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World grain shortage report

andybob

Well-known member
World Grain Situation Not Looking Good
GLOBAL - Six of the last seven years world grain production has fallen short of world use.

World carryover of grain stocks are down to 57 days of consumption. Now with huge profits in converting grain into ethanol fuel there will be even less grain available for exports to other countries. Importing countries like Japan, Egypt, and Mexico are concerned that U.S. corn exports, which are 70 percent of the world total, will disrupt their poultry and livestock industries.

Other countries are also experiencing a decline in corn available for export. Argentina recently suspended export permits because of concerns over their domestic supply of corn. Exports from China are forecast to decline, and because of this, domestic prices are beginning to rise more rapidly throughout the country which could result in even less exports then currently expected.

The U.S. corn price for no.2 yellow corn in November averaged $164 per ton, up US $67 per ton, or 70 percent, from 2005. The Argentine export prices have also increased sharply in the recent months, to almost $170 per ton, up US$78 per ton from 2005. Other coarse grains have also been keeping a more firm market tone in recent months party because of the spill over effect of corn. Sorghum in the U.S. has become less available and barley and oats supplies in Australia are down sharply. Canada also reports reduced barley production.

There is a more comprehensive link on www.thepigsite.com with a country by country analysis,I couldn't copy it.
 

Jason

Well-known member
Frightening?

This situation has been developing for several years.

Anyone thinking grains would stay forever cheap with world population growing wasn't keeping up.

This shows drought is still the big stick in the picture, as Australia has suffered the driest season in recent memory, and that has forced most of the recent climb.

If corn exports fall to other cattle feeding countries, either there will be more lean beef on the market or grain fed cattle will climb, or maybe some of both.
 

agman

Well-known member
The statistics that you should know about regarding corn follow:

U.S. ending stocks vs usage in 1996, 5.0%, 2006/07 estimated at 7.7%

World ending stocks vs usage in 1996, 23%, 2006/07 estimated at 12% or one -half the level in 1996.

The U.S is 40% of world corn production but is 70% of world exports.

For the new crop year 2007/08: If planted acreage increases by 7.1 million acres as is currently forecast a tendline yield will produce a crop size of 11.96 billion bushels. Demand or usage is projected at 12.3 billion bushels. As such, ending stocks would be reduced from 935 million bushels to 594 million bushels. Thus, ending stocks versus usage, the main price driver of corn, would calculate at 4.8% for the 07/08 marketing year versus 7.7% for the 06/07 marketing year and the previous record low of 5.0% attained in 1995/96.

Now review the level of world ending stocks posted above. Yes, the U.S would project to have a record low ending stocks versus usage level of 4.8% while the world ending stocks are at a record low of 12% and one-half the the 23% level of 1995/96. I hope this information is beneficial for those who have a genuine interest and need in understanding the current and pending corn situation.
 

Jason

Well-known member
Thanks Agman those are exactly the kinds of numbers we should be watching.

Drought would kick the heck out of those ending stocks if it is widespread.

Seed growers still claim they can double the yield of corn, looks like they better get going.
 

Bullhauler

Well-known member
Every time the market gets high I hear the same BS. I am suprised nobody said my favorite line of ignorance "new plateau". I guarantee corn will be below $1.80 at my local elevator by this time next fall. Anyone want to take bets?
 

Sandhusker

Well-known member
Bullhauler said:
Every time the market gets high I hear the same BS. I am suprised nobody said my favorite line of ignorance "new plateau". I guarantee corn will be below $1.80 at my local elevator by this time next fall. Anyone want to take bets?

Nothing is ever as good or as bad as projected.
 

agman

Well-known member
Bullhauler said:
Every time the market gets high I hear the same BS. I am suprised nobody said my favorite line of ignorance "new plateau". I guarantee corn will be below $1.80 at my local elevator by this time next fall. Anyone want to take bets?

I am on for a $1,000. Agman
 

agman

Well-known member
Jason said:
Thanks Agman those are exactly the kinds of numbers we should be watching.

Drought would kick the heck out of those ending stocks if it is widespread.

Seed growers still claim they can double the yield of corn, looks like they better get going.

Yields nationally have increased approximately 3 bu/ac per year since 1996. What is overlooked is the early planting rate, a result of generally excellent planting conditions. Point: The actual improvement and yield gains from new varieties of corn may be overstated. As is most often the case, Mother Nature dictates the final yield.
 

cowzilla

Well-known member
Jason said:
Frightening?

This situation has been developing for several years.

Anyone thinking grains would stay forever cheap with world population growing wasn't keeping up.

This shows drought is still the big stick in the picture, as Australia has suffered the driest season in recent memory, and that has forced most of the recent climb.

If corn exports fall to other cattle feeding countries, either there will be more lean beef on the market or grain fed cattle will climb, or maybe some of both.
So whats the plan? Sell the cows, invest in corn futures and rent the pasture and hayland to a ambitious grain farmer . If everybody is so sure corn prices are going to stay high or go higher then we should all be able to make a good living without the cows :!: I think I will keep them for another year and see just incase :roll:
 

Red Robin

Well-known member
cowzilla said:
Jason said:
Frightening?

This situation has been developing for several years.

Anyone thinking grains would stay forever cheap with world population growing wasn't keeping up.

This shows drought is still the big stick in the picture, as Australia has suffered the driest season in recent memory, and that has forced most of the recent climb.

If corn exports fall to other cattle feeding countries, either there will be more lean beef on the market or grain fed cattle will climb, or maybe some of both.
So whats the plan? Sell the cows, invest in corn futures and rent the pasture and hayland to a ambitious grain farmer . If everybody is so sure corn prices are going to stay high or go higher then we should all be able to make a good living without the cows :!: I think I will keep them for another year and see just incase :roll:
I know a fella that is turning his hay ground into corn this spring. All of it. This might be a good year to plant alfalfa.
 

DiamondSCattleCo

Well-known member
Red Robin said:
I know a fella that is turning his hay ground into corn this spring. All of it. This might be a good year to plant alfalfa.

The same thing will be happening up here, although probably not at the same rate as the US, since our culls aren't worth anything and it'll be tougher to move from cattle to grain. But guys will take the cattle loss and turn hay, grassland, and specialty crop land into grain production, and the worldwide crisis will be eliminated. Next year, or the year after, we'll have a glut and prices will crash.

Rod
 

Maple Leaf Angus

Well-known member
DiamondSCattleCo said:
Red Robin said:
I know a fella that is turning his hay ground into corn this spring. All of it. This might be a good year to plant alfalfa.

The same thing will be happening up here, although probably not at the same rate as the US, since our culls aren't worth anything and it'll be tougher to move from cattle to grain. But guys will take the cattle loss and turn hay, grassland, and specialty crop land into grain production, and the worldwide crisis will be eliminated. Next year, or the year after, we'll have a glut and prices will crash.

Rod

If history is any indicator, the guys that are doing this had better get the crop priced or at least hedged before harvest.

I think it is safe to say that high prices usually happen when the least people can benefit from them.
 

William Kanitz

Well-known member
Everyone is missing the point here on grains. What has happened is that a few years ago the tables were turned when fuel ,oil, BTU's, gas were held hostage by OPEC demanding higher prices and the speculators started running up the price of a barrel of crude. So some within the energy industry started looking at options. First came corn stoves then grain furnaces,next ethanol came along and those speculators said ,wow there's a ton of BTU's in a 180 bu. corn crop. We can do what ADM can do and double our money by selling corn to feed the ethanol plants.

Well then the price of crude went over $50.00 bucks and the rest is history. So now all raw agricultural products will be priced according to the BTU's recovery rate around the world. A corn stove for a home now makes $8.75 tradeoff for a bu. of corn against fuel oil. The corn stove manufacturer's are 6-9 months behind in furnace production in every country that builds them. When the price of crude goes higher $80-$90 and China and India will want more product, then that will push all prices higher nomatter how mush is raised. Just look at the transportation in Brazil, Its running on Sugar Cane ,and the farmers are tearing out citrus groves to plant cane. Fuel is worth more then Feed.

http://www.earthinhandcornstoves.com/Corn_Stove_Info_Package.pdf
 

Maple Leaf Angus

Well-known member
Now that's just a mighty interesting perspective.

But I'm still not gonna go out and plow up my hay ground. Nor am I going to compete with the guys that are driving rent to all time highs to grow corn.
 

PORKER

Well-known member
Hey Jason , We are Snowbirds and we let the farm manager shovel snow and tend the cow herd till the snow melts. Isn't it wonderful to be able to afford a ranch in Florida with your retirement funds.
 
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