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The market may be signaling that the world will need more U.S. wheat.

Kim Anderson

December 17, 2020

3 Min Read

Some private analysts are projecting an increase in U.S. wheat planted acres for the 2021/22 wheat marketing year. This increase may be due to higher prices. Wheat may be forward contracted for 2021 harvest delivery in Medford, Okla., for $5.42, and for $5.25 in Perryton, Texas. In early December 2019, the forward contract price was $4.19 for both Medford and Perryton. 

The USDA/ERS data series for U.S. wheat planted acres started in 1919 at 77.4 million acres. The harvested wheat acres data series started in 1866 at 15.4 million acres. For the 2020/21 wheat marketing year (winter wheat planted in the fall of 2019), U.S. planted wheat acres were 44.3 million and harvested acres were 36.7 million. The 2020/21 planted acres were the lowest on record (1919 – 2020), and the harvested acres were the lowest since 1890. 

1981/80 was a banner year for U.S. wheat production. Planted acres were a record 88.3 million (Figure 1). Harvested acres were a record 80.6 million. Production was a record 2.8 billion bushels. These records have not been broken.  

Figure 1. U.S. wheat planted acres (million) and average annual prices ($/bu.).


The wheat yield for 1981 was a record 34.5 bushels per acres. The 2020 wheat average yield was 49.7 bushels per acre. 

A side point is harvested acres as a percentage of planted acres. In 1950/51, the percentage of harvested acres was 92 percent. Starting in 1950 and continuing through 1984, the 10-year average harvested acres percentage was between 88 and 90 percent. In 1986, the harvested acres percentage dropped to 87 percent. The 10-year average hit 84 percent in 1992/93. The harvested acres percentage has been 82 to 83 percent for the last three years. 

On a positive note, average yield has increased from 16.5 bushels per acre in 1950 to about 50 bushels per acres for the last two years. 

U.S. wheat production has declined from the 1981/82 record of 2.8 billion bushels to 1.8 billion bushels for the 2020/21 wheat marketing year. The 10-year average (2011 through 2020) U.S. wheat production is 2.0 billion bushels per year. 

During the 1981/82 wheat marketing year, world wheat production was a record 16.4 billion bushels. World wheat production for the 2020/21 wheat marketing year is projected to be a record 28.4 billion bushels. Since 1981, world wheat production has increased 73 percent, and U.S. wheat production has decreased 32 percent. 

Major world wheat production increases have occurred in the Black Sea region (Russia and Ukraine) and in some western Asian countries. These increases have been due mostly to improved production practices and technology that have resulted in increases in yields and quality. Some current signals indicate that Black Sea area wheat production increases are levelling out. 

During the 1980/81 wheat marketing year (June 1, 1980 through May 30, 1981), the average annual U.S. wheat price was $3.66 (Figure 1), and the 10-year average price was a record $3.04. For the period 1973 through 2006, U.S. wheat prices traded between $2.30 and $4.55. Between the 1981/82 and 2005/06 wheat marketing years, the10-year average prices were between $3.04 and $3.55. 

During the 2006/07 wheat marketing years, the increased ethanol mandate resulted in a dramatic increase in grain prices. Wheat prices broke out of the $3.04 to $4.55 price pattern and established an average annual price range between $3.89 and $7.77. The average price for 2007/08 through the projected 2020/21 marketing year is $5.69. 

The market may be signaling that the world will need more U.S. wheat. The result may be slightly higher prices and a need for an increase in U.S. wheat planted acres. 


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