Summary: larger U.S. coarse grain production projected to push world output up - total global 1991-1992 coarse grain supply projected to increase about 1 percent - U.S. Dept. of Agriculture, Economic Research Service report

Situation and Outlook Report: Feed, May, 1991

Global output of coarse grains in 1991/92 is projected to rise 6 million metric tons to 831 million, due to increased U.S. production. Foreign production is projected to drop almost 4 million tons from the expected 1990/91 record, led by declines in the USSR, China, and Canada. With forecast carryin stocks about the same as a year earlier, total global 1991/92 coarse grain supply is projected to increase about 1 percent.

World coarse grain trade in 1991/92 is projected to rise slightly from 1990/91, which, at 83 million tons, is forecast to be the lowest in 3 years. Most of the gain in trade is because of larger imports by the USSR and Korea. World 1991/92 ending stocks of coarse grains are projected to increase about 3 million tons because of larger U.S. stocks. U.S. 1991/92 feed grain supply is projected at 285 million tons, up 8 million from 1990/91. Production for 1991/92 is projected up almost 10 million tons to 240 million, but beginning stocks are forecast down 2 million tons. Use in 1991/92 is projected to rise about 3 million tons to 236 million, with larger domestic use and exports. However, use is expected to be less than production, leading to a rise in ending stocks. Corn supply for 1991/92 is projected at almost 9.7 billion bushels, 4 percent above 1990/91. Corn production in 1991/92, at nearly 8.3 billion bushels, is projected up 4 percent, and carryin stocks are forecast to rise 4 percent. Use for 1991/92 is projected at 8.1 billion bushels, a 180-million increase over the 1990/91 level, with larger feed and residual disappearance accounting for most of the gain. Use is projected to fall short of production, leading to increased ending stocks and lower average prices in 1991/92. The sorghum supply for 1991/92 is projected at 758 million bushels, 4 percent below 1990/91. While 1991 production, at 640 million bushels, is projected up 69 million from 1990, a forecast 102-million-bushel drop in beginning stocks will be more than offsetting. Sorghum use for 1991/92 is projected at 635 million bushels, down 6 percent from the 1990/91 forecast. Use is projected to about match production, resulting in little change in stocks. Sorghum prices are expected to follow corn prices down in 1991/92, but because of relatively tight supplies, they likely will average a little higher than normal relative to corn prices. In March, barley growers indicated plans to plant just over 8.7 million acres in 1991, up about 6 percent from last year. Production is projected to be only marginally above 1990, and, when combined with lower forecast beginning stocks, result in a 5-percent drop in supply from 1990/91. Total use for 1991/92 is projected at 435 million bushels, a decline from a year earlier equal in magnitude to that in supply, leaving barley ending stocks unchanged from 1990/91. Farm prices are projected to average $1.80-$2.20 a bushel in 1991/92, compared with a preliminary $2.13 for 1990/91. Only 300 million bushels of oats are projected to be harvested in 1991. March Prospective Plantings reported that producers intended to harvest for grain about 10 percent less area in 1991 than the year before, which would be the lowest on record. Slightly higher projected imports and carryin stocks will not be sufficient to offset the expected decline in production, so supplies are projected to be about 50 million bushels below 1990/91. Total disappearance of oats in 1991/92 is projected around 400 million bushels, 20 million less than forecast for a year earlier. However, total use is still expected to exceed production plus imports, leading to a projected decline of around 30 million bushels in 1991/92 ending stocks. Farm prices for 1991/92 are projected to average $1.00-$1.40 per bushel, compared with a preliminary $1.13 in 1990/91. In March, farmers reported intentions to harvest hay from 61.4 million acres in 1991, down about 150,000 acres from 1990. Beginning stocks for 1991/92 were 27.1 million short tons, identical to 1990 carryin stocks. In early May, pasture and range conditions in most of the country were equal to, or better, than a year earlier. However, conditions were significantly below a year earlier in Kansas, Montana, Oklahoma, and Texas, States that accounted for 11 percent of the area harvested for alfalfa hay in 1990. For States that harvested 61 percent of the alfalfa area in 1990, the pasture and range conditions in May averaged 78.8 percent compared with 70.4 percent in 1990. With grain exports running well below last year, demand for rail and barge transportation has diminished from a year earlier. The return of normal navigation conditions on the Mississippi River system has allowed barge shipments to increase seasonally. Rail and barge equipment should be adequate for wheat and coarse grain harvests. Although fuel prices have fallen below April 1990 levels, operating costs for all transportation modes are higher. However, competitive pressures have limited rail rate increases and held barge rates down.