Summary of the August WASDE Report
USDA World Agricultural Supply & Demand Estimates - Released August 12th
August WASDE Report: Price Projections for both Cattle & Corn Raised
For 2022, the red meat and poultry production forecast is reduced as lower expected beef production more than offsets slightly higher pork production.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2021 is reduced from last month on lower expected beef and pork production. The decline in beef production largely reflects lighter expected carcass weights due to a higher expected proportion of non-fed cattle being slaughtered through the end of the year. The pork production forecast is reduced on a slower expected pace of slaughter for the remainder of the year and lighter carcass weights. Broiler production is raised from last month as higher-than-expected second quarter production more than offset a lowered second half-forecast. The turkey production forecast is virtually unchanged.
For 2022, the red meat and poultry production forecast is reduced as lower expected beef production more than offsets slightly higher pork production. The beef production forecast is lowered on tighter expected supplies of both fed and non-fed cattle. Pork production is forecast higher as slightly heavier carcass weights more than offset lower expected hog slaughter. Poultry and egg production forecasts are unchanged from last month.
For 2021, beef imports are raised on recent trade data and expected firm demand from several key trading countries; the import forecasts for 2022 are also raised. Beef export forecasts are lowered for both 2021 and 2022 on slowing global demand for U.S. beef. Pork export forecasts for 2021 and 2022 are reduced from last month on recent trade data and continued slower demand growth from Asia. Broiler and egg export forecasts for 2021 are raised on recent data; no changes are made to the 2022 forecasts.
Cattle prices are raised for 2021 and 2022 on current price strength and firm demand. The 2021 hog price forecast is raised on current price strength while the 2022 price forecast is unchanged from last month. Broiler and turkey price forecasts for 2021 are raised on current prices; the 2022 forecasts are unchanged.
COARSE GRAINS: This month’s 2021/22 U.S. corn outlook is for lower supplies, reduced feed and residual use, increased food, seed, and industrial use, lower exports, and smaller ending stocks. Projected beginning stocks for 2021/22 are 35 million bushels higher based on a lower use forecast for 2020/21. Reduced exports are partially offset by greater corn used for ethanol, starch, and glucose and dextrose. Corn production for 2021/22 is forecast at 14.8 billion bushels, down 415 million from the July projection. The season’s first survey-based corn yield forecast, at 174.6 bushels per acre, is 4.9 bushels below last month’s trend-based projection. Among the major producing states, today’s Crop Production report indicates that record-high yields are expected in Illinois, Indiana, and Ohio. In contrast, yields in Minnesota and South Dakota are forecast below a year ago.
Total U.S. corn use for 2021/22 is down 190 million bushels to 14.7 billion. Feed and residual use is down 100 million bushels based mostly on a smaller crop and higher expected prices. Corn used for glucose and dextrose and starch is projected higher based on observed use during 2020/21. Exports for 2021/22 are lowered 100 million bushels to 2.4 billion. With supply falling more than use, ending stocks are down 190 million bushels to 1.2 billion. The season-average corn price received by producers is raised 15 cents to $5.75 per bushel.
This month’s 2021/22 foreign coarse grain outlook is for lower production, slightly lower trade, and smaller stocks relative to last month. Foreign corn production is forecast higher relative to last month. Ukraine corn production is raised as a reduction in area is more than offset by a boost in yield prospects. Russia corn production is increased based on expectations of greater area. EU corn production is lowered, mostly reflecting reductions for Hungary, Romania, and Bulgaria that are partially offset by increases for France, Croatia, and Germany. Other notable corn production changes include projected increases for India, Canada, and Moldova, with a reduction for Serbia. Foreign barley production is lower, with reductions for Canada, Kazakhstan, Turkey, the EU, and Russia more than offsetting increases for Ukraine, Australia, and Morocco.
WHEAT: The outlook for 2021/22 U.S. wheat this month is for reduced supplies, lower domestic use, unchanged exports, and decreased ending stocks. The NASS Crop Production report forecast all wheat production at 1,697 million bushels, down 49 million from the previous forecast. Most of the reduction is in Hard Red Winter and Soft White Winter. The all wheat yield is forecast at 44.5 bushels per acre, down 1.3 bushels from the previous forecast. Feed and residual use is lowered 10 million bushels to 160 million on reduced supplies. Food use for both 2020/21 and 2021/22 is reduced slightly, based primarily on the latest NASS Flour Milling Products report. Wheat exports are unchanged but there are offsetting by-class export changes for several classes. Projected 2021/22 ending stocks are reduced 38 million bushels to 627 million and are 26 percent below last year. The projected 2021/22 season-average farm price is raised $0.10 per bushel to $6.70.
The global wheat outlook for 2021/22 is for reduced supplies, lower consumption, reduced trade, and smaller ending stocks. Supplies are projected to decline 16.8 million tons to 1,065.7 million, primarily on lower production for Russia, Canada, and the United States. Russia’s production is reduced 12.5 million tons to 72.5 million on decreased winter wheat production, which is only slightly offset by higher spring wheat output. Winter wheat harvested area is reduced on updated area data from Rosstat, Russia’s statistical agency, while yield is lowered on harvest results reported by the Ministry of Agriculture. A series of thawing and refreezing events during February and March, referred to as “ice crusting,” resulted in reductions for both area harvested and yield for Russia’s winter wheat. Canada’s production is lowered 7.5 million tons to 24.0 million on worsening drought conditions across the Prairie Provinces during July. This would be the smallest Canadian wheat crop since 2010/11. Partially offsetting these reductions are production increases for Ukraine and Australia. Ukraine is raised to a record 33.0 million tons on increased area as reported by its State Statistical Service and a higher yield on harvest results to date. Australia is increased 1.5 million tons to 30.0 million as continued abundant precipitation has benefited crop conditions.
Projected 2021/22 world consumption is reduced by 4.2 million tons to 786.7 million. Most of the consumption decreases are for feed and residual use with the curtailed supplies in Russia and Canada. Projected 2021/22 global trade is lowered 5.8 million tons to 198.2 million on reduced exports for Canada and Russia only partially offset by higher exports by Ukraine, Australia, and the EU. The reduction in aggregate exportable supplies from major exporters resulted in decreased imports from several countries including Afghanistan and Algeria, while larger crops in Brazil and Morocco reduce import demand there. Projected 2021/22 world ending stocks are lowered 12.6 million tons to 279.1 million with China accounting for 51 percent of the total.