World Agricultural Supply And Demand Estimates

Current estimates of global agricultural production, inventories, exports, and consumption are presented for 2007/2008, including outlooks for the following categories: wheat, coarse grains, rice, oilseeds, sugar, livestock, poultry, and dairy, and cotton.

The forecast for total 2008 U.S. meat production is raised as higher expected beef and pork production more than offset lower forecast broiler production. Beef production is increased due to continued strong cow slaughter and higher-than-expected cattle weights. Pork production forecasts are raised as USDA’s Quarterly Hogs and Pigs report, released on March 28, indicated large hog inventories on March 1, upwardly revised pig crops for second half 2007, and pointed to a relatively large pig crop in the first half of 2008. Although this implies larger slaughter in 2008, increased forecast corn prices are expected to limit hog weights. Poultry production forecasts are reduced as hatchery data point to a slowdown in production and higher grain prices are expected to affect growth later in the year. Turkey production is increased slightly as early gains in the first part of the year offset expected slower growth in the second half. Egg production is raised slightly for 2008 as the industry responds to continued high egg prices.

Beef import forecasts for 2008 are lowered from last month as high domestic cow slaughter reduces the demand for imported processing beef. Pork imports are unchanged from last month. Beef export forecasts for 2008 are lowered due to slow exports to both North America and Asia markets. Pork and broiler export forecasts for 2008 are unchanged.

Forecasts for 2008 cattle and hog prices are reduced as beef and pork supplies are forecast larger than last month. However, broiler, turkey, and egg price forecasts are raised as slower forecast production growth, especially in the second half, is expected to support prices.

Forecasts for 2008 milk production are reduced as growth in output per cow is forecast slower than last month. Higher feed prices are expect to dampen output during the year. The first quarter cow herd forecast is raised but subsequent quarters are unchanged.

Both Class III and Class IV price forecasts for 2008 are raised from last month. Tighter supplies of milk and expected strength in both domestic and export commercial use underlie increased product price forecasts. Cheese prices are forecast higher as supplies remain tight. Despite current relatively heavy production and large stocks, butter prices are forecast higher as later year supplies are expected to tighten. Nonfat dry milk prices are also forecast slightly higher as supplies tighten and export and domestic demand remains relatively firm. Whey price forecasts are raised slightly. The all milk price forecast for 2008 is raised to $17.65 to $18.15 per cwt.