Trade war may also affect wheat

China imported more than 61 million bushels of U.S. wheat last year, making it the country’s fourth biggest customer

Soybeans are the big dog when it comes to United States exports to China.

In 2016, American farmers sold about US$14 billion worth of soybeans to China, by far the largest importer of soybeans in the world.

But American farmers also sell wheat to China.

“People may not know that China imported more than 61 million bushels of U.S. wheat in marketing year 2016-17, making it our fourth largest buyer in the world,” said Mike Miller, a farmer from Ritzville, Washington, and chair of the U.S. Wheat Associates.

“Farmers across the country have invested a lot of money and time over the years to develop a Chinese market that has great potential to buy even more American wheat. Now that effort is in jeopardy.”

The Chinese market is at risk for American growers because China plans to introduce a 25 percent tariff on wheat, soybeans, sorghum and other U.S. agricultural products.

The tariffs are retaliation for American duties on Chinese goods. On April 3 U.S. President Donald Trump announced tariffs on $50 billion worth of Chinese imports, such as flat screen TVs and aircraft parts.

The soybean and wheat tariffs rattled commodity futures markets in early April, even though the Chinese duties on soybeans, wheat and sorghum may not take effect until May.

The tariffs on U.S. wheat may or may not come to pass because China and America could resolve the trade dispute.

Either way, it’s not earth-shattering news for wheat growers in Canada, said Bruce Burnett, Glacier FarmMedia’s director of weather and markets information.

“Trump, tariffs and all that kind of thing. You phone me from 10 minutes from now and it will change,” he said. “I think this is more negotiating tactics and eventually the thing gets resolved.”

Burnett said the bigger news for Canadian farmers is acreage projections for spring wheat in North Dakota.

In late March, the U.S. Department of Agriculture said spring wheat acres in the U.S. would jump from 11 million in 2017 to 12.6 million this spring.

The USDA projected spring wheat acres of:

  • 6.4 million in North Dakota, up from 5.35 million in 2017
  • 1.6 million in Minnesota, up from 1.1 million in 2017

Jim Bahm, who farms in New Salem, N.D., west of Bismarck, said spring wheat acres could be slightly lower than the USDA projections.

But it’s almost a certainty that North Dakota will produce more wheat this year because the western half of the state was exceptionally dry in 2017.

“In our area, we were in a drought last year, and a lot of our wheat got cut off for hay,” Bahm said.

“We’re going to see those wheat acres and hopefully we’ll get bushels this year.”

The subsoils in the western part of North Dakota remain dry but there’s sufficient topsoil moisture to seed a crop.

“But we’re going to need some timely rains (this spring),” Bahm noted.

A potential increase in North Dakota acres is significant for the broader spring wheat market because wheat acres in Canada are also expected to jump.

With weak demand and low prices, acres of peas and lentils are expected to sink in Saskatchewan by about two million.

Those acres will be allocated to other crops and some producers may choose to seed more wheat. Agriculture Canada has predicted that spring wheat acres across the country will rise by five percent.

However, the department pegs 2018 all wheat production in Canada at 24.3 million tonnes, down from 25 million tonnes in 2017 because yields were above average last year.

One wild card in wheat acreage is the spring weather on the northern U.S. Plains. The last week of March and first 10 days of April have been exceptionally cold. As of April 10, fields in North Dakota and Saskatchewan may not be ready for seeding for two, three or four weeks.

The chilly weather will delay spring wheat seeding in North Dakota, where growers typically plant wheat from the middle of April until early May.

Bahm remains confident that North Dakota farmers will follow through on their planting intentions for wheat, despite the cold temperatures.

“The wheat will go in the ground.”

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