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  • Feed Outlook: January 2012

    FDS-12A, January 17, 2012

    The National Agricultural Statistics Service's Crop Production 2011 Summary and January Grain Stocks reports revealed larger than expected corn supplies this month. Feed grain production for 2011/12 is estimated at 323.5 million tons, up 0.4 million from last month as higher estimated corn production more than offset lower sorghum output. Feed grain ending stocks are forecast down 0.3 million tons to 23.8 million tons. Corn production is estimated 48 million bushels higher, with harvested acreage advanced 45,000 acres and the national average yield raised 0.5 bushels per acre. Projected 2011/12 corn ending stocks are lowered 2 million bushels, as a 50-million-bushel increase in exports more than offsets the larger supply. Ending stocks at 6.7 percent of projected usage will be the tightest since 1995/96. The projected season average prices are lowered for corn, sorghum, and barley. Global coarse grain production is up slightly as a sharp reduction in prospects for Argentina is offset by increases for Ukraine and other countries. Reduced Argentine exports and increased imports by China support increased U.S. corn exports. Foreign 2011/12 coarse grain ending stocks are forecast higher this month, up 3 percent from a year.

  • Estimating the Substitution of Distillers' Grains for Corn and Soybean Meal in the U.S. Feed Complex

    FDS-11I01, October 13, 2011

    Corn-based dry-mill ethanol production and its coproducts - notably distillers' dried grains with soluble (DDGS) - have surged in recent years. The report estimates the potential substitution of DDGS for corn and soybean meal in livestock feeding and the impact of substitution upon the U.S. feed complex.

  • Market Issues and Prospects for U.S. Distillers' Grains Supply, Use, and Price Relationships

    FDS-10K-01, December 09, 2010

    Growth in corn dry-mill ethanol production has surged in the past several years, simultaneously creating a coproduct-distillers' grains (DDGS). Many in the U.S. feed industry were concerned about the size of this new feed source and whether it could be used entirely by the feed industry, but they also worried about the price discovery process for the product. The authors of this report provide a transparent methodology to estimate U.S. supply and consumption of DDGS. Potential domestic and export use of U.S. DDGS exceeds current production and is likely to exceed future production as ethanol production continues to grow. The authors identify the DDGS price discovery process along with the price relationships of distillers' grains, corn, and soybean meal.

  • Feed Outlook: December 2009

    FDS-09K-01, December 14, 2009

    China's corn imports are minimal, even though it is using a growing proportion of its corn to produce starch, ethanol, and other industrial products. The corn-processing industry's growth was encouraged by Chinese government policy, but the industry now has excess capacity. Many of the corn-based industrial products are exported. China's price support for corn during 2008/09 increased raw material costs for the industry and slowed its growth.

  • Issues and Prospects in Corn, Soybeans, and Wheat Futures Markets

    FDS-09G-01, August 05, 2009

    The past 5 years have seen large increases in trading of corn, soybean, and wheat futures contracts by nontraditional traders, a trend that coincided with historic price increases for these commodities. These events have raised questions about whether changes in the composition of traders participating have contributed to movements in commodity prices beyond the effects of market fundamentals. Evidence suggests the link between futures and cash prices for some commodity markets may have weakened (poor convergence), making it more difficult for traditional traders to use futures markets to manage risk. This report discusses the role and objective of new futures traders compared with those of traditional futures traders and seeks to determine if the composition of traders in futures markets has contributed to convergence problems. Market activity is analyzed by focusing on positions of both traditional and new market traders, price levels, price volatility, and volume and open interest trends. Convergence of futures and cash prices is examined, along with implications and prospects for risk management by market participants. The report also discusses the implications for market performance and the regulatory response of the Commodity Futures Trading Commission.

  • Feed Outlook: April 2009

    FDS-09D01, April 01, 2009

    The byproducts of making ethanol, sweeteners, syrups, and oils used to be considered less valuable than the primary products. But the increased livestock-feed market for such byproducts in the past few years has switched that perception to one of the ethanol industry making grain-based "co-products" that have market value separate from the primary products. Co-products such as dried distiller's grains, corn gluten feed, corn gluten meal, corn oil, solubles, and brewer's grains have become economically viable components, along with traditional ingredients (such as corn, soybean meal, and urea), in feed rations.

  • Ethanol Expansion in the United States: How Will the Agricultural Sector Adjust?

    FDS-07D-01, May 18, 2007

    A large expansion in ethanol production is underway in the United States. Cellulosic sources of feedstocks for ethanol production hold some promise for the future, but the primary feedstock in the United States currently is corn. Market adjustments to this increased demand extend well beyond the corn sector to supply and demand for other crops, such as soybeans and cotton, as well as to U.S. livestock industries. USDA's long-term projections, augmented by farmers' planting intentions for 2007, are used to illustrate anticipated changes in the agricultural sector.

  • Feed Grains Backgrounder

    FDS-07C01, March 30, 2007

    The U.S. feed grain sector, largest of the major U.S. field crops, faces unprecedented demand conditions. The size and speed of the expanding use of corn by the ethanol industry is raising widespread issues throughout U.S. agriculture. Debate is ongoing over the use of grain for fuel instead of for food or feed and the adequacy of future grain supplies. Increased productivity (yield) and additional area from land planted to competing crops, land enrolled in conservation programs, or idled land is expected to provide an increased supply of feed grains. The outlook is for higher feed grain prices, in part, as a result of renewable energy policies and high energy prices, with feed grain prices rising above farm program support levels. During the ongoing farm policy debate, the U.S. feed grain sector faces uncertainty about the future level and type of government support.

  • Forecasting the Counter-Cyclical Payment Rate for U.S. Corn: An Application of the Futures Price Forecasting Model

    FDS-05A-01, January 28, 2005

    The 2002 Farm Act provides for counter-cyclical payments when prices are below specified levels. Producers and policy analysts have a need to forecast counter-cyclical payments to plan for these program benefits/outlays. A futures price forecasting model provides forecasts of the counter-cyclical payment rate for corn in conjunction with forecasts for the season-average price received.

  • Forecasting Feed Grain Prices in a Changing Environment

    FDS-04F-01, July 13, 2004

    Structural change has been occurring throughout the feed grains sector and has affected commodity markets and price forecasting relationships. Structural changes that have affected feed grains stem from government policy such as the 1996 Farm Act, international trade agreements such as NAFTA, and changing consumer preferences. A statistical test of structural change is provided along with price forecasting models for corn, sorghum, barley, and oats. The models provide a framework to forecast season-average, farm-level prices and gauge the consistency of supply, demand, and price forecasts.

  • Is China's Corn Market at a Turning Point?

    FDS-04C01, May 13, 2004

    Many analysts see signs that China's corn market is reaching the turning point in a decade-long cycle. China curtailed corn exports in calendar year 2004 and may begin to import corn during marketing year 2004/05. Reduced Chinese exports are also driving U.S. prices higher. Higher prices and increased shipping rates have kept U.S. corn out of the China market, but growing demand and limited production capacity will eventually make China a net importer of corn. China's reduction in exports will expand opportunities for U.S. exports.

  • U.S.-Mexico Corn Trade During the NAFTA Era: New Twists to an Old Story

    FDS-04D-01, May 01, 2004

    Although the growing U.S.-Mexico corn trade has changed significantly since the implementation of the North American Free Trade Agreement in 1994, it retains many of its pre-trade-liberalization characteristics. The majority of U.S. corn exports to Mexico still consists of yellow corn, which is primarily used as an ingredient in animal feed. From 1998 to 2002, the United States also exported to Mexico substantial quantities of white corn, which is used to make tortillas, but these exports have since diminished, possibly due to Mexican Government support for domestically produced white corn. The number of agricultural producers in Mexico declined substantially during the 1990s, but the Mexican corn sector still features a large number of small-scale producers, whose efforts are also supplemented by government payments. Broader access to U.S. yellow corn is fostering the expansion of hog and poultry production in Mexico, while Mexico's large flour companies are increasing their role in tortilla production, not only in Mexico but also in the United States.

  • China's Corn Exports: Business as Usual, Despite WTO Accession

    FDS-1202-01, December 12, 2002

    A decline in China's corn exports was expected to be a main effect of that country's accession to the World Trade Organization in December 2001. Instead, China's corn exports continued at a near-record pace during 2002. China has canceled direct export subsidies, but other policies have replaced them, although details of these new measures are not clear. This year's rising international prices have given an added boost to China's corn export program and delayed an expected increase in China's corn imports. In the long run, government policies that encourage exports may prove too costly to continue, and restructuring of China's corn and livestock sectors may reduce the flow of exports.

  • Livestock Feeding and Feed Imports in the European Union-A Decade of Change

    FDS-0602-01, July 02, 2002

    This report examines events and policy changes in the livestock sectors of the European Union during the 1990s and their impacts on trade in feedstuffs. Lower grain prices and a declining euro together with several animal disease epidemics resulted in significant increases in the feeding of grains and oilseed meals and a reduction in the feeding of nongrain feed ingredients.