Continued strong grain demand expected for 2019
WACO, Texas – Growing demand in developing markets will help fuel optimism for Texas grain producers this growing season, according to a Texas A&M AgriLife Extension Service economist.
Jason Johnson, AgriLife Extension economist at Stephenville, told producers at the recent Blackland Income Growth Conference that world demand for grain products has been steadily growing.
“We’ve been benefiting from growing per capita grain use,” he said. “That growth is coming from the developing markets.”
The U.S. corn crop has been plentiful over the past few years, Johnson said, as world production has been dominated by the U.S. and China.
“Even with record crops, ending supplies of corn have been down,” Johnson said.
Harvest averages per acre have been 171 bushels to 178 bushels. U.S. ethanol production has helped with demand and another bright spot has been export demand, Johnson said.
Price projections for corn are $3.50-$4.40 per bushel for 2019, Johnson said, with an average price projection of $3.90 a bushel. That’s good news for the cattle industry, whose margins are heavily dependent on the price of grain for feeding out livestock.
Feed demand is expected to remain steady overall as other protein sources such as chicken, turkey and pork will continue to need grain to provide steady supplies of retail product to meet both domestic and export market demand.
Wheat prices are projected at $5.74 a bushel, the highest price projection since 2015, Johnson said, primarily attributable to good demand, especially in export markets.
Clark Neely, AgriLife Extension wheat specialist, College Station, discussed crop outlook for Texas wheat. He said for wheat growers, potential Hessian fly problems could less of a threat due to wet conditions early on, coupled with delayed fall planting into November or December, reducing the likelihood of fall infestations.
“You can expect wet conditions through harvest thanks to El Niño,” Neely said, also indicating there will be above average rainfall predicted for the February-March period as well.