U.S. production of feed grains, particularly corn, will increase this year compared to 2008, and even hay production will see a modest increase, according to the latest Feed Outlook report from USDA. The June 30 Acreage report showed planted and harvested area to be up from last year for corn, but down for sorghum and barley. Planted area for oats was down slightly but harvested area was up. Overall production is up, as are ending stocks for the 2008-2009 marketing year and supplies for 2009-2010, bringing lower prices for all four major feed grains.

USDA projects U.S. feed grain production for 2009-2010 at 327.6 million metric tons, up 8.6 million tons from it’s projection last month, and 1.7 million from 2008. Projected total use of feed grains in 2008-2009 is decreased 4.1 million tons this month, reflecting lower-than-expected feed and residual use, food and industrial use, and ethanol production.

Feed and residual use of all feed grains through the current September-August marketing year 2009-2010 will total 144.3 million tons and account for 41 percent of total use, according to the report. Corn will account for about 92 percent of total grain feed and residual use.

The agency projects corn prices for the 2009-2010 marketing year at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range from last-month’s forecast. The estimated average price for the current marketing year is $3.95 to $4.15 per bushel, down from a record $4.20 per bushel in 2007-2008.

The USDA will make its first survey-based forecasts for corn and sorghum yields and production in its August 12 Crop Production report.

The report also projects slight increases in U.S. hay production this year, with expected harvested area of alfalfa and alfalfa mixtures, at 21.0 million acres, up 2,000 acres from 2008. Expected area for harvest of all other types of hay totals 39.2 million acres, up slightly from 2008.

Production ranges widely between regions, however, with some areas seeing significantly less harvested acreage.

The full report is available online from USDA.