usda agricultural outlook - maff.go.jp · 2020-04-06 · forecast october 2016 forecast percent...

USDA Agricultural Outlook

December 2016

World Agricultural Outlook BoardOffice of the Chief EconomistU.S. Department of Agriculture

Washington, D.C.

The Office of the Chief Economist is Non‐Political

Office of the Chief Economist

• Several functions in support of the Secretary– Climate Change Program Office (e.g., COP‐21)– Office of Energy Policy and New Uses (e.g. bioproducts)– Office of Risk Assessment and Cost Benefit Analysis (e.g., biotech regs)

– Office of Environmental Markets (e.g., Chesapeake Bay)– World Agriculture Outlook Board (e.g. Market Outlook)– Trade / Sustainability / Labor (e.g., recent China case)– Domestic Policy (e.g., Farm Bill 2018)


WASDE and Crop Production and area products are market movers

Economic and Trend Analysis

U.S. and World

Weather

Travel Reports

Remote Sensing

Official Country Reports

Attaché Reports

USDA’s Economic Information System

Agricultural Weather AssessmentsWorld Agricultural Outlook Board

2016 2015

Average

December 9, 2016

Foreign Agricultural ServiceOffice of Global AnalysisIPA Division

Source: USGS EarthExplorer; Landsat 8

Feb 5, 2015Feb 5, 2015Feb 2, 2014Feb 2, 2014

Thailand: North Central Plains Region ‐ Chainat Province Landsat Imagery ComparisonThailand: North Central Plains Region ‐ Chainat Province Landsat Imagery Comparison

March 10, 2015

Crop Reports Other Country Data

Picture courtesy Xavier Audran; FAS‐Paris

Near Chartres, France (about 50 miles southwest of Paris and in the northern grain belt)

The price of corn* in dollars and real, monthlyDollars per bushel, monthly average Reals per bushel, monthly average

Price in real(right axis)

Price in US dollars (left axis)

*Central Illinois

5

7

9

11

13

15

17

2.5

3.5

4.5

5.5

6.5

7.5

8.5

Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16

72.5

75.0

77.5

80.0

82.5

85.0

87.5

90.0

92.5

95.0

97.5

100.0

102.5

105.0

Jul11

Jul12

Jul13

Jul14

Jul15

Jan16

Mar16

Jun16

Sep16

Dec16

Weekly averageLast 52 weeks

Monthly averageLast 5 years

Index 2000=100Weighted-Average DollarInterContinental Exchange Index

Weighted‐Average DollarInterContinental Exchange Index


The IMF’s downward forecasts of global growth

3.00

3.25

3.50

3.75

4.00

2013 2015 2017 2019

Lower Growth–World

April 2015forecast

October 2015forecast

April 2016forecast


Percent change

3.75

4.00

4.25

4.50

4.75

5.00

5.25

5.50

2013 2015 2017 2019

Lower Growth–Emerging markets and developing

countries

April 2015forecast


April 2016forecast


Percent change


Source: IMF, World Economic Outlook forecast database.

Global production and consumption are record highs

300

400

500

600

700

800

MMT Wheat

Source: World Agricultural Supply and Demand Estimates, December 9, 2016. Foreign Agricultural Service, PS&D database.

300

400

500

600

700

800

900

1,000

1,100

MMT Corn

0

50

100

150

200

250

300

350

MMTSoybean

Global ending stocks remain high

Source: World Agricultural Supply and Demand Estimates, December 9, 2016. Foreign Agricultural Service, PS&D database.

100

150

200

250

300

350

400

40

60

80

100

120

140

160

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Wheat CornRice SoybeansCotton (right axis)

Days of use Days of use

Prices soften, rise modestly over time

Ave 2000‐03 2011 2012 2013 2014 2015F 2016F

2017 Baseline

2026 Baseline

Wheat ($/bu) 3.09 7.24 7.77 6.87 5.99 4.89 3.70 4.00 5.00

Corn ($/bu) 2.14 6.22 6.89 4.46 3.70 3.61 3.35 3.30 3.70

Soybeans ($/bu) 5.45 12.50 14.40 13.00 10.10 8.95 9.45 9.35 9.55Cotton (cents/lb) 46.48 88.30 72.50 77.90 61.30 61.20 67.00 64.00 68.00

All Rice ($/cwt) 5.61 14.50 15.10 16.30 13.40 12.10 10.40 10.70 12.60

Red denotes record high.

Source: USDA‐OCE, World Agricultural Supply and Demand Estimates, Dec 9, 2016. Baseline, November 29, 2016

Crop


Real Commodity PricesLong run downward price trend as productivity has increased

2005=1002005=100

0

100

200

300

400

500

600

700

800

0

100

200

300

400

500

600

700

800

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Corn

Soybeans

Rice

Wheat

Source: USDA‐OCE Early‐Release Tables from USDA Agricultural Projections to 2026.

Crop Area Expected to DeclineCrop (mil.acres) 2010 2011 2012 2013 2014 2015 2016

2017 Baseline

2026 Baseline

Corn 88.2 91.9 97.2 95.4 90.6 88.0 94.5 90.0 86.0

Soybeans 77.4 75.0 77.2 76.8 83.7 82.7 83.7 85.5 85

Wheat 52.6 54.3 55.3 56.2 56.8 55.0 50.2 48.5 49.5Upland cotton1 10.8 14.4 12.0 10.2 10.8 8.4 10.0 10.5 10.0Minor feed grains 11.4 10.4 12.6 14.6 12.8 15.2 12.6 11.7 10.8

Rice 3.6 2.7 2.7 2.5 2.9 2.6 3.2 2.7 2.9Total 8 crops 244.0 248.7 257.1 255.7 257.4 251.9 254.1 248.9 244.2

CRP 31.0 31.1 29.5 26.8 25.4 24.2 23.8 23.5 23.98 crops + CRP 275.0 279.9 286.7 282.6 282.9 276.1 277.9 272.4 268.2


0

10

20

30

40

50

60

70

80

90

100

1919

1924

1929

1934

1939

1944

1949

1954

1959

1964

1969

1974

1979

1984

1989

1994

1999

2004

2009

2014

2019

2024

Million acres

US Wheat Area1919‐2026

Area for 2017/18 lowest on record


VHI Data – Oct 2010

Despite a significant drought in the west, national wheat production was a record 27.4 Mt…

…because near ideal growing conditions in the south and east led to very high yielding crops.

December 9, 2016Source: WASDE Secretary’s Briefing December 9, 2016

VHI Data – Oct 2016

This year, conditions in the west are vastly better than in 2010…

…and conditions in the south and east are even better than the excellent conditions in 2010.

December 9, 2016Source: WASDE Secretary’s Briefing December 9, 2016

Global wheat supply and use

0

50

100

150

200

250

300

350

400

500

550

600

650

700

750

800

2000

/200

120

01/200

220

02/200

320

03/200

420

04/200

520

05/200

620

06/200

720

07/200

820

08/200

920

09/201

020

10/201

120

11/201

220

12/201

320

13/201

420

14/201

520

15/201

620

16/201

7

ProductionConsumptionEnding Stocks

Mil MT

Source: USDA PSD database, December 9, 2016

Projected wheat exports

0

25

50

75

100

125

150

175

200

US EU CanadaAustralia Argentina OtherFSU

MMT

0

1

2

3

4

1991

/199

2

1994

/199

5

1997

/199

8

2000

/200

1

2003

/200

4

2006

/200

7

2009

/201

0

2012

/201

3

2015

/201

6

Russia Ukraine United States

MT/HT

Source: USDA‐OCE USDA Agricultural Projections to 2025 released February 2016.

Global corn supply and use

0

50

100

150

200

250

300

350

400

500

600

700

800

900

1000

1100

2000

/200

120

01/200

220

02/200

320

03/200

420

04/200

520

05/200

620

06/200

720

07/200

820

08/200

920

09/201

020

10/201

120

11/201

220

12/201

320

13/201

420

14/201

520

15/201

620

16/201

7


Mil MT


High World Corn Prices Support Area Expansion in Competitor Countries

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

15

17

19

21

23

25

2720

04/200

5

2006

/200

7

2008

/200

9

2010

/201

1

2012

/201

3

2014

/201

5

2016

/201

7

$/bushelMil Ha

Corn Area in Argentina+Brazil+Ukraine U.S. Corn Price

Source: PS&D Online, WASDE & NASS.

U.S. Corn Exports Will Likely Face Strong Competition Beginning In Spring 2017

140

160

180

200

220

240

260

Jan‐14

Feb‐14

Mar‐14

Apr‐14

May‐14

Jun‐14

Jul‐1

4Au

g‐14

Sep‐14

Oct‐14

Nov

‐14

Dec‐14

Jan‐15

Feb‐15

Mar‐15

Apr‐15

May‐15

Jun‐15

Jul‐1

5Au

g‐15

Sep‐15

Oct‐15

Nov

‐15

Dec‐15

Jan‐16

Feb‐16

Mar‐16

Apr‐16

May‐16

Jun‐16

Jul‐1

6Au

g‐16

Sep‐16

Oct‐ 16

Nov

‐16

Dec‐16

Jan‐17

Feb‐17

Mar‐17

Apr‐17

$/MT, FOB

Argentina, Up River Black Sea Brazil, Paranagua US Gulf

Source: International Grains Council.

Current Forward Quotes

U.S. Is World’s Largest Corn Exporter, But Share Has Declined

0%10%20%30%40%50%60%70%80%90%

0

20

40

60

80

100

120

140

160

1960

/196

1

1964

/196

5

1968

/196

9

1972

/197

3

1976

/197

7

1980

/198

1

1984

/198

5

1988

/198

9

1992

/199

3

1996

/199

7

2000

/200

1

2004

/200

5

2008

/200

9

2012

/201

3

2016

/201

7

MMT

Total Trade U.S. Share

Source: PS&D Online. Oct‐Sep basis.

2012 U.S. Drought

2015/16

U.S. Argie Brazil China Other

15.2 MMT

Japan’s Corn Import Market Size Declines While Fight For Market Share Increases

2005/06

‐1.4 MMT

Source: Japan Customs, Oct‐Sep basis.

16.6 MMT

0

20

40

60

80

100

120

140

160

1990 1995 2000 2005 2010 2015 2020 2025

United States

FSU

Brazil

Argentina

EU

China

Other

Global corn exports

Million metric tons

1 Former Soviet Union.

1

Global Corn Exports


Monthly Chinese Corn/Barley/Sorghum Imports by Origin

0.00.51.01.52.02.53.03.54.04.55.0

10/201

012

/201

002

/201

104

/201

106

/201

108

/201

110

/201

112

/201

102

/201

204

/201

206

/201

208

/201

210

/201

212

/201

202

/201

304

/201

306

/201

308

/201

310

/201

312

/201

302

/201

404

/201

406

/201

408

/201

410

/201

412

/201

42/20

154/20

156/20

158/20

1510

/201

512

/201

502

/201

604

/201

606

/201

608

/201

610

/201

6

Million Metric

Ton

s

US‐CORN US‐SORGHUM US‐DDG

Ukraine‐CORN Thailand/Burma/Laos‐CORN Other‐CORN

BARLEY Other‐SORGHUM Other‐DDG

Source: Global Trade Information Services (GTIS)

Soybean to Corn Ratio In China and United States

1

1.5

2

2.5

3

3.5

4Jan‐05

Jul‐0

5Jan‐06

Jul‐0

6Jan‐07

Jul‐0

7Jan‐08

Jul‐0

8Jan‐09

Jul‐0

9Jan‐10

Jul‐1

0Jan‐11

Jul‐1

1Jan‐12

Jul‐1

2Jan‐13

Jul‐1

3Jan‐14

Jul‐1

4Jan‐15

Jul‐1

5Jan‐16

Jul‐1

6

DCE Ratio CME Ratio

Source: International Grains Council. Ratio of nearby futures.

Global soybean supply and use

0

20

40

60

80

100

120

140

0

50

100

150

200

250

300

350

400

2000

/200

120

01/200

220

02/200

320

03/200

420

04/200

520

05/200

620

06/200

720

07/200

820

08/200

920

09/201

020

10/201

120

11/201

220

12/201

320

13/201

420

14/201

520

15/201

620

16/201

7


Mil MT


SoybeansProduction Future Demand

0

50

100

150

200

250

300

350

400

450

90/91

93/94

96/97

99/00

02/03

05/06

08/09

11/12

14/15

17/18

20/21

23/24

US S. America other

MMT

0

20

40

60

80

100

120

140

160

180

90/91

93/94

96/97

99/00

02/03

05/06

08/09

11/12

14/15

17/18

20/21

23/24

China Row

MMT


MMTSoybean Meal Replaces Japan’s Soybean Imports

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

1

2

3

4

5

6

Soybean Meal Soybeans U.S. Share of Soybean Imports

U.S. share of Japan’s soybean imports ranged from 62‐80 percent since 2000

Source: PS&D Online, Japan Customs, Oct‐Sep basis.

Japan’s Soybean Meal Import Market Grows with Larger Shipments from China

17%

2000/2001

70%

2015/16

China U.S India Other

611,000 MT

1,721,000 MT

+1.1 MMT

Source: Japan Customs, Oct‐Sep basis.

Global rice supply and use

0

50

100

150

200

250

250

300

350

400

450

500

2000

/200

120

01/200

220

02/200

320

03/200

420

04/200

520

05/200

620

06/200

720

07/200

820

08/200

920

09/201

020

10/201

120

11/201

220

12/201

320

13/201

420

14/201

520

15/201

620

16/201

7


Mil MT


Global Rice Trade

0

10

20

30

40

50

60

ThailandUSVietnamROW

MMT


Beef, pork, poultry, and milk production higher in 2016 and 2017, all but pork up in 2018.

Animalproducts 2012 2013 2014 2015 2016F 2017F 2018F*

Million metric tonsBeef 11.7 11.7 11.0 10.7 11.4 11.8 12.3Pork 10.6 10.5 10.3 11.1 11.3 11.7 11.6Broilers 16.8 17.1 17.5 18.2 18.5 18.8 18.9Total1 41.8 42.0 41.5 42.3 44.2 45.4 45.6

Million metric tonsMilk 91.0 91.3 93.5 94.6 96.4 98.4 100.7

Red denotes record high.

1 Total includes turkey production.Source: USDA‐OCE, World Agricultural Supply and Demand Estimates, Dec 9, 2016. Baseline, November 29, 2016

Cattle and hog prices to come down in 2016 and 2017, but broilers and dairy turn up in 2017, all up

in 2018.

Prices in red denote record levels.

Item 2012 2013 2014 2015 2016F 2017F 2018F*

Dollars per metric ton

Steers 2,709 2,776 3,408 3,265 2,658 2,359 2,601

Hogs 1,343 1,413 1,676 1,107 1,009 882 896

Broilers 1,909 2,198 2,313 1,995 1,856 1,819 1,817

Milk 408 443 529 377 355 380 388

Source: USDA‐OCE World Agricultural Supply and Demand Estimates, December 9, 2016 and *Early‐Release Tables from USDA Agricultural Projections to 2026.

US Meat Exports

0

500

1,000

1,500

2,000

2,500

3,000

3,5002000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016F

2017F

Broilers

Pork

Beef and veal

1000 MT

Source: USDA‐OCE.


US Dairy Exports

0

100

200

300

400

500

600

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016F

Nonfat Dry Milk

Cheese

Butter

Dry Whole MilkPowder

1000 MT

Source: USDA.


Ethanol margin tightens but production highEthanol Margin1

Source: 1 OCE calculations, AMS data for IA, NE, IL/eastern corn belt, 2 Energy Information Agency.

$ per gallon annualized rate in billion gallons

Ethanol Production2

-0.40-0.200.000.200.400.600.801.001.201.401.60

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

10

11

12

13

14

15

16

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

RFS Max conventional ethanol

US corn used in ethanol to grow modestly

0

5

10

15

20

25

30

35

40

0

1

2

3

4

5

6

1998

/99

2000

/01

2002

/03

2004

/05

2006

/07

2008

/09

2010

/11

2012

/13

2014

/15

2016

/17

2018

/19

2020

/21

2022

/23

2024

/25

2026

/27

Ethanol corn use Ethanol share of corn use (%)

PercentBil bu

Source: USDA Agricultural Projections to 2026, Released November 29, 2016

US Gasoline Consumption

115

120

125

130

135

140

145

15020

15

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

Bil Gallons

USDA Gasoline Product Supplied, Bil GallonsAEO Liquid Fuels Use: by Fuel: Motor Gasoline Bil GalNovember STEO Gasoline Cons, Bil Gal

Source: Department of Energy, Annual Energy Outlook (AEO), Short Term Energy Outlook (STEO) and USDA limited baseline release November 29, 2016

Biofuel RIN prices

0.00

0.50

1.00

1.50

2.00Jan‐12

Apr‐12

Jul‐1

2

Oct‐12

Jan‐13

Apr‐13

Jul‐1

3

Oct‐13

Jan‐14

Apr‐14

Jul‐1

4

Oct‐14

Jan‐15

Apr‐15

Jul‐1

5

Oct‐15

Jan‐16

Apr‐16

Jul‐1

6

Oct‐16

dollars per RIN gallon

D6 D4 D5

EPA Announces Standards for 2014, 2015 and 2016 (+ Biodiesel for 2017)

EPA Announces Proposed Standards for 2017 (+ Biodiesel for 2018)

Finalizes 2017

Closing in on Blend Wall

Source: OPIS

Total US biofuel mandate loweredfuel types adjusted differently

0

5

10

15

20

25

2014Legislated

2014Applied

2015Legislated

2015Applied

2016Legislated

2016Applied

2017Legislated

2017Applied

Cellulosic

Biodiesel

UnspecifiedAdvanced

Conventional

Billion Gallons

Biodiesel Feedstocks

0

200

400

600

800

1,000

1,200Jan‐13

Mar‐13

May‐13

Jul‐1

3

Sep‐13

Nov

‐13

Jan‐14

Mar‐14

May‐14

Jul‐1

4

Sep‐14

Nov

‐14

Jan‐15

Mar‐15

May‐15

Jul‐1

5

Sep‐15

Nov

‐15

Jan‐16

Mar‐16

May‐16

Jul‐1

6

Sep‐16

Million Po

unds

Soybean Oil Other Vegetable Oils Animal Fat

Source: U.S. Energy Information Administration

Central Illinois Production Budget 2016Highly Productive Land Per Acre Trend Yields

Per Acre + 10% Trend Yields

Corn After Soybeans

Soybeans After Corn

Corn After Soybeans

Soybeans After Corn

Total non‐land costs $552 $351 $552 $351

Yield (bushel/acre) 201 58 221 64Price (per bushel) $3.25 $9.05 $3.25 $9.05Crop Revenue $653 $525 $718 $579

ARC(PLC) $30 $30 $30 $30Insurance Proceeds $0 $0 $0 $0

Operator and Land Returns (excludes ARC/PLC) $101 $174 $166 $228

Cash Rent $278 $278 $278 $278


Source: University of Illinois, Dec 2015 Crop Budget; FarmDoc Daily Land Rent Est, Sept 2015.

U.S. 4WD Tractor SalesAccumulated Sales, current year and prior 5 year min/max

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Units Sold

5Y Min 5Y Max 2016 Acc. Sales

Source: American Equipment Manufacturers


In the US falling rents ahead of land values

0

50

100

150

200

250

300

1990 2000 2010 2020

Appalachian

Corn Belt

Delta States

Lake States

Mountain

Northeast

Northern Plains

Pacific

Southeast

Southern Plains0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990 2000 2010 2020

Source: USDA NASS.

$/acre $/acre Cash Rent Land Value

2016F

0

40

80

120

160

1990 1995 2000 2005 2010 2015

Real Nominal

Net farm income declines in 2016 and is the lowest since 2009$ billion

Net farm income is net cash farm income, plus non‐cash income and costs including inventory changes.

Net farm income forecast to decline 17.2%.

F= Forecast.Source: USDA, Economic Research Service, Farm Income & Wealth Statistics. Data as of November 30, 2016.

1/

Farm sector debt‐to‐asset and debt‐to‐equity ratios expected to rise slightly in 2016

Debt‐to‐asset (D/A) and debt‐to‐equity (D/E) are solvency ratios. Higher ratios indicate higher likelihood of default and decreased ability to overcome adverse financial events.

For the fourth straight year, both farm sector D/A and D/E ratios are forecast to rise, but remain low by historical standards (since 1970).

‐

5

10

15

20

25

30

1970

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

2015

PercentFarm sector debt ratios, 1970‐2016F

Debt‐to‐asset ratio Debt‐to‐equity ratio

F= Forecast. Source: USDA, Economic Research Service, Farm Income and Wealth StatisticsData as of November 30, 2016

Payment made in October 2016 based on 2015/16 crop

Crop Insurance has become the most important safety net program and revenue products dominate

0

50

100

150

200

250

300

350

1990 1993 1996 1999 2002 2005 2008 2011 2014

OtherAreaRevenueAPH

Mil acres

Source: USDA RMA Summary of Business Data

Market Outlook and Situation• Commodity prices have declined from recent highs,

historically productivity has kept pace with demand leading to long run declines in prices

• Record global production, including in the US, has led to rising global stocks

• Slowing global economic growth has slowed demand growth for agricultural products.

• US dollar strength poses challenges to export competitiveness

• Global policy changes impact trade and add market uncertainty

• China’s demand path a key driver, for soybeans in particular• Farm Income has declined with falling crop and livestock

prices. Input use and land prices will adjust

usda agricultural outlook - maff.go.jp · 2020-04-06 · forecast october 2016 forecast percent...

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