Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915
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Extension Communications |
10/23/03
FOR IMMEDIATE RELEASE
Contacts:
Robert Wisner, Ag Economics, (515) 294-6310, wisner@iastate.edu
Jean McGuire, Continuing Education and Communication Services, (515) 294-7033,
jmcguire@iastate.edu
Update on World Feed Grains and Soybean Supplies
AMES, Iowa -- "The world supply situation for feed grains and soybeans is 180 degrees opposite that in the U.S.," said Robert Wisner, Iowa State University (ISU) Extension economist. He said world feed grain and wheat carryover stocks have been declining for four years, while global soybean carryover stocks have been increasing for the past six years and are estimated to be 150 percent above 1999 levels.
In the U.S., farmers are harvesting the largest corn crop on record, while soybean production is estimated to be down 10 percent from last year and down 15 percent from two years ago. Wisner noted that tight supplies are almost certain to force a 9 to 10 percent reduction from last season in total use of U.S. soybeans in the year ahead, due to a lack of supplies.
Wisner said that at the world level, feed grain stocks as a percent of annual use by the end of this marketing year are projected to be the lowest since 1973. In contrast, world soybean carryover stocks in the 2002-03 marketing year rose an estimated 16 percent from the previous year, after a five percent increase the year before.
By the end of the current marketing year, world soybean carryover stocks are projected to decline by a very modest 0.5 percent from a year earlier--despite a very short 2003 U.S. soybean crop. "The U.S. soybean carryover stocks as a percent of annual use are expected to be the tightest since the mid-1960s and possibly the tightest on record, while U.S. corn carryover stocks are expected to be about 25 percent larger than a year earlier," Wisner said.
World soybean stocks have increased because of the rapid expansion of soybean production in South America. Declining stocks occur when world production falls below consumption.
Wisner said the shortfall in world feed grain production this year reflects adverse weather in Europe and parts of the former Soviet Union. For example, total grain production in the Ukraine (former breadbasket of the Soviet Union), is estimated to be down 49 percent from 2002. China's feed grain production also is estimated to be modestly below last year.
Low world feed grain and wheat reserve stocks will make corn prices potentially quite sensitive to U.S. and world crop prospects next spring and summer, Wisner added.
He said much of the reduction in global stocks is expected to occur in China and in former Soviet republics, where farms and farmers are expected to sell grain because of the urgent need for cash. Since Chinese stocks are believed to be above levels desired by the government, its stocks also are believed likely to flow readily into world markets without much price increase. Movement of these stocks into markets is expected to result in only a modest uptrend in corn prices until the 2004 planting season, Wisner said.
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