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Grain Supply Update: Oct. 16, 1996
Grain Supply Update: October 16, 1996
Final ’96 Food Supply Figures & Outlooks Rolling In
(c) Geri Guidetti, 1996
Watching this week’s agricultural and commodities prices headlines in
the national newspapers might lead you to believe that we are soon to be
buried under mountains of grain and beans from this season’s harvest.
Below are the facts, most of which did not make it to the national media
this week:
Source: National Agricultural Statistics Service, Agricultural
Statistics Board, U.S. Department of Agriculture. This report was
approved on September 30, 1996, by the Acting Secretary of Agriculture,
Richard E. Rominger.
"....Old crop corn stored in all positions on September 1, 1996, is
estimated at 426 million bushels, down 73 percent from September 1,
1995. This is the lowest ending stocks since 1976......Old crop
soybeans stored in all positions on September 1, 1996 totaled 183
million bushels, down 45 percent from stocks on hand one year
ago.....All wheat in all storage positions September 1, 1996 is
estimated at 1.72 billion bushels, down 8 percent from September 1,
1995. This is the lowest September 1 stock level since the reference
date was changed in the 1986-87 marketing year....Oats stored in all
positions on September 1, 1996 is estimated ate 133 million bushels, 26
percent below the stocks of September 1, 1995."
The above report is referring to the so-called ending stocks that we
have been talking about in these updates for the past several months.
Keeping these in mind, below are some of the recent figures and
production forecasts for wheat and corn:
Wheat
Source: Economic Research Service, U.S. Dept. Of Agriculture, Oct. 15,
1996
*U.S. wheat production drops 14 million bushels from the September
forecast.
*World wheat production second highest on record
*U.S. September 1 stocks lowest recorded
*U.S. feed and residual use up 25 million bushels
*U.S. ending stocks down 36 million from September forecast
Though the USDA’s Small Grains Summary increased its estimates of
durum, hard red spring and white spring wheat harvests, they reported
that the increases were not large enough to offset the large declines in
winter wheat, despite the fact that this season’s total wheat harvest
was up 99 million bushels from ‘95’s poor crop. On a brighter note,
world wheat production for the 1996/97 season is projected to be nearly
45 million tons higher than the 1995/96 season. This would represent an
8 percent increase; the EU and Australia are seen as major exporters.
Another source of the potential increase in world wheat for ‘96/’97 is
thought to be Canada, though bad weather is hampering harvest and
causing a decline in wheat quality. Much of this wheat will be used for
animal feed.
Corn
Good news: Improved yield prospects for this season’s corn crop as a
result of recently better weather and field conditions may result in a
harvest that will be 22 percent larger than the 1995 harvest. This
would be quite a blessing considering the late plantings, short season
corn substitution, etc., in the corn belt states
As I reported earlier this season, the corn supply shortage caused
industrial ethanol producers to close this summer or cut back production
dramatically. The better than expected corn crop has allowed some of
these producers to restart their plants. Corn targeted for this market
is projected to increase 14 percent from the 1995/96 season, but this is
still below production in the 1994/95 season. The demand for corn used
in the production of corn sweeteners is expected to remain strong, but
that used in the production of alcoholic beverages for export is
expected to decline.
Because of the very low supplies and very high prices of feed corn this
summer, both dairy and feeder beef cattle herds were reduced. Milk
production dropped and the prices of milk and milk products have risen.
It appears, thus far, that the milk cow herd reduction has remained
steady. Cattle on feed for beef production, however, are on their way
back up because of the better projections for corn available to feed
them this year. Though feed corn prices have dropped from their record
highs this summer, they remain relatively high. The trend for future
food prices continues to be up.
What is the bottom line for domestic supplies? First, there should be
enough corn for this year’s daily needs and exports. But, despite the
fact that ending stocks are expected to improve current, historically
low supplies, the report states: "Nonetheless, stocks will remain well
below 1994/95." I’ll go a step further to put that in perspective: the
supply of corn remaining in our stockpiles at the end of summer 1997,
those ending stocks from this season’s harvest which are available to
feed us until the next harvest is realized, will be measured in days or,
if exports are down, perhaps weeks. They will not be measured in
months.
The fundamental questions of personal food security still remain: What
would you do—what would we all do—if there was little or no harvest this
year or next? Can we, as individuals and families, afford the luxury of
complete dependence on a day-to-day, commercial food supply pipeline
when there is no longer a comfortable national or global food reserve
"cushion?" .....Geri Guidetti, The Ark Institute
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Build Your Ark! How to Prepare for Self-Reliance in Uncertain Times...
Book I: Food Self-Sufficiency http://www.lis.ab.ca/walton/geri.html
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This report may be reprinted if copyright and Sig. File remain intact.