Thursday, July 13, 2017

Wheat acres down, Millers worried

WASHINGTON - Wheat acreage had dropped to lowest level in more than 100 years.

This latest revelation from the USDA is not a big surprise, in fact
farmers have planted less wheat, each year for the past three decades.

Record yields have helped declining acreage according to the report but a drought or crop failure could severely impact bakers and bread makers.

This trend is discouraging for bread makers that depend on stable supplies grain, according to a new report from Rabobank.

“As the acreage base has continued to shrink year after year, the impact of droughts looms larger since there is less cushion in the case of production problems,” according to the report, which highlighted hard red winter wheat because it is important to breadmakers. “A lower capacity for production in this wheat class, based on decreased acreage, increases the probability of weather-related price volatility, driven by supply-related issues.”

American farmers still producing a lot of wheat despite a 40- percent reduction in wheat acres over the past 27 years, according to the report, that put wheat acreage for the 2017-18 marketing year at 46 million acres, down from 75 million acres for 1990-91.

Like acreage, production has also dropped. Farmers will produce about 1.8 billion bushels for the 2017-18 marketing year, according to the latest USDA forecast. That, Rabobank says, is down from 2.75 billion bushels for 1990-91.

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