Feed Grain Outlook: Record-High Corn Crop Projected For 2020/21

Photo: Mississippi State University

The 2020/21 U.S. corn crop is forecast to be a record high 16.0 billion bushels. In spite of lower carryin, supplies will still reach a record 18.1 billion bushels. Corn use is also projected at a record level as food, seed, and industrial (FSI) use, feed and residual use and exports all increase from the 2019/20 COVID-19 impacted levels.

Total use is projected at 14.8 billion bushels. Ending corn stocks of 3.3 billion bushels are up 1.2 billion bushels from last year and, if realized, would be the highest since 1987/88. The stocks-to-use ratio is the highest since 1992/93, contributing to a $0.40 per bushel reduction in the projected season average price of corn to $3.20.

Global 2020/21 coarse grain production is projected at a new record of 1.5 billion tons, with a rebound in the United States and large crops in Brazil, Argentina, and Ukraine. Despite record-high corn production prospects, U.S. 2020/21 corn exports face tough competition and are projected at a mere 30 percent of global corn trade, while Brazil, Argentina, and Ukraine are expected collectively to have a 58 percent export share.

Sorghum exports are boosted for both 2020/21 and 2019/20, based on growing demand from China. Coarse grain use affected by the pandemic in 2019/20 is projected down, but recovering in 2020/21.

Coarse grain global ending stocks for 2020/21 are projected higher, with corn stocks taking the lead and U.S. stocks the highest in 33 years. Foreign corn ending stocks are expected to fall, with a decline for China. Excluding China, foreign corn stocks end up slightly higher.

Domestic Outlook

Corn Planting Advances Quickly as Record Crop is Projected

Corn planting is well underway and running ahead of the pace of recent years. As of May 10, 67 percent of the corn crop was in the ground, compared with a 5-year average of 56 percent. Iowa, the largest corn-producing State, has planted 91 percent of its crop, compared with the 5-year average of 66 percent. Last year at this time, only 28 percent of the crop had been planted, due to extremely wet conditions that kept farmers out of the fields.

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Planted area is projected at 97.0 million acres, based on the March 31 National Agricultural Statistics Service (NASS) Prospective Plantings report. If realized, this would produce a record-high corn crop of 15,995 million bushels at the projected weather-adjusted trend yield of 178.5 bushels per acre. This assumes normal planting progress and, summer growing season weather, and the historical relationship between planted and harvested area.

Supplies at this level of production would be 18,118 million bushels, given a projected carryin of 2,098 million bushels and imports of 25 million. The 2019/20 estimated supply is 15,928 million bushels. The previous record was set in 2016/17, at 16,942 million bushels.

2020/21 Corn Use Projected to Recover

Corn disappearance for 2020/21 shows a rebound from the COVID-19 devastated markets. Feed and residual is projected at 6,050 million bushels, 350 million greater than 2019/20 on increased grain consuming animal units, a larger crop, and lower expected prices.

Food, seed, and industrial (FSI) gains 245 million to 6,600 million bushels as motor gasoline consumption returns to more normal levels spurring ethanol blending. Domestic disappearance is projected to be 12,650 million bushels, 595 million greater than last year.

Corn exports are slated to increase as global markets revive and, with the large crop, U.S. prices are competitive. Projected exports are 2,150 million bushels, 375 million over last year. Resulting total disappearance is projected at 14,800 million bushels, a gain of 970 million over last year.

Ending corn stocks are pegged at 3,347 million bushels, an increase of 1,220 million from last year, the highest since 1986/87’s 4,882 million. The stocks-to-use ratio is 22.6, the highest since 1992/93. The larger stocks relative to disappearance, the season average price received by farmers is projected at $3.20 per bushel, $0.40 below 2019/20 and the lowest since 2006/07’s $3.04 per bushel.

COVID-19 Continues to Impact 2019/20 Marketing Year Demand

The projected 2019/20 corn disappearance is lowered again this month as the effects of COVID-19 continue to ripple through the economy. FSI use is lowered 110 million bushels to 6,355 million as an ongoing collapse of motor fuel demand continues to erode ethanol production and use. Corn for ethanol is lowered 100 million bushels this month.

High fructose corn syrup (HFCS) is lowered 20 million bushels; this is partially offset by a 5-million increase in forecast starch production, as the higher volume of good shipped increases the demand for cardboard and paper made from corn starch. Corn used for cereals is raised 5 million bushels on indications of greater demand for corn-based food products.

Feed and residual use is raised 25 million bushels to 5,700 million, reflecting lower supplies of distillers dried grains, bringing domestic disappearance to 12,055 million bushels.

Improved corn export prospects, driven by improved price competitiveness and current year-to-date pace, are behind a 50-million-bushel increase to 1,775 million bushels. Resulting total disappearance is projected at 13,830 million bushels, nearly 500 million below last year and 35 million below last month’s projection.

Projected ending corn stocks are increased by 6 million bushels to 2,098 million. The 2019/20 season average price received by farmers is unchanged this month at $3.60 per bushel.

U.S. Feed Grain Use Lowered

U.S. feed grain disappearance for 2020/21 is projected at 391.6 million metric tons, 24.7 million above last year. Feed and residual use, projected at 158.1 million tons, is 8.8 million higher than the 2019/20 estimate. FSI use, at 173.2 million tons, is 5.8 million over last year. Exports are projected to increase 10.0 million tons to 60.3 million. Total feed grain disappearance in 2019/20 is estimated at 366.9 million tons.

Grain Consuming Animal Units

Grain consuming animal units (GCAU) for 2020/21 are projected at 103.46 million units, 1.45 million higher than the revised estimate for 2019/20 of 102.01 million units. In 2020/21, expansion in GCAUs is driven by greater cattle on feed and poultry more than offsetting a modest decline for hogs. For 2019/20, poultry and hog inventories were down, while beef cattle were slightly higher.

Feed and Residual Use: Four Feed Grains and Wheat

On a September-August basis, feed and residual use for the four feed grains and wheat are projected at 160.8 million metric tons, 7.4 million higher than last year’s estimate of 134.4 million. Feed and residual use for corn is higher, at 153.7 million tons, while all others declined.

Modestly Higher Sorghum Production Projected for 2020/21, Use Down Year Over Year

Projected production of sorghum in 2020/21 is 351 million bushels, up from the 2019/20 production projections of 341.5 million bushels. This increase in production is due to higher planted and harvested area projections of 5.82 million acres and 5.2 million acres, respectively. This more than offsets a projected year-over-year decline in yield at 67.5 bushels per acre.

Total sorghum supply is projected down year over year in 2020/21 to 386.2 million bushels, due to lower beginning stocks to start the year at 35.2 million bushels. Total domestic use is projected to be 135.0 million bushels, down from the 170.0 projected for 2019/20. This is due to less sorghum being used as feed at 185.0 million bushels, less used as food, seed, and for industrial uses at 50.0 million bushels, —and less going to ethanol production at 48.0 million bushels, all year-over-year declines.

Year-over-year increases in sorghum exports are projected. These exports are expected to expand by 10.0 percent, to 220.0 million bushels in 2020/21, over the 200.0 projected for 20019/20.

This results in expected ending stocks of 31.2 million bushels, down from the ending stocks projected in 2019/20 of 35.2 million bushels. The season average price received by farmers is expected to decline to $3.20 per bushel in 2020/21, down from $3.25 in 2019/20’s current projection.

Sorghum Use in 2019/20 Projected Down Month over Month Offset by Increased Exports

Total sorghum use in 2019/20 is unchanged at 370.0 million bushels. Fewer bushels used for all sub-use categories are also projected, with needs for feed and residual use down by 5.0 million bushels to 100.0 million, and food, seed, and industrial uses down by 10.0 million due to a 10.0-million-bushel reduction in the use for ethanol production. A 15.0-million bushel projected increase in sorghum exports fully offsets these bushels lost to use, resulting in exports at 200.0 million bushels and ending stocks unchanged at 35.2 million bushels.

Larger Production, Use, and Ending Stocks Projected for 2020/21

Production of barley in 2020/21 is projected to be up year over year, to 182.0 million bushels. This increase is due to larger area planted and harvested more than offsetting a small decrease in projected yield year over year. Harvested area is projected at 2.4 million acres—more than 2019/20’s 2.9 million acres—while yield is projected to be 75.8 bushels per acre, down slightly from 2019/20’s 77.7 bushels per acre. Additionally, a 1.0-million bushel reduction in barley imports is projected in 2020/21 at 7.0, down from 2019/20’s 8.0-million-bushel import level.

Domestic total barley use is projected up in 2020/21 over 2019/20, at 183.0 million bushels. Feed and residual use are is projected to be 40.0 million bushels – while food, seed, and industrial use is projected to be 143.0 million bushels. Both barley use categories are up year over year.

Barley exports are projected down by 1.0 million bushels to 5.0 million bushels in 2020/21. All of these changes result in a higher level of ending stocks, at 93.1 million bushels, over 2019/20’s 92.1-million-bushel projection. The average farm price is projected down year over year to $4.30 per bushel.

Barley Use Down, While Price is Projected Up in 2019/20

Barley feed and residual use is projected up by 5.0 million bushels, to 30.0 million. Food seed, and industrial uses is projected down by 10.0 million bushels to 136.0 million bushels. This reduction in use more than offsets the increased feed use, resulting in total domestic use to be projected down by 5.0 million bushels in 2019/20 to 166.0 million bushels.

These 5.0 million bushels not used result in a 5.0-million bushel projected increase to ending stocks, now projected at 92.1 million bushels. The season average price received by farmers in 2019/20 is projected $0.10 per bushel higher at $4.70 per bushel.

Larger Oat Supply Projected for 2020/21, While Prices Decline and Use is Modestly Up

Oat production in 2020/21 is projected at 73.0 million bushels, up year over year, due to more area planted and harvested and increased yield projections. Imports are projected up year over year to 96.0 million bushels, resulting in total supply of 198.0 million bushels, up over 2019/20’s 182.0 million bushels.

Oat feed use in 2020/21 is projected to be 75.0 million bushels, up over the prior year. Food, seed, and industrial use is projected down year over year to 79.0 million bushels. All of these changes result in a total domestic use of 154.0 million bushels, modestly up over the prior year. Additionally, ending stocks are projected up year over year in 2020/21 at 42.0 million bushels. Price per bushel is projected to be $2.50, down $0.35 per bushel over 2019/20.

Total Oat Supply Down, While Use Up in 2019/20

Oat supply in 2019/20 is projected down by 1.0 million bushels due to a 1.0-million-bushel reduction in imports. Total supply is now projected to be 182.0 million bushels. At the same time, total use is projected to be up by 3.0 million bushels, due to an additional 3.0 million bushels being used for food, seed, and industrial uses. These changes shake out of the balance sheet as a 4.0-million-bushel reduction in ending stocks for 2019/20, now projected to be 29.0 million bushels. Price per bushel is projected to be $2.85, the same as last month.

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