NASHVILLE, Tenn. — U.S. farmers achieved record corn, soybean and wheat yields last year.
“We are in a very adequate supply environment from an historical standpoint in comparison to the last 10 years,” said Cattlefax market analyst Mike Murphy.
Grain prices should remain stable, so beef, pork and poultry producers can take advantage of that with more reasonable feed costs, he said at the National Cattlemen’s Beef Association convention held in Nashville Feb. 1-4.
“There is continued demand out there, particularly in the feed sector, as you think about growing protein supplies in the beef, hog and poultry sector,” Murphy said.
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Grain production has been growing steadily in the last decade with wheat leading the pack.
However, U.S. wheat production is expected to drop in this crop year. Cattlefax forecasts that wheat acres could be down to 46.4 million acres, down four million acres from last year.
Corn came in at a record 174 bushels per acre with stable prices and good demand. This crop has the biggest ending stocks since late 1980s.
Ethanol production is expected to require about 5.325 billion bu. of corn, which is about 35 percent of the available supply. There is also less competition for corn compared to 2006-10, when there appeared to be exponential growth in ethanol production.
Corn exports are stable at around two billion bu. per year. This level of export has held steady for 15 years.
Brazil and Argentina have become major players in terms of corn exports in the last few years.
“That is taking the pressure off the U.S.,” Murphy said.
If the Brazilians and Argentineans were not there, it would have put more pressure on U.S. corn hit hard in recent years by drought and other domestic demands.
“Brazil and Argentina and the U.S. will run neck and neck in terms of our exports around the globe,” he said.
The world is adequately supplied with corn, so prices should stay around $3.50 to $4 per bu.
Corn acres will be down to 92.9 million acres, which is a decline of about 1.1 million acres.
Yields are expected to come in at about 170 bu. per acre.
Soybeans have been steadily increasing for the last six years. Record yields were achieved last year.
Cattlefax suggested that U.S. soybean acres could expand to 83.9 million acres, an increase of about 500,000 acres.
