Projections for U.S. feed grain production and supplies have increased significantly over last year’s, but ethanol use and exports will keep demand and usage high. The USDA’s monthly Feed Outlook report, released August 14, includes the first survey-based forecasts for U.S. corn and sorghum production, projecting a corn crop of 12.8 billion bushels, the second-largest on record. The agency projects sorghum production, however, will fall short of last year by 19 percent.

USDA projects total 2009 production for the four major feed grains – corn, sorghum, oats and barley – at 339.6 million metric tons, up 12 million metric tons from last-month’s forecast and up 13.7 million from 2008. Including carryover, the agency projects supplies of these grain for 2009/2010 at 390.4 million tons, up 10.5 million from last month and up 16.5 million from 2008/09. Beginning stocks are projected to be 3 million tons higher than last year, but grain use also is likely to increase significantly. The report projects total feed grain use for the 2009/2010 marketing year at 345.2 million tons, an increase of 19.4 million tons from last year. Global production has dropped, resulting in brighter prospects for U.S. grain exports, and ethanol production is growing, placing higher demand on corn for industrial use

As noted above, USDA expects a whopping 12.8-billion-bushel corn crop, but usage projections are equally impressive, with total use forecast at 12.875 billion bushels. The projection for feed, seed and industrial use of corn for the 2009/2010 crop is up 100 million bushels from the previous year, with ethanol usage accounting for virtually all of the increase. Exports also are picking up, but with higher production, USDA increased its projection of ending stocks for 2009/2010 by 71 million bushels to 1.621 billion bushels. The agency reduced its projection for ending stocks for the current marketing year to 48.1 million tons, down from 49.4 million last month.

Based on these supply and demand trends, USDA projects farm prices for the 2009/2010 corn crop at $3.10-$3.90 per bushel, down 25 cents on both ends of the range from last month. The report notes that that the price estimate reflects higher prices for corn sold for forward delivery earlier in the summer, before futures and cash prices dropped as the crop shaped up over the past month.

Hay production increases

The report projects all hay production for 2009 at 152 million tons, up 6.27 million from 2008 due to higher harvested acres and yields. The all-hay yield is expected to be 2.52 tons per acre, up from 2.43 tons per acre in 2008. Alfalfa hay production is forecast at 73.0 million tons, up 5 percent from last year, based on yields averaging 3.48 tons per acre, slightly higher than last year’s average of 3.32 tons.

Farm prices for hay during the first 3 months of the 2009/2010 marketing year – May through July – averaged $123.33 per ton for all hay, compared to $164.33 during the same period last year, and $128.66 per ton for alfalfa, compared with $176.33 last year. USDA expects hay prices to remain lower through the rest of this marketing year.

The full report is available on line.