USDA Feed Outlook 2017.01.17

Feed grain balance sheets for 2016/17 are nearly steady this month, with the most significant changes a 25-million bushel increase in corn used for ethanol, a 50-million bushel cut in feed and residual use, and minor changes resulting from NASS stocks data. Season-average prices for corn are forecast $0.05 per bushel higher than last month at $3.40, and sorghum prices are lowered $0.15 per bushel to $2.90. The forecast season-average price for barley and oats is raised $0.05 per bushel to $4.90 and $1.95, respectively. Global coarse grain production for 2016/17 is projected down 1.7 million tons this month to 1,327.7 million. The decline in U.S. corn production drives the reduced global forecast; changes in foreign coarse grains production and the rest of the supply and demand balance are minor. Feed Outlook Tom Capehart tcapehart@ers.usda.gov Olga Liefert oliefert@ers.usda.gov U.S. Corn Production Lowered Economic Research Service Situation and Outlook FDS-17a January 17, 2017 The next release is February 13, 2017. -------------- Approved by the World Agricultural Outlook Board. Corn Crop Reduced From Last Month USDA’s National Agricultural Statistics Service (NASS) Crop Production report lowered both planted and harvested acreage for 2016/17 based on the latest information from the December Agricultural and Objective Yield Surveys. Planted area is reduced 486,000 acres to 94.0 million, and harvested acreage dropped 88,000 acres to 86.7 million. NASS also lowered the estimated corn yield by 0.7 bushels per acre, to 174.6 bushels per acre. U.S. production is estimated at a record 15,148 million bushels. With a 5-million-bushel increase in projected corn imports to 55 million bushels and a slight decline in beginning stocks, supply is projected at a record 16,940 million bushels, down 73.2 million from last month but 1.5 billion higher than 2015/16. Disappearance Projected Lower Disappearance for 2016/17 is projected at 14,585 million bushels, down 25 million from last month’s forecast but 922 million higher than 2015/16. Feed and residual use is lowered 50 million bushels this month, reflecting a smaller crop, greater sorghum feeding, increased corn used for ethanol, and higher expected prices. At 5,600 million bushels, feed and residual is 469 million higher than last year. The NASS Grain Stocks report estimated December 1 corn stocks at 12,384 million bushels. For the first quarter (September-November), feed and residual use is 2,279 million bushels, up from 2,178 million a year earlier. 05010015020025030035040045050006/0707/0808/0909/1010/1111/1212/1313/1414/1515/1616/17Mil. metric tonsFigure 1U.S. feed grain productionCornSorghumBarleyOatsSource: USDA, World Agricultural Outlook Board, WASDEand USDA, National Agricultural Statistics Service, Crop Production.Domestic Outlook 2 Feed Outlook / FDS-17a / January 17, 2017 Economic Research Service, USDA Corn FSI Use Boosted Food, seed, and industrial (FSI) use of corn is raised 25 million bushels on higher projected corn used for ethanol. Weekly data from the U.S. Energy Information Administration (EIA) indicates strong production during the mid-winter season, while the latest information from NASS’s Grain Crushings and Co-Products Production report estimated a record high amount of corn used to produce ethanol during September-November. Corn used for ethanol is now forecast at 5,325 million bushels. With no changes in other categories, total FSI use for 2016/17 is now projected at 6,760 million bushels, up from an estimated 6,635 million in 2015/16. 020406080100120140160180200010203040506070809010088/89 91/92 94/95 97/98 2000/01 03/04 06/07 09/10 12/13 15/16Bu/acreMil. acresFig. 2U.S. corn harvested area and yieldSources: USDA, National Agricultural Statistics Service, Quick Statsand USDA, World Agricultural Outlook Board, WASDE.Harvested area (left axis)Yield (right axis)02468101214161887/88 1990/91 93/94 96/97 99/00 2002/03 05/06 08/09 11/12 14/15Feed and residualExportsOther food, seed, and industrial usesEthanolEnding stocksFigure 3Note: Marketing years. 2015/16 and 2016/17 are projected.Source: USDA, World Agricultural Outlook Board, WASDE. U.S. corn utilizationBil. bu3 Feed Outlook / FDS-17a / January 17, 2017 Economic Research Service, USDA Feed and Residual Use for Four Grains Plus Wheat On a September-August basis, 2016/17 U.S. feed and residual use for the four feed grains plus wheat is projected lower from last month’s forecast at a total of 155.6 million tons, 16.9 million above the total of 138.7 million for 2015/16. Corn is forecast to account for 91 percent of feed and residual use in 2016/17, down from 94 percent in 2015/16. The projected index of grain consuming animal units (GCAU) in 2016/17 is 95.80 million units, up from 94.87 in December and up 1.64 million units from