U.S. farmers are expected to plant only one percent more wheat this year, despite tightening supply and booming prices
There is one sentence in the 2022 U.S. Prospective Plantings report that stood out for MarketsFarm analyst Bruce Burnett.
It was a comment related to the expectation that growers will plant 47.4 million acres of wheat, a one percent increase over 2021 area.
“If realized, this represents the fifth lowest all wheat planted area since records began in 1919,” stated the U.S. Department of Agriculture.
Burnett said that is remarkable given today’s wheat prices and the fact that the world’s largest and third-largest exporters are embroiled in a war that is jeopardizing global trade of the commodity.
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“Even the best wheat prices on record for some of the winter wheats and the second highest prices in the past 15 years for spring wheat weren’t sufficient enough to change this trend,” he said.
The trend he is referring to is the steady erosion of wheat acres in favour of corn and soybeans.
This year’s winner is soybeans, with acres expected to rise four percent to a record 91 million acres, while corn plantings are projected to fall four percent to 89.5 million acres.
U.S. canola plantings are forecast to be unchanged at 2.16 million acres. Burnett thinks Canadian canola acres will increase, by contrast, because a lot of the prime growing areas have a fair amount of snow whereas it is dry in Montana.
Tyler Groeneveld, North American commercial grains and oils leader for Corteva Agriscience, thinks Canadian canola area will remain flat at last year’s levels of 22.5 million acres due to poor seed availability caused by the 2021 drought.
U.S. spring wheat plantings are forecast at 11.2 million acres, a two percent reduction from last year, while durum is pegged at 1.92 million acres, a whopping 17 percent increase.
“Despite the price of spring wheat being robust relative to past years, the area (will decline) and a whole host of other crops (will be) planted in its stead,” he said.
U.S. Wheat Associates had a similar observation.
“Farmers are now considering the profit potential of crops other than spring wheat,” it noted in a recent blog about the report.
“In fact, USDA’s survey shows farmers in the northern Plains spring wheat and durum production area intend to plant 584,000 more acres of barley, dry peas, sunflowers, lentils and flax this year compared to 2021.”
Burnett said U.S. planting intentions are a harbinger of what may happen in Western Canada this spring, where he anticipates a decline in spring wheat and an increase in a “plethora” of other crops, including durum.
U.S. farmers intend to plant 1.09 million acres of peas and 788,000 acres of lentils, both an 11 percent increase over last year.
“I would think we’re going to see the same thing,” he said.
But he noted that Canada won’t see double-digit increases in pulses because there are a lot more acres of those two crops north of the border.
Flax is expected to receive a big boost in the U.S. with an 11 percent increase to 360,000 acres. Burnett anticipates a sizable bump in Canadian acres as well.
Barley is yet another U.S. crop with an anticipated 11 percent increase to 2.94 million acres.
“There’s a strong incentive to plant barley,” said Burnett.
“Our barley prices are good and agronomically speaking, barley is cheaper to plant and takes less fertilizer.”
It will pick up ground in Canada at the expense of wheat for growers wanting to keep a cereal crop in their rotations.
The one surprise in the U.S. report was the forecast for 2.55 million acres of oats, which is unchanged from last year.
But delving deeper into the report, Burnett noticed that acres are going to be up in states like Minnesota and North Dakota and he thinks that tendency will spill over into Western Canada.
