/97 U.S. cottonseed crop was produced on a planted area of 14.634 million acres, of which 12.868 million were harvested. Cotton lint production amounted to 18.942 million 480-pound bales while cottonseed production was 7.144 million short tons--for a national average ratio of 1.57152 pounds of seed per pound of lint. The 1996 outturn was 4.3 percent above a year earlier and, when combined with 517,000 tons of beginning stocks, resulted in a 3.5-percent increase in total supply to 7.661 million short tons. High prices for competing feeds in the 1996/97 season helped boost the average price received by farmers for cottonseed to $130 per ton and the farm value of the 1996 cottonseed crop to $929 million, a record. Despite a larger cottonseed supply in the 1996/97 season (August-July), cottonseed crush fell 22,000 short tons from the previous season to 3.86 million. The lower crush is perhaps attributable to reduced crush margins in the 1996/97 season. Cottonseed oil prices averaged about 1 cent per pound lower at 25.6 cents and cottonseed meal was about unchanged from the previous year at $192 per short ton. With much higher prices paid for seed and about a $6 drop in the oil-and-meal values of products, crushing was not as attractive as in the 1995/96 season. The value of cottonseed in feeding remained high in the 1996/97 season owing to the continued strong prices for corn and soybean meal. Soybean meal prices in the 1996 season averaged near $270 per short ton and the corn price received by farmers averaged $2.73 per bushel, down from the previous season but still historically high. Thus, other uses of cottonseed, primarily whole seed feeding, rose 276,000 short tons to 3.162 million. U.S. Peanut Food Use Rose in 1996/97 Season USDA announced a national peanut poundage quota for the 1996 marketing year of 1.1 million short tons (2.2 billion pounds), in-shell basis, well below the 1.35-million-short-ton quota for the 1995 season. Despite a drop in 1996 planted peanut area of 136,000 acres to 1.402 million, the lowest since the 1982 season, U.S. peanut production rose 5.8 percent to 3.661 billion pounds, in-shell basis. The increase was due to a 16-percent rise in average yields to 2,653 pounds per harvested acre, the highest since 1985. With a lower quota support rate in the 1996 season, $610 per short ton versus $678.36 the previous season, the average price received by farmers for peanuts in the 1996 season averaged lower at 28.5 cents per pound, compared with 29.3 cents for the 1995 season. Early season concerns about possible production problems, and associated strong peanut prices, likely kept the 1996 average price above what may have otherwise prevailed. In Texas, where 1996 peanut production surged 28 percent, average yield in 1996 was 2,600 pounds, which exceeded the previous best by 16.6 percent. In the 1996 season, U.S. peanut food use rose 1.8 percent to 2.029 billion pounds, in-shell, the first increase since the 1991 season. Peanut use in primary products rose 2.9 percent in peanut candy, 4.7 percent in snack peanuts, and 5.7 percent in the small "other" category, but remained about unchanged in the import peanut butter category. Roasting stock use rose very slightly and continued at a high level in the 1996 season. Sunflower, Minor Oilseed Acreage Succumbs to Heavy Grains Demand The 2-year revival in sunflower acreage ended in 1996 with a surge in spring wheat area that was the largest in 60 years. U.S. sunflower plantings were 2.6 million acres, down 26 percent from the previous year. All of the decline was in oil-type sunflowers, as non-oil type acreage was unchanged at 568,000 acres. Many producers opted to increase wheat planting at the expense of sunflowers, with the severest cut occurring in Minnesota, which dropped 290,000 acres from 1995. Plantings in South Dakota and North Dakota fell 270,000 and 260,000 acres, respectively. Despite wet soils that delayed sunflower planting, nearly ideal summer weather conditions led to mostly good to excellent crop conditions throughout the year. Although sunflower acreage dropped, national average sunflowerseed yield improved to 1,435 pounds per acre, or 21 percent above the 1995 average. Given this yield and 2.5 million acres harvested, sunflowerseed production fell to 3,587 million pounds in 1996. U.S. production of confection sunflowers actually increased to a record volume because of the superb yields. September 1 carryin stocks of sunflowerseed were 453 million pounds, twice as high as a year earlier. Very large carryin stocks maintained total 1996/97 supplies at 4.1 billion pounds, near the 1995/96 level of 4.3 billion. This moderated the declines in 1996/97 crush and exports. Sluggish oil demand in 1996/97 backed up onto the seed crushing pace. Despite ample seed supplies, crushings dropped to 1,861 million pounds, down 8 percent from 1995/96. U.S. sunflowerseed oil production dropped to 849 million pounds in 1996/97, the lowest in 3 years. Consequently, U.S. sunflowerseed oil carryout stocks for 1996/97 fell to 85 million pounds. Seed exports also lagged, which prevented a significant reduction of sunflowerseed stocks. Ample competing exports from Russia, Ukraine, and Argentina made penetration of traditional EU markets very difficult for U.S. oil-type sunflowerseed in 1996/97. More normal weather produced a much larger Spanish sunflowerseed harvest, sharply cutting EU imports of sunflowerseed. On the other hand, non-oil sunflowerseed use (including birdfood) rose to a record 1.4 million hundredweight. Within a decade, consumption from rapidly expanding non-oil sources may equal domestic crush demand. Year ending stocks of sunflowerseed climbed to 433 million pounds, down marginally from the previous year. Sunflowerseed prices slightly increased to $11.80 per hundredweight from $11.50 in 1995/96. U.S. exports of sunflowerseed oil slipped to 739 million pounds in 1996/97. The static situation was reflected by lackluster prices for sunflower oil. Stiff competition from soybean oil virtually eliminated any price premium for sunflowerseed oil, which averaged 22.6 cents per pound. Recent additions to Canadian oilseed crushing capacity have also heightened the competition. And, the absence of the Sunflower Oil Assistance Program (SOAP) has also allowed domestic sunflowerseed crush margins to remain tight compared to recent years. Mexican sunflowerseed oil imports were normal. India's sunflower oil imports substantially increased because of a shortfall in Indian rapeseed, soybean, and cottonseed oil production and comparatively higher prices for palm oil imports. But these two markets were not sufficient to offset falling U.S. export demand elsewhere, including important markets in North Africa and the Middle East. Like sunflowers, U.S. canola acreage fell in 1996 as relative prices favored a shift to wheat and feed grains. Total canola plantings fell 18 percent to 366,000 acres, although a rebound in yield to 1,384 pounds per acre helped blunt a reduction in supplies. Higher seed prices and lower U.S. vegetable oil prices restricted the volume of Canadian seed imports to 570 million pounds, just 2 percent more than the previous year. U.S. safflower acreage planted for 1996 was 242,000 acres, down 9 percent from 1995. And the shrinkage of flaxseed area accelerated, with 1996 plantings of just 96,000 acres and well below March intentions. This represented a drop of 32 percent from 1995 and 84 percent from 1986. Despite a similar plunge in Canadian minor oilseed acreage this year, flaxseed imports accounted for an even larger share of total U.S. supplies in 1996/97. Corn Oil Much lower corn prices and firm prices for corn byproducts significantly improved corn wet milling margins from the previous year. Corn oil prices averaged 24.1 cents per pound, down from 25.2 cents in 1995/96. Corn oil production rebounded to 2,230 million pounds. Given its premium price, domestic disappearance of corn oil suffered from the plethora of competing oils, falling to 1,250 million pounds. Factory consumption of corn oil for edible products declined 9 percent. However, export markets continued to expand, exceeding 1 billion pounds for the first time. The two largest foreign import markets, Turkey and Saudi Arabia, were responsible for most of the growth in U.S. corn oil exports. END_OF_FILE