Feed YEARBOOK -- SUMMARY April 28, 2008 April 2008, ERS-FDS-2008 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 text of the yearbook will be available electronically about 1 week following this summary release. ----------------------------------------------------------------------------- Record Demand Drives Feed Grain Prices Higher in 2007/08 U.S. total feed grain disappearance for 2007/08 is projected at 354 million metric tons, up from 301 million in 2006/07. Food, seed, and industrial (FSI) use is forecast at a record 118 million tons, boosted by strong demand for corn to produce ethanol. Exports are projected at 72 million tons, up from 58 million last year. The expected growth in utilization will exceed the growth in supply, leaving ending stocks less than their 2006/07 level. U.S. feed and residual use of the four feed grains plus wheat in September-August 2007/08 is expected to be up 9.9 million metric tons from the 154.0 million metric tons used in September-August 2006/07. The grain used per grain-consuming animal unit (GCAU) in 2007/08 is expected to be 1.73 tons, up from 1.67 tons in 2006/07. Corn is expected to represent 95 percent of feed and residual use for all feed grains including wheat in 2007/08, up from 92 percent in 2006/07. U.S. corn production in 2007/08 was a record 13.1 billion bushels, up from last year’s crop of 10.5 billion bushels. The year-to- year increase stems from a 15.3-million-acre increase in planted area and a 15.9-million-acre increase in area harvested for grain. In addition, the 2007/08 yield was 151.1 bushels per acre, up from 149.1 bushels per acre in 2006/07. Beginning 2007/08 corn stocks were 1,304 million bushels, down 664 million from the previous year. Projected 2007/08 total corn supply is 14,393 million bushels, up 1,879 million bushels from the previous year. Total corn utilization in 2007/08 is projected at a record 13,110 million bushels, up from 11,210 million in 2006/07. Utilization is forecast up for FSI, feed and residual, and exports. With utilization higher than supply, ending stocks are projected to decrease 21 million bushels to 1,283 million bushels. The season average farm price is projected at a record $4.10-$4.50 per bushel, up from $3.04 per bushel in 2006/07. Corn FSI use in 2007/08 in the United States is expected to total 4,460 million bushels, up from 3,488 million in 2006/07. FSI use would represent 34 percent of total corn use, up from 31 percent in 2006/07 and 26 percent in 2005/06. Corn used to make ethanol for 2007/08 is forecast at 3,100 million bushels, up 46 percent from 2006/07. In January 2008 (latest data available), ethanol production reported by the U.S. Department of Energy was 510,000 barrels per day, up from 375,000 barrels in January 2007 as new plants have come on stream. The U.S. sorghum crop was 505 million bushels in 2007/08, up from 278 million bushels in 2006/07. Increased planted and harvested area plus record yields are responsible for this year-to-year change. Total 2007/08 supply is 537 million bushels, up from 343 million in 2006/07. Total sorghum utilization is projected at 485 million bushels, up from 311 million last year. Feed and residual and export uses of sorghum are expected to be up from last year. Ending stocks in 2007/08 are projected at 52 million bushels, up from 32 million a year earlier. The season average farm price is projected at a record $3.95-$4.35 per bushel, compared with $3.29 per bushel in 2006/07. Barley production in 2007/08 was 212 million bushels, up from 180 million bushels in 2006/07. Harvested area was 3.5 million acres, up 500,000 acres from last year. The average yield decreased from 61.1 bushels per acre in 2006 to 60.4 bushels per acre in 2007. Total forecast barley supply in 2007/08 is 301 million bushels, almost unchanged from last year. Total barley use for 2007/08 is forecast at 245 million bushels, up from 231 million in 2006/07. Total use increased year-to-year despite a decline in FSI use as feed and residual use and exports are both projected higher. Barley ending stocks are forecast at 56 million bushels, down 13 million bushels from a year earlier. The season average price received by producers for barley in 2007/08 is forecast at a record $4.00-$4.10 per bushel, compared with $2.85 per bushel in 2006/07. Total oats supply in 2007/08 is forecast at 262 million bushels, up from 252 million in 2006/07. Lower beginning stocks and record low production are expected to be offset by increased imports, accounting for the increase in supply. Total 2007/08 oats utilization is projected at 212 million bushels, up 10 million bushels from 2006/07. Ending stocks for 2007/08 are forecast at 50 million bushels, down slightly from the previous year. Average oats prices received by farmers in 2007/08 are expected to be $2.50-$2.60 per bushel, up from $1.87 per bushel a year earlier, but below the 1988/89 record of $2.61 per bushel. In March, U.S. producers indicated that they intended to plant 86.0 million corn acres in 2008, down 8 percent from 2007. Expected acreage is down from last year in most States as favorable prices for other crops, high input costs for corn, and crop rotation considerations are motivating some farmers to plant fewer acres to corn. Sorghum growers intend to plant 7.4 million acres, down 4 percent from last year. Barley growers intend to plant 4.1 million acres for 2008, up 3 percent from a year earlier. Oats growers intend to plant 3.4 million acres, down 9 percent from a year earlier, and, if realized, the lowest planted acreage on record. Hay production in the United States for 2007 is estimated at 150 million short tons, up from 142 million in 2006. Acreage harvested in 2007/08 is 61.6 million acres, up from 60.9 million a year earlier. Average 2007/08 yield is 2.44 tons per acre, up 0.10 tons from the previous year. Stocks of all hay stored on farms totaled 104 million tons on December 1, 2007, up 8 percent from a year earlier. Prices for all hay are up in 2007/08. According to the March 31 Prospective Plantings report, U.S. producers expect to harvest 60.6 million acres of all hay in 2008, down 2 percent from 2007. U.S. corn exports for the October-September 2007/08 trade year are forecast at a record 63 million metric tons, up 16 percent from the previous year and 2 percent above the 1979/80 high. Record world corn trade is projected for 2007/08 as import demand remains strong despite high prices. Competition from Argentina is forecast down due to a reduced corn crop and government intervention limiting export registrations. Brazil has emerged as a large corn exporter, but mostly to markets that do not purchase from the United States. Corn exports from Ukraine, South Africa, and China are expected to be relatively low. World coarse grains are expected to reach records in 2007/08 for prices, production, use, and trade. World coarse grain production in 2007/08 is expected to increase 8 percent to a record 1.06 billion tons, reflecting increased area and higher U.S. yields. Foreign coarse grain production is forecast up only 1 percent as declines for the Former Soviet Union, the EU-27, other countries in Europe, North Africa, and the Middle East were more than offset by increases for Sub-Saharan Africa, South Asia, Southeast Asia, Oceania, and South America. Coarse grains production in China is up slightly and at another record high. Global coarse grain beginning stocks for 2007/08 were estimated down 28 million tons from that of the previous year, following growth in use in 2006/07. Reduced beginning stocks in 2007/08 partly offset the 78-million-ton increase in projected production, leaving 2007/08 global coarse grain supplies up 50 million tons year-to-year. World coarse grain consumption is expected to increase 6 percent in 2007/08, as strong demand for feed is coupled with increasing use of coarse grains for biofuels. This year’s record growth in world coarse grains use follows 4 straight years of demand growth. Increasing global consumption is expected to reduce world ending stocks 7 percent to 128 million tons, the lowest level in 30 years. Strong demand is projected to boost world coarse grain trade to a record 123 million tons.