Wheat use down as animal feeding switches to corn

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According to the USDA's latest Wheat Outlook, foreign use is projected at 652.5 million tons in 2012/13, down 9.5 million tons (1.4 percent) from estimated 2011/12 disappearance. A major change in the pattern of grain feeding is projected for 2012/13, with corn (and sometimes barley) feeding on the rise and wheat feeding taking a hit.

Projected broad availability and relatively lower corn prices on one hand, and reduced availability of low-quality wheat from the Black Sea (Ukraine), EU-27, and Australia on the other, are projected to reduce wheat feed use in importing countries. Foreign wheat feed and residual use is projected down 15.3 million tons (10 percent) to 127.4 million, while foreign corn feeding is projected up 18.2 million tons.

EU-27 wheat feed and residual use is expected to decline 3 million tons to 54.5 million, because of easily available abundant supplies of Ukrainian corn and lower wheat imports from Russia and Ukraine combined with the EU-27’s lower projected wheat production and higher coarse grain output.

Reduced wheat supplies in the FSU- 12 are expected to trim feed and residual use 3.5 million tons to 25.6 million. A dramatic drop in wheat feed and residual use in Ukraine and a lesser decline in Kazakhstan occurs mainly because of a decline in the residual part of the category, rather than in feed use, following a record crop and suboptimal storage conditions.

Wheat feed use is projected to decline in South Korea, Israel, Philippines, and Vietnam. It is also projected to be lower for Mexico, Turkey and Saudi Arabia, as these countries return to their usual feeding patterns.

Canada’s wheat feed and residual use is expected to decline by half due to the improved quality of expected wheat production compared to last year’s unusually high share of feed-quality wheat in Canadian output, and higher projected corn production and feeding. Despite strong growth in compound feed production in China, the country’s wheat feed and residual use is projected flat on the year because of projected stronger prices and less availability of low-quality wheat from Australia. This means that in 2012/13, the grain composition of compound feed in China will shift modestly away from wheat in the favor of corn

Global nonfeed use of wheat (mostly food use) is projected up 9.6 million tons or 1.8 percent. This increase mostly reflects population growth. In some countries, like China, wheat food use is up with a growing economy and diversifying diets that increasingly favor wheat-based European-style baking products. Growth is expected in India with expanding population and expected larger sales of government-held subsidized wheat.

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