May 16, 2007

US feed grains use sees record prospects

The US Department of Agriculture said total use of US feed grains is expected to reach record highs over the next several years due to increased usage of ethanol with a likely drop in domestic feed and residual use and corn exports. High grain prices will also push for a decline in feed and residual use for 2006/2007 and the succeeding years.  

US meat and poultry production returns are expected to fall in the next several years due to higher grain prices from expansion of corn-based ethanol production. This scenario will likely reduce beef and pork production and slow gains for poultry over the next several years. Foreign countries, particularly the developing ones, are posting faster growing economies, thereby, increasing its consumption of meat and dairy in their daily diets. This development could contribute to the growing demand for US fed grains but is seen to restrain also due impacts of higher feed grain prices.

The USDA said the use of byproducts (distillers' spent grains) from ethanol production is expected to meet more of the feed demands by US livestock.

With soaring corn prices, USDA reports grain feeding is seen to reduce in the next several years with corn exports to rise slightly in the 2006/2007 crop. This is due to global demand for feed grains amid its high prices. However, US exports are seen to decline on the next few years due to high grain prices.

Demand for feed grain will likely stimulate growth in the food, seed, and industrial (mostly fuel for ethanol) sectors as market conditions in the energy sector stimulate a faster pace of ethanol production than was required by the renewable fuel mandate, according to the USDA.