While pork and poultry production are expected to expand modestly during the year ahead, fewer cattle are expected to be fed. In addition, sorghum feeding is expected to rebound by 55 million bushels if production rebounds from the low level of 2000. The 80 million bushel decline is considerably smaller than the 200 to 400 million reduction projected by some private analysts. It is early in the growing season, so that significant changes in supply and consumption projections may occur. Most interest, of course, will be on U.S. growing conditions and yield prospects.
Prices appear to be low enough for now.
In addition to technical buying, some early season weather concerns should result in a modest recovery in prices. Until there is some indication that supplies will be smaller, however, prices are likely to remain at the low levels experienced since the summer of 1998. Persistence of low prices could have a direct impact on the nature of new farm legislation.