Situation and Outlook, Major Field Crops by rlj20071

VIEWS: 15 PAGES: 37

									   Situation and Outlook
      Major Field Crops




Feed and Grain Summit
           Gerald A. Bange
             Chairperson
   World Agricultural Outlook Board
    Office of the Chief Economist
   U.S. Department of Agriculture

         March 11, 2009
      Harrisburg , Pennsylvania
                     Major Crop and CRP Acreage
                      (USDA Outlook Forum – Feb. 2009)


                                              2008/09                 2009/10 F                    % Change
                                                                     Million acres

                Corn                                     86.0                       86.0                 0.0

                Soybeans                                 75.7                       77.0               +1.7

                Wheat                                    63.1                       58.0                -8.1

                All Cotton                                 9.5                         8.5             -10.5

                Rice                                     3.00                       2.93                -2.3

                5-crop total                           237.1                      232.4                 -2.0

                CRP acres                                34.8                       34.0                -2.3

Note: 2009 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
                                                                                                               2
Planted Area 8-major Crops*

Mil. acres
260


255                                                         253

                       250                                                         251
               250                                                         249            250        249                 249   249     249
250                           249                                                                          249   248
        248                                          248            248

245                                   243    243


240


235


230


225
       2001           2003           2005           2007          2009F          2011F          2013F            2015F         2017F
Note: 2009 planted area forecast from USDA’s Grains & Oilseeds Outlook, Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.
* The 8-major crops include wheat, corn, sorghum, barley, oats, soybeans, upland cotton, and rice.                                           3
Conservation Reserve Program Area

Mil. acres
40

                                                 36.8
                                          36.0
                           34.7 35.0                    34.8
35             34.1
     33.6 34.0
                                                                34.0

                                                                        31.9                                 31.9 32.0 32.0
                                                                                                     31.4
                                                                               30.3 30.2 30.1 30.5
30




25




20
     2001           2003          2005           2007           2009F          2011F    2013F        2015F       2017F

Source: USDA Agricultural Projections to 2018, February 2009.

                                                                                                                              4
  U.S. Wheat Supply and Demand
                                                         2007/08          2008/09           2009/10       Change from
                                                         estimate         forecast          forecast        2008/09
                                                                                                              Percent
            Planted area (million acres)                       60.5             63.1              58.0          -8.2
            Harvested area (million acres)                     51.0             55.7              49.3         -11.5
            Yield (bushels per acre)                           40.2             44.9              43.0          -4.2
                                                                       Million bushels
            Beginning stocks                                   456               306               655        114.2
            Production                                       2,051             2,500             2,120        -15.2
            Imports                                            113               120               105        -12.5
             Total supply                                    2,620             2,925             2,880         -1.5
            Food use                                           947               925               955          3.2
            Seed                                                88                78                81          3.8
            Feed and residual                                   15               230               230          0.0
             Domestic use                                    1,050             1,233             1,266          2.7
            Exports                                          1,264               980               950         -3.1
             Total use                                       2,314             2,213             2,216          0.1
            Ending stocks                                      306               712               664         -6.8
                                                                           Percent
            Stocks to use ratio                                13.2             32.2              32.2
                                                                      Dollars per bushel
            Average market price                               6.48             6.80              5.15         -24.3
Note: 2009/10 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009; estimates for 2007/08 and forecasts for   5
2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.
 World Wheat Production
                                                          2007/08             2008/09              Change from
                   Country or Region                      estimate            forecast              2007/08
                                                                  Million Tons                          Percent
                World                                            611.0               684.4                 12.0
                 United States                                    55.8                68.0                 21.9
                Foreign                                          555.2               616.4                 11.0
                 Argentina                                        16.3                 8.4                -48.5
                 Canada                                           20.1                28.6                 42.7
                 Australia                                        13.8                21.5                 55.4
                 European Union                                  119.4               150.3                 25.8
                 Russian Federation                               49.4                63.7                 28.9
                 Ukraine                                          13.9                25.9                 86.3
                 China                                           109.3               113.0                  3.4
                 India                                            75.8                78.6                  3.7
Note: Estimates for 2007/08 and forecasts for 2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.   6
U.S. Wheat Planted Area Trend
Mil. acres
70


65                                                       63.1
                    62.1
             60.3                                 60.5                  60.5 61.0 60.5 60.0 60.0
      59.4                  59.6                                                                 59.5 59.5 59.5 59.5
60                                                              58.0
                                   57.2 57.3

55


50


45


40
     2001           2003           2005          2007           2009F         2011F         2013F          2015F          2017F
Note: 2009 planted area forecast from USDA’s Grains & Oilseeds Outlook, Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.
                                                                                                                                           7
Renewable Fuel Standards (RFS)
Corn starch based ethanol, 2006 through 2022

  Billion gallons                                                           15.0
 16
 14

 12
 10                     9.0
   8
   6                                                                         7.3
   4                    5.4                                    Energy Independence and Security Act of 2007
   2                                                           Energy Policy Act of 2005

   0
        2006            2008           2010           2012           2014            2016           2018           2020           2022

Note: RFS levels under the Energy Policy Act of 2005 are projected for 2013 and beyond based on the act’s provisions and growth in motor
gasoline consumption for transportation projected by the Energy Information Administration in Annual Energy Outlook 2009.
                                                                                                                                           8
 U.S. Blended Motor Gasoline Consumption
   Bil. gallons
   155
                 Actual           EIA STEO Mar. 2009                 EIA AEO Dec. 2008                 EIA AEO Dec. 2007


   150


   145

                                                                                               9 bil. gal.
   140


   135


   130
            2000                2002                2004               2006                2008               2010F

Source: DOE-Energy Information Administration, Short-term Energy Outlook (STEO) and Annual Energy Outlook (AEO).
                                                                                                                           9
New-crop Soybean/Corn Price Ratios
2007-crop, 2008-crop, & 2009-crop thru Mar. 9, 2009
Soybean/corn
2.70      Nov 2007 Soy/Dec 2007 Corn                     Nov 2008 Soy/Dec 2008 Corn      Nov 2009 Soy/Dec 2009 Corn

2.60
2.50

2.40
2.30
2.20
2.10

2.00
1.90
1.80
      1-Sep      1-Oct     1-Nov      1-Dec      1-Jan   1-Feb 1-Mar     1-Apr   1-May    1-Jun    1-Jul   1-Aug


Note: Chicago Board of Trade daily settlement prices.
                                                                                                                      10
 Ethanol and RBOB Nearby Futures Prices
  $/gal.
  3.00


  2.50


  2.00
                                                                                                       Ethanol

  1.50


  1.00
                          Reformulate Gasoline
                          Blend Stock (RBOB)
  0.50


  0.00
     9/2/08                 10/9/08              11/15/08              12/22/08               1/28/09                3/6/09
Note: Ethanol prices based on CBOT nearby futures. RBOB (Reformulated Gasoline Blend Stock) based on NYME nearby futures.
                                                                                                                              11
     U.S. Ammonia Prices, weekly
  $ per short ton                                                                  $ per short ton
  1,100                                                                                       1,100

   1,000                    Mid Corn Belt                                                     1,000

     900                    New Orleans Barge                                                 900

     800                                                                                      800

     700                                                                                      700

     600                                                                                      600

     500                                                                                      500

     400                                                                                      400

     300                                                                                      300

     200                                                                                      200

     100                                                                                      100
        Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Dec Mar Jun Sep Dec
         04 04 04 04 05 05 05 05 06 06 06 06 07 07 07 07 07 08 08 08 08

Source: Green Markets Fertilizer Market Intelligence Weekly
                                                                                                      12
Early Spring Net Returns Outlook
  $ per acre                                      2006        2007        2008         2009
  500

  450

  400

  350

  300

  250

  200

  150

  100

    50

      0
                           Corn                                  Soybeans                                     Wheat
Note: Net returns are above variable costs and reflect trend yields and USDA price and production cost forecasts as of February each year.
Projections for 2009 are from USDA’s Grains & Oilseeds Outlook, Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
                                                                                                                                             13
 U.S. Corn Supply and Demand
                                                         2007/08         2008/09           2009/10       Change from
                                                         estimate        forecast          forecast        2008/09
                                                                                                             Percent
            Planted area (million acres)                      93.5            86.0               86.0           0.0
            Harvested area (million acres)                    86.5            78.6               78.8           0.2
            Yield (bushels per acre)                         150.7           153.9              156.9           1.9
                                                                      Million bushels
            Beginning stocks                                1,304            1,624              1,790          10.2
            Production                                     13,038           12,101             12,365           2.2
             Total supply                                  14,362           13,740             14,170           3.1
            Feed and residual                               5,938            5,300              5,200          -1.9
            Food, seed, and industrial                      4,363            5,000              5,400           8.0
             Ethanol                                        3,026            3,700              4,100          10.8
              Domestic use                                 10,302           10,300             10,600           2.9
            Exports                                         2,436            1,700              1,850           8.8
             Total use                                     12,737           12,000             12,450           3.8
            Ending stocks                                   1,624            1,740              1,720          -1.2
                                                                          Percent
            Stocks/use                                        12.8            14.5               13.8
                                                                      Dollars/bushel
            Average market price                              4.20            4.10               3.60         -12.2
Note: 2009/10 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009; estimates for 2007/08 and forecasts for 14
2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.
 Corn-based Feed Co-product Production
MMT
50
           Distillers dried grains (DDG)                  Corn gluten feed (CGF)          Corn gluten meal (CGM)


40


30


20


10


  0
       2000/01                   2002/03                  2004/05               2006/07         2008/09F
Note: Based on USDA food, seed, and industrial use estimates and projections.
                                                                                                                   15
 Corn-based Feed Co-product Use
MMT                                      Domestic Use                  Exports
50


40


30


20


10


  0
        2000/01                 2002/03                  2004/05       2006/07   2008/09F
Note: Based on USDA production and export estimates and projections.
                                                                                            16
Domestic Corn and Co-product Feeding
MMT                                      Corn              Co-products
175

150

125

100

  75

  50

  25

    0
        2000/01                  2002/03         2004/05        2006/07   2008/09F
Note: Based on USDA estimates and projections.
                                                                                     17
 Ethanol Producer Net Returns
  Above Variable Costs

$/gal.
 0.60

 0.50

 0.40

 0.30

 0.20

 0.10

 0.00
    9/7/07          11/24/07          2/10/08         4/28/08          7/15/08          10/1/08         12/18/08          3/6/09
-0.10

-0.20

Note: USDA-WAOB estimates based on USDA-AMS plant reports and DOE-EIA estimates and forecasts for natural gas and electricity prices.
                                                                                                                                        18
U.S. Ethanol Production Capacity
Bil. gal./yr.                             Operating Capacity            Idled Capacity
14
                                                                                                  13.1
12
                                                               10.7
10

  8
      6.8
  6

  4

  2

  0
   Sep-07              Jan-08             May-08              Sep-08         Jan-09      May-09   Sep-09
Source: USDA-WAOB internal estimates and projections, March 11, 2009.
                                                                                                           19
  U.S. Corn Used for Ethanol
  1995/96 through 2018/19F

Bil. bushels                                                                                                                  Percent
 6.0                                                                                                                                     40
                                                                                                                               35%
                    Ethanol corn use                                33%                                                        5.1 35
 5.0                                                            31%
                    Ethanol share of corn use
                                                                    4.1                                                                  30
 4.0                                                            3.7
                                                                                                                                         25

 3.0                                                                                                                                     20

                                                                                                                                         15
 2.0
                                                                                                                                         10
 1.0
                                                                                                                                         5

 0.0                                                                                                                                     0
       1999/00          2002/03            2005/06           2008/09F          2011/12F           2014/15F           2017/18F
Note: 2008/09 is projected based on the World Agricultural Supply and Demand Estimates, March 11, 2009. 2009/10 is projected based on
USDA’s Grains & Oilseeds Outlook, Agricultural Outlook Forum, Washington, D.C., February 27, 2009. Projections for 2010/11-2018/19 are
from USDA Agricultural Projections to 2018, February 2009.
                                                                                                                                              20
U.S. Corn Planted Area Trend
Mil. acres
100


 95                                                93.5

                                                                               90.0 90.0 90.0 90.0 90.0 90.5 90.5 90.5
 90                                                                     89.0

                                                          86.0 86.0
 85
                                    81.8
                             80.9
 80           78.9 78.6                    78.3
       75.7
 75


 70
       2001          2003           2005          2007          2009F          2011F         2013F         2015F          2017F
Note: 2009 planted area forecast from USDA’s Grains & Oilseeds Outlook, Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.
                                                                                                                                           21
 World Corn Production
                                                        2007/08             2008/09              Change from
                  Country or Region                     estimate            forecast              2007/08
                                                                Million Tons                         Percent
                World                                          793.0               787.1                -0.7
                 United States                                 331.2               307.4                -7.2
                Foreign                                        461.8               479.7                 3.9
                 Argentina                                      22.0                13.5               -38.6
                 Brazil                                         58.6                49.5               -15.5
                 Mexico                                         23.4                25.0                 6.8
                 Canada                                         11.6                10.6                -9.0
                 European Union                                 47.7                61.4                28.7
                 FSU-12                                         13.8                21.3                54.6
                 South Africa                                   13.2                12.0                -8.8
                 China                                         152.3               165.5                 8.7
Note: Estimates for 2007/08 and forecasts for 2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.   22
   U.S. Biodiesel Mandate . . .
   (2007 Energy Act)
Million gallons                                                         Percent
1,200                                                                        35


1,000             Biodiesel Consumption Mandate                              30

                  Share of Soybean Oil Prod.                                 25
 800
                                                                             20
 600                             18%
                                                                             15
 400
                                                                             10

 200                                                                         5

   0                                                                         0
        2000/01       2003/04    2006/07       2009/10   2012/13   2015/16
                                                                             23
   China Soybean Import Dependence Expected
   to Increase in the Next 10 Years
   Million Tons                                                                                                   Percent
  90                                                                                                                     90
                       Imports
  80                                                                                                                     80
                       Production
  70                   Import Dependence                                                                                 70

  60                                                                                                                     60

  50                                                                                                                     50

  40                                                                                                                     40

  30                                                                                                                     30

  20                                                                                                                     20

  10                                                                                                                     10

    0                                                                                                                    0
        1994    1996      1998      2000     2002      2004     2006      2008      2010     2012   2014   2016   2018


Note: 2009 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.                                      24
 U.S. Soybean Supply and Demand
                                                        2007/08          2008/09           2009/10        Change from
                                                        estimate         forecast          forecast         2008/09
                                                                                                              Percent
          Planted area (million acres)                       64.7            75.7                 77.0           1.7
          Harvested area (million acres)                     64.1            74.6                 76.0           1.8
          Yield (bushels per acre)                           41.7            39.6                 42.6           7.5
                                                                     Million bushels
          Beginning stocks                                    574             205                 210           2.4
          Production                                        2,677           2,959               3,240           9.5
          Imports                                              10                9                  3         -66.7
           Total Supply                                     3,261           3,173               3,453           8.8
          Crush                                             1,801           1,640               1,675           2.2
          Seed and Residual                                    93             163                 172           5.5
           Domestic use                                     1,895           1,803               1,848           2.5
          Exports                                           1,161           1,185               1,225           3.4
           Total Use                                        3,056           2,988               3,073           2.8
          Ending stocks                                       205             185                 380         105.8
                                                                         Percent
          Stocks/use ratio                                     6.7             6.2                12.4
                                                                     Dollars/bushel
          Average market price                              10.10            9.35                 8.00        -14.4
Note: 2009/10 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009; estimates for 2007/08 and forecasts for 25
2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.
 Soybean Oil Futures Prices
 December 2009 Contract
 Cents/lb.
 75
 70
 65
 60
 55
 50
 45
 40
 35
 30
 25
 24-Oct-07       24-Dec-07        24-Feb-08       24-Apr-08   24-Jun-08   24-Aug-08   24-Oct-08   24-Dec-08   24-Feb-09

Note: Chicago Board of Trade daily settlement prices.
                                                                                                                     26
Biodiesel Margin
   cents/lb
   150
   100
    50
      0
   -50
                          SBO costs
  -100                   exceed $4/gal
  -150
  -200

          06         6            07           07         7            08           08         8            09
      -          t- 0         -            -          t- 0         -            -          t- 0         -
  Jun          Oc        F eb          Jun          Oc        F eb          Jun          Oc        F eb


                                                                                                                 27
 U.S. Soybean Oil Supply and Use
                                                       2007/08              2008/09                2009/10            Change from
                                                       estimate             forecast               forecast             2008/09
                                                                          Million pounds                                   Percent
         Beginning stocks                                    3,085                2,483                  2,243               -9.7
         Production                                         20,568               18,645                 19,095                2.4
         Imports                                                65                   50                     60               20.0
          Total supply                                      23,718               21,178                 21,398                1.0
         Domestic use                                       18,327               16,900                 17,400                3.0
          Methyl ester                                       2,981                2,200                  2,900               31.8
         Exports                                             2,908                1,500                  1,750               16.7
          Total use                                         21,235               18,400                 19,150                4.1
         Ending stocks                                       2,483                2,778                  2,248              -19.1
                                                                         Cents per pound
         Average market price                               52.03                  30.00                  31.00                3.3


Note: 2009/10 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009; estimates for 2007/08 and forecasts for 28
2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.
           U.S. Soybean Planted Area Trend
     Million Acres
    90

    80                                    75.5                  75.7 77.0
            74.3 74.1 74.0 73.4 75.2                                         73.0 72.0 71.5 71.5
                                     72.0                                                        71.0 71.0 71.0 71.0 71.0
    70                                                   64.7

    60

    50

    40

    30
           00

           01

           02

           03

           04

           05

           06

           07

           08

           09

           10

           11

          12

          13

          14

          15

          16

          17

          18
        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20

        20
Note: 2009 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.
                                                                                                                            29
                          Soybean Harvested Area
  Million Acres

  225
  200
  175
  150
  125
  100
   75
   50
   25
    0




                                                                                                               18
          00


                      02


                                  04


                                               06


                                                           08


                                                                        10


                                                                                    12


                                                                                                14


                                                                                                        16

                                                                                                             20
        20


                    20


                                20


                                             20


                                                         20


                                                                      20


                                                                                  20


                                                                                              20


                                                                                                      20
                                 U.S.                       Argentina                              Brazil
Note: 2009 forecast from USDA’s Agricultural Outlook Forum, Washington, D.C., February 27, 2009.
Projections for 2010-2018 are from USDA Agricultural Projections to 2018, February 2009.                            30
 World Soybean Production
                                                       2007/08                 2008/09                  Change from
         Country or Region                             estimate                forecast                  2007/08
                                                                Million Tons                                  Percent
       World                                                   220.9                    223.3                     1.1
        United States                                           72.9                     80.5                    10.5
       Foreign                                                 148.0                    142.7                    -3.6
        Argentina                                               46.2                     43.0                    -6.9
        Brazil                                                  61.0                     57.0                    -6.6
        Paraguay                                                 6.8                      4.0                   -41.2
        China                                                   14.0                     16.8                    20.0


Note: Estimates for 2007/08 and forecasts for 2008/09 from World Agricultural Supply and Demand Estimates, March 11, 2009.   31
        Total Meat Production forecast to
        decline 2 percent in 2009
               100
                90
                80
                70
Billion lbs.




                60
                50
                40
                30
                20
                10
                 0
                     1997    1999     2001     2003          2005      2007   2009*
                                    Poultry   Beef    Pork     Other
                * Forecast
                                                                                      32
 Livestock and Poultry Prices Generally
 Weaker
                    100
                     90
                     80
$/cwt or cents/lb




                     70
                     60
                     50
                     40
                     30
                     20
                     10
                      0
                          1997   1999    2001          2003    2005     2007   2009*
                                    Cattle      Hogs      Broilers    Turkey
                    * Forecast
                                                                                   33
Red Meat and Poultry Exports forecast
to decline for first time since 2004
               16
               14
               12
Billion lbs.




               10
                8
                6
                4
                2
                0
                    1997    1999     2001     2003      2005      2007   2009*
                              Beef   Pork   Broilers   Turkey   Other
               * Forecast
                                                                             34
U.S. Dairy Product Prices

                    2008               2009      Change from
                   forecast          forecast       2008
Product prices           Dollars/pound             Percent
 Cheese                 1.90              1.24       -34.3
 Butter                 1.44              1.15       -19.8
 Nonfat dry milk        1.23              0.83       -32.4
 Dry whey               0.25              0.18       -29.9

Class prices              Dollars/cwt
 Class III            17.44             10.35        -40.6
 Class IV             14.65              9.85        -32.8
 All milk             18.32             11.55        -36.9




                                                               35
       Key USDA Releases

 March 31 - NASS Prospective
  Plantings Report
 April 9 – WASDE - Updated 2008/09
  Forecasts
 May 12 – WASDE – Updated
  2008/09 Forecasts - plus - First
  “Official” 2009/10 Forecasts

                                      36
        END
Harrisburg Presentation

								
To top