January 25 – How Can American Farmers Plant More Durum in 2018/19?

The 2017/18 US durum wheat crop was one of the worst in recent memory.

But since farmers are eternal optimists, it looks like we might see a rebound in acres seeded to the cereal.

The 2017/18 US durum wheat crop was one of the worst in recent memory.
But since farmers are eternal optimists, it looks like we might see a rebound in acres seeded to the cereal.

According to a recent survey of nearly 1,000 growers by Farm Futures, it’s being suggested that 2.4 million acres of durum wheat would get planted by American farmers in the upcoming planting campaign.

That would be up nearly 5% – or about 100,000 acres – from last year’s Plant 2017.

If realized and combined with the USDA’s first stab at 2018/19 winter wheat acres and the estimate of 11.8 million acres of spring wheat, this would put total planted wheat acres in America at 46.8 million.

That’s about a 2% climb year-over-year.

Okay so what does this mean for production?

This is where things get tricky, mainly due to the lack of moisture in main spring wheat growing regions.

Thus, I’m going to give you two scenarios to read through.

First, conditions stay terribly dry. If that’s the case, we could imagine a similar percentage of abandoned acres and below-average yields.

Using last year’s abandoned rate of about 7.5%, this would mean American harvested durum wheat acres would come in a little more than 2.2 million, or only about 86,000 acres more than last year.

Combined with 2017’s average US durum wheat yield of just 25.7 bushels per acre, this would produce a crop of about 57.1 million bushels (or about 1.55 million tonnes if you’re using GrainUnitConverter.com).

This is only about 2 million bushels, or about 60,000 tonnes more than the 2017 drought-riddled crop..

The second scenario if we use some more average numbers, based on the assumption that we see some decent rains in the spring and through the growing season.

This would suggest an abandoned rate of about 2.6%, meaning American harvested durum wheat acres would come in at around 2.34 million acres.

That’s well above the five-year average of 1.82 million acres but it’s about 200,000 acres more than the 2.14 million acres of US durum wheat harvested in 2016/17.

Combined with an average yield of 42.1 bushels per acre, this would suggest an American durum wheat crop of nearly 98.4 million bushels (or 2.68 million tonnes).

Conclusion: there’s about 40 million bushels of uncertainty already going into the 2018/19 US durum wheat growing season.

 

Farm Futures survey shows farmers want more of the same

While U.S. farmers aren’t ready to make major changes to corn and soybean rotations in 2018, they plan to plant more of what paid best in 2017, according to Farm Futures latest survey of intentions for the coming spring.

Farmers said they wanted to plant more soybeans than corn for the first time since 1983, when the government’s PIK program idled millions of corn acres. But the difference wasn’t much, just 35,000 acres. Growers plan to put in around 90.1 million acres of both crops, little changed from 2017.

The survey of 925 growers nationwide showed them ready to seed 11.8 million acres of spring wheat, up 6.7% form 2017. Spring wheat yields plunged due to drought on the northern Plains, sending prices for high protein varieties sharply higher. Minneapolis futures still command a premium to winter wheat, which attracted almost as many seedings as the previous year, according to USDA’s first survey released Jan. 12. That could take total wheat acreage for harvest in 2018 to 46.8 million, up 1.8% from 2017.

Farm Futures first survey of 2018 intentions, released in August, showed farmers wanted to boost corn acreage and cut back on soybeans, while adding even more wheat. But price relationships have changed substantially in the past four months.

Farmers in the South and West also plan to boost cotton acreage this spring to 13.2 million, up 5%. Cotton was one of the few bright spots in the crop community in 2017. Strong exports and growing world demand boosted prices, making the fiber an attractive alternative.

Another crop popular in western states could also attract more acres this spring. Farmers want to put in 5.8 million acres of sorghum in 2018, up 2.4% from 2017. While prices of the feed grain remain depressed, it’s a more drought tolerant crop than corn or soybeans, and parts of the southwest Plains are already dry. And unlike corn, sorghum has escaped some of the export restrictions China imposes on corn, says Farm Futures market analyst Bryce Knorr.

“Of course, all of these plans are subject to both changing prices and weather,” says Knorr. “Soybeans show an advantage on average to corn on a profit per acre basis, though both crops pencil out to a loss on paper right now.”

Rising fertilizer prices, especially for nitrogen, could also be a factor as corn demands that nutrient.

“Sorghum has become something of a niche crop and farmers remember what happened a few years ago when exports to China exploded and took prices sharply higher,” Knorr says.

Results of the survey were released today on the first day of Farm Futures Business Summit 2018, which is being held in Coralville, Iowa. Growers were invited by email to complete a survey from Dec. 4 to Jan. 3. USDA releases its annual survey of planting intentions March 30.

H/T: Farm Futures
About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.