The Acreage Shuffle By Joe Lardy W hile world demand for wheat remains stable, world supply more than meets what’s needed. In fact, the global stockpiles remain so high that some American producers have already decided to grow other crops instead. In the coming years, wheat acreage will likely continue to decline. A Changing Commodity Mix For more than 15 years, the amount of planted acreage across the country has remained steady, varying between 315 million and 327 million acres, according to USDA. While the amount of land dedicated to crops remains roughly the same each year, what’s most interesting are changes to the commodity mix. The main crops planted each year are barley, corn, cotton, oats, rice, sorghum, soybeans and wheat. If you look at corn and soybean acreage, you’ll see an interesting trend. From 2000 to 2006, average acreage of the two commodities combined was 153 million acres. During the five-year period from 2007 through 2011, combined acreage jumped to 163 million planted acres. The most recent five-year period (2012 through 2016) saw another 10 million acre jump to a combined 173 million planted acres on average. The World Has Wheat Since total planted acres have remained stable, acres gained by corn and soybeans have come at the expense of other crops. In recent years, the losing crop has been wheat. In 2016, U.S. wheat acreage decreased by 7 percent, according to USDA, the third consecutive year-to-year decline. Two factors are driving down U.S. wheat acres: World supplies remain high and traditional wheat-growing areas can now support other crops. Wheat is successfully grown worldwide — especially in Australia, Brazil and the Ukraine — and wheat stocks are growing. At the end of last season, the stocks-to-use ratio for wheat was 47 percent, as opposed to only 16 percent for corn and just 9 percent for soybeans. With so much wheat being produced and stockpiled, depressed market prices have forced some producers to consider alternatives. One recent unexpected location for change has been North Dakota. 14 NOVEMBER/DECEMBER 2016 CHSINC.COM
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The Acreage Shuffle
Joe Lardy
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