The United States is witnessing a stark decline in its wheat export numbers, reaching levels not seen in over five decades according to the United States Department of Agriculture (USDA)'s August Wheat Outlook report. With significant reductions in Hard Red Winter (HRW) production and dwindling competitiveness in global markets, the nation's wheat exports have hit a 52-year low.
In an unsettling turn of events, U.S. all-wheat exports have been slashed by 25 million bushels, marking a significant drop to 700 million bushels. This dismal export figure represents the lowest volume since the 1971/72 period (see Figure 1). Despite a slight increase in HRW production, exports for this category have taken a severe hit, dropping by 25 million bushels to 165 million. This marks the lowest level observed since the inception of by-class supply and utilization records back in 1973/74.
The plight of HRW exports becomes palpable when examining shipment and sales data. June 2023 saw HRW exports at a mere 10 million bushels, a considerable decline from the 19.2 million bushels recorded in June 2022.
Drawing from data furnished by the USDA's Foreign Agricultural Service's Export Sales Reporting, all-wheat U.S. total commitments, which encompass accumulated exports and outstanding sales, have nosedived to approximately 6.4 million metric tons as of August 3. This figure reflects a sharp 26 percent drop from the same juncture last year and an even more staggering 37 percent dip from the ten-year average at this point spanning 2013/14 to 2022/23. HRW total commitments have taken an even more significant hit, plummeting by 53 percent in comparison to the previous year. This decline is underpinned by the competitive international shipments from Russia and the European Union.
Delving into domestic changes, the USDA's National Agricultural Statistics Service (NASS) Crop Production report has painted a challenging picture. U.S. wheat production for the 2023/24 marketing year is estimated at 1,734 million bushels, marking a 5 million bushel reduction from the July forecast. Nonetheless, this figure remains 5 percent higher than the previous year's production.
The average all-wheat yield is down 0.3 bushels per acre to 45.8 bushels. In addition to production figures, the report has unveiled updated area planted and harvested, taking certified acreage data from the USDA's Farm Service Agency (FSA) into account.
A closer look at specific wheat types reveals intriguing dynamics. Average winter wheat yield is forecasted at 48.1 bushels per acre, marking a notable increase of 1.2 bushels from the July forecast and a jump from 47.0 last year. However, winter wheat area planted has been slightly lowered to 36.8 million acres, while harvested area stands at 25.5 million, reflecting a decrease as well.
HRW production for the new marketing year is projected at 585 million bushels, an upward adjustment of 8 million from the July estimate. While this represents a 10 percent increase from the previous year, HRW production remains historically low. Prolonged drought conditions have led to diminished yields and higher abandonment rates this season compared to the average.
On a more positive note, Soft Red Winter (SRW) production for 2023/24 is estimated at 440 million bushels, reflecting an 18 million bushel increase from the July estimate. This boost is attributed to higher area harvested and improved yield. The estimated SRW yield stands at 75.0 bushels per acre, a rise from 70.2 last year and a notable increase from the recent 5-year average of 67.1.
White Wheat production, however, faces challenges. Forecasted at 239 million bushels, this figure marks a 6 million bushel drop from the previous month, primarily due to lower yields. While Soft White Winter wheat, mainly cultivated in the Pacific Northwest and forming the bulk of this category, has seen decreased production due to drier growing conditions, Hard White Winter, Hard White Spring, and Soft White Spring have all shown slight year-over-year improvements.
Durum production is estimated at 57 million bushels, reflecting a 3 million bushel increase from the prior month. This rise is attributed to an upward revision in planted area that more than compensates for a minor reduction in yield.
Hard Red Spring production, however, is grappling with challenges. Estimated at 413 million bushels, this projection reflects a 28 million bushel decline from the previous month. While area harvested has slightly increased, this positive development is overshadowed by a substantial reduction in yield.
In terms of exports, U.S. wheat exports for the 2023/24 period are projected at 700 million bushels, a 25 million bushel decrease from the July forecast. The sluggish pace of export sales has driven this adjustment. HRW exports have faced a similar fate, plummeting by 25 million bushels to reach 165 million bushels.
In the broader context, official U.S. wheat exports for June 2023 stand at 44 million bushels, a sharp drop from the 59 million bushels recorded in June 2022.
Meanwhile, U.S. wheat imports for the 2023/24 period remain unchanged at 130 million bushels, with June 2023 imports totaling 10 million bushels.
In terms of prices, the season-average farm price (SAFP) for 2023/24 holds steady at $7.50 per bushel. Based on the latest USDA NASS Agricultural Prices report, the June all-wheat average farm price is estimated at $7.67.
As the U.S. grapples with these wheat-related challenges, experts continue to monitor the market dynamics and their potential implications on the domestic and global agricultural landscape.