March 4, 2004
Canadian Feed Usage Seen Impacted By BSE
Canadian feed use projections will be directly affected in 2003/04 and 2004/05 due to closure of overseas markets for live cattle exports resulting from the discovery of bovine spongiform encephalopathy in 2003, according to information from the U.S. Department of Agriculture's Foreign Agricultural Service web site, dated Feb. 24 and released Wednesday.
NON-DURUM WHEAT
Production
Non-durum wheat acreage for 2004/05 is expected to drop below 2003/04 levels as declining projected Pool Return Outlook prices from the Canadian Wheat Board for 2003/04 temper farmer's planting intentions. Assuming that yield levels are relatively unchanged from 2003/04, this will result in a slight decline in non-durum wheat production for 2004/05.
Trade
As a result of the forecast decrease in production, partially offset by higher beginning stocks, 2004/05 non-durum wheat imports are expected to increase slightly, while exports are expected to decline.
Policy
Post considers that the ongoing issues over bovine spongiform encephalopathy, while not related to any specific domestic policy, will have a somewhat negative impact on the production of non-durum wheat as farmers switch acreage to feed grains and other crops, (such as canola if moisture concerns in fact do not become a problem), the release said. The continuation of anti-dumping and countervailing duties by the U.S. Department of Commerce are expected to continue to make the U.S. an uneconomical market for Canadian non-durum wheat.
DURUM WHEAT
Production
Expectations of a winter with below average snowfall lending to the idea of moisture concerns for the upcoming growing season will result in increased plantings of durum wheat. Combined with increased yields, durum production for 2004/05 is expected to increase.
Trade
Durum imports for 2004/05 are expected to remain unchanged, while durum wheat exports are expected to increase due to increased supplies.
Policy
The determination by the U.S. International Trade Commission and the subsequent dropping of anti-dumping and countervailing duties by the U.S. Commerce will continue to be a positive factor for Canadian exports of durum wheat. The resumption in durum exports to the U.S. will be accompanied by increased exports to third-country markets on account of the overall increase in durum supplies.
BARLEY
Production
Under the assumption that barley acreage for 2004/05 will increase as farmers seek to provide more feed barley for the domestic cattle sector that is coping with BSE and record cattle herd numbers, together with an anticipated increase in yield, Post forecasts that Canadian barley production will increase for 2004/05, the release said.
Trade
Good production will likely result in continued low barley imports, almost unchanged from 2003/04 levels. Increased requirements by the livestock feed sector will result in more domestic production being used locally. Barley exports are not expected to change from 2003/04 levels.
Policy
BSE will result in the increased barley supplies being used domestically for livestock feed consumption.
CORN
Production
Increased acreage as Ontario farmers switch from winter wheat to corn will be partially offset by yields declining from record levels in 2003/04. This will result in an overall (slight) increase in corn production for 2004/05.
Trade
Reduced ending stocks for 2003/04 combined with only a marginal increase in corn production for 2004/05 will result in a marginal increase in corn imports. However, imports will not return to the record levels seen in 2002/03. Exports are expected to decline as domestic usage increases, primarily for industrial purposes.
Policy
While overall domestic corn consumption is expected to rise due to increased industrial usage, the effects of BSE are also expected to see additional corn (in silage and grain corn format) fed to livestock in eastern Canada.
OATS
Production
Oat production for 2004/05 is forecast to increase due to higher yields and lower abandonment.
Trade
Oat imports for 2004/05 are forecast to decline slightly as domestic production increases. Exports, mainly to the U.S., are forecast to rise due to increased supplies and stronger U.S. demand. Domestic use is forecast to increase and carry-out stocks are expected to rise.
Source: USDA
