Every livestock producer is widely aware of the critically low supply of livestock feed and the high prices that are prevalent across the nation for grains, forage, and any other commodity that might be considered as livestock feed. But the domestic availability is mirrored overseas, where many nations are coming to the U.S. and purchasing significant amounts of grain for their own livestock. Will there be enough to go around?
From July to August, 2.2 billion bushels of corn disappeared. If that had happened on Wall Street, someone would be answering to Congress and subjected to investigations, lawsuits, and potentially criminal prosecution. But a drought cannot be prosecuted and end users of that amount of feed will have to make do elsewhere. That is easier said than done, but in the USDA’s big balance sheet for livestock feed there has to be a safety valve. But where?
The USDA’s recently issued Feed Outlook began with the dire observation that domestic corn and sorghum supplies were dropping further. Although the US supplies many nations, they may be lining up at Brazilian ports where a good corn crop was being harvested. China, which has been a 200 million bushel market for US corn, will have a record crop of its own. Those crops will take off some of the pressure on export demand. Domestically, total feed grain stocks are down 11% from last year. While corn is down, sorghum production is up, along with barley and oats. The total supply projected to be available is 318.7 million tons, down by 39.7 million from 2011 (12%).
The total demand for feed grains in the marketing year that begins September 1 is projected to be 30.2 million shorter than 2011—so the shortfall is 9.5 million tons. Because of the drought, the use of corn will be restricted for other end users, including food, seed, and industrial. In the latter category, ethanol production is down 13% from last year. Exports will be down 5.2 million tons. For total feed grains, the additional supply of sorghum will allow that category to increase. But while we are exporting feed grains, more are being imported, with a projected increase of 1.4 million tons, and particular increases for oats and barley.
While feed grains are coming in and going out, the number of animals to consume them is declining. Measured in grain consuming animal units, and generally reflective of a steer on feed, GCAU will be projected lower in the new marketing year compared to the one coming to a close. At the same time, the amount of feed being consumed per animal is also down as reflected in lower cattle carcass weights and lower hog numbers because of the feed expense.