USDA: Boost in US corn, feed use as hay supplies limited

By Aerin Einstein-Curtis contact

- Last updated on GMT

© GettyImages
© GettyImages

Related tags: Feed costs, Feed production, Usda

US feed grain use is expected to increase in the coming year, however, hay production is set to fall while prices climb, say analysts.

The US Department of Agriculture (USDA) released details regarding anticipated US and global feed production, use and trade Monday [July 22] in a feed outlook report​.

Overall, the forecast for the disappearance of feed grains in the US anticipates an increase in 2019/20 to 376.9m metric tons, the report authors said.

“Exports are unchanged for 2019/20 but are lowered 2.5m this month for 2018/19 to 55.6m on current outstanding sales and export inspection data during June, which were the lowest for the month since 2013,”​ they said.  

However, acres harvested for hay production are expected to be the lowest since 1908 and prices for the feed ingredient continue to increase, they said.

"USDA’s Risk Management Agency will allow producers who planted cover crops on prevented planting acres to hay or graze those fields after September 1, which is a change from the previous requirement to leave cover crops standing until November 1.”

Hay production challenges

US harvested hay acreage is expected to be down in 2019, the report authors said.

“Prices for hay continue to rise on limited supply combined with strong domestic and export demand, with NASS [National Agricultural Statistics Service] reporting $152 per ton for hay excluding alfalfa, and $204 per ton for alfalfa in May,” ​they added.

Prices are the highest reported since 2014 for both types, they said.

“Record-low hay production is expected in California, Illinois, Maine, Michigan, New York, Ohio, Pennsylvania, Vermont, Washington, and West Virginia,” ​the authors said. “The wet spring and cool June has impacted hay as well as other feed crops.”

Exports of alfalfa and other hay increased in May following strong export demand for “high-quality animal fodder,”​ they said. Primary importers in 2019 include China, Japan and Saudi Arabia for alfalfa and Japan, South Korea and Taiwan for other varieties.

US feed grain picture

“Feed and residual use for the four feed grains (corn, sorghum, barley, and oats) and wheat on a September-August marketing year basis for 2019/20 is projected at 139.9m tons, 1.3m higher than last month’s forecast mostly due to increases in wheat feed and residual as well as corn and oats,”​ the report authors said. “For 2018/19, feed and residual is raised 3.1m to a projection of 144.2m tons.”

The forecast production of corn has been increased by 195m bushels based on the anticipated expansion in planted acres and a 1.2m-acre increase in the acres to be harvested, the authors said. With current yield expectations, the crop would provide 13.87bn bushels – a drop of 545m from production in 2018/19.

However, the USDA’s National Agricultural Statistics Service (NASS) plans to re-survey most major corn-producing states in July to address the influence of late corn sowing, they said.

“The 195m-bushel increase in crop size is reflected in a 25m-bushel increase in projected feed and residual for 2019/20,” ​the report authors said. “Livestock numbers and crop size both contribute to the gain.”

However, the increase in domestic feed use is expected to be somewhat offset by a drop in other uses for corn, they said. Ending stocks are anticipated to increase by 335m bushels.

Sorghum production is expected to drop based on both planted and harvested area, the authors said. The total supply and production are both forecast to drop for 2018/19, along with ending stocks.

Global production

Globally, feed grain production is expected to increase in 2018/19 based in part on increased production in Argentina, the report authors said. Production is also forecast to grow in 2019/20, based in part on corn output anticipated from Ukraine.

However, the international use of feed grain is expected to decrease, they said. World ending stocks are expected to increase, although remain below where they were in previous years.

The global trade in corn for the international trade year 2019/20 is expected to be 171.2m tons as a hike in exports from Ukraine offset an anticipated drop in exports from Brazil, they said. 

“US 2018/19 corn exports for the October-September international trade year are reduced this month by 1.5m tons to 53.5m tons.”

“A projection for the September-August 2018/19 local marketing year is reduced by 100m bushels to 2,100m,” ​they said.

“US corn exports started to slow down abruptly in June, suggesting lower-than-expected exports in the last quarter of the marketing year, just as competitors – corn producers in the Southern Hemisphere – enter the market with escalating exports.”

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