Expansion in corn, soybeans may push wheat acres abroad

European Union production | Study shows Russia, Ukraine and Kazakhstan could produce 35 percent of world wheat exports by 2021

CHICAGO, Ill. — Wheat is being squeezed out of rotations in the United States as genetically modified corn and soybeans continue their northwesterly march, says an agricultural economist.

Bill Wilson, university distinguished professor at North Dakota State University, lives in Cass County, which used to be the biggest producer of spring wheat and malting barley in the state. It is now the second biggest corn producer.

“We’re producing 200 bushels to the acre in some parts of North Dakota and we have field trials with 300 this past year,” he told delegates attending the DTN/The Progressive Farmer Ag Summit 2012.

Wilson said the impressive yield results will encourage the continued expansion of corn and soybeans into places like the Dakotas and Montana at the expense of wheat.

“We’ll see more and more technology crops grown in North America, not just in the United States but in Canada as well. So that’s a pretty big deal,” he said.

Wilson keeps close tabs on seed technology company research and development expenditures for various crops.

“In aggregate, these companies are spending about $8 to $10 per acre per year on developing technologies in the GM crops. You know how much we’re spending on wheat? Seventy cents. You know how much Canada is spending? Forty cents per acre per year,” he said.

“We’ve got a problem.”

Monsanto expects to double corn productivity by 2030 from a base year of 2000.

Corn has 14 traits in the development pipeline, including nitrogen use efficiency, while soybeans have a couple dozen traits in the works.

Drought tolerant corn performed well in 2012 and will be the “big game changer” in terms of the continued westward movement of corn.

Seed technology companies have partnered with public researchers on GM wheat projects, but the traits they are developing are complex, challenging and a long way off.

The wheat industry hopes the drought tolerance trait will result in a 20 percent bump in yields when it is commercialized around 2021.

In the meantime, corn and soybeans will continue gobbling up wheat acres.

So where will wheat production go?

Wilson said it’s already shifting to the former Soviet Union.

Russia comprises 24 percent of world wheat trade, up from hardly anything a decade ago. It sells to North Africa, Egypt, the European Union, Philippines, Indonesia and Latin America, typically undercutting U.S. wheat by $25 to $50 per tonne.

“This is a big challenge for us,” said Wilson.

There is tremendous potential to expand acreage and yields in the former Soviet Union.

A recent study shows Russia could export 32 million tonnes of wheat by 2021, up from 20 million tonnes last year.

A European Union outlook on long-term wheat exports shows that Russia, Ukraine and Kazakhstan could account for 35 percent of world wheat trade by 2021, up from 22 percent in 2008-2011.

That increase in market share will come at the expense of the U.S., which will see its share of the market fall to 16 percent from 23 percent. The EU and Canada will also lose ground.



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