OIL CROPS YEARBOOK -- SUMMARY October 24, 2001 October 2001, ERS-OCS-2001 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-2001) will be available electronically about 2 weeks from the date of this summary. ------------------------------------------------------------------------------- Despite Strong U.S. Soybean Demand, Huge Foreign Crops Squelch 2000/01 Prices Based largely on a record harvested area of 72.4 million acres, U.S. soybean production in 2000 increased 104 million bushels to a record 2,758 million bushels. With stronger demand for soybean meal in 2000/01, domestic soybean crushing climbed to a record 1,641 million bushels from 1,578 million the previous year. The lowest prices in three decades and the rapid pace of Chinas soybean imports helped lift foreign demand for U.S. exports in 2000/01 to 998 million bushels, surpassing the 1999/2000 record of 973 million. Consequently, the record use of soybeans reduced U.S. ending stocks to 248 million bushels from 290 million in 1999/2000. The 2000/01 U.S. average farm price was $4.55 per bushel compared with $4.63 the previous season. Brisk soybean meal sales, particularly to the European Union (EU), Indonesia, Egypt, and South Korea, helped expand U.S. meal exports in 2000/01 to 7.6 million short tons. Gradually improving livestock-price-to-feed-cost relationships expanded 2000/01 domestic disappearance of soybean meal by 5 percent to 31.85 million tons. Despite a bumper South American soybean harvest, relatively weak growth in their output and exports of soybean meal helped support the U.S. season-average price at $173.60 per ton. A higher soybean crush pace in 2000/01 produced a record U.S. soybean oil output of 18,480 million pounds. Low soybean oil prices helped support steady growth in domestic disappearance of soybean oil to 16,350 million pounds from 16,056 million in 1999/2000. However, estimated U.S. exports only edged up to 1,400 million pounds from 1,376 million in 1999/2000. The large carryover and record output raised stocks throughout the year, which had swelled to a record 2,800 million pounds by September 30. The supply glut depressed soybean oil prices in 2000/01 (averaging 14.15 cents per pound) to their lowest level in 30 years. Virtually all of the increase in world oilseed production in 2000/01 was due to an 8-percent rise in global soybean production to 173.2 million metric tons, which derived from a record area in the United States and an almost ideal growing season in South America. The growth in Chinas domestic supplies was far exceeded by its import needs, which swelled from 10.5 million tons to 13.2 million tons. Chinas domestic consumption of soybean meal surged 19 percent to nearly 15 million tons. And after the European Union banned the use of meat and bone meal in all livestock feeds, EU soybean imports expanded from 15.7 million to 17.2 million tons in 2000/01 and soybean meal imports rose from 19.8 million to 20.2 million tons. Despite strong consumption growth, global ending stocks of soybeans rose to a record 28.5 million tons. Global output of soybean oil totaled 26.5 million tons, up 1.7 million tons from 1999/2000. However, world trade expanded just 0.4 million tons to 7.7 million tons in spite of a large increase in Indian soybean oil imports. Indian soybean oil imports increased from 0.8 million to 1.4 million tons in 2000/01 because of poor domestic oilseed harvests, strengthening consumption, and higher import tariffs on competing vegetable oils. A moderating influence on global soybean oil trade was the huge increase of Chinas domestic production, which sharply curtailed its 2000/01 soybean oil imports to just 80,000 tons from 1999/2000 imports of 556,000 tons. A severe drought caused poor U.S. cotton yields and substantial area abandonment in 2000, resulting in only a slight increase in cottonseed output to 6.4 million short tons. Weak prices for cottonseed oil diminished crushing margins for cottonseed, reducing crush to 2.7 million tons in 2000/01 from 3.1 million in 1999/2000. But consumption of cottonseed in livestock feed and planting seed increased 7 percent to 3.75 million tons. Firmer feed prices generally supported the 2000/01 average cottonseed price at $106 per ton. U.S. peanut production fell sharply in 2000, down 563 million pounds to 3,266 million. Although national plantings were up slightly, extremely dry conditions in many areas of the Southwest (New Mexico, Oklahoma, and Texas) during the growing season raised abandonment and cut national harvested acreage to 1.32 million acres, down 8 percent from 1999. As in 1999, poor weather also cut the 2000 average peanut yield, which fell to 2,444 pounds per harvested acre, down 223 pounds per acre (8 percent) from 1999, and the lowest yield since 1995. Domestic food use of peanuts weakened in 2000/01, falling to 2,170 million pounds from 2,233 million in 1999/2000. Ample foreign harvests and a tighter available U.S. supply reduced U.S. peanut exports to 520 million pounds from 727 million in 1999/2000, the smallest since 1980/81. U.S. sunflower harvested acreage fell in 2000 to 2.6 million acres, down nearly one-fourth from 1999. Domestic sunflowerseed production in 2000 was 3,544 million pounds, down from the previous years 4,342 million. Sluggish European demand curtailed 2000/01 oil-type sunflowerseed exports to just 45 million pounds. In contrast, U.S. confectionery seed exports increased (to the EU in particular) to a record 400 million pounds, in spite of a shorter domestic supply. But estimated sunflowerseed oil exports, which make up the majority of crushers sales, fell again in 2000/01 to 575 million pounds. Very low soybean oil prices pressured U.S. season-average prices for sunflowerseed and sunflowerseed oil of $6.80 per hundredweight and 16.2 cents per pound, near- historic lows. 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. This issue contains two special articles, "Comparing Soybean Production Costs" and Export Competitiveness in the United States, Brazil, and Argentina" and "Estimating Farm-Level Effects of Adopting Herbicide-Tolerant Soybeans". The full text of the report will also be available electronically via the ERS website at www.ers.usda.gov. END_OF_FILE