USDA has been accused of fluffing their demand numbers to help offset record production, and we have also criticized their feed & residual use estimates in the past. After use totaled sub-5.5 billion bushels in 2024-25, it’s reasonable to ask why USDA would expect it to surge above 6.0 billion bushels for the first time ever in the 2025-26 marketing year.
But our look at the numbers suggests USDA may not be too far off the mark.
Feed & residual use as proportion of total supply
Historically, use tracks more closely to a proportion of total supply than it does with the size of the cattle or hog herds or poultry flocks. That ratio has held around 34% the past 15 years, straying less that 3% either way. As USDA increased its estimates of both carry-in and production over the past several reports, feed & residual use estimates have gone up as well, continuing to track near that 34% historical mark. The 2025-26 estimate is 33.3% of total supplies at present.
How has use held up so far?
USDA published their 1Q feed & residual use figure following the Jan. 12 reports. Not only was export use an all-time high and ethanol use robust, but feed & residual use surged to a fresh record. Part of that can be attributed to high December exports. When exports are high, use for the prior quarter tends to spike, but the sheer amount of bushels used from September to November is impressive and warrants a second look at annual use.
Since 2010, an average of 42% of annual feed & residual use is consumed in the first quarter of the marketing year. This year, use totaled over 44% of the estimated annual figure. That indicates USDA could have actually increased their forecast for the year. Record supply is going to yield record use, but ending stocks are still likely to end near the 2.0 billion bushel mark.
