USDA predicts higher meat and soybean, lower corn production in latest WASDE
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WASHINGTON, July 10, 2015 - The Department of Agriculture released the latest World Agricultural Supply and Demand Estimates (WASDE) today, projecting mixed returns in the grain sector but increased total meat production for the remainder of 2015 and the start of 2016.
This month's WASDE estimates an increase in wheat and soybean production, but lower corn, rice, sugar, and cotton production from 2015 to 2016. While its projection for total beef and turkey production for 2015 is lower, those losses are offset by projected increases in pork and broiler production. Milk production is also projected to increase."
USDA expects a 100 million bushel drop in corn production based on the June 30 USDA Acreage Report that found planted and harvested acreage for corn was down. Corn use is also projected to lower as a result of a 25 million bushel reduction in feed and residual use, higher expected supplies of distillers grains, and a higher price outlook. Exports of corn are expected to drop 25 million bushels due to increased competition from Brazil.
Ethanol use is expected to climb 25 million bushels, according to the Energy Information Administration's higher forecasts for 2015 and 2016 gasoline consumption. Corn ending stocks for 2015-2016 are projected to drop 172 million bushels, potentially pushing prices up 25 cents per bushel.
Soybean production is projected at 3.8 billion bushels - an increase of 35 million bushels - based on an increase in harvested acreage. Although production is projected to increase, soybean supplies are reduced 40 million bushels due to lower beginning stocks; ending stocks are projected at 425 million bushels, down 50 million. The soybean price is projected to be between $8.50 and $10.00 per bushel, a 25 cent jump on both the high and low end of the spectrum.
The forecasts for total meat production for 2015 and 2016 are raised from last month. Beef production for 2015 is expected to be lower due to a reduction in second quarter feed cattle slaughter. In addition, relatively good forage conditions and higher feed prices are expected to slow the pace of placements until later in 2015, reducing available supplies of fed cattle for slaughter in late 2015.
The pork production forecast for 2015 is up, which supports a higher third-quarter 2015 slaughter forecast, according to the Quarterly Hogs and Pigs report. Broiler production for 2015 and 2016 is raised based on hatchery data and continued increases in bird weights. Turkey and egg production are both reduced for 2015.
Prices for the majority of the protein sector are mixed. The report projects higher prices for hogs, turkeys and eggs, but decreased prices for cattle and broilers.
The next WASDE report is scheduled to be released August 12. That report will be the first using 2015 production forecasts based on farmer surveys.
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