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April 15, 2014

USDA beefs up production forecast

Corn, soybean outlook improves

Mark Parker — In USDA’s latest forecast, total meat production is predicted to be lower in 2014 despite higher beef production and price expectations.

And on the crop side, the World Agricultural Supply and Demand Estimates report, issued April 9, helped ease fears of lower crop prices.

"That fear was very real," Purdue economist Chris Hurt said. "But recently, both old- and new-crop corn futures have pierced the $5 mark on the heels of USDA reports showing better old-crop corn usage and reduced acreage for 2014 plantings."

The soybean outlook has also improved, according to Hurt.

For beef, slaughter is projected to be lower in the first quarter but that is expected to be more than offset by higher slaughter numbers in the second half of the year.

Larger second-half slaughter reflects larger placements during the first half of the year.

The beef import forecast for 2014 was also raised from last month as demand for processing-grade beef remains strong and the export forecast is raised on continued strong sales to Asian markets.

USDA upped cattle price expectations for 2014 from last month, reflecting continued price strength for fed cattle.

A commodity-by-commodity synopsis follows:

Corn and coarse grains

Feed grain ending stocks in the U.S. for 2013-2014 were projected lower with reductions for corn, barley and oats. The season-average farm price for corn was raised to $4.40 to $4.80 per bushel, compared with $4.25 to $4.75 per bushel reported last month.

Projected grain sorghum prices were raised to $4.15 to $4.55 per bushel, and barley and oats price ranges narrowed to $6.00 to $6.20 per bushel.

Worldwide, coarse grain supplies raised 3.6 million tons with increases in foreign corn production far exceeding reductions for millet, sorghum, and barley.

Global corn production was raised 6.4 million tons with a 2.0-million-ton increase for Brazil and 1.0-million-ton increases each for South Africa and Russia. For Brazil, favorable precipitation in March and early April has supported the developing safrinha (second-season) corn crop with yields expected just below last year’s.

Soybeans and oilseeds

U.S. soybean supplies for 2013-2014 were increased by 30 million bushels to 3.49 billion bushels, due to an expected increase in imports.

Despite high prices and record harvests in South America, U.S. exports have remained strong, especially to China, where imports from the United States have already exceeded the previous marketing-year record.

Soybean crush was reduced 5 million bushels to 1.685 billion with lower domestic soybean meal consumption more than offsetting a small increase in projected soybean meal exports.

The projected range for the season-average soybean price was raised from $12.50 to $13.50 per bushel. Oil and soybean meal prices were also projected higher.

Global soybean production is projected at 284.0 million tons, down 1.4 million from last month but still a record.

Brazil soybean production is forecast at 87.5 million tons, down 1 million from last month, with lower yields offsetting higher harvested area.


U.S. wheat ending stocks for the 2013-2014 crop year were predicted to increase by an estimated 25 million bushels as lower expected imports more than offset by a reduction in feed and residual use. The project season-average farm price for all wheat was unchanged at $6.75 to $6.95 per bushel.

Globally, crop year wheat supplies were raised 0.5 million tons with higher projected beginning stocks, mostly because of reductions in European Union and Ukraine consumption for 2012/13.

World wheat production for 2013/14 was lowered 0.2 million tons.


Pork production was lowered, due to the Quarterly Hogs and Pigs report estimated of a decline in the December-February 2014 pig crop and revised the June-August 2013 pig crop lower.

Though producers intend to farrow more sows in March-May and June-August, the loss of pigs due to the PED virus is expected to result in lower slaughter.

Expected tighter supplies of feeder pigs also resulted in an expected increase in live hog prices. Pork imports were raised based on high U.S. prices, but the export forecast was reduced due to tighter supplies.


Broiler production and hatchery data points to slower growth in eggs set and chicks placed, USDA says. Higher feed prices are projected to slow production.

Broiler exports were cut based on February numbers.

Turkey production for the first quarter was also reduced based on February production, but forecasts for production in subsequent quarters was unchanged. Turkey export predictions were reduced on weak sales.

Price expectations for both broilers and turkeys were increased due to support from higher cattle prices.

Egg production forecasts for 2014 also remained the same but import and export projections were both lowered. Egg prices, however, were raised because of continued strong demand.


USDA’s 2014 milk production forecast was raised from last month as strong returns are expected to encourage a more rapid expansion in cow numbers and increased milk per cow.

Fat-basis exports were raised on higher sales of cheese and butter, but the skim-solids export forecast was lowered on weaker nonfat dry milk sales. Skim-solid imports were reduced due to lower imports of milk protein concentrate and casein.

USDA increased product price forecasts for cheese, butter, and whey based on strong demand. However, the NDM price was unchanged. Class III and Class IV prices were raised on higher product prices. All-milk price was forecast at $22.55-23.05 per cwt.

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