Highlights from Doane Outlook Conference
click image to zoom We expect USDA to raise the 2013/14 estimate for wheat feed use in the November supply and demand forecast, pulling wheat carryover stocks down toward the 500 million bushels level. Export sales remain strong despite the big increase in foreign wheat production this year. With good wheat prices and better moisture conditions, winter wheat acreage may be up this year and the fall crop condition ratings are expected to be much better than they were in the fall of 2012. With trend yields next year, which would be down from the record levels of 2013, wheat ending stocks move a little higher and acreage declines in 2015. World wheat ending stocks are expected to rise over the next few years, putting some pressure on prices.
Our analysis suggests that U.S. cotton ending stocks for 2013/14 may be a little higher than indicated in the last USDA forecast but ending stocks decline in 2014/15 even if yields are modestly above trend levels and the harvested-to-planted acre ratio returns to “normal”. But the most critical long term factor is still Chinese policy. Prices could drop sharply if China decides to release some of its huge stocks onto world markets – or even if China just stops importing excess cotton and uses mostly domestic production to satisfy domestic demand.
Recent data indicate that the world is not running out of cropland. The amount of land planted to major crops has increased by 185 million acres since 2000 and addition land is available in South America, Africa and the former Soviet Union. But the pace of world demand growth is rising, especially in China, and especially for corn. China’s corn demand is rising at more than 10 million tonnes per year and corn acreage will have to increase substantially for production to keep pace with demand growth. If acreage rises more slowly than it has in the past – China will need to boost imports. Production and exports from Brazil and the former Soviet Union countries are expected to continue to rise in the years ahead and these products will compete with U.S. exports in the world market.
click image to zoom While USDA has not provided any updated information recently, it is pretty clear that the U.S. cattle inventory is still declining. However, cow slaughter has dropped below year ago levels in recent months and heifer slaughter is also dropping. These may be the first signs that producers are beginning to try to rebuild beef herds. But for the near term, beef production is expected to fall significantly below year ago levels and cattle prices should remain high into 2014. Fewer feeder cattle will be available next year and the supplies will be constrained even more if heifer retention rises. Still we can’t expect any significant increase in the inventory before 2015 or 2016 at the earliest. Beef exports have recovered to above their pre-BSE level, but the tight supplies and high prices will probably keep them from rising further in the next year or two.
Self-contained hydraulic system with power cables (hydraulic). Tandem Henschen axles (hydraulic). Hydraulic fenders. Manual or hydraulic tilt. 6,500-gallon tank.
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