3. Broiler production continues to grow. Broilers can reach a 5- pound market weight in just five weeks. 15,000 20,000 25,000 30,000 35,000 40,000 45,000 million pounds Broilers (Federally Inspected), 1990-2017
57 Applied Economics 3411/5411, 2018 Lecture Notes Copyright © 2018 Edward Usset. All rights reserved. U.S. Grain Use Wheat : Food demand represents the most stable component of wheat demand. The demand for wheat flour generally follows population growth, about 1% per year. Can food consumption trends make a difference? Yes! Despite population growth, food demand has not grown over the past 4 years. Could this be the impact of the “gluten free” trend? In 1980, export demand of 1.5 billion bushels was more than twice as large as domestic demand, 600 million bushels. Today, domestic demand and exports are very close. U.S. wheat exports first topped 1 billion bushels in 1972, and total wheat exports in 2018 will be just a little less than they were 45 years ago. The world wheat trade is very competitive and, with the recent addition of Russia, Ukraine and Kazahkstan, getting more crowded. The export market for U.S. wheat is erratic and the trends is, at best, sideways. Feed demand is also erratic, driven by year-to-year changes in the wheat/corn price spread and wheat quality. “Residual” demand is essentially a plug number used by USDA to balance demand with known stocks. 0 200 400 600 800 1,000 1,200 1,400 1,600 million bushels Export and Domestic Demand for U.S. Wheat, 1990-2018 Exports Food Seed Feed and Residual
58 Applied Economics 3411/5411, 2018 Lecture Notes Copyright © 2018 Edward Usset. All rights reserved. Mexico is our primary destinaition for wheat exports, followed by Japan and the Phillipines. Japan and the Phillipines are long-time buyers of U.S. wheat. Exports to Mexico are growing. Corn : Ethanol demand was the story in corn during the first decade of the new century. Ethanol demand for corn was the smallest component of demand in 1990, and now it challenges feed for the lead as the largest component of corn demand. It is worth noting that the incredible growth in corn demand for ethanol production has slowed since 2010. Food and industrial demand – not including ethanol – continues to grow slowly. Industrial use includes corn syrups (including high fructose corn syrup) and starch. Export demand is a smaller factor in corn than wheat and soybeans, and about the same level as food demand. Corn exports seemed remarkably steady, until 2012, when a drought stricken crop and higher prices crimped demand. Corn exports climbed back above the 2 billion bushel mark in 2016, the first time in a decade that corn exports topped that figure. Mexico, 132 Japan, 107 Philippines, 97 Sub-Saharan Africa, 96 China, 61 South Korea, 49 Brazil, 48 Indonesia, 42 Taiwan, 39 other, 360 U.S. Wheat Exports by Country, 2016/17 (June/May, mb)
59 Applied Economics 3411/5411, 2018 Lecture Notes Copyright © 2018 Edward Usset. All rights reserved.
- Spring '14
- Supply And Demand, Edward C. Usset