NASHVILLE, Tenn. — North America will lose its status as the world’s largest wheat exporting region over the next decade, according to the U.S. Department of Agriculture.
In its Agricultural Long-Term Projections report, the department predicts that Canada and the United States will have a 27 percent share of world wheat trade by 2021-22, down from 33 percent in 2010-11.
“That one surprised not just us but a lot of people in the trade,” said Alan Tracy, president of U.S. Wheat Associates.
By contrast, the Black Sea region’s share will grow to 29 percent from 11 percent over the same time frame.
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The USDA predicts global wheat demand will rise 19 percent, or 25.5 million tonnes, over the next decade, with the Black Sea region picking up all of the extra business plus a bit more.
Tracy said that is highly unlikely. He doubts that a country like Egypt would rely so heavily on one exporter given that the Russian government has restricted wheat exports in three of the last five years.
He also said the Black Sea region faces more uncertain weather than North America, with many years of winterkill and drought.
Tracy disagreed with the USDA projection that the European Union will pick up an additional three million tonnes of wheat sales.
He said acreage is not expanding there and yields are already high in Western Europe. As well, the EU is increasingly using wheat to make ethanol.
However, he does agree with the projection for increasing global demand for the crop. U.S. Wheat Associates expects a 53 percent, or 70 million tonne, increase in world wheat imports in 20 years.
West Africa and the Middle East are expected to account for 51 percent of the increase in world trade.
“The fact that there is a growing demand for wheat in the world is good news to both Canadian and U.S. farmers,” Tracy said during an interview at the 2012 Commodity Classic conference.
He thinks there will be particularly strong demand for high protein North American spring wheat in markets such as South Asia.
“They’re not going to use Black Sea wheat in place of (spring wheat),” he said.
Tracy said it is possible that the U.S. share of the growing world wheat market could contract if corn and soybeans continue their westward march. The largest soybean producing county in the United States is located in North Dakota on the Canadian border.
However, he doesn’t fear losing more ground to corn and soybeans because it would mean higher prices for growers who continue to plant wheat.
Wheat isn’t the only U.S. crop losing its influence on the world stage. The U.S. will account for less than half of world corn exports for the first time in 2011-12.
Shipments are expected to ease to 43.2 million tonnes, or 46 percent of global sales, down from 52 percent last year.
“Many factors contribute to the change,” said Rebecca Bratter, vice-president for international operations with the U.S. Grains Council.
Almost every market in the world has voiced concerns about U.S. corn quality. It is partially a lingering effect of the poor quality 2009 crop but also a genuine concern in tropical markets about the high moisture content of American corn.
Also to blame are trade barriers, foreign production, export subsidies and stiff price competition from aggressive competitors in Argentina, Brazil and the Black Sea region.
On the soybean front, Brazil is expected to export more than the U.S. for the first time ever in 2011-12. The USDA forecasts 37.8 million tonnes of Brazilian soybean exports compared to 34.7 million tonnes from the U.S.
The U.S. Grains Council said its producers are facing a “crisis of competitiveness” that is forcing the U.S. to look to emerging markets to regain its competitive edge.
