USDA: US sees drop in feed grain production

By Aerin Einstein-Curtis

- Last updated on GMT

© iStock/melcowell
© iStock/melcowell

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Feed production, use sees decreases in the US as initial survey-based results arrive, says USDA.

The US Department of Agriculture (USDA) feed outlook report​ for August included details of feed grain production and supply.

The USDA has forecast overall feed grain supplies for the US in 2017/18 to drop by 102m bushels based primarily on a reduction in corn yield.

Exports of the feed grain also are expected to see a 25m bushel drop.

Similarly, it expects global coarse grain supply to be lower this month. Foreign corn production is predicted to drop – but also to be offset by an increase in generation of barley, rye and millet.  

There was an anticipation that the amount of corn yield per acre would fall in the US, said Joseph Janzen, assistant professor of agricultural economics at Montana State University in a previous interview. However, the size of the reduction came as a surprise.

“People thought yield was going to be down more than it was,”​ he told us. “The trade was guessing a number lower than 169.5 [bushels an acre].”

The season average price range for the feed grain has been amended to a range of $2.90 to $3.70 a bushel, the USDA said.

Feed production specifics

Although the projected supply of US feed grains fell 2.3m metric tons from prior forecasts, it remains at 440.7, tons, said the USDA.

“The change in supply is due to lower corn production offsetting higher sorghum production,”​ the department said.

Beginning stocks and imports for the feed grain are not expected to alter. However, ending stocks also fell, dropping 1.3m tons to 61.1m, or 3.6m below the estimate set in 2016/17.

Sorghum production will likely increase, but will not offset the fall in corn yield, said the US agency. Yield forecasts were increased by 2.6 bushel an acre but remain about 111m bushels behind last year’s stemming from a reduction in area planted.

The season’s first “survey-based yield”​ offered a forecast of 169.5 bushels an acre for corn, said the USDA. The amount is a drop of 1.2 bushels or less than 1% from trend-based assessments.

However, corn production remains at an almost record production amount, falling shy only of crops from 2016 and 2014, said the USDA.

Forecasts for barley production fell with a reduction of yield per acre, the department said. However, predictions for oat production were raised slightly.

Hay production projections were reduced from earlier estimates, the department said. Alfalfa dropped by 2.1m tons and other hay by 6.1m tons.

“Feed and residual per grain consuming animal unit (GCAU) is projected at 1.52 tons, 0.02 tons below last month’s estimate,” ​the department said.

Feed use and sales forecast

Feed and residual use for corn, sorghum, barley and oats – the four feed grains – is predicted to be about 148.3m metric tons, said the USDA. Use fell by 0.7m tons from earlier expectations but remains above the amount set in 2016/17.

However, there has been a projected increase in grain consuming animal units for 2017/18, said the USDA.

The increase points to continued growth in cattle placements, as pork and poultry production remains consistent with previous forecasts, said the department. Feed and residual use per grain consuming animal unit is anticipated to drop slightly from earlier expectations and be in keeping with results from 2016/17.

Exports for corn fell in August, said the department. “Competitor corn shipments continue to be forecast higher, dampening US prospects,” ​it added.

“So far this marketing year, the major buyers of US corn have been Mexico, Japan and Pakistan,”​ the department said. “Brazil, Argentina, and the Ukraine continue to ship more than last year, increasing pressure on US exports.”

Expected use for sorghum has been increased from earlier estimates, said the department. Exports also were raised.

“Exports are projected up 10m bushels to 210m on expected increased shipments to China resulting from demand in the feed deficit southern regions,”​ the department said.

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