USDA/ERS
Wheat YEARBOOK - SUMMARY
Month Year, ERS-WHS-2006s
Approved by the World
Agricultural Outlook Board
This SUMMARY is published
by the Economic Research Service, U.S. Department of
Agriculture, Washington, DC 20036-5831. The text of the
yearbook will be available electronically about 1 week
following this summary release.
U.S. wheat supply,
demand, and prices expected to be stable in 2006/07
U.S. winter wheat seeded
area for 2006 was reported in January to total 41.4
million acres, up .9 million acres from 2005, which was
the lowest since 1971. Seeding began last August and
fell behind the 5-year average pace because of a lack of
moisture in the southern Great Plains during September
and much of October. Precipitation during mid-October
relieved moisture concerns somewhat in major producing
areas, enabling seeding to advance ahead of the 5-year
average during the latter part of the month as mild and
dry weather prevailed. U.S. spring wheat acreage is
expected to decline slightly to 16.6 million acres in
2006, unless U.S. winter wheat production problems or
other events cause a significant rally in wheat prices
before spring wheat planting (mostly in May).
Relatively attractive returns for soybeans, corn,
sunflower seed, dry peas, and lentils are expected to
limit spring wheat area in the northern Plains. Total
U.S. wheat planted area for 2006 is projected at 58.0
million acres, .8 million more than in 2005, which was
the lowest since 1972. On March 31, NASS will release
its Prospective Plantings Report. Total U.S. wheat
production is expected to fall 30 million bushels to
2,075 million bushels in 2006, driven by a lower
harvested area. This reflects a return to normal
abandonment rates for most States, along with a modest
downward adjustment for Texas and Oklahoma to account
for ongoing drought.
U.S. wheat production is estimated at 2,105 million
bushels for marketing year 2005/06, down 54 million
bushels from 2004/05 as yield dropped. Reduced
abandonment on the Plains meant that harvested area for
2005/06 was up compared with 2004/05, despite a lower
planted area. The lower production and lower beginning
stocks lead to a forecast of a 45-million bushel drop in
U.S. wheat supply in 2005/06 from a year earlier.
U.S. wheat disappearance in 2005/06 is projected to drop
47 million bushels from a year before to 2,188 million
bushels. Domestic use is forecast up 16 million
bushels, not enough to offset a 63-million-bushel
year-to-year decline of exports. U.S. wheat exports are
projected at 1,000 million bushels for 2005/06, down
because of increased competition in world markets,
smaller purchases by China, and tight U.S. supplies.
U.S. wheat food use is projected at 910 million bushels,
up 5 million from a year earlier. Population increased
at a higher rate than wheat food use, so per capita food
use declined for calendar year 2005. Feed and residual
use is projected to increase slightly in 2005/06, by 11
million bushels, to 200 million bushels.
U.S. ending stocks in
2005/06 are projected to total 542 million bushels,
about the same as for the previous 2 years. The
season-average farm price in 2005/06 is forecast at
$3.35-$3.45 per bushel. This price range brackets the
$3.40 of the previous 2 marketing years.
Although in many locations
world wheat prices were somewhat higher in the fall of
2005 than in the previous year, especially for high
protein wheat, higher costs for energy and other inputs
limited prospective returns. Along with poor weather
conditions, this put a brake on area expansion in some
Northern Hemisphere countries. Reduced production
prospects in the United States, Ukraine, and Russia are
expected to offset normal/favorable conditions
elsewhere, leaving global wheat production down in
marketing year 2006/07. The decline in production is
expected to be exacerbated by reduced beginning stocks,
leaving global wheat supplies in 2006/07 down. For
marketing year 2006/07, global food use is likely to
continue growing, with population increases supporting
human consumption in many developing countries. However,
reduced use of wheat for feed in 2006/07 (due to adverse
growing conditions in the Black Sea region that provides
much of the wheat used as feed) may help even-out supply
and demand. Even with stagnant use, however, reduced
global supplies are expected to support prices.
Global wheat production in
2005/06 is estimated down 10 million tons to 617
million, but is still the second-largest on record.
Favorable growing conditions boosted production in the
FSU-12, and China had the largest crop in 5 years. At
the same time, drought conditions centered in Spain
reduced EU-25 production 14 million tons and cut
production in parts of North Africa. Conversely, global
wheat consumption for marketing year 2005/06 is forecast
up 15 million tons from the previous year, supported by
increasing use of wheat for feed. This puts global use
at 7 million tons above production and trims projected
ending stocks to 143 million tons. Global wheat trade
is expected to contract, mostly because of reduced
imports by China.
