Washington, DC, USA
March 4, 2010
by Chad Weigand, USW Market Analyst
USDA held its annual Agricultural Outlook Forum Feb. 18-19 in Arlington, VA. The theme of the Forum was “Sustainable Agriculture: The Key to Health and Prosperity” and incorporated sessions discussing conservation, climate change, and nutrition into this year’s program. The Forum also included the traditional sessions covering economic and commodity outlooks.
Max Fisher, USDA’s Farm Service Agency Economist, presented the Grain and Oilseeds outlook and announced the preliminary 2010/11 U.S. wheat planted area estimate at 53.8 million acres, which is a 9 percent decrease from last year. Winter wheat acreage, as announced in USDA’s Jan. 12 Winter Wheat Seedings report, is the lowest since 1913/14 at 37.1 million acres. USDA expects a slight increase in spring wheat plantings, offsetting reduced winter wheat acres in the Northern Plains. USDA forecasts harvested acres to fall to their lowest point since 1970/71, to 45.7 million acres.
Reduced acres and a lower projected average yield of 42.6 bushels per acre will significantly reduce U.S. production in 2010/11. Projected output currently stands at 52.9 MMT, down from 60.3 MMT in 2009/10 and well below the 5-year average of 58.1 MMT. Despite the reduced production, U.S. supplies will increase to an estimated 83.0 MMT, which would be a 10-year high. USDA forecasts beginning stocks at 26.7 MMT, the highest since 1988/89 and a 49 percent increase over last year.
Both domestic consumption and exports are expected to increase in 2010/11, by 5 percent and 3 percent, respectively. This will help reduce the U.S. wheat surplus, but 2010/11 ending stocks, projected at 25.6 MMT, would be the second highest level in the past 10 years.
The issue of growing supplies highlights a significant advantage for the United States over other exporting countries: the ability to store large amounts of wheat. Farm storage capacity allows U.S. producers to hold approximately a year’s worth of wheat. Heading into the new marketing year, not only will U.S. production be down, but global production will fall as well. The United States remains the world’s most reliable supplier and once again stands ready to meet growing global demand.
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