Livestock Producers Can Expect Friendlier Feed Prices

US - Livestock producer organisations have pushed Congress for a policy that protects them against high feed prices resulting from federal policies to promoted biofuels from typical feed grains and oilseeds.
calendar icon 3 August 2007
clock icon 3 minute read
Feed budgets have been hurt in the past 10 months by high corn prices, but once the extent of acreage in the new crop was established, corn prices have softened, and USDA now says record feed grain production will loosen the tight supplies.

The official feed grains of corn, sorghum, barley and oats will be produced in a quantity unseen since the 1986-87 crop year. Although sorghum, barley and oats were over one third of the feed grain production 21 years ago, this year their share of the production will be closer to 15 per cent of total production.

USDA’s latest feed outlook indicates that the total supply will be 378.2 million tons, up 41.2 million from the last crop year. Total use for feed, seed, and residual is expected to total 152.8 million tons which is about 45 per cent of the total use. USDA economists Allen Baker and Edward Allen report that ethanol co-products are replacing corn in feed that ethanol refineries are taking out of the market. They say that corn is estimated to account for 89 percent of the feed and residual use, down from 93 percent forecast for 2006/07. Increased production and feed use of distiller’s spent grains are expected to offset decreased feed and residual use of the four feed grains plus wheat.

The number of livestock consuming the feed has changed little in the past year, holding at 91.8 million animal units. Cattle on feed and dairy cows are down slightly, but hogs and broilers are up. Pork production is on the rise, so feed for hogs will be up. Broiler, turkey, and egg production are also increasing, so poultry demands for feed will also increase. Beef production for the balance of the year is expected to weaken, and feed needs will be picked up in part by distiller’s grains. Food and industrial demands will consume 38 per cent of the supply compared to 31 per cent for last year.

Worldwide, coarse grain production will be 1.066 billion tons. A 9 million ton increase results from increased US corn production, and negates a 2 million ton global decrease. That is because many parts of the world are having weather problems from either being too wet or too dry. Comparatively, global use is projected at 1.059 billion tons. Global ending stocks are estimated at 137 million tons. With the recent slowdown in US corn exports, USDA has also lowered its estimate of new crop exports to about 2.1 billion bushels.

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