USDA on Tuesday released its September Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports. Farm Director KC Sheperd had the chance to visit with Allendale’s Rich Nelson about the report.
On the wheat side of things, Nelson said the report was pretty quiet.
“We will see USDA making a production change here next month, so that left all these numbers, including supply and demand, unchanged for wheat on today’s report,” Nelson said.
Nelson said an eye will be kept on wheat export sales.
“USDA’s current goal requires us to run about 18 percent below the five-year average from here all the way through June to meet USDA’s goal,” Nelson said. “That seems kind of reasonable. The past four weeks, we have been running about 13 percent below average, so this is something that we will watch here in the very short term.”
On the 29th of September, Nelson said the small grains summary report will be coming out, providing a complete revision of acreage and wheat production.
“USDA can certainly give us a good revision for wheat production on that report,” Nelson said.
Another important report to watch coming out on September 29th, Nelson added, will be the quarterly grain stocks report.
You can also access the full reports here:
— Crop Production: https://www.nass.usda.gov/…
— World Agricultural Supply and Demand Estimates (WASDE): https://www.usda.gov/oce/commodity/wasde
WHEAT: The 2023/24 U.S. all wheat outlook for supply and use is unchanged this month with
offsetting by-class changes on exports. The projected 2023/24 season-average farm price is also
unchanged at $7.50 per bushel.
The 2023/24 global wheat outlook lowers supplies, consumption, exports, and ending stocks
compared with last month. Supplies are projected to decline 7.2 million tons to 1,054.5 million,
primarily on lower production for Australia, Canada, Argentina, and the EU, which is only partly
offset by an increase for Ukraine. If realized, this would be the first year-to-year decline in global
wheat production since 2018/19. Australia is reduced 3.0 million tons to 26.0 million as dry
weather this past month in Western Australia, New South Wales, and Queensland lowers yield
prospects. Canada is decreased 2.0 million tons to 31.0 million on the initial model-based
forecast by Statistics Canada for the 2023/24 crop, indicating lower yields from last year arising
from dry conditions across the Prairies. Despite smaller global supplies, world consumption is
nearly unchanged with decreased Food, Seed, and Industrial use mostly offset by increased feed
and residual use. Feed and residual use is raised by 1.0 million tons for both China and the EU
due to wet weather during harvest that is expected to result in higher amounts of lower-quality
wheat used for feed. Global trade is trimmed 2.1 million tons to 207.3 million as reductions for
Australia, Canada, and the EU are only partly offset by increases for Russia and Kazakhstan.
World ending stocks are reduced 7.0 million tons to 258.6 million and would be the lowest since
2015/16. Ending stocks are tightened in many countries this month, particularly for several major
wheat exporters.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2023 red meat and poultry production is
lowered from last month, on lower beef, pork, and broiler forecasts. Beef production is reduced
on a slower pace of marketings in the third quarter. This decline is only partly offset by higher
expected carcass weights in that quarter and higher expected cow slaughter in the third and
fourth quarters. Pork production is lowered for the second half with a slower expected pace of
slaughter and lighter carcass weights. Broiler production is lowered on current slaughter data and
expectations of a lower number of chicks placed and lighter bird weights. Turkey production is
unchanged from last month. Egg production is reduced on hatchery data. For 2024, the red meat
and poultry production forecast is reduced on lower broiler production as weaker prices are
expected to constrain production growth. No changes are made to beef, pork, or turkey
forecasts. The slower pace of egg production growth for 2023 is expected to carry into the first
part of 2024, reducing the production forecast.
Beef import forecasts for 2023 and 2024 are raised on continued strength in demand and
availability of supplies in Oceania. Beef exports are lowered for 2023 and 2024 on tight domestic
supplies and strong competition in Asian markets. Pork imports are increased for 2023 on the
current pace of trade but are unchanged for 2024. Pork exports are lowered for both 2023 and
2024 on weaker demand. Broiler exports for 2023 and 2024 are reduced on the current pace of
trade and a lower production forecast. Turkey exports are raised for 2023 and 2024 as prices are
expected to be attractive for buyers.
Cattle price forecasts for 2023 and 2024 are unchanged from last month. The hog price forecast
for 2023 is lowered on a sharper decline in recent prices than previously expected; however, the
price forecast for 2024 is unchanged. The broiler price forecast for third quarter 2023 is raised on
current prices but the forecasts for the outlying quarters, including 2024, are unchanged from last
month. Turkey price forecasts for 2023 and 2024 are reduced on continued weakness in
demand. Egg price forecasts are raised on slower expected production growth.
The milk production forecasts for 2023 and 2024 are lowered from last month. The cow inventory
is reduced, reflecting the average July 2023 cow number reported in the recent Milk Production
report. The reduction in cow numbers is expected to continue through 2023 and into the first half
of 2024 as returns remain under pressure. For 2023, output-per-cow is forecast to increase at a
lower rate than previously expected on recent data and the expected impact of high
temperatures during the summer. However, the forecast of milk per cow for 2024 is unchanged.
Fat basis import forecasts for 2023 and 2024 are lowered, largely driven by recent trade data and
lower expected imports of cheese and butter throughout the forecast period. Skim-solids basis
imports are unchanged for 2023 and 2024. Fat basis export forecasts are unchanged for 2023,
while skim-solids basis export forecasts are lowered on weaker whey exports. For 2024, exports
on a fat basis are lowered on expectations of fewer shipments of butter and fat containing
products and cheese, while exports on a skim-solids basis are reduced, reflecting lower cheese,
and whey and whey products shipments.
For 2023, forecasts for cheese, butter, and whey prices are raised on current price strength, but
nonfat dried milk (NDM) is lowered. Both Class III and Class IV prices are raised, reflecting
changes in their component values. For 2024, price forecasts for cheese, butter and whey are
raised on lowered milk production and continued firm demand. NDM price forecasts are lowered.
The Class III price forecast is raised on higher cheese and whey prices while the Class IV price
forecast is raised as the higher butter price more than offsets the lower NDM price. The 2023 all
milk price forecast is raised to $20.40 per cwt and the 2024 all milk price is raised to $20.30 per
cwt.
COTTON: The 2023/24 U.S. cotton projections include higher beginning stocks but lower
production, exports, and ending stocks. Beginning stocks are increased 550,000 bales, largely
reflecting ending stocks data for the previous year from the Agricultural Marketing Service and
the NASS Cotton System Consumption and Stocks report. Beginning stocks were also increased
for 2022/23 as unexpectedly large warehouse stocks reported for July 31, 2023 indicated stocks
in-transit as of July 31, 2022 were higher than previously estimated. The 2023/24 U.S. production
forecast is 860,000 bales lower this month, with the Southeast and Southwest leading the
decline. Projected consumption is unchanged from August, but exports are down 200,000 bales
and ending stocks are 100,000 bales lower. The season-average price for upland cotton
projected for 2023/24 is 80 cents per pound, up 1 cent from the previous month.
The 2023/24 world cotton projections include lower beginning stocks, production, consumption,
trade, and ending stocks relative to last month. Beginning stocks are about 1.0 million bales
lower as the effects of upward revisions for earlier years’ consumption in China and Turkey more
than offset the impact of larger U.S. and Brazil beginning stocks. World production is projected
1.7 million bales lower as reductions for the United States, India, the African Franc Zone,
Greece, and Mexico more than offset an increase for Brazil. World consumption is also more
than 1.0 million bales lower, with reductions in India, Bangladesh, Mexico, and Vietnam. World
trade is 600,000 bales lower with net import reductions for Bangladesh and Vietnam, and export
reductions for the Franc Zone, the United States, Australia, Greece, and Mexico more than
offsetting a 550,000-bale increase for Brazil. World ending stocks are 1.6 million bales lower this
month, at 90.0 million bales
