USDA Feed Yearbook Puts Corn, Sorghum, and Barley Prices up in 2003/04

For 2003/04, total U.S. feed grain disappearance is projected at 283 million tons, up from 260 million tons the previous year, according to the 2004 annual USDA-ERS Feed Yearbook,
April 27, 2004

For 2003/04, total U.S. feed grain disappearance is projected at 283 million tons, up from 260 million tons the previous year, according to the 2004 annual USDA-ERS Feed Yearbook, a supplement to Feed Outlook.

All use categories show year-over-year increases, but exports show the biggest gain. Food, seed, and industrial (FSI) use is forecast at a record 70.3 million tons. A record corn crop led to a rise in feed grain supplies, which are forecast at 309 million tons. However, the growth in utilization is expected to exceed
the growth in supply, and ending stocks will decline for the third year in a row.

Feed and residual use of the four feed grains plus wheat in September-August 2003/04 is expected to be up 3 percent from the 156 million tons used in September-August 2002/03. The grain used per grain consuming animal unit in 2003/04 is forecast at 1.78
tons, compared with 2002/03's 1.76 tons. Corn is expected to represent 92 percent of feed and residual use in 2003/04, up nearly 1 percent from 2002/03.

Corn production in 2003/04 was a record 10,114 million bushels, up from the previous year's drought-reduced crop of 8,967 million bushels. A record average yield of 142.2 bushels per acre and a 1.8-million-acre increase in harvested area are behind this year-
over-year increase. Beginning stocks were 1,087 million bushels, and the total 2003/04 corn supply was up 633 million to 11,211 million bushels. Although corn supplies were up, utilization is forecast up even more. Total corn utilization is expected to rise
864 million bushels to a record 10,355 million bushels.
Utilization is up for all use categories. Ending corn stocks for 2003/04 are expected to fall to 856 million bushels, their lowest level since 1995/96, and prices are expected to rise to $2.45- $2.65.

Corn FSI use in 2003/04 is expected to total 2,555 million bushels, up from 2,340 million in 2002/03. FSI use would represent 25 percent of total corn use, unchanged from 2002/03 and up 4 percentage points from 2001/02. Corn food and industrial use in 2003/04 is expected to be up for all component categories. Corn used to make ethanol for all of 2003/04 is forecast at 1,195 million bushels, up 20 percent from 2002/03. Ethanol production reported by the U.S. Department of Energy (DOE) continued to set
records, as new plants came on stream.

The 2003/04 sorghum crop is 411 million bushels, up from 361 million bushels a year earlier. An increase in harvested area and yield, estimated at 7.8 million acres and 52.7 bushels per acre, respectively, led to this year-over-year change. Beginning stocks
were 43 million bushels. Total sorghum supply is 454 million bushels, up from 422 million bushels in 2002/03. Total sorghum utilization is expected to rise from 379 million bushels to 410 million in 2003/04. The bulk of this increase comes from exports. Sorghum ending stocks are forecast at 44 million bushels in 2003/04, up slightly from a year earlier, and the season average price is projected at $2.45-$2.65. These are the highest season
average sorghum prices since 1995/96.

The barley crop is 276 million bushels, up from 2002/03’s 227 million. This increase stems from higher average yields and larger harvested area. Beginning stocks were 69 million bushels, down from 92 million bushels in 2002/03. These low stocks were
caused by dry conditions in 2002/03. Total barley supply is 360 million bushels in 2003/04, up from 337 million bushels a year earlier. Total utilization is forecast at 262 million bushels, down from 268 million. Most of this year-over-year decline stems
from a 5-million-bushel drop in exports to 25 million bushels. Ending barley stocks are forecast at 98 million bushels. The 2003/04 season average barley price is forecast at $2.80-$2.90, up from $2.72 the previous year.

The 2003/04 oats supply is forecast at 284 million bushels, up from 274 million bushels a year earlier. A recovery from drought conditions is behind this increase. The 2003/04 yield was 65 bushels per acre, up from 56.4 a year ago and the second largest
on record. Imports are forecast at 90 million bushels, the lowest since 1995/96. Total oats utilization is projected at 220 million bushels, down 4.5 million bushels from the previous year and the lowest on record, the result of a drop in feed and residual use.
Ending 2003/04 stocks are forecast to be 64 million bushels, up from 50 million. The 2003/04 season average oats price is expected to be $1.45-$1.50 per bushel, compared with $1.81 a year earlier.

According to the U.S. Department of Agriculture's March 31 Prospective Plantings report, growers intend to plant 79 million acres of corn, up fractionally from both 2003 and 2002. Farmers intend to plant 46 percent of their prospective corn acreage with varieties developed using biotechnology, up from 40 percent in 2003. Sorghum growers intend to plant 8.6 million acres, down 9 percent from 2003. Barley growers intend to plant 4.68 million acres in 2004, down 12 percent from a year earlier. Oats growers intend to plant 4.31 million acres and harvest 2.07 million acres, down 6 percent and 7 percent, respectively. The Prospective Plantings report indicates that sorghum, barley, and oats planted area are forecast to be the lowest on record. This continues a long-term decline in planted area due to higher relative returns for other crops.

World coarse grain production is expected to increase 2 percent in 2003/04, supported by a record U.S. corn crop. However, foreign coarse grain production is forecast down 2 percent because drought devastated production across most of the European Union, Eastern Europe, and parts of the former Soviet Union. Corn production in China is forecast down 6 percent as growing conditions were too dry in some parts of the Northeast while a cool misty summer limited corn growth in the North China Plain.

Global coarse grains beginning stocks were the lowest since 1984/85, reducing 2003/04 supplies. World coarse grain consumption in 2003/04 is expected to grow over 3 percent, partly because of reduced supplies of lower-quality wheat used for feeding, improving economic growth in several regions, and increased population growth. Moreover, global consumption is forecast to remain much larger than production, dropping world
ending stocks 43.4 million tons to 102.3 million, the smallest since 1975/76.

U.S. corn exports for the October-September 2003/04 trade year are forecast at 51 million tons, up 24 percent from the previous year. Competition from Argentina and China is down. In addition, there are reduced supplies of competitively priced wheat that are
used for feeding. Corn exports from Eastern Europe are projected down 63 percent. However, corn exports from Brazil are expected to increase. High ocean freight rates and strong U.S. corn prices are expected to limit the increase in U.S. exports.

The Feed Yearbook annual report examines world and U.S. production, consumption, trade, stocks, and prices for feed grains (focusing on corn). It includes special articles related to the feed grain industry. The full report will be available online within the next few days at: