ABUNDANT FEED SUPPLIES KEEP PRESSURE ON PRICES

Editor: Marlene Fritz (208/364-4010 in Boise)
Sources: Paul Patterson (208/529-8376 in Idaho Falls)
Neil Rimbey (208/459-6365 in Caldwell)

IDAHO FALLS, Idaho–With ending stocks of U.S. feed grains continuing to build and with the third-largest U.S. corn crop following directly on the heels of the second, a University of Idaho extension agricultural economist says feed barley should continue to trade in the $3.50 to $4.00 per hundredweight range during the 1999-00 marketing year.

"Cheap corn means cheap barley for Idaho producers," says Paul Patterson in the university’s January 2000 Idaho Agricultural Outlook.

According to Patterson, the USDA is currently forecasting the average price for 1999-00 corn to fall within the $1.70-to-$1.90 per bushel range. That compares with a five-year average price of $2.42. Although corn producers harvested fewer acres in 1999 than the five-year average, ample yields averaging134.5 bushels pushed production to 9.537 billion bushels.

Corn accounts for 90 percent of U.S. feed grain production. "While barley may be the dominant feed grain in the many Western states, including Idaho, corn is the key to all feed grain prices," Patterson says.

At 265.9 million metric tons, total production of all U.S. feed grains for the 1999-00 marketing year was down 2.1 percent from the previous crop. Although use was up 1.8 percent, U.S. ending stocks are persistently building as annual use continues to fall short of annual production. The USDA anticipates 1999-00 ending stocks of 56.4 MMT--up 9.3 percent over the previous year–and a price-depressing stocks-to-use ratio of 27 percent.

Worldwide, 1999-00 coarse grain production of 876.5 MMT is expected to be down 14 MMT from 1998-99. "The 1.6 percent reduction is beneficial, but not of the magnitude to help much on the price side," Patterson says. At 155.5 MMT, USDA-projected world ending stocks of coarse grains exceeded the previous year’s for the fourth consecutive year–but the increase is the smallest of the four. Patterson calls the 17.8 percent expected stocks-to-use ratio "a modestly high value."

On Jan. 11, the USDA’s National Agricultural Statistics Service will release data on hay stocks remaining on Idaho farms. At Caldwell, UI extension range economist Neil Rimbey says producers should compare those figures with the long-term average of about 2.9 million tons.

"If the report shows that Idaho hay stocks are large, this indicates hay has not been moving and there may be pressure on prices," Rimbey says. "If hay stocks are lower than expected, there may be higher hay prices on the horizon."

In October 1999, Rimbey projected $85-to-$110 per ton prices for high-quality dairy and horse hay but only $35 to $55 for lower quality feeder and beef hay. By mid-December, the USDA had released no additional information that would change those projections.

The 1999 Idaho hay crop was the largest on record. Heaped on top of generous carryover stocks from 1998, it brought Idaho’s October 1999 hay supply to an all-time high of 6.254 million tons.

The University of Idaho’s January 2000 Idaho Agricultural Outlook is available at length, with supporting tables and graphs, on the web site of the UI Department of Agricultural Economics and Rural Sociology, http://www.uidaho.edu/ag/agecon. Once on the home page, Internet users should click first on Publications, then on the Idaho Agricultural Outlook for January 2000. Planning price projections for Idaho commodities can also be found on the home page.