The last two weeks of December are always busy, and not just because of holiday activity. This is a good time to consider what’s driving corn demand, other than exports.
The monthly Cattle on Feed report and the quarterly hog and pig report seem to remind of us of that demand. While corn exports are certainly important - USDA is expecting 2.650 million bushels of this crop to be exported - demand from domestic usage for feeding is also vital to corn consumption.
According to the latest USDA estimates, 5.7 million bushels of corn will be consumed as livestock feed in the U.S. this year. To say the least, livestock are a large driver for corn demand. The release of the quarterly hog and pig numbers last week shows the inventory of all hogs and pigs in the U.S. was 99.1% of last year’s inventory.
Some other key numbers from the report included some revisions to prior year reports both higher and lower. The breeding herd was reported about 3% lower going forward.
Bottom line, the pork industry remains at very high numbers in the foreseeable future, adding to demand from that sector.
Looking also at Cattle on Feed numbers last week, while placements were light on cattle going into feed yards, currently feedlots are at record high levels of cattle consuming feedstuff, adding another plus on the side of corn consumption.
A chart I use frequently to help understand how important the livestock industry is to corn consumption is shown here.
Grain-consuming animal units shows a break out of the livestock and poultry industry consuming grain.
It is important to keep in mind as we move forward the importance of livestock to the bottom line of the grain producer in the United States. The balance sheet shows about 39% of corn consumption is used in feeding livestock.
The resiliency of the livestock industry in the U.S. is outstanding. This year has been challenging to livestock producers, yet they forge ahead with numbers that will continue to support the bottom line of the grain producers.
As we approach the year end, let’s make a toast to a great 2021 to all of agriculture. It takes every one of us in the Agriculture industry to support our livelihood and future!
Cheers to 2021!