US Winter Wheat Planting Hits Record Low

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US farmers planted fewer acres of winter wheat this season than in any year since record keeping began in 1909, according to the USDA’s Winter Wheat and Canola Seedings report. It marks the nadir of a trend that began in the early 1980s, as more acres have been turned over to other crops, especially corn and soybeans.

At its peak, wheat was planted on more acres than corn, but looks to be planted on barely more than half that acreage this season. Wheat area plateaued in the late 1980s and early 1990s due to gains in spring wheat area, but the downward trend became more pronounced in the late 1990s. Expanding corn and soybean area has pushed wheat out. Soybean area surpassed wheat for the first time in 1998 and has not looked back.

Technology is a one of the key drivers pushing farmers to switch to corn and soybeans. Five-year average yields for corn and soybeans rose 73 percent and 67 percent, respectively, since 1981, the high point in wheat planted area, while winter wheat yields rose only 38 percent. That is a significant factor in farmer returns. According to the USDA ERS Cost and Returns database, net profits from wheat were lower than corn and soybeans for all but two years in the last 15.

Competition is another key factor in the decline of US wheat. Similar to planted area, the US share of world exports peaked in the 1987/88 season and has steadily declined since. Over the last five years in particular, the Black Sea region has massively expanded its global footprint. That region’s significant investment in farming practices along with favorable weather led to record production, which has caused wheat supplies to back up in the United States. At this point it is hard to chart a clear path to higher wheat prices that would motivate US farmers to switch acreage back to wheat.

US winter wheat plantings peaked in the 1981/82 season and have steadily declined since then. Kansas, the largest wheat producing state, has switched acres to corn and soybeans due to more favorable economics.

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