U.S. farmers will plant the smallest amount of land to wheat, 46 million acres, since record keeping began in 1919, the USDA projected at its annual Outlook Forum. Wheat has lost ground to corn and soybeans, which offer higher yields per acre and more potential for profit, for more than three decades.
Wheat sowings peaked at 88.25 million acres in 1981. By coincidence, soybean plantings will nearly match that total this year, reaching a record 88 million acres, according to USDA projections. The last time wheat sowings topped 70 million acres was 1997, at 70.4 million, and the 63.6 million acres of 2008 marked the last time plantings exceeded 60 million acres. Genetic engineering has aided the expansion of the growing area for corn and soybean, as well as a steady rise in yields.
The SDA’s database of wheat plantings lists only three other years — 1957, 1962 and 1970 — when plantings dipped below 50 million acres.
Growers are scaling back this year due to a worldwide glut of wheat and low commodity prices. The 2016 crop, now on the market, is forecast to fetch an average of $3.85 a bushel, compared to $5.99 a bushel for the 2014 crop. It would be the lowest season-average price in 12 years.
With normal weather and a return to average yields, growers will reap 1.837 billion bushels of wheat this year, the smallest crop in 11 years and 20-percent smaller than the 2.31 billion bushels of 2016. The smaller crop would pull down the U.S. wheat inventory by 21 percent, but the projected stockpile of 905 million bushels still would be far above the five-year average of 835 million bushels and enough wheat to meet U.S. and foreign demand for five months.
“After setting records in four consecutive years, world wheat production in 2017/18 is expected to decline,” said USDA. “In addition to the large reduction in the U.S. crop, wheat output in both Australia and Russia is expected to be significantly lower following record crops in the previous year. Smaller crops are also forecast in Canada and Ukraine. Conversely, the European Union is well-positioned to have a larger crop and plentiful wheat exports after unfavorable weather conditions last year,” said USDA.
Plantings of wheat, corn and soybeans — the three most widely grown crops in the nation — are projected for 224 million acres, lowest since 2011. Besides 88 million acres of soybeans, the USDA projects farmers will plant 90 million acres of corn.
The International Grains Council, based in London, also foresees a downturn in the world wheat crop, albeit a small one. “Only a slight fall in world 2017/18 all-wheat harvested area is projected, but with a fall in average yields, production is tentatively placed 2% lower year-over-year, at 735 million tonnes,” said the IGC monthly Grain Market Report. “Firm domestic prices, including attractive levels of government support, will help to underpin sowings in some regions. However, a poor outlook for profits could contribute to a switch to other crops in places, with winter wheat area in the US the lowest in more than a century.”