USDA Reduces Planting Forecast, Further Reductions Likely
Spring wheat acreage was reported at 13.6 million acres, down from its previous forecast of 14.4 million acres
The U.S. Department of Agriculture (USDA) surprised many farmers and traders last week with its annual planted acreage report issued June 30. USDA lowered its total U.S. wheat planted area estimate from 58 million acres to 56.4 million acres. That decrease was expected, but the fact that USDA did not lower its estimate of spring wheat planted area more left many people scratching their heads.
USDA reported U.S. spring wheat acreage at 13.6 million acres, down from its previous forecast of 14.4 million acres, but that was well above average trade estimates of 13.3 million acres based on flooding and far-above-normal rainfall in much of the northern plains, especially North Dakota and Montana. Just a few days prior to the release of USDA’s acreage report, the North Dakota Farm Service Agency (FSA) estimated that up to 6.3 million acres will not be planted (termed prevented planting for crop insurance purposes) in that state this year. That is up sharply from the previous record of 3.9 million acres set in 1999 and the widest ever difference between USDA's annual planted acres and the FSA prevented planting estimate. The FSA estimate could potentially include more than 2 million spring wheat and durum acres since wheat accounts for nearly 40 percent of North Dakota's total crop plantings.
USDA lowered its North Dakota spring wheat acreage forecast from 7.1 million acres in March to 6.35 million acres in the June report. However, many analysts feel that actual acreage is much lower. Jim Peterson, marketing director with the North Dakota Wheat Commission, suspects that spring wheat acreage should be 6.1 million acres and said he would not be surprised if it fell below 6 million acres. USDA currently projects total wheat area in North Dakota at 7.7 million acres, the lowest amount since the state planted 7.4 million acres in 1983.
In what was a surprise to both Peterson and Kim Falcon, executive vice president of the Montana Wheat and Barley Committee, USDA increased Montana’s spring wheat acreage from its previous forecast. USDA estimated the state’s spring wheat planted area at 3 million acres, up from 2.85 million acres in March. However, since the USDA survey in early June, rain and flooding have drowned planted crops and kept planters out of other fields. Precipitation in some parts of eastern Montana where farmers grow the majority of its hard red spring wheat (HRS) has exceeded average levels by more than 400 percent (see map). Falcon said Montana’s spring wheat acres could fall by nearly 20 percent from 2010 to approximately 2.3 million acres.
Projected durum acreage also fell sharply, from 2.4 million acres estimated in March to 1.7 million acres in the June 30 report. If realized, this would be a 34 percent decline from 2010 and the lowest durum acreage in the past 50 years. USDA predicted acreage in North Dakota, the largest durum-producing state, at 1 million acres. Peterson also expects this number to fall, potentially below the record low 797,000 acres in 1958.
USDA’s National Agricultural Statistics Service has already announced it will collect additional acreage data throughout July for Minnesota, Montana, North Dakota and South Dakota. USDA will update its estimates in its August 11 crop production report.
The moisture problems plaguing Montana and North Dakota also leaked into Canada’s western spring wheat production region. This week, Agriculture and Agri-Food Canada (AAFC) cut its wheat production forecast to 24 million metric tons (MMT) from June's forecast of 25.5 MMT. That includes spring, soft wheat, grown mainly in the east, and durum, but most of Canada’s production is spring wheat.
