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Canadian feed crops to see production hike despite dip in canola and soybean output

Aerin Curtis

By Aerin Einstein-Curtis

10-May-2016
Last updated on 10-May-2016 at 10:51 GMT2016-05-10T10:51:36Z

© iStock.com
© iStock.com

Feed crops may be set to see a production boost in Canada even if oilseed planting drops.

Details regarding the 2016/17 feed crops output including corn, wheat, barley and oats were released in the US Department of Agriculture’s (USDA) Foreign Agricultural Service Grain and Feed Annual report.

According to planting intentions and assuming average yields, the total production of wheat, barley, corn and oats is forecast to reach 53.6 million metric tons (MMT) in 2016/2017, said the USDA. “This is a 1.5% increase from 2015/2016 production levels," noted the US agency.

However, plantings of some oilseed crops such as canola and soybeans are expected to be either down or similar to what was planted last year, said the USDA in a related Canadian oilseeds report . Crush and meal production are also expected to be reduced.

The USDA said, based on the seeding intentions, it forecasts total oilseeds production to fall to 21.505 MMT in 2016/2017. “This decrease is attributed to lower area seeded and a return to average yields, and represents a 2.035 MMT decrease from 2015/2016 production," reported the agency.

Feed crop details

Wheat production is expected to increase by 4% and barley production by 1.3% from 2015/16 levels, said the USDA. However, production for corn and oats is expected to be reduced by 1.6% and 5.9%, respectively.

The total area planted in 2016 is expected to be 15.03m hectares, which is a small drop from the 15.2m hectares planted in 2015, it said. But, assuming average yields, the predicted total production of wheat, barley, corn and oats should generate a 1.5% improvement from production in 2015/16.

Corn plantings are expected to increase by about 6.2% in 2016/17, said the agency. But, the increase in area planted is predicted to be mitigated by lower yields.

The livestock feed industry remains the largest market for Canadian corn. “Lower relative prices and ample supplies in 2016/17 are expected to spur additional feed demand slightly, up 100,000 tons from 2015/16 to 8.1 MMT,” it added.

Imports are expected to remain consistent and exports are predicted to drop.  Corn stocks may increase.

“Planting intentions suggest that area seeded to spring wheat and oats will fall from 2015/2016 by 5.7% and 10.9%, respectively,” reported the USDA. “Canadian farmers also report that they intend to plant more pulse crops this year, mostly affecting spring wheat acres.”

However, an increased in the amount of land planted with winter wheat mitigates some of the reduction to the spring wheat crop, said the agency. “Area seeded to winter wheat is also reported up significantly and reflects a return to more normal levels after back-to-back poor crops,” it added.

“In 2016/2017, wheat consumption is forecast to remain flat at 2015/2016 expected levels of 8.8 MMT,” reported the USDA. “Use of wheat in 2015/2016 is expected to fall compared to 2014/2015 levels due to an abundance of supplies of competitively priced alternative feeds available due to increased domestic crush levels in canola and soybeans.”

Total imports are also expected to fall by nearly 5% based predominately on the current domestic supply of barley, said the agency.

“Total exports, mainly wheat, are forecast to drop nearly 9.0 percent due to lower domestic supplies and lower carry-in of wheat,” it reported. “Wheat ending stocks are projected to drop to a record low.”

Soy and canola

Overall production of oilseeds is expected to drop by 2m tons to 21.5 MMT for the 2016/17 season, said the USDA. The drop stems from a reduction in canola production.

In 2016/17 the canola area harvested is expected to be about 7.8m hectares with a crush of 8MMT down from about 8.1m hectares and 8.2 MMT, reported the agency. Soybean area harvested is set to be 2.1m hectares up slightly from 2015/16 with an expected crush of 1.8 MMT down from 2 MMT.

“Generally, the decision to plant oilseeds has been driven by their resilience and often offer attractive returns compared to other field crops,” noted the USDA. “However, this year, lower prices combined with higher pulse prices have resulted in some oilseed acreage, particularly canola, being shifted to pulses.”

In 2016/17 oilseed exports are expected to face a 16% decline.

“Canola crush is raised 100,000 tons in 2015/2016 as a result of large domestic supplies and greater crush capacity,” it said. “In 2015/2016, healthy domestic supplies, increased domestic crush capacity, a depreciated Canadian dollar, a recovering US livestock industry, and increased demand from China are all supporting greater than expected exports.”

Overall meal production is set to fall by 4.5% to 5.78 MMT, forecast the USDA. “Total meal exports in 2016/2017 will be limited by lower domestic supplies and are forecast to fall to 4.0 MMT from 4.3 MMT in 2015/16, a 7.3% drop,” it added.

“In 2016/2017, total oilseed imports are forecast to rise to 510,000 metric tons due to lower domestic supplies resulting from a smaller carry-in and slightly lower production than last year,” the agency added. “This forecast is 16.7% higher than the anticipated 2015/2016 level of 425,000 tons.”

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