Expected durum jump may not materialize

Growers in the United States plan to reduce acreage by four percent, which is blamed on steep quality discounts

American durum growers are thumbing their noses at millers and pasta manufacturers.

Growers told the U.S. Department of Agriculture they were going to cut acres by four percent to 1.29 million acres in 2020.

Some people in the trade had been expecting a 50 to 80 percent increase in acres, said Jim Peterson, policy and marketing director with the North Dakota Wheat Commission.

He was thinking something along the lines of a 20 to 25 percent expansion.

Growers were clearly unimpressed with the prices millers have been offering and have been expressing that dissatisfaction at winter meetings.

“Hopefully we’ll get an industry response with some stronger new crop bids,” said Peterson.

Durum has been selling at a US$1 to $1.50 per bushel premium to spring wheat for most of the year but that wasn’t enough to entice growers to plant more of the crop in 2020. They are fed up with steep quality discounts.

Producers who harvested ordinary quality durum are making less net income on the crop than they are on their spring wheat due to agronomic deficiencies, such as poor fusarium resistance in durum, said Peterson.

He anticipated a big rebound in Minnesota but growers said they were going to plant 570,000 acres, a slight increase over last year. Farmers in North Dakota intend to plant 640,000 acres, an 11 percent decline.

He thinks millers and pasta manufacturers may have become complacent after having good coverage for a couple of years with big crops in Canada and the U.S.

Peterson has heard talk of a 25 to 30 percent rebound in Canadian durum acres but now he’s wondering if there will be a similar surprise north of the border.

Neil Townsend, chief market analyst with FarmLink Marketing Solutions, is expecting a 10 percent increase in durum acres in Western Canada this spring.

The crop is facing stiff competition from spring wheat, which has some good hedging opportunities.

Townsend said in the “old days” durum prices this strong would have prompted a 15 to 20 percent acreage response but with the higher yielding spring wheat varieties now on the market that is no longer the case.

He agrees with Peterson that growers are tired of quality discounts that can cost them $1 to $1.50 per bushel to go from a No.1 to a No.3.

Peterson thinks by the time spring rolls around some U.S. growers may have changed their minds and acreage could be up five or 10 percent.

But if Canada’s acreage only increases 10 percent that is going to make for a tight durum market in 2020-21 because exports have been brisk.

The U.S. has shipped out 913,000 tonnes of the crop through March 26, a 90 percent improvement over the previous year. Italy has been the top buyer with Algeria and Nigeria a very distant second and third.

Canada exported 2.72 million tonnes through the end of February, a 39 percent increase over the same seven-month period a year ago. Turkey has been the top customer, followed by Italy and Morocco.

Morocco has suspended customs duties on durum, lentils, chickpeas and beans as of April 1.

“The decision aims to provide regular and affordable supplies of durum and legumes during Morocco’s ongoing drought and also in preparation for the month of Ramadan,” the USDA said in a recent report.

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