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U.S. and World Crop and Livestock Outlook

U.S. and World Crop and Livestock Outlook. Pat Westhoff Food and Agricultural Policy Research Institute (FAPRI) www.fapri.missouri.edu Agricultural Outlook Conference, Lubbock May 14, 2004. Agenda. Macroeconomic outlook Crop market outlook Livestock market outlook Policy issues.

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U.S. and World Crop and Livestock Outlook

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  1. U.S. and World Crop and Livestock Outlook Pat Westhoff Food and Agricultural Policy Research Institute (FAPRI) www.fapri.missouri.edu Agricultural Outlook Conference, Lubbock May 14, 2004

  2. Agenda • Macroeconomic outlook • Crop market outlook • Livestock market outlook • Policy issues

  3. Macroeconomic outlook Source: Project LINK, April 15, 2004

  4. Interest rates Source: Global Insight, Dec. 2003

  5. Federal budget deficit Source: CBO estimates of President’s Budget, 2004

  6. Market overview: Crop prices Sources: Season average farm prices: USDA’s World Agricultural Supply and Demand Estimates (WASDE), May 12, 2004 (note: USDA is not allowed to project cotton prices) Futures: NYCE cotton and CBOT wheat, May 12, 2004 close

  7. U.S. average farm prices

  8. Texas average farm prices

  9. World grain supply and demand

  10. China grain supply and demand

  11. U.S. planted area (FAPRI Jan. 2004 baseline)

  12. U.S. planted area (FAPRI Jan. 2004 baseline)

  13. U.S. wheat acreage and production Source: USDA World Agricultural Supply and Demand Estimates, May 12, 2004

  14. Exporter wheat production(May 2004 USDA estimates)

  15. Wheat supply and demand (mil. bu.) May 2004 USDA estimates for 2003/04; Unofficial May 2004 FAPRI estimates for 2004/05

  16. U.S. sorghum acreage and production 2004 figures based on USDA planting intentions report and an assumption of average growing conditions

  17. U.S. feed and residual use

  18. Corn used to produce ethanol

  19. Mexican net imports of corn and sorghum (Jan. 2004 FAPRI baseline)

  20. Sorghum supply and demand (mil. bu.) May 2004 USDA estimates for 2003/04; Unofficial May 2004 FAPRI estimates for 2004/05

  21. Highlights for other crops May 2004 USDA estimates for 2003/04 Unofficial May 2004 FAPRI estimates for 2004/05 Corn and soybeans in mil. bu. and $/bu., cotton in mil. bales and cents/lb.

  22. U.S. wheat returns (FAPRI Jan. 2004 baseline)

  23. U.S. sorghum returns(FAPRI Jan. 2004 baseline)

  24. U.S. upland cotton returns(FAPRI Jan. 2004 baseline)

  25. Crop summary • Recent strength in grain markets from a variety of factors • Production shortfalls in 2002 and 2003 • Tightening of Chinese markets • Strong U.S. demand for corn (ethanol and more) • With lower U.S. and world stocks of grains and cotton, markets will be sensitive to news

  26. Cattle outlook issues • BSE cases in U.S. and Canada • Effects on U.S. imports of cattle and beef • Effects on U.S. beef exports • Domestic demand • Trade agreements • Animal identification

  27. BSE and cattle prices

  28. Livestock Marketing Information Center

  29. Livestock Marketing Information Center

  30. USDA cattle* quarterly price estimates Dollars per Cwt BSE Detected In Canada (5/20/2003) BSE Detected In United States (12/23/2003) * Nebraska Direct Choice Steers 1100-1300 lbs.

  31. Livestock Marketing Information Center Data Source: USDA/NASS

  32. Livestock Marketing Information Center Data Source: USDA/NASS

  33. Livestock Marketing Information Center

  34. Choice Boneless Sirloin Steak Retail Price

  35. Cattle and beef outlook (USDA estimates from May 2004)

  36. U.S. livestock production (Jan. 2004 FAPRI baseline)

  37. U.S. meat and poultry net exports(Jan. 2004 FAPRI baseline)

  38. U.S. livestock prices(Unofficial April 2004 FAPRI estimates)

  39. Livestock summary • Domestic cattle supplies to remain tight • Strong domestic demand has supported prices, offsetting lost export markets • Cattle prices could strengthen when export markets reopen • Animal ID will continue to cause discussion • Feed costs add another uncertainty to the picture • Details of new trade agreements crucial to the sector

  40. Good news/bad news on the budget • For 2004, cuts in basic farm programs appear unlikely • But… • Could be cuts in conservation programs to pay for research, food assistance, rural development, etc. • In 2005, if budget picture doesn’t improve, could be farm program cuts regardless of who is elected President or to Congress

  41. Other policy issues • Implementation of Conservation Security Program • Trade agreements with Australia, Morocco, Central America (and more to come?) • Brazilian WTO cotton case • WTO negotiations

  42. Extra slides

  43. U.S. per-capita food use of wheat

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