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Additional Perspective on USDA's 2011-12 Outlook

February 25, 2011
By: Roger Bernard, Farm Journal Policy and Washington Editor
 
 

Additional perspective was released today at USDA's Outlook Forum on the supply and demand forecasts U.S. grains and livestock. USDA Chief Economist Joe Glauber provided the balance sheet details in his presentation which kicked off the Forum Thursday.

Here's a link to read more on his presentation.

As for what was released today, following is a condensed summary of the details for U.S. grains, cotton and livestock:

Corn: Corn for ethanol use at 5 billion bu. for 2011-12, up 50 million bu., would be the smallest year-to-year increase since the late 1990s. USDA assumes a 2.7 gallon per bu. conversion rate. On exports, analysts acknowledged China’s potential, noting "China’s potential to import corn remains unknown, but will be dependent on domestic production, relative prices, and internal policies."

Soybeans: "Higher returns for corn and cotton are expected to shift some area to those crops in the Midwest and South. However, an increase in double-crop soybean plantings should offset area lost to corn and cotton as producers respond to higher soybean prices." USDA also notes soybean oil accounts for just under half of expected U.S. biodiesel production from all fats and oils.

Wheat: "Other spring and durum plantings are expected to decline slightly this year because of the high net returns for other crops, especially oilseeds. " The season average price forecast of $7.50 reflects favorable opportunities for forward pricing in recent months.

Cotton: The 2011-12 marketing year average price received by producers is projected at $1.10 per pound, exceeding the 2010-11 price by 35%. The projected ending stock level of 2.9 million bales would constitute about 15 percent of total disappearance, the second-lowest since 1995-96.

Cattle: Calf crop will decline further in 2011 and potentially in 2012, depending on producer expansion plans. Even if some heifers are retained this year, "it is unlikely that calf supplies could support an increase in beef production before 2014." Beef exports are forecast up 2% in 2011, but "tighter U.S. beef supplies will likely limit growth in exports." USDA analysts also noted caution on rising consumer prices for beef, as resistance to higher prices could slow wholesale beef and cash cattle prices for 2011. The 5-Area steer price for 2011 is forecast to average $102 to $109 per cwt.

Hogs: Pork production is seen up 0.4% from 2010 as carcass weights are expected above 2010 for most of 2011. But feed prices could trim carcass weights later in the year. Pork exports are seen up 11% in 2011. U.S. hog prices, on a national base, 51%-52% lean, live equivalent, are forecast to average $58 to $61 per cwt for 2011, which could eclipse the series high $58.78 per cwt set in 1982.

Here's a link to access the full releases from USDA on the above areas.


 

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RELATED TOPICS: Policy, Crops, Livestock, Ethanol

 
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