NOTE: This report presents USDA's initial assessment of U.S. and world crop supply and demand prospects and U.S. prices for the 2008/09 season.
Also presented are the first calendar-year 2009 projections of
U.S. livestock, poultry, and dairy products. Projections reflect economic analysis, normal weather, trends, and judgment. Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative.
National Agricultural Statistics Service (NASS) forecasts are used for
U.S. winter wheat area, yield, and production. For other U.S. crops, the March 31 NASS Prospective Plantings report is used for planted
acreage. Methods used to project harvested acreage and yield are noted on each table
.
WHEAT: The 2008/09 U.S. wheat outlook is for higher
production, lower exports, and increased domestic use.
Total production is projected at 2.4 billion bushels, up 16
percent from 2007/08. The survey-based forecast of winter
wheat production is up 17 percent as area and yield are
higher than last year. Spring wheat production is expected
higher with seeded area up 10 percent in the March 31
Prospective Plantings report. Durum and other spring
wheat production is projected at 614 million bushels, up 12
percent from 2007/08, based on 10-year harvested-to-
planted ratios and trend yields. Total wheat supplies are
projected up only 4 percent because of historically low
carryin.
Total wheat use is projected down 5 percent for 2008/09 as
lower exports more than offset increased domestic use.
Food use is projected at 960 million bushels, up 10 million
from the current year reflecting steady growth in domestic
demand. Feed and residual use is projected at 230 million
bushels, up sharply from the 60 million projected for
2007/08. Larger supplies of soft red winter wheat and
higher corn prices boost wheat feeding. Exports are
projected at 975 million bushels, down 24 percent from
2007/08. Ending stocks for 2008/09 are projected at 483
million bushels, more than double the current year's
projected 239 million. The national average farm price for
2008/09 is projected at $6.60 to $8.10 per bushel,
compared with the current year forecast of a record $6.55
per bushel. Wheat prices will be supported by farmer
forward sales and early season export demand.
Global wheat production for 2008/09 is projected at a record
656 million tons, up 8 percent from 2007/08, and up 5
percent from the previous record in 2004/05. Higher
production is projected for most of the world's major
exporting countries including Australia, Canada, EU-27,
Russia, and Ukraine. Strong world prices and favorable
weather in most of EU-27 and FSU-12 raised production for
2008. Production is also projected higher in Brazil, China,
and India. Partly offsetting are reductions for Argentina and
Kazahkstan. The only significant weather problems for
winter wheat remain in drought-stricken Middle East and
North Africa countries.
World wheat imports, exports, and consumption are
projected higher for 2008/09. Imports are generally
projected higher throughout the world with EU-27 the major
exception. Imports are expected to fall sharply for EU-27 as
wheat production rebounds from weather-reduced crops in
the 2 previous years. EU-27 exports and wheat feeding are
expected to rise sharply. World wheat ending stocks are
projected at 124 million tons, up 13 percent from the current
year's projection.
COARSE GRAINS: The 2008/09 U.S. feed grains outlook
is for lower production, strong domestic demand, and lower
ending stocks. The 2008/09 corn crop is projected at 12.1
billion bushels, down 7 percent from the record 2007/08
crop. Planted area is from producer intentions reported in
Prospective Plantings. Harvested area is based on
historical abandonment and derived demand for silage.
The yield is projected at 153.9 bushels per acre, 1 bushel
per acre below the 1990-2007 trend based on the slower-
than-average pace of planting as reported in Crop
Progress. The projected yield assumes a mid-May planting
progress near the 10-year average and reflective of last
year's May planting pace. Corn supplies fall 870 million
bushels from the 2007/08 record with a small increase in
carryin more than offset by the projected 949-million-bushel
reduction in output. Higher year-to-year beginning stocks
reflect this month's 100-million-bushel reduction in 2007/08
corn use for ethanol.
Total U.S. corn use in 2008/09 is projected down 2 percent
as reductions in feed and residual use and exports more
than offset a continued expansion in ethanol production.
Feed and residual use is projected down 14 percent as corn
feeding declines with increased production of distillers
grains, higher corn prices, and reduced red meat
production. Corn exports are projected down 16 percent as
U.S. supplies face increased world competition with
increased foreign production and a sharp drop in EU-27
imports. Ethanol use is projected at 4 billion bushels, up 33
percent from 2007/08. The slowing pace of plant
construction and expansion, and lower capacity utilization
are expected to modestly dampen growth in ethanol corn
use. With total corn use expected to exceed production by
635 million bushels, ending stocks are projected down 45
percent. At 763 million bushels, ending stocks would be the
lowest since 1995/96. The season-average price is
projected at $5.00 to $6.00 per bushel, well above the
current year's forecast record of $4.10 to $4.40 per bushel.
Global coarse grains production for 2008/09 is projected at
1.1 billion tons, up slightly from the current year record,
despite the year-to-year decline in U.S. corn output.
Foreign coarse-grain production is expected to increase 4
percent from 2007/08. World coarse grain output reflects
year-to-year increases in projected corn production in
Argentina, Brazil, China, EU-27, and FSU-12. World coarse
grain output is also boosted by a recovery in barley
production in Australia, EU-27, and FSU-12. Global coarse
grain imports and exports are projected to decline in
2008/09 mostly reflecting lower EU-27 corn and sorghum
imports and lower U.S. corn exports. Global coarse grain
feeding is projected lower with declines in U.S. corn feeding
more than offsetting the increase in foreign corn feeding.
World coarse grain ending stocks are projected to fall 6
percent as declines in U.S. corn ending stocks more than
offset increases elsewhere. At the projected 99.0 million
tons, 2008/09 global corn ending stocks are expected to hit
a 25-year low.
RICE: U.S. rice production in 2008/09 is projected at 197.0
million cwt, nearly the same as 2007/08. Planted area is
estimated at 2.77 million acres as reported in Prospective
Plantings, up only 9,000 acres from 2007. Average rice
yield is projected at 7,145 pounds per acre, down 40
pounds per acre from 2007, but the second highest on
record. Imports for 2008/09 are projected at a record 22.5
million cwt, up nearly 5 percent from revised 2007/08.
Beginning stocks in 2008/09 are estimated at 21.6 million
cwt, down 45 percent from 2007/08.
U.S. domestic and residual use for 2008/09 is projected at a
record 126.0 million cwt, 1 percent above 2007/08. Exports
are projected at 98.0 million cwt, 14 percent below 2007/08.
Tighter supplies and higher prices will constrain exports in
the new marketing year. Ending stocks in 2008/09 are
projected at 17.1 million cwt, 45 percent below 2007/08,
and the lowest stocks since 1980/81 (16.5 million cwt). The
stocks-to-use ratio at 7.6 percent is the lowest since
1974/75 (6.3 percent). The season-average range for
2008/09 is projected at a record $18.50 to $19.50 per cwt,
compared to a revised $12.85 to $13.15 per cwt for
2007/08. Tighter domestic supplies along with expected
high global prices will support prices during the year.
Global 2008/09 rice production is projected at a record 432
million tons, up 5 million from 2007/08. World
disappearance (consumption and residual) is projected at a
record 428 million tons, up 3.6 million tons. Large crops are
projected for most of Asia assuming normal weather.
Burma's 2008/09 rice crop is projected at 10 million tons, 7
percent below revised 2007/08. Cyclone Nargis made
landfall in Burma on May 2 hitting the major Irrawaddy rice
growing region, which accounts for an estimated one third
of annual rice production. The storm likely damaged
recently harvested rice (dry season crop), although much of
the crop was probably already harvested. The conditions
are delaying planting of the main rainy season crop in this
important rice growing region. Burmese farmers were
completing the dry season harvest and in the early stages
of planting the main season crop (normally harvested in
December/January) when the storm hit. Seed availability
for planting the rainy season crop may have been affected.
Also, salt intrusion into the rice paddies may lower yield
potential and prevent plantings in some areas altogether.
Information on the storm's impact is limited, therefore,
USDA's supply and use projections for Burma are very
tentative. USDA is monitoring the situation and will
reassess prior to the June 10 WASDE report.
Global exports for 2008/09 are expected to be about the
same as 2007/08 at about 27 million tons, but down 3.4
million from 2006/07. India's 2008/09 exports are projected
at 2.0 million tons, down 0.5 million from revised 2007/08,
and down 4.0 million tons from revised 2006/07. It is
assumed that India will maintain export restrictions on non-
basmati rice through most of the 2008/09 marketing year.
Global ending stocks are expected to increase 5 percent
from 2007/08 to 82 million tons the largest stocks since
2002/03. The stocks-to-use ratio at 19.3 percent is up from
last year's 18.5 percent and is the highest since 2003/04.
OILSEEDS: U.S. oilseed production for 2008/09 is
projected at 93.0 million tons, up 16 percent from 2007/08.
Higher soybean production accounts for most of the
increase. Peanut production is also projected higher, while
production of sunflowerseed, canola, and cottonseed are
each projected to decline from 2007/08 levels. Soybean
production is projected at 3.1 billion bushels, up 520 million
bushels from 2007/08. Soybean supplies are projected at
3.3 billion bushels, up just 3 percent from 2007/08 despite
higher planted area. Most of the production gains are offset
by sharply lower beginning stocks.
Soybean crush is projected to increase less than 1 percent
to 1.85 billion bushels, reflecting a small increase in
domestic soybean meal use and a projected decline in
soybean meal exports. Domestic consumption of soybean
oil is projected to increase only slightly as higher biodiesel
use of soybean oil is mostly offset by a continued decline in
food use. Biodiesel production is projected to use 15
percent of total soybean oil production for 2008/09
compared with 14 percent in 2007/08. Soybean exports are
projected at 1.05 billion bushels, down 40 million from
2007/08. Ending stocks for 2008/09 are projected at 185
million bushels, up 40 million from 2007/08, leaving the
stocks-to-use ratio at a relatively low 6 percent.
The U.S. season-average soybean price for 2008/09 is
projected at $10.50 to $12.00 per bushel, compared with
$10.00 per bushel in 2007/08. Prices are expected to
remain firm due to relatively strong corn and soybean oil
prices. Soybean meal prices are forecast at $280 to $340
per short ton, compared with $315 per ton for 2007/08.
Soybean oil prices are projected at 50 to 54 cents per
pound compared with 52 cents per pound for 2007/08.
Global oilseed production for 2008/09 is projected at 423
million tons, up 32.2 million tons from 2007/08. Oilseed
production is projected to recover from the first year-to-year
decline in global oilseed production since 1995/96. U.S.
oilseed production gains account for 40 percent of the
global increase. Total foreign supplies are projected to
increase by 4 percent from 2007/08.
Global oilseed ending stocks for 2007/08 are projected at
56.7 million tons, down 0.5 million tons from last month.
Most of the decrease is due to lower projected soybean
stocks in the United States resulting from a 15-million
bushel increase in projected exports. Soybean stocks for
Brazil and Argentina are projected at a combined 39.8
million tons, down 1.5 million from 2006/07.
SUGAR: Projected U.S. sugar supply for fiscal year
2008/09 of 12.1 million short tons, raw value, is down
321,000 tons from 2007/08, mainly due to lower production
and beginning stocks. Lower beet sugar production, due to
reduced area, more than offsets higher cane sugar
production from improved yields. Imports under the sugar
tariff rate quota (TRQ) are put at 1.27 million short tons to
reflect the minimum of U.S. commitments to import raw and
refined sugar. The TRQ shortfall is 100,000 tons. The
Secretary of Agriculture will establish the actual level of the
TRQ at a later date. Projected total use of 10.8 million tons
is up 100,000 tons. Year-ending stocks are 1.34 million
tons.
LIVESTOCK, POULTRY, AND DAIRY: Note: Broiler stock
data has been adjusted to remove chicken paws starting in third quarter
2003. Dairy supply and use estimates now breakout commercial exports.
Commercial use excludes exports. See
http://www.usda.gov/oce/commodity/wasde/revisions/historical.htm for
details.
Total U.S. meat production in 2009 is projected to decline
about 1 percent. Beef production in 2009 declines on
tighter supplies of cattle. Cow inventories declined in 2007
and with relatively high cow slaughter expected in 2008,
cattle inventories will be smaller and result in fewer cattle
marketings during 2009. Marketable supplies of cattle may
be further reduced if producers begin retaining calves from
this year's calf crop for addition to the breeding herd to
rebuild herds. Pork production is expected to decline as
producers reduce sows farrowing later this year and into
next year in response to poor returns. Additionally, hog
imports are expected to be lower as Canadian producers
reduce inventories. Broiler production in 2009 will be
slightly higher as production declines in late 2008 and early
2009 due to high feed costs, but then rebounds later in the
year. Turkey production is forecast slightly lower, reversing
several years of strong expansion. Egg production is
forecast about unchanged in 2009, although output is
expected to decline during the first half of the year.
The total meat production forecast for 2008 is raised as
higher expected beef production more than offsets lower
pork and broiler forecasts. Beef production is raised to
reflect higher expected cattle slaughter during the second
quarter. Pork production is reduced due to lower slaughter
in the second half of the year. Expected imports of hogs
from Canada are reduced from last month, primarily in
response to reduced inventories in Canada. Broiler
production forecasts are lowered for the year as hatchery
data continue to point toward slower production in the
second half of the year.
Total meat exports are forecast to increase in 2008 and
2009. The recently announced agreement to re-open South
Korea to imports of U.S. beef is expected to support
increased exports beginning in mid-2008 and expanding
through 2009. Pork exports for 2008 are raised as markets
in Asia increase sharply. But pork exports are forecast to
decline in 2009, especially if China's domestic pork supply
situation improves. Broilers and turkeys continue to
increase. The 2008 beef import forecast is lowered as high
U.S. cow slaughter reduces demand for imported
processing beef, but imports in 2009 are expected to
increase as cow slaughter declines and competing exporter
supplies are displaced in South Korea. Pork imports are
expected to continue to decline gradually.
In 2009, livestock and poultry prices are generally forecast
higher due to lower meat supplies. Cattle prices are
forecast about the same as 2008. Hog prices are forecast
higher due to tighter supplies and continued strength in
domestic demand and relative strong exports. Broiler
prices will increase, reflecting tighter supplies in the first
part of 2009. Turkey and egg prices are forecast to decline
from record 2008 levels. Most livestock and poultry prices
for 2008 are raised from last month due to stronger exports
and, in the case of hogs and broilers, tighter supplies.
Milk production is forecast to increase fractionally in 2009
reflecting lower cow numbers and minimal gains in milk per
cow. Although producers continue to add cows in 2008,
poor returns are expected to end the expansionary phase of
dairy cow inventories. Commercial exports are forecast to
remain relatively robust by historical standards but will likely
be lower in 2009 as production in competing supplier
countries recovers and tighter U.S. production increases
competition between domestic and export uses. Domestic
disappearance of fat and skim solids is expected to
increase modestly, tightening commercial stocks and
supporting higher butter, nonfat dry milk (NDM), and whey
prices in 2009. Cheese prices are forecast slightly lower as
favorable cheese prices early in the year may encourage
increased supplies of milk to flow into cheese vats. With a
firmer whey price, the Class III price is forecast to rise from
2008, but will average below its 2007 record. Likewise,
strong butter and NDM prices are expected to result in a
stronger Class IV price. The all milk price is forecast at
$17.90 to $18.90 per cwt in 2009.
Forecast milk production in 2008 is lowered slightly from
last month. Milk per cow in the first quarter was weaker
than expected. Price forecasts for most products are raised
sharply from last month as demand for all products remains
strong. Fat basis exports are robust although exports on a
skims solids basis are forecast weaker than last year, NDM
exports are helping support prices. Class III and Class IV
prices are raised and the all milk price is forecast to
average $17.95 to $18.45 per cwt.
COTTON: The 2008/09 U.S. cotton projections include
sharply lower production and ending stocks compared with
2007/08. Production is projected at 14.5 million bales,
down 25 percent from 2007/08, based on planted area in
the Prospective Plantings, combined with historical
average abandonment and yields. Domestic mill use also is
reduced 300,000 bales from 2007/08 to 4.3 million bales,
but exports are raised slightly to 14.5 million. Ending stocks
are projected at 5.6 million bales, a 43 percent reduction
from the beginning level and 30 percent of total use.
A combination of slightly lower production and slightly
higher consumption is expected to reduce world stocks in
2008/09. World production is forecast at 118 million bales,
2 percent below the current season, as higher foreign
production partially offsets a reduction in the United States.
World consumption is projected at 127 million bales, a
growth rate of 2 percent, reflecting a slight recovery from
2007/08, but well below the recent 5-year average growth.
For China, slightly lower planted area and slightly higher
yields result in production of 35.5 million bales, marginally
below the revised 2007/08 level. Strong but decelerating
growth in China's consumption results in higher imports and
lower ending stocks; higher trade by China also supports an
increase in world trade. World ending stocks are projected
to fall nearly 10 percent to about 55.5 million bales.
For 2007/08, a slight decrease in U.S. production relative to
last month reflects USDA's final production estimate.
Domestic mill use and exports are both reduced based on
recent activity, raising ending stocks to 9.9 million bales.
The 2007/08 world beginning stocks and production are
raised from last month, due mainly to revisions in the China
balance sheet beginning in 2000/01. China's production is
revised beginning in 2002/03 based on sources in China
who have revised estimates for Xinjiang using rail shipment
data (see http://www.fas.usda.gov/psdonline/circulars/cotton.pdf for
detailed estimates). Production is also raised for India and
Brazil, but is lowered for Zimbabwe. World consumption is
reduced about 500,000 bales due to decreases for Turkey,
Russia, the United States and others. A reduction of nearly
700,000 bales in world imports reflects decreases for China,
Turkey, Russia, and others. World 2007/08 ending stocks
are raised 1.9 million bales, with the largest increases in