Feed Outlook: Projected corn and sorghum supplies raised
USDA’s National Agricultural Statistics Service (NASS) raised 2013 U.S. corn and sorghum yields in the September Crop Production report, boosting production for the two crops by a combined 118 million bushels. The forecast corn crop is record-high at 13.8 billion bushels and the sorghum crop, at 396 million bushels, is the highest since 2008. The boost in 2013/14 supplies and projected ending stocks results in a $0.10-per-bushel reduction in corn and sorghum midpoint price forecasts to $4.80 and $4.50 per bushel, respectively. Projected corn use for the 2012/13 crop is up as corn used for ethanol increased 15 million bushels, partially offset by a 5-million decline in corn used for high fructose corn syrup (HFCS). Food, seed, and industrial (FSI) use is projected at 6.1 billion bushels. Feed and residual use is increased 25 million bushels to 4,475 million as a late new-crop harvest leaves users heavily dependent on available old-crop corn through August. Exports are raised 20 million bushels from last month’s projection based on shipment data, resulting in exports of 735 million bushels. Carryout for 2012/13 is projected at 661 million bushels, down 58 million bushels from August.
World coarse grain production for 2013/14 is nearly unchanged this month as reduced foreign prospects offset increased U.S. production.
Higher Corn and Sorghum Yields Boost Feed Grain Supplies
The NASS September Crop Production report raises yields for 2013/14 corn and sorghum, by 0.9 and 6.1 bushels per acre, respectively. The yield increase contributes to an expansion of total feed grain production to 367.5 million metric tons, up from 364.5 million projected in August. The higher production, combined with lower projected carryin and imports, raises feed grain supplies 1.3 million tons to 389.8 million, compared with 388.4 million last month and 320.1 million a year earlier.
Projected feed grain use is forecast at 339.4 million tons, up 0.9 million this month due to increased sorghum feed and residual use and exports. At 135.1 million tons, the feed and residual category for 2013/14 is now expected to be 14 percent higher than last year’s figure. Expanded supplies contribute to a slight export expansion; up 0.2 million tons over the August estimate. Ending stocks also benefit from more plentiful supplies; the September projected feed grain carryout of 50.3 million tons is 0.5 million above last month and more than double the 2012/13 projection.
U.S. feed and residual for the four feed grains plus wheat in 2013/14 is projected at 139.7 million metric tons, up 700,000 metric tons from the August forecast and 10.7 million tons higher than the revised 2012/13 level of 128.0 million metric tons. Most of the gain is in higher sorghum feeding. Corn is projected to account for 93 percent of total feeding in 2013/14, up from the 2012/13 estimate of 89 percent.
The 2013/14 projected index of grain-consuming animal units (GCAUs) is 92.2, down from 92.3 last month and lower than the revised forecast of 92.5 for 2012/13. Feed grain used per GCAU is 1.51 tons, about the same as last month’s figure. In the index components, GCAUs increased for dairy, slipped for cattle, and showed a strong increase for poultry.
USDA’s Quarterly Hogs and Pigs report will be released on September 27 and will provide an indication of sow farrowing intentions into early 2014. Moderating feed grain prices will tend to encourage producers to feed out to higher carcass weights that are forecast for the second half of calendar year 2013 and will ultimately contribute to a net increase in pork production.