ERS Charts of Note
Friday, December 4, 2015
Rice consumption worldwide is expected to exceed production for the third consecutive year in 2015/16, resulting in the smallest global ending stocks since the 2007/08 marketing year. Ending stocks among the world’s five leading rice exporters—India, Thailand, Vietnam, Pakistan and the United States—are projected down a combined 33 percent from last year and 47 percent below the peak levels of 2012/13. These countries account for the bulk of the decline in global stocks. The last time stocks were near these levels in 2007/08, prices rose to their highest nominal level on record, prompted by export bans by Egypt, India, and Vietnam and fears of rice shortages in countries where rice is a staple food. Today the market situation is far different, with global rice prices relatively flat since late August 2015 after trending lower for the previous several years. However, the low stocks held by major exporters suggest that in the event of a major weather problem in any large rice consuming country, prices could rise rapidly since little surplus rice would be available to meet consumer needs. This chart is from the November 2015 Rice Outlook report.
Tuesday, December 1, 2015
Dietary changes in China have led to profound changes in its markets for agricultural products. China is now the world’s largest producer of livestock products as well as the largest manufacturer of animal feed. Commercial feed includes a variety of raw materials that can be altered depending on market conditions, but the predominant ingredients in China are corn and soybean meal. China is the world’s largest importer of soybeans, but the Chinese Government’s long-standing goal of self-sufficiency in grains has led to several policies aimed at supporting and expanding domestic corn production, resulting in China’s corn output doubling from 2000 to 2013. Corn output has surpassed that of wheat and rice, and became the country’s leading crop in 2012. In contrast, China’s domestic soybean output was relatively flat throughout this period and declined to under 12 million metric tons in 2013. While import restrictions and price supports succeeded in expanding corn production, those policies also led to large corn surpluses held in government stocks at prices well above world prices. This chart is from Development of China’s Feed Industry and Demand for Imported Commodities, November 19, 2015.
Friday, October 2, 2015
Over the last 5 years, the role of Brazil and Ukraine as suppliers of global corn markets has expanded rapidly, and in 2013/14 Brazil and Ukraine became the largest corn exporters after the United States. For both countries, technical developments over the last decade, coupled with a period of relatively strong world corn prices, supported a rapid increase in area dedicated to corn. In Brazil, shorter-maturing varieties allowed corn to increasingly be grown as a second crop after soybeans, instead of as a main crop in competition with soybeans. In Ukraine, corn production expanded and shifted northward, again aided by shorter-season high-yielding varieties. While global corn prices have fallen over the past few years, the exchange rate for Brazil and Ukraine has also devalued, offsetting much of the price decline. This chart is from the September 2015 Feed Outlook report.
Tuesday, September 29, 2015
Although 2015 fed steer supplies remain historically small, prices have recently fallen from the record high levels reached during the first and second quarters of 2015. Prices have been trending lower since April 2015, and in July and August fell below the levels of the same time a year ago. The recent decline in fed steer prices is driven by negative margins faced by packers during the summer months. As a result, slaughter data suggests packers may have slowed the pace of slaughter to improve their margins, subsequently driving fed steer prices lower. A continued reluctance of packers to expand their slaughter could put further downward pressure on the price of these cattle in the months ahead, especially if it creates a backlog of fed steer supplies into the fourth quarter, when demand typically shifts away from grilling items to traditional holiday items such as turkeys and hams, easing wholesale beef prices. This chart is from the September 2015 Livestock, Dairy, and Poultry report.
Thursday, September 17, 2015
During the surges in world agricultural and food prices over 2006-12, many countries restricted agricultural exports by implementing taxes, quotas, or complete export bans. Taxing exports is a longstanding practice among many countries. An ERS analysis of reports by the World Trade Organization found that from 1995 to 2014, 74 countries and trading blocs (out of 121 that were reviewed) applied export taxes for products such as agricultural goods, fishery/forestry products, and minerals/metals, with 58 of these countries taxing at least one agricultural product. Reasons to tax exports include obtaining revenue, supporting the domestic processing sector by reducing the price of raw materials, and—if the exported good is a food product—benefiting domestic consumers and improving the country’s food security. For countries that are important suppliers to world markets, export taxes can lead to higher prices worldwide due to the reduced volume of exports resulting from the tax, thus benefitting competing suppliers while hurting foreign consumers. The chart is based on the report Alternative Policies to Agricultural Export Taxes That Are Less Market Distorting, ERR-187.
Monday, August 31, 2015
Thailand’s 2015/16 rice production (January/December marketing year) is forecast down 4 percent from last year and will be the lowest since 2004/05. The production decline is due to a second consecutive year of drought and resulting low reservoir levels. Planted area is forecast to fall to 10.2 million hectares for 2015/16, down from 10.92 million in 2013/14, before the current drought began; yields have dropped as well. The USDA area forecast was lowered in August based on Government statements informing growers that they will receive only 50 percent of normal dry-season irrigation water due to the low reservoir levels. In addition to less-than-adequate rainfall in 2014, less-than-normal rainfall at the beginning of the 2015 monsoon season in the central growing region in May and June also contributed to the low reservoir levels. This is the second consecutive year of a drought-reduced rice crop in Thailand. Thailand is typically the largest or near-largest rice exporting country, but exports for the 2015 calendar year are forecast about 18 percent below last year. Exports are forecast to rebound in 2016, but continued low reservoir levels and limited availability of irrigation water could impact the upcoming crop and export prospects. This chart is from the August 2015 Rice Outlook report
Wednesday, August 26, 2015
The U.S. domestic wholesale prices of nonfat dry milk (NDM) have declined from a record high of $2.090 per pound in March 2014 to $0.837 per pound in July 2015, the lowest price since May 2009. International export prices for skim milk powder (SMP) are also declining, reaching $0.792 per pound in July for Oceania and $0.851 per pound for Western Europe. Since the U.S. market for NDM is highly dependent upon exports (52 percent of production was exported in 2014), domestic prices track closely with international prices. The domestic wholesale price for dry whey, which is also highly dependent upon exports, fell from 42.5 cents in June to 39.4 cents in July, the lowest level since January 2011. Domestic prices for butter and cheese have not fallen as much since those markets are not as dependent upon exports. The declining prices reflect weak global demand, particularly from China, and the Russian import ban on dairy products from major producers. With lower dairy product prices, milk prices are also declining, with the all-milk price currently forecast to average $16.75-$16.95 per hundredweight in 2015, down from an average of $23.97 in 2014. This chart is from the August 2015 Livestock, Dairy and Poultry Outlook report.
Thursday, August 20, 2015
Meat consumption is correlated with income around the world, and the Middle East and North Africa (MENA) region is no exception. While income levels vary widely across the region, income growth continues to outpace the world average with implications for MENA’s future meat demand, particularly poultry. Per capita meat consumption has more than doubled from around 12 kilograms (kg) in the 1990s to about 24 kg in 2010, and USDA’s Baseline Projections suggest this growth will continue well into the future. As with other commodities, the growth of poultry consumption has exceeded gains in domestic production, leading to rising imports, and MENA is now the largest regional importer of poultry products in the world. Domestic meat production is also growing rapidly; regional poultry production grew by nearly 5 percent annually from 2000 to 2011, leading to growth in demand for animal feeds, primarily corn and soybean meal. The chart is from Middle East and North Africa Region: An Important Driver of World Agricultural Trade.
Monday, August 17, 2015
India’s large and diverse agricultural sector is growing more rapidly than it was a decade ago, but per hectare yields of most major crops remain low by world standards despite generally good quality soils; ample, if highly seasonal, rainfall; and the largest irrigated area in the world. Of India’s major crops, only wheat—which is 93 percent irrigated—has average yields near the world average. India’s small scale-farm holdings—the average farm is 1.15 hectares—are often cited as a reason for slow adoption of yield enhancing technology. Another possible factor is the relatively low level of public investment in agricultural research, extension, and market infrastructure. However, private investment in Indian agriculture is now much larger than public investment and is credited with the development and adoption of Bt (Bacillus thuringiensis) cotton varieties and hybrid corn, the rapid growth of integrated poultry operations, and the still nascent development of modern food marketing and supply chains. USDA long-term projections for India suggest a continued gradual increase in major crop yields towards potential yields, but greater public and private investment could accelerate the rate of yield improvement. This chart is from the Amber Waves article "Food Policy and Productivity Key to India Outlook."
Thursday, August 6, 2015
Rice acreage for 2015 is estimated at 2.77 million acres, down 6 percent from last year and 5 percent from March planting intentions. Rice acreage is down in all major producing States, reflecting low prices—especially for long-grain varieties—as well as drought in California, a cool and wet spring across much of the South, and continued water restrictions in Texas. California is reporting the largest percentage decline (11 percent) in rice area, which is the lowest since 1991/92. The 2015 decline follows a 23-percent reduction in rice acreage last year. The large, multi-year declines in California rice area reflect 4 consecutive years of severe drought. Growers in Texas have also faced tightening water restrictions for the past 4 years, and 2015 acreage is down around 20 percent from pre-drought levels, leaving it with the smallest acreage of any rice-producing State. Arkansas—the largest rice-producing State—accounts for more than half of the decline in U.S. rice area this year, with a drop in acreage of more than 6 percent. Arkansas produces both long-grain and medium-grain rice; low prices and unfavorable weather are behind a 9-percent decline in long-grain plantings, while medium-grain plantings in Arkansas increased 25,000 acres (12 percent) this year due to the expectation of favorable prices caused by California’s medium-grain shortfall. Louisiana and Mississippi are also reporting declines in rice acreage this year. This chart is from the July 2015 Rice Outlook report.
Wednesday, July 22, 2015
The Middle East and North Africa (MENA) region accounts for a significant and growing portion of worldwide food and feed imports. Expansion of the region’s livestock sector—particularly poultry—has boosted demand for feed, driving steady growth in corn consumption over the past 20 years. Given the disparity between MENA’s limited corn production capacity and its growing demand for livestock feed, corn imports have steadily risen, except for a temporary drop in 2009 associated with the spike in global food prices. The U.S. share of the region’s corn imports has declined from about 70 percent during the mid-1990s to around 10 percent in recent years, the result of reduced U.S. exportable surpluses, higher U.S. prices following the 2012 U.S. drought, and increased competition from other suppliers. Major U.S. competitors in the MENA corn market include Ukraine and Russia, which enjoy transport cost advantages to the MENA region, but can experience frequent weather-induced fluctuations in production. The leading destinations of MENA-bound U.S. corn are Saudi Arabia and Egypt. The chart is from Middle East and North Africa Region: An Important Driver of World Agricultural Trade, AES-88.
Friday, June 26, 2015
World raw sugar prices have fallen steadily since January 2011, and in May 2015 reached their lowest point since January 2009 due to growing production surpluses and the weakening Brazilian currency. U.S. raw sugar prices have also fallen relative to the record-high levels seen between 2010 and 2012, but have trended higher over the past year. Since the integration of U.S. and Mexican sweetener markets under NAFTA in 2008, U.S. and world prices had tracked more closely. However, those prices began diverging in March 2014 when the U.S. domestic sugar industry filed an anti-dumping and countervailing duty investigation against Mexican sugar imports, resulting in a December 2014 agreement that limits the volume of Mexican sugar entering the United States. With these new limitations on Mexican imports, the spread between U.S. and world prices has increased in recent months, though remains within ranges seen in recent years. This chart is based on the June 2015 Sugar and Sweeteners Outlook.
Wednesday, June 3, 2015
Global rice prices have fallen more than 14 percent over the past 8 months, recently hitting their lowest level since January 2008. Thailand’s global benchmark price was $389 per ton for the week ending May 18, down from $455 in late September; U.S. rice prices have declined at about the same rate. Several factors have contributed to this steep decline: the Government of Thailand selling its record high stock of rice; continued abundance of exportable rice, despite a smaller global rice crop and lower global ending stocks in 2014/15; and the appreciation of the U.S. dollar, which has put downward pressure on global rice prices, since rice is typically traded in dollars. Meanwhile, low oil prices have reduced the buying capacity of several major importers, especially Venezuela and several Middle Eastern buyers, and none of the major Asian rice importers—Indonesia, the Philippines, or Bangladesh—have experienced a crop shortfall that would boost imports. This chart is based on the report, Rice Outlook: May 2015.
Friday, May 29, 2015
Broiler shipments were down 4.1 percent in March 2015 from a year ago. The 603 million pounds shipped was higher than had been expected, given Highly Pathogenic Avian Influenza (HPAI) related national and regionalized trade bans and a stronger dollar. Exports declined in January and February by 12.4 and 17 percent from a year ago, respectively, due to national bans imposed by China, South Korea, and Russia and regionalized bans imposed by a majority of trading partners; however, declining prices, particularly for leg quarters, led to greater shipments into other markets as low prices offset the impact of a stronger currency. The largest gains in shipments were to Asian markets including Taiwan (up 186 percent), Hong Kong (up 58 percent), and Vietnam (up 115 percent). Shipments also increased to Mexico and Canada. For all of 2014, U.S. broiler exports reached 7.304 billion pounds, and USDA currently forecasts 2015 exports of 6.680 billion pounds, down 7.2 percent from 2014, reflecting the bans in place by Russia, South Korea, and China, as well as the continuing strength of the U.S. dollar. This chart is from the May 2015 edition of the Livestock, Dairy and Poultry Report.
Tuesday, May 26, 2015
U.S. production of fresh vegetables has grown over the past several decades, but domestic consumption has grown even faster, reflecting an expanding population and higher per capita use. The United States has been a net importer of fresh vegetables since 1969 (with the exception of 1981), and the rate of increase of the share of imports grew notably after 1990. Since 2010, approximately 25 percent of the fresh vegetable supply utilized in the United States has been imported each year. The value of fresh vegetable imports exceeded exports by almost $4.3 billion in 2014. The share of imports in domestic use continues to grow in response to multiple factors, including supply gaps, increased awareness of vegetables as a part of healthy diets, desire for year-round variety of fresh vegetables, and increased demand for new products. Exports have remained a relatively small share of U.S. fresh vegetable production. Average volume exported as a share of production peaked in the 1990s and the share exported to all countries fell approximately 3 percent in 2014 compared to the previous year. Onions and lettuce continue to dominate fresh vegetable exports. This chart is based on the Vegetables and Pulses Outlook: May 2015.
Wednesday, May 20, 2015
U.S. sweet potato production reached a record high 29 million hundredweight (cwt) in 2014, extending production gains that have continued for more than 15 years. Since 1971, North Carolina has been the top sweet potato producer in the United States, and in 2014 it produced 53 percent of all sweet potatoes grown in the country. North Carolina’s production of sweet potatoes in 2000 was 5.6 million cwt, and by 2014 it had had expanded to 15.8 million cwt. The 185-percent increase in North Carolina’s production has led the growth of the U.S. sweet potato industry, but production has expanded in many other states, including California (where production has doubled since 2000) and Mississippi (where production is up by 155 percent). This chart is from the Vegetables and Pulses Outlook: May 2015.
Thursday, April 30, 2015
Exports of U.S. dairy products have been strong over the past decade, growing from 1.95 billion pounds in 2005 to nearly 5 billion pounds in 2014. However, over the past 9 months, exports have softened considerably, falling from 464 million pounds in May 2014 to below 340 million pounds in February 2015. Much of the reduction in export volume can be attributed to lower demand by China. Chinese imports of milk powders surged in late 2013 and early 2014, reflecting tight domestic supplies due to herd reductions, stricter regulations on dairy/infant formula production, and strong consumer demand. China turned to the United States and the European Union to supply growing volumes of skim milk powder, while New Zealand increased output of whole milk powder. By mid-2014, China scaled back purchases of milk powders due to growing inventory, slowing economic growth, and an upsurge in China’s domestic milk production. In addition, U.S. dairy exports have been hampered by the strong exchange rate value of the dollar and flagging international demand for milk powders in general. This chart is based on Livestock, Dairy and Poultry Outlook, LDPM-250, April 2015.
Tuesday, April 28, 2015
The spread, or difference, between the Choice beef cutout and pork carcass value can indicate the relative demand for red meat proteins at the wholesale level. Likewise, the spread between wholesale Choice beef and pork cutout values—the value of a carcass based on the wholesale prices for the various cuts of meat and other items contained in the carcass—is important to the retail sector. The rapid rise in beef prices and significant decline in pork prices since the beginning of 2015 has widened the spread between the two competing meats to $190/cwt (as of April 24). The choice beef-to-pork ratio sits at 3.77, implying that wholesale beef is being priced nearly four times higher than pork. Most retailers are sensitive to price changes at the wholesale level and choose to feature meat items that provide a good value to consumers while ensuring profitable margins. At current prices, consumers are likely to favor more pork in their diet and less beef. Retail beef prices are expected to remain high throughout the calendar year due to constrained beef production. This chart appears in the cattle and beef section of the April 2015 Livestock, Dairy and Poultry Outlook, LDPM-250.
Friday, April 24, 2015
After Vietnam joined the Association of Southeast Asian Nations (ASEAN), its agricultural trade within the 10-member regional trade bloc expanded. The normalization of trade with the United States in 2001 and WTO accession in 2007 also provided catalysts for growth and integration. Subsequent preferential trade agreements (PTAs) have led to tariff reductions that have only recently begun to take effect. Today, Vietnam’s agricultural trade is still led by trade with its ASEAN partners; however, China has become a major export market and Vietnam’s largest trade partner, while the United States is a close second, and also the largest source of imports. Trade growth with both partners has been significant, growing 7- and 10-fold, respectively, while imports from South America have also grown. The Trans-Pacific Partnership (TPP) agreement, now under negotiation, is viewed as important to Vietnam’s long-term economic strategy as it could potentially secure markets abroad and facilitate the flow of foreign investment. Vietnam seeks greater access for its textile and footwear industry, while exporting countries, including the United States, see Vietnam as a market with growth potential. This report is from the Amber Waves article, “Japan, Vietnam, and the Asian Model of Agricultural Development and Trade.”
Friday, April 17, 2015
Global ending stocks of most agricultural commodities, including feedgrains, oilseeds, wheat, and cotton are expected to reach multi-year highs in 2015. Ample supplies are reflected in prices that are well below the record levels of just a few years ago. Rice is an exception, with global ending stocks projected to decline for the second year in a row to reach their lowest level since the 2009/10 marketing year (August/July). At the same time, global use continues to grow, led by consumption growth in China, India, Bangladesh, the Philippines, and several other nations. As a result, the global stocks-to-use ratio is projected at just over 20 percent, the lowest it has been since 2007/08, a time when international concern over high commodity and food prices led several of the world’s leading rice producing and consuming countries to restrict exports and increase government-owned rice reserves. These actions resulted in a rapid rise in global rice prices and reduced trade. Today, even though global stocks are approaching levels that prompted substantial trade restrictions in early 2008, prices are lower and global rice trade remains at near-record levels. This chart is from the April 2015 Rice Outlook.