Feed: Grain supply and use of coarse grains projected down in 1991/92 – production and consumption statistics

Grain supply and use of coarse grains projected down in 1991/92 – production and consumption statistics – U.S. Dept. of Agriculture. Economic Research Service report

World 1991/92 production of coarse grains is projected to decline 3.5 percent to 799 million tons, reflecting both lower U.S. and foreign crops. The biggest year-to-year decline among the coarse grains is expected in barley, with sizable declines also projected in rye and oats. Global corn output is expected to fall only slightly, despite the sharp decrease in the U.S. crop, because of gains in foreign corn production. Little change is anticipated in sorghum output.

Although global 1991/92 carryin stocks are expected to be up 4 percent, the drop in production will more than offset this and world coarse grain supply is projected to shrink 2 percent in 1991/92. World ending stocks of coarse grains are projected to fall 10 percent to 116.5 million tons–the lowest since 1983/84–as U.S. and foreign stocks both decline.

Global consumption of coarse grains in 1991/92 is projected to fall 1 percent to 812 million tons. Foreign coarse grain consumption is projected to decline nearly 2 percent to the lowest level in 4 years, mainly due to a sharp reduction in use by the Soviet Union.

The ratio of world ending stocks to use, forecast at 15.7 percent in 1990/91, is projected to drop to 14.4 percent in 1991/92. This would be slightly lower than 1983/84, and the lowest since 1973/74. This tightening of coarse grain supplies is expected to lead to higher prices in world markets.

Global wheat supplies will also be tighter in 1991/92, and ending stocks are projected to decline 7 percent. However, wheat price increases will be moderated by sharp competition in wheat markets and extensive use of export subsidies. Many wheat exporters will have large supplies because of bumper crops and/or large carryin stocks.

Foreign Production To Fall from

1990/91 Record

Foreign coarse grain production is projected at 582 million tons in 1991/92, 2.5 percent below the year-earlier record, estimated at 597 million. However, weather and economic conditions can still alter the outlook significantly. Although harvests of spring-planted crops will be starting soon in the Northern Hemisphere, most Southern Hemisphere crops have yet to be planted.

Foreign corn output is projected to rise 4 percent to a record 281 million tons in 1991/92. If realized, this would be 4 million tons greater than the previous high in 1988/89. Most of the increase is due to a big rebound in European production from the drought-reduced 1990/91 crop. In Western Europe, France accounts for most of the projected gain. Corn crops will also be up significantly in Eastern Europe as better growing conditions are expected to result in sharply higher yields.

Among foreign producers, Eastern Europe is expected to register the largest year-to-year gains in total 1991/92 coarse grain production, largely because of its big corn crop. The region’s coarse grain harvest is forecast up 5.7 million tons, even though output of barley, oats, and rye is projected to fall. Like Eastern Europe, the European Community (EC) is also forecast to achieve a large production gain of 5.4 million tons, primarily due to a bigger corn crop.

The Soviet Union is expected to show the largest decline in coarse grain output among foreign producers. The Soviet crop is projected at 91.5 million tons, a drop of nearly 22 million from 1990/91. Soviet total grain production is forecast at 190 million tons, down 45 million from the bumper 1990 crop, and the lowest in 7 years. Yield prospects, already clouded by inadequate input supplies and equipment shortages, were reduced by several weeks of hot, dry weather in many of the major spring grain areas. Also, recent harvest reports indicate that winter grain yields were less than expected.

Competitor Crops Mixed

The production outlook is mixed among competing coarse grain exporters, particularly for corn. The marked recovery in the EC corn crop will allow the EC to reemerge as a substantial exporter in 1991/92. In China, the largest foreign corn exporter, corn output is forecast to fall 7 percent from the 1990/91 record. Some area planted to corn last year was switched to other crops and conditions point to lower yields. The extensive flooding that has occurred this summer in China is not expected to have a major impact on the corn crop. Wheat, rice, and cotton are more likely to be affected.

Argentina’s 1991/92 corn production is projected to decline 8 percent, despite a small rise in area, and sorghum output 25 percent, with area unchanged. Although the harvest of each in 1990/91 was delayed by unusually heavy rains, conditions were exceptionally good for most of the season, propelling estimated yields of both crops to records. Argentina’s ability to react to higher world prices in 1991/92 by increasing plantings may be constrained by farmers’ limited confidence in the local economy and their strapped financial position. Producers’ plans could also change in coming months depending on relative price movements of oilseeds and coarse grains.

South Africa is forecast to increase production about 1 million tons from 1990/91, assuming normal weather permits an increase in area and yields. Recent political changes and the end of trade sanctions against South Africa by some countries are not likely to have any significant impact on its corn production or trade. No structural changes in agriculture are expected in the short term, while trade changes will probably be minimal–sanctions had little impact on South Africa’s corn exports in the past. South Africa’s recent efforts to cut expenditures on export subsidies for corn will likely have a greater bearing on its future production and trade patterns.

Competitors barley supplies will be large in 1991/92 as a result of prospective production increases in Australia, Canada, and Turkey, and another large EC crop. In Turkey, a sporadic exporter, the crop is forecast up 13 percent, and comes on top of a large crop in 1990/91. Australia is expected to increase barley output by 5 percent to 4.35 million tons. Farmers there switched some land from wheat to barley because of relative price expectations.

Canada’s barley crop is forecast up 3 percent in 1991/92 to 14.5 million tons, the second highest ever. Barley area is up only slightly, but abundant moisture has aided crop development and record yields are forecast. Coarse grain area in Canada is down slightly in 1991/92, reflecting a reduction in rye and oats.

However, total grain acreage planted by Canadian farmers this year is forecast at a near-record, and includes record wheat acreage, despite relatively low prices. Mostly excellent weather at planting and the Gross Revenue Insurance Plan, a new safety net program for farmers, bolstered area.

For the EC, the world’s leading exporter, barley area is forecast down slightly. This is consistent with the downward trend in EC barley plantings since 1980, mainly reflecting shifts into wheat. However, production in 1991/92 is forecast to slip less than 1 percent to 50.3 million tons.

COPYRIGHT 1991 For more information, contact US Department of Agriculture Economic Research Service. Phone: 1-800-999-6779 (8:30-5:00 ET)

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