USDA Outlook: U.S. wheat output forecast to rise 11.8% year-over-year to 2.234 billion bushels in 2012/2013; wheat ending stocks to fall 4.8% to 694 million bushels

Andrew Rogers

WASHINGTON , June 14, 2012 (press release) – The following article is excerpted from the June Wheat Outlook published by the Economic Research Service of the USDA.

Domestic Situation and Outlook Ending Stocks for 2012/13

Projected To Decrease From May

Ending stocks of wheat for 2012/13 are projected to be down 41 million bushels from May to 694 million bushels because of smaller carryin stocks and reduced production. Ending stocks for 2012/13 are projected down 34 million bushels from 2011/12 as total use increases more than supplies.

Total production is projected at 2,234 million bushels, down 11 million bushels from May, but up 235 million bushels from 2011/12.

Winter Wheat Production

The survey-based forecast of winter wheat production, at 1,684 million bushels, is down 10 million bushels from May, but up 190 million bushels from 2011. Expected harvested area is 35.6 million acres, unchanged from May, but up 3.3 million acres from last year with both higher planted area and expected fewer abandoned acres for hard red winter (HRW) wheat on the Central and Southern Plains. Abandonment is expected down with some recovery from severe 2011 drought conditions. The U.S. winter wheat yield is forecast at a near-record high of 47.3 bushels per acre, up 1.1 bushels from the previous year, but down 0.3 bushels from last month.

Winter Wheat Production Estimates by Class

HRW production is forecast to be down 8 million bushels from May to 1,024 million bushels, but up 244 million bushels from a year ago. Production is up year to year with the higher forecast planted area for the 2012 crop and the expected smaller abandonment rate and higher yield due to the recovery from the severe drought on the Central and Southern Plains. Forecast planted area and harvested area are unchanged from May. Forecast planted area, harvested area, and yield and year-to-year changes for 2012 are 29.9 million acres, up 1.4 million acres; 25.0 million acres, up 3.6 million acres; and 40.9 bushels per acre, up 4.5 bushels per acre, respectively.

Soft red winter (SRW) production is forecast unchanged from May at 428 million bushels, but down 29 million bushels from last year. SRW production is forecast lower year to year with both lower planted and harvested areas and lower yield. Forecast planted area and harvested area are unchanged from May. Forecast planted area, harvested area, and yield and year-to-year changes for 2012 are 8.4 million acres, down 0.2 million acres; 7.3 million acres, down 0.2 million acres; and 59.0 bushels per acre, down 2.7 bushels per acre, respectively.

White winter wheat production for 2012 is forecast to total 231 million bushels, down 2 million bushels from May and down 25 million bushels from a year ago. Of the white production total, 14 million bushels are hard white (HW) and 217 million bushels are soft white (SW). The 2011 production of HW and SW were 12 million bushels and 244 million bushels, respectively.

The forecast planted and harvested area for HW and SW are unchanged from May. The 2012 HW and SW harvested and planted areas are 0.34 million acres and 0.29 million acres; and 3.12 million acres and 3.00 million acres, respectively. The previous year, the HW and SW harvested and planted areas were 0.32 million acres and 0.27 million acres; and 3.28 million acres and 3.18 million acres, respectively. HW 2012 yield is 48.5 bushels per acre compared to 45.5 bushels in 2011. SW 2012 yield is 72.4 bushels per acre compared to 76.6 bushels in 2011.

Desert durum production in California and Arizona is forecast at 25 million bushels for 2012, down 1 million bushels from May. This production is greater than the 21 million bushels in 2011 because of both higher area and yield.

Projected 2012/13 Utilization

Total U.S. wheat use for 2012/13 is projected at 2,388 million bushels, down 10 million bushels from May because of lower expected feed and residual use, but up 134 million bushels from 2011/12 with both expected higher domestic use and exports. Food use is projected at 945 million bushels, unchanged from May. Feed and residual use is projected at 220 million bushels, down 10 million bushels because of reduced supplies. Exports are projected at 1,150 million bushels, unchanged from May, but up 125 million bushels from 2011/12 with larger supplies and more competitive prices. Thus, ending stocks for 2012/13 are projected at 694 million bushels, down 41 million bushels from May and down 34 million bushels from 2011/12.

2011/12 Supplies

Total projected supplies for 2011/12, at 2,982 million bushels, are unchanged from May. Supplies for 2011/12 are 297 million bushels below 2010/11. Year to year, lower beginning stocks and production were only slightly offset by higher imports.

Projected supplies of HRW, HRS, and durum are down year to year, mostly because of reduced production. HRW production is down from last year because of reduced harvested area and lower yields. Year to year, the planted area for the 2011 HRW crop is slightly smaller than 2010, but the rate of abandonment is up sharply and yields are down from the previous year due to the severe drought on the Central and Southern Plains. HRS and durum production are down from a year ago with lower planted and harvested areas and lower yields. Excessive moisture and cool temperatures on the Northern Plains resulted in late seeding and prevented plantings. The 2011 HRS crop was reduced by a greater percentage from 2010 than the HRW crop. The result is a substantial premium of HRS over HRW and a substitution of HRW for HRS in some flour blends.

Projected supplies of SRW and white are up from 2010/11, mostly because of larger production. SRW production is up from last year because of larger harvested area and higher yields. The 2011 crop area recovered from 2010, when a rain-delayed row-crop harvest and low prices reduced SRW seedings in the fall of 2009. Due to excellent weather conditions through much of the season, production was up significantly from the previous year, with production in many of the SRW States up more than 100 percent from 2010. White wheat production was up due to both higher area and yield.

All-wheat 2011 production is estimated at 1,999 million bushels, unchanged from May, but down 208 million bushels from 2010. All-wheat harvested area is estimated at 45.7 million acres, unchanged from May and down 1.9 million acres from the previous year. The U.S. all-wheat estimated yield is 43.7 bushels per acre for 2011, unchanged from May, but down 2.6 bushels from the 2010 record high of 46.3 bushels.

Estimated 2011/12 carryin stocks, in total and by class, are unchanged from May. Projected 2011/12 carryin stocks of HRS and SRW are down sharply year to year. The carryin stocks for the other classes are nearly unchanged year to year.

2011/12 Use

Domestic use of wheat for 2011/12 is projected at 1,199 million bushels, up 10 million bushels from May, but 71 million bushels higher than last year. Food use for 2011/12 is projected at 940 million bushels, up from May based upon the latest quarterly flour report from the North American Millers’ Association. Projected food use for 2011/12 is up 14 million bushels from 2010/11. Projected seed use is unchanged from May. Feed and residual use this month is projected at 180 million bushels, unchanged from May. Projected feed and residual use for 2011/12 is 48 million bushels higher than in 2010/11.

Projected total U.S. ending stocks for 2011/12, at 728 million bushels, are down 40 million bushels from May and down 134 million bushels from 2010/11.

All-wheat ending stocks are expected to be down 16 percent from 2010/11. Durum, HRS, white and HRW ending stocks are projected down from 2010/11 by 61 percent, 29 percent, 23 percent, and 16 percent, respectively. SRW ending stocks are projected up from 2010/11 by 14 percent.

Winter Wheat Harvesting Ahead of Normal Pace

As of June 10, 2012, 35 percent of the winter wheat in the principal winter wheat States had been harvested. This pace is faster than the 5-year average of 9 percent at this time of the year.

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