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Record acreage and high yields raise U.S. peanut harvest to an all-time high

Tuesday, December 12, 2017

Peanuts are expected to be especially plentiful in the 2017/18 marketing year, as record acreage of planted peanuts and high yields per acre are on track to produce the largest peanut harvest of all time. If realized, the 7.6 billion pounds of peanuts expected would exceed the previous record of 6.7 billion pounds in 2012. The 2017 forecast predicts a significant change from 2016 with 37 percent more peanuts produced. The projected growth is due to a 15-percent increase in yield per acre and a 19-percent increase in acreage harvested. The record production will likely mean a significant increase in peanut exports, which had already doubled since 2011. At the State level, record high yields are forecast in Georgia, Mississippi, and South Carolina. If realized, production in Georgia and South Carolina will be the highest on record. Georgia is the largest producer of peanuts in the United States and is responsible for growing roughly 50 percent of all the country’s peanuts. This chart is drawn from the ERS Oil Crops Outlook, released in November 2017.

Peanut supplies may surge with a fourth consecutive acreage increase

Friday, August 4, 2017

Peanuts have always been a popular American food item, from peanut butter and jelly sandwiches to baseball stadium snacks. But not since 1991 have there been more acres of peanuts planted in the United States as there are now. The 1.8 million acres planted for the 2017/18 marketing year is the third highest on record. Since 2014, planted acreage has increased each year, after mostly trending downward for over 20 years. During that time, production did not fall due to increasing yields per acre, allowing farmers to dedicate less land to peanuts while maintaining steady output. The growth in acreage over the past 4 years has led to a sharp increase in the amount of peanuts on the market. If expectations are met, the 2017/18 peanut crop is expected to reach 6.45 billion pounds. This would only rank behind the 2012/13 record harvest of 6.75 billion pounds. Much of these gains have led to an increase in U.S. peanut exports, which have doubled since 2011. This chart is drawn from the ERS Oil Crops Outlook newsletter released in July 2017.

South American countries often exported their soy products to Asia and European Union

Thursday, June 29, 2017

To meet the increasing demand for agricultural commodities, forestland is frequently converted into crop fields or pasture, especially in developing countries. For example, deforestation in Argentina, Bolivia, Brazil, and Paraguay is linked with the production of soybeans (and beef). However, the majority of soybean production in these countries is consumed elsewhere, especially in China, the rest of Asia, and the European Union. Brazil and Argentina, the largest Latin American producers, exported an average of 67 percent of their soy production outside of South America. By contrast, the United States consumed 50 percent of its production and exported 44 percent of its production outside of North America. The soy product exported varied with the country. For example, Argentina exported about 8 million tons of soybeans and 22 million tons of soybean meal; by comparison, Brazil exported about 43 million tons of soybeans and 13 million tons of soybean meal. This chart appears in the ERS report International Trade and Deforestation: Potential Policy Effects via a Global Economic Model, released April 2017.

Contrasting area planted records projected for soybeans and wheat

Monday, May 1, 2017

The latest projections for crop area plantings in 2017 indicate contrasting records for soybeans and wheat. Soybean plantings for 2017 are projected to reach 89.5 million acres, a new record-high. In contrast, forecast wheat plantings of 46.1 million acres would be a record low, if realized. Taken together, these planted area projections indicate that many farmers are switching from wheat to soybean production in several key wheat-growing States, including Kansas, Michigan, Nebraska, North Dakota, Oklahoma, South Dakota, and Texas. Since 2011, soybean acreage in these seven States has expanded by one-third, while wheat area has contracted. Farmers are likely responding to the higher prices and potential returns associated with soybeans, after multiple years of wheat prices trending lower. For the 2016/17 marketing year, the projected midpoint season-average farm-gate price for soybeans was $9.55 per bushel, slightly higher than the 2015/16 average of $8.95 per bushel. The all-wheat price for the 2016/17 marketing year is projected at $3.85 per bushel, more than a dollar below the 2015/16 season-average price and the lowest since 2005/06. This chart appears in the ERS Wheat Outlook report released in April 2017.

Domestic use of canola, corn, and palm oil growing at a faster rate than soybean oil

Tuesday, April 11, 2017

In 2016, soybean oil dominated the domestic use of edible oils and fats. Just over 50 percent of oil usage that year was sourced from soybeans. Interestingly, this is the lowest share of domestic use for soybean oil since at least 2003. Additional edible oils have grown in usage over this period. Canola, corn, and palm oils have each grown at a faster rate than soybean oil. Since 2011, canola, corn, and palm oil usage has grown 66, 57, and 21 percent, respectively. Over the same period, soybean oil use increased by 11 percent. The growth in canola oil consumption can be partially attributed to the thriving Canadian industry, which is the third largest producer in the world. The United States imported 1.9 million metric tons of canola oil from Canada in 2016, nearly half of the country’s total production. The growth of corn oil has been the result of expanded oil extraction from corn distillers grains and is likely primarily used for biodiesel fuel production. Global palm oil production has nearly doubled over the last 10 years and has resulted in a much larger export market, which has contributed to growing U.S. imports. Low prices at the wholesale level may help explain the appeal of canola and palm oil relative to other oils, but soybean oil remains the most price competitive. This chart is drawn from data in the annual ERS Oil Crops Yearbook tables updated in March 2017.

Oilseed prices continued downward trajectory in the 2015/16 marketing year

Monday, January 30, 2017

Oilseeds like soybeans, canola, and peanuts are strong substitutes for one another, particularly when used to produce cooking oils. As a result of their substitutability, their prices often move in similar directions. The rise in one oilseed’s price typically drives up the price of its alternatives. For example, if the price of soybeans increases, alternative oilseeds, like canola, would be more attractive to buyers. Subsequently, the price for canola would likely increase too. Prices for all major oilseeds have been moving steadily downward since peaking between 2011 and 2013. Data from the 2015/16 marketing year show that oilseed prices haven’t been this low since at least 2009/10. The price reduction for farmers is largely attributed to record domestic and global production of soybeans, peanuts, and other oilseeds in recent years. This chart is drawn from data discussed in the latest Oil Crops Outlook report released in January 2017.

Record yields driving soybean production gains

Wednesday, October 26, 2016

In October, USDA raised its 2016/17 forecast of the U.S. average soybean yield to a record 51.4 bushels. Coupled with a harvested acreage estimate of 83 million acres, the higher yield boosts forecasted soybean production by 68 million bushels to 4.3 billion. The largest production gains are due to higher acreage and yield indications for North Dakota, South Dakota, and Illinois. These increases more than offset reductions in acreage and production for Minnesota, Iowa, and Tennessee. The 4.3 billion bushel forecast would be a record for U.S. production, while 2014/15 and 2015/16 production would become the second and third highest harvests, respectively. Much of the production gains are attributable to significant gains in yields which have increased from 38.1 bushels per acre in 2000/01 to 48 bushels per acre in the 2015/16 marketing year. Growing conditions for soybeans this year were nearly ideal. Spring planting for soybeans proceeded without any major delays. During the summer growing season, the Midwestern soybean-growing region benefited from much-above-average rainfall and there were no prolonged dry or hot spells to stress crops. Gains in production are leading to higher forecasted ending stocks and increases in exports, reducing downward pressure on domestic soybean prices. This chart uses data from the ERS Oil Crops Yearbook dataset and the ERS Oil Crops Outlook report released in October 2016.

Contract changes improve convergence of futures and cash prices for soft red winter wheat

Thursday, September 1, 2016

Futures markets play an important role in price discovery (determination of prices through the interaction of market supply and demand) for major agricultural commodities, and provide a tool for growers, traders, and processors to mitigate risk. For futures markets to perform these functions effectively, the price of a commodity held in a futures contract must match (or ?converge?) with its price in the cash?or spot?market when the futures contract expires.? During 2005-2011, cash and futures prices for soft red winter (SRW) wheat failed to converge to the generally acceptable ?basis??or difference between the cash price and futures price?of plus or minus $0.10/bushel. At times the basis exceeded $1.00/bushel.? In response, the futures exchanges modified their SRW contracts to better align contract terms with changes occurring in cash markets for factors including storage rates, major delivery locations for SRW, and quality specifications. Following these changes, cash and futures market prices for SRW have moved closer together, improving the effectiveness of futures contracts in determining prices and as a tool to manage risk. This chart is based on Recent Convergence Performance of Futures and Cash Prices for Corn, Soybeans, and Wheat, FDS-13L-01, released December 30, 2013.

Mixed picture for recent returns to production of U.S. field crops

Thursday, September 1, 2016

Estimates of U.S. crop returns per acre reveal large differences in crop profitability across commodities and over time during 2010-13. Returns to crop production are defined as the gross value of production less total economic costs. Total economic costs include operating costs such as seeds, fertilizer, and pesticides; the capital recovery cost for machinery and equipment; and the costs?known as opportunity costs?of employing land, labor, capital and other owned resources that have alternative uses. While returns to total economic costs for corn, soybeans, rice, and peanuts were positive, on average, for the 2010-13 period, average returns for other major crops were negative.? For most crops, changes in farm prices and the gross value of production per acre, rather than changes in production costs, have driven returns to total economic costs. Lower prices contributed to reduced returns for corn, soybeans, wheat, sorghum, and peanuts in 2013, while price and yield increases improved returns for oats and rice.? The negative returns over total economic costs for some crops indicate that that those producers realized a lower rate of return to their land, labor, and capital than the benchmark rates of return used in ERS commodity cost and returns accounts; returns over operating costs alone were positive for all crops throughout the period.? This chart is based on data found in Commodity Costs and Returns.

Record soybean crop forecast to restore U.S. role as leading global exporter

Thursday, September 1, 2016

With the 2014/15 (September/August marketing years) soybean production forecast at a record 103.4 million metric tons (3.8 billion bushels), the United States is expected to reclaim the role of leading global soybean exporter that it lost to Brazil in 2012/13. A record harvested area of 84.1 million acres is expected to enhance U.S. price competitiveness and boost U.S. soybean exports to a record 45.6 million metric tons (mmt). U.S. soybean meal and oil exports are also expected to increase, with soybean meal shipments abroad forecast to edge up to 10.66 mmt in 2014/15 from 10.57 mmt this year, and soybean oil exports could reach 0.95 mmt, up from 0.77 mmt in 2013/14. If achieved, the plentiful US supplies will drive farm prices lower.? USDA forecasts the U.S. average farm price for soybeans in 2014/15 to fall within a range of $9.50-11.50 per bushel, down from an estimated $13.00 per bushel in 2013/14. ?The last time the U.S. farm price for soybeans averaged below $12.00 per bushel for a crop year was in 2010/11 when it reached $11.30 per bushel, a record at the time.? Find this chart in the Oil Crops Chart Gallery, with additional analysis in the Oil Crops Outlook: July 2014.

U.S. soybean shipments to China increase with record U.S. crop

Thursday, September 1, 2016

The large 2014/15 (September/August) U.S. soybean crop?18 percent above the previous record?has led to a record pace for U.S. soybean export sales commitments, including sales to China, the largest U.S. market for soybeans. The 2014/15 U.S. soybean crop is estimated at 107.7 million tons and total marketing year exports are forecast at a record 47.9 million tons. Cumulative export shipments have accelerated this fall, with record U.S. export inspections of soybeans in October and again in November. China accounts for most of the gains with 72 percent of U.S. export shipments to date, although substantial gains have been seen for other importers, including the EU, Turkey, and Taiwan. Actual U.S. export shipments are now growing faster than export sales and due to this robust pace, future ?shipments could moderate without another round of new sales. Even with the outlook for record U.S. exports, the large U.S harvest, coupled with expected record Brazilian and Argentine harvests, is forecast to lead to a 23-percent decline in the U.S. farm price of soybeans to about $10/bushel for 2014/15. Find additional analysis in Soybeans and Oil Crops Outlook: December 2014.

U.S. soybean prices drop then rebound on changing new-crop outlook

Thursday, September 1, 2016

Last month, U.S. cash prices for soybeans fell under the pressure of a new-crop outlook that is much improved over last year, combined with prospects for increased competition in export markets for soybeans and products because of abundant unused stocks in South America. The market?s transition also encouraged farmers to sell more of their last few stocks of old-crop soybeans, which added to the downward price momentum. In early July, cash prices at central Illinois country elevators were near $16 per bushel but were just over $13 by early August. But prices have now rebounded since USDA?s August 12 crop production report, which included a soybean yield forecast that was below market expectations. At $10.35-$12.35 per bushel, USDA?s forecast range for the 2013/14 average farm price is well below this year?s average of $14.40 per bushel. Cash prices for soybean meal and soybean oil are also lower. From its mid-July peak, central Illinois soybean meal prices dropped about $150 per short ton by early August to around $425 per short ton. Likewise, soybean oil prices in early July were close to 47 cents per pound but currently hover just over 41 cents per pound. This chart appears in the Oil Crops Chart Gallery.

Edible oil prices converge, contributing to substitution by importers

Thursday, September 1, 2016

Palm oil accounts for the largest share of global edible oil trade and is typically the lowest priced of the major edible oils, accounting for a large share of purchases by developing importing countries such as India and China. Since late 2013, however, edible oil prices have converged, triggering substitution of other major oils for palm oil by importers and creating opportunities for the United States and other major soybean oil exporters.? In India, the world?s largest importer of edible oils, imports of competing oils have expanded as their price gap with palm oil has narrowed. Prices for palm oil delivered to Mumbai are currently $35-$75 per metric ton cheaper than soybean oil and sunflowerseed oil, down from $200-$300 a year ago. Reduced shipments by Indonesia and Malaysia, the 2 major palm oil exporters, are largely responsible for higher palm oil prices. Indonesia?s supplies are being siphoned off by higher blend requirements for domestic biodiesel consumption. In Malaysia, palm oil output has stagnated while domestic use has strengthened, leading to a decline in palm oil stocks. Find additional analysis in Oil Crops Outlook: April 2014.

Brazil expected to surpass the United States in soybean production in 2013/14

Thursday, September 1, 2016

Brazil is forecast to surpass the United States as the world?s largest soybean producer for the first time in 2013/14 (September/August), the result of dry U.S. weather and prospects for continued price-driven expansion in Brazilian plantings.? For 2013/14, U.S. soybean yields are now forecast at 41.2 bushels/acre, down from the previous forecast of 42.6 bushels but still above the 2012/13 drought-damaged yield of 39.6 bushels.? Dry weather in the U.S. Midwest during August led USDA to cut soybean yield forecasts for 13 States, with the largest reductions in Missouri, Iowa, North Dakota, and Minnesota.? The dimmer outlook for U.S. production has increased global soybean prices, making soybeans even more price-competitive with other crop alternatives. In Brazil, prices faced by producers have also been reinforced by currency depreciation versus the U.S. dollar, with Brazil?s real falling 17 percent against the dollar since April 2013. Brazil?s farmers will soon begin planting the 2013/14 soybean crop, with funds on hand from last year?s bumper harvests and facing attractive prices. Brazil?s 2013/14 soybean area is forecast to rise 4 percent to 28.9 million hectares, with production growing to a record 88 million tons?up 6 million from the 2012/13 crop of 82 million tons. This chart can be found in the Oil Crops Chart Gallery with analysis in the Oil Crops Outlook: September 2013.

Global soybean market outlook turns toward Brazil's large impending crop

Thursday, September 1, 2016

Although robust demand has recently supported soybean prices, the 2013/14 (October/September) soybean market outlook now hinges on the impending large crop forecast in Brazil, the world?s second-largest producer after the United States. The Brazilian forecast indicates a widening gap between soybean production and total use (crush plus exports), which may signal lower prices ahead. High prices are contributing to increased soybean area in Brazil, leading USDA to raise its 2013/14 soybean production forecast for Brazil to 89 million metric tons. The new forecast is up 1 million tons from the previous forecast, is well above last year?s record crop of 82 million, and is nearly equal to this year?s U.S. harvest of 89.5 million. Although abundant rainfall has created favorable growing conditions for Brazil?s 2013/14 soybean crop, the yield forecast is unchanged this month, with another 8-10 weeks of good weather needed if yields are to match or surpass the country?s 2010/11 yield record. While part of the increase in Brazilian supplies is expected to boost the country?s 2013/14 soybean crush and exports, the current outlook indicates a substantial increase in stocks.? This chart can be found in the Oil Crops Chart Gallery, with supporting analysis in Oil Crops Outlook: January 2014.

Ukraine an important exporter in several agricultural markets

Thursday, September 1, 2016

Over the last 15 years, Ukraine has emerged as a major supplier to world markets for several agricultural commodities, including wheat, corn, sunflower oil, and rapeseed.? Wheat is a traditional export, with annual shipments varying with crop size. For 2013/14 (July/June marketing year), Ukraine?s wheat exports are forecast at 10 million tons, or about 6 percent of world wheat trade.? During the last decade, Ukraine?s corn production and exports have expanded, with 2013/14 (October/September) exports forecast at 18.5 million tons, making Ukraine the world?s third-largest corn exporter.? Robust production growth is also behind Ukraine?s emergence as the world?s dominant supplier of sunflowerseed oil, with 2013/14 (September/August) exports forecast at nearly 4.1 million tons, or about 57 percent of global trade.? Ukraine has also become a significant exporter of rapeseed, with 2013/14 (July/June) exports forecast at about 2.2 million tons, or 16 percent of world trade. Despite recent political developments in Ukraine, so far there is no evidence of significant shipping disruptions that might alter the 2013/14 Ukraine export forecasts. Find additional analysis Wheat Outlook: March 2014, Feed Outlook: March 2014, and Oil Crops Outlook: March 2014.

Herbicide-tolerant (HT) soybean growers more likely to practice conservation tillage

Thursday, September 1, 2016

By leaving at least 30 percent of crop residue covering the soil surface after all tillage and planting operations, conservation tillage (including no-till, ridge-till, and mulch-till) reduces soil erosion, increases water retention, and reduces soil degradation and water/chemical runoff. Conservation tillage also reduces the carbon footprint of agriculture. By 2006, approximately 86 percent of land planted with herbicide tolerant (HT) soybeans was under conservation tillage, compared to only 36 percent of conventional soybean acres. Differences in the use of no-till were just as pronounced. While approximately 45 percent of HT soybean acres were cultivated using no-till technologies in 2006, only 5 percent of the acres planted with conventional seeds were cultivated using no-till techniques, which are often considered the most effective of all conservation tillage systems. Cotton and corn data exhibit similar, though less pronounced, patterns. This chart is found in ?Adoption of Genetically Engineered Crops by U.S. Farmers Has Increased Steadily for Over 15 Years? in the March 2014 Amber Waves online magazine.

U.S. farm prices of major field crops are forecast to decline for 2014/15

Thursday, September 1, 2016

Current USDA forecasts show declines in U.S. average farm prices for major U.S. field crops?corn, soybeans, wheat, and cotton?of 4 to 19 percent in 2014/15. For corn, soybeans, and wheat, this would be the second consecutive year of declining prices. Soybean prices are forecast to decline the most in 2014/15, based on an expected record U.S. crop, combined with ample supplies from Brazil and Argentina. U.S. corn prices are forecast to fall 10 percent in 2014/15, after a 35-percent decline in 2013/14, also based on a large U.S. corn crop forecast and competition from other exporters like Brazil, Argentina, and Ukraine. U.S. wheat prices are forecast to decline about 4 percent in 2014/15, despite the forecast for smaller U.S. supplies, due to adequate supplies from both traditional and Black Sea wheat exporters. Although smaller cotton crops are forecast for China and India?the top two global producers?a larger U.S. crop is expected to lead to a fifth consecutive year of rising global cotton stocks and a 12-percent drop in U.S. prices in 2014/15. Find additional analysis in the current ERS outlook newsletters: Feed Outlook: July 2014, Oil Crops Outlook: July 2014, Wheat Outlook: July 2014, and Cotton and Wool Outlook: July 2014.

Global stocks of major crops rising

Thursday, September 1, 2016

Global stocks of major crop commodities are forecast to expand in the 2014/15 marketing year, with total stocks of wheat, rice, corn, and soybeans completing recovery from the relatively low levels that preceded the 2008 spike in world crop prices. Record U.S. crops of corn and soybeans, along with good harvest by some other major producing countries, are forecast to push both U.S. and global stocks of these commodities to record levels. World wheat stocks are forecast to rise based on the outlook for record or near-record harvests by major foreign producers, including China, the EU, India, and the Former Soviet Union. While world rice stocks are forecast below peak levels of the early 2000s, good harvests and ample stocks are expected across the major producing regions in Asia. The supply outlook is expected to lead to lower commodity prices, with the average U.S. farm prices of corn (-24 percent), soybeans (-23 percent), wheat (-14 percent), and rice (-10 percent) all forecast down in their respective 2014/15 marketing years compared with 2013/14. Find additional analysis in the current editions of Feed Grain Outlook, Oil Crops Outlook, Wheat Outlook, and Rice Outlook.

Export sales commitments to China drive U.S. soybean export market

Thursday, September 1, 2016

USDA has raised the 2013/14 (September/August marketing year) U.S. soybean export forecast to 39.5 million tons based on improved U.S. supplies and robust early season export sales commitments. As of October 31, 2013 U.S. export sales of soybeans already totaled 32.2 million tons?a record high for that date. Brisk sales to China are the main contributor to the strong pace, accounting for 71 percent of cumulative export inspections during September-October. Just over 2 months into the new marketing year, soybean sales commitments to China are already 98 percent of all sales during 2012/13. Importers are shifting their purchases toward U.S. soybeans as export shipments from Brazil and Argentina are in a seasonal decline, and U.S. Gulf soybean prices are comparatively cheaper than Brazil?s. Early season export sales of U.S. soybean meal are also unprecedentedly high because of declining shipments from South American and Indian processors, strengthening crush demand by domestic processors.? This chart can be found in the Oil Crops Chart Gallery, with accompanying analysis in Oil Crops Outlook: November 2013.

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