WHEAT YEARBOOK February 29, 1996 Approved by the World Agricultural Outlook Board ----------------------------------------------------------------------------- WHEAT YEARBOOK is published annually by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20005-4788. WHS-1996. Please note that this release contains only the text of the WHEAT YEARBOOK--tables and graphics are not included. Printed copies of this yearbook are available from the ERS-NASS order desk. Call, toll-free, 1-800-999-6779 and ask for stock #WHS-1996, $15. ERS-NASS accepts MasterCard and Visa. ----------------------------------------------------------------------------- Contents Summary Wheat Supplies Likely To Remain Tight in 1996/97 Outlook for 1996/97 U.S. Winter Wheat Seedings Up, But How Much Production Increases Is Uncertain World Wheat Production Expected To Improve in 1996/97 as Plantings Increase Situation and Outlook for 1995/96 World Wheat Trade Unchanged Despite Higher World Prices in 1995/96 U.S. Exports Show Strong Gains in 1995/96 Tight Supplies and Strong Demand Generate Record Farm Prices in 1995/96 Wheat by Class Total Use of Hard Red Winter Wheat To Shrink, Other Classes Increase Special Article U.S. Wheat Area: Tracking Flexibility and Regional Shifts Since 1990, by Sara Schwartz and Bryan Just List of Tables Situation Coordinator Edward W. Allen (202) 219-0831 Principal Contributors Edward W. Allen (202) 219-0831 Jenny R. Gonzales (202) 501-8552 (Statistical) Mark Simone (202) 219-0823 (International) Approved by the World Agricultural Outlook Board. Summary released February 26, 1996. Additional copies of the Wheat Yearbook are available from ERS-NASS, 341 Victory Drive, Herndon, Va. 22070. Or call, toll free, 1-800-999-6779 (8:30-5:00 ET, U.S. and Canada only). All other areas, please call 703-834-0125. Text may be accessed electronically. For details call (202) 720-5505. The Wheat Outlook is available on Fax and by computer, eleventimes a year, except when the Wheat Yearbook is issued (February). See back cover for details. The United States Department of Agriculture (USDA) prohibits discrimination in its programs on the basis of race, color, national origin, sex, religion, age, disability, political beliefs and marital or familial status. (Not all prohibited bases apply to all programs). Persons with disabilities who require alternative means for communication of program information (braille, large print, audiotape, etc.) should contact the USDA Office of Communications at (202) 720-2791. To file a complaint, write the Secretary of Agriculture, U.S. Department of Agriculture, Washington, D.C., 20250, or call (202) 720-7327 (voice) or (202) 720-1127 (TDD). USDA is an equal opportunity employer. Summary Wheat Supplies Likely To Remain Relatively Tight in 1996/97 U.S. wheat supplies in 1996/97 are expected to rise about 5 percent from the low levels of 1995/96 as increased production more than offsets low carryin stocks. Much of the larger production will come from increased area. Winter wheat planted area was up 7 percent, and spring wheat plantings also will increase. U.S. average yields are expected to rise from last year, when they were below average. Even though wheat in the Southern Plains is reported in poor condition, weather developments this spring and summer will largely determine yields. USDA will release its first forecast of U.S. and world production for 1996 on May 10. Beginning stocks on June 1, 1996, are forecast at 346 million bushels, down more than 160 million from a year earlier and barely larger than in 1974/75. About a third of the stocks are expected to be in CCC inventory, leaving privately owned stocks exceptionally low. Demand for U.S. wheat will likely be strong early in 1996/97. With U.S. supplies remaining relatively tight, demand becomes the key to price developments. Wheat prices usually are lowest during or soon after harvest, when supplies are largest. U.S. corn supplies are forecast to be tight this summer, and wheat will be used for feed unless its price is well above the corn price. Also, little of competing exporters' 1996 production will be available until late summer and fall. However, foreign production is expected up in 1996/97, and as increased competitor supplies become available, world wheat prices are expected to decline. Several major wheat exporting countries are anticipated to increase wheat area in response to this year's high prices. The European Union, Canada, and Australia are each expected to plant more wheat for 1996/97. Increased rainfall in the former Soviet Union and North Africa has improved conditions in those regions. For the 1995/96 year ending May 31, U.S. wheat supplies are down more than 200 million bushels, mostly because of below average yields, particularly in the Southern Plains. Total use is projected down less than 60 million bushels because of strong exports. Lower yields, strong exports, and tight global supplies have pushed the 1995/96 wheat farm price to a projected $4.40-4.50 per bushel, much above the 1974/75 record of $4.09. The December 1995 wheat farm price was $4.88 per bushel, the highest reported for any month since $4.96 in March 1974. However, if past wheat prices are adjusted for inflation, the current prices are not records, as real wheat prices have generally trended down for over a century. Despite increased world wheat production in 1995/96, projected consumption is again expected to exceed production, reducing global stocks to their lowest since 1975/76. The tight supplies and strong import demand have dramatically raised U.S. and international wheat prices. Despite higher prices, global trade is little changed from last year. U.S. wheat exports have shown strong gains in 1995/96. According to U.S. Export Sales, wheat commitments as of February 15 were 2.6 million tons ahead of last year's pace. Outlook for 1996/97 U.S. Winter Wheat Seedings Up, But How Much Production Increases Is Uncertain Wheat farmers responded to high prices and boosted winter wheat plantings 7 percent from a year earlier to 52 million acres. Spring wheat plantings will also rise, but less than winter wheat. Favorable conditions outside the Southern Plains and larger seedings will lead to some rise in production in 1996. Weather conditions this spring and summer will determine the extent of the increase. USDA will release its first forecast of U.S. 1996 production on May 10. U.S. Winter Wheat Area Planted Highest Since 1990 Strong wheat prices and better planting conditions in Montana, South Dakota, and major soft red winter (SRW) States boosted U.S. winter wheat seedings to the highest level in 5 years. SRW area increased 10 percent from a year ago, while hard red winter (HRW) and white winter each increased 6 percent. The major HRW States of the Southern Plains increased area only 3 percent or less, as dryness hampered seeding, except in Oklahoma, where September wetness delayed the start of planting. Further north in Montana and South Dakota, winter wheat area increased dramatically from last year's low levels. Although winter wheat planted increased 50 percent in Montana, this was merely a return to the normal acreage of several years ago. In South Dakota, winter wheat expanded on areas left fallow by poor spring planting conditions last year. Planting conditions were generally favorable in SRW Corn Belt States, with area increases ranging from 11 percent in Illinois to 26 percent in Missouri. SRW area increases were generally less dramatic outside the Corn Belt, with excessive rains putting a damper on wheat area in North Carolina. White wheat area planted increased rather strongly in Washington (up 7 percent) and Idaho (up 8 percent), but seedings declined in Oregon. Conditions are generally favorable in the region. Although the highest since 1990, the winter wheat seedings for 1996 are not terribly large by historical standards. The 1990 area was 56.7 million acres, and there was a 5-percent ARP (but with optional modified contracts that allowed some producers to plant more than their base). In 1986 winter wheat seedings reached 53.9 million acres despite a 22.5-percent ARP. In 1981 and 1982, winter area reached 65.5 million acres. Wheat base in the Conservation Reserve Program (CRP) only partly explains the long term decline (See special article). As a response to record high wheat farm prices in 1995, a 7-percent increase is not very large, especially since planting conditions were more favorable in several regions. Spring Wheat Area Increases May Also Be Modest Unlike winter wheat, spring wheat area has been closer to historical highs for the last few years. In 1995, durum and other spring wheat area reached 20.5 million acres, roughly similar to the previous 3 years, and only modestly less than the peak of 23.0 million in 1980. The significant CRP area in the major spring wheat States of North Dakota, Minnesota, South Dakota, and Montana means that there is not much land outside of the CRP that was used to grow wheat in the past that can now be easily moved into wheat. Wheat prices will be attractive at spring wheat planting (mostly April and May) but feed grain and oilseed prices are also expected to be strong, limiting the movement of wheat onto other crop land. The "early out" of some CRP acres will facilitate some small expansion, but most government program changes are expected to have relatively little effect on spring wheat plantings because the wheat price is high enough that wheat farmers will be responding to market signals and keep growing wheat. Montana and South Dakota are special and offsetting cases. For the last 2 years Montana's planting conditions in the fall were unfavorable and winter wheat seedings were low. Consequently spring wheat was planted in the spring on much of that land. Last fall planting conditions for winter wheat were favorable and the land was planted to winter wheat. Therefore, that land will not be available for spring sowing and Montana's spring wheat area will drop. In South Dakota, spring wheat seedings in 1995 were disrupted by flooding and excess rains. A more normal planting season would herald a significant increase in area. The increase in South Dakota may about offset the expected decline in Montana, leaving several other States to make up the expected relatively small increase in total spring wheat (including durum) plantings. Wheat in the Southern Plains Reported in Poor Condition On February 6, the Weekly Weather and Crop Bulletin reported "Wheat acreage across most of (Kansas) continues to be damaged. Very short moisture availability since early fall has caused poor emergence, shallow rooting. ... Sustained winds of 35 to 40 miles per hour across the wheat areas during mid- to late January caused severe soil blowing. This was followed by a week of frigid temperatures with no snow cover." In Texas, wheat was rated at 40 percent of normal, worse than last year's 68 percent. In Oklahoma, 50 percent of the wheat crop was in poor or very poor condition. While the winter wheat crop in the Southern Plains may have suffered damage, it will be impossible to know the extent of the damage until the crop breaks dormancy. Wheat that has been killed will not produce, and wheat that has been badly stressed may have poor yield potential. Rains in coming weeks will be critical. USDA's first survey-based forecast of winter wheat production will be in May. In other regions wheat has fared better. In the Pacific Northwest, recent flooding was mostly west of major wheat areas, and wheat is doing well. Planting conditions in the fall were much better than the year before, and the crop is well established. In Idaho, 98 percent of the wheat was reported in good to excellent condition. In soft red winter growing areas there was generally enough snow to limit damage from very cold temperatures. In Missouri, 27 percent of the crop was rated poor to very poor, but conditions were better in Arkansas, Illinois, Ohio, and Indiana. Generally favorable conditions outside the Southern Plains and expanded planted area are expected to boost U.S. wheat production above 1995 because 1995 yields were below recent averages, especially in the Southern Plains. Wheat Supplies Likely To Remain Relatively Tight in 1996/97 Imports in 1996/97 are likely to grow modestly. A larger Canadian wheat crop could lead to some expansion of U.S. imports. Imports of wheat, flour, and selected products in 1995/96 are expected to be about 3 percent of the U.S. wheat supply, and that is unlikely to change much in 1996/97. Beginning stocks on June 1, 1996, are forecast at 346 million bushels, down more than 150 million from a year earlier. The forecast stocks are barely larger than the 340 million bushels in 1974/75. About a third of the stocks are expected to be in CCC inventory, leaving privately owned stocks forecast at 226 million bushels, exceptionally low compared to 340 million privately owned in 1974/75. U.S. wheat supplies in 1996/97 are expected to rise about 5 percent from the low levels of 1995/96 as increased production more than offsets low carryin stocks. Much of the larger production will come from increased area. Winter wheat planted area was up 7 percent, and spring wheat plantings also will increase. U.S. average yields are expected to rise from last year, when they were below average. Even though wheat in the Southern Plains is reported in poor condition, weather developments this spring and summer will largely determine yields. USDA will release its first forecast of U.S. and world production for 1996 on May 10. Demand for U.S. Wheat Likely Strong Early in 1996/97, But May Then Slump With U.S. supplies remaining relatively tight in 1996/97, demand changes become the key to price developments. Wheat prices usually are lowest during or soon after harvest, when supplies are most abundant. However, in 1996/97, demand during the summer months is likely to be strong. Corn supplies are forecast to be tight this summer as export and domestic demand remain strong. Strong corn prices provide support for wheat prices because wheat will be used for feed unless the wheat price is well above the corn price. Feed compounders are expected to bid aggressively for wheat this summer, meaning domestic millers and importers will also have to be aggressive. Export demand is likely to be strong this summer as well. With record prices in 1995/96, importers that are able to, will attempt to wait for new-crop wheat at lower expected prices. This "pent-up demand" will be waiting for the U.S. crop. Wheat is harvested in the United States before most competitors harvest their crops. Delayed farmer marketing means little of the European Union's (EU) wheat crop moves into world markets until the fall. Canada, predominantly a spring wheat producer, does not have significant new-crop supplies until the fall. This leaves the United States as the dominant exporter of new-crop wheat during the summer. Foreign production is expected up in 1996/97, and if increased competitor supplies become available in the fall and winter, world wheat prices would be expected to decline. Farm Legislation in 1996 At this writing, there is no new farm bill. Permanent legislation would be disruptive to marketing, and expensive for the U.S. government, so some compromise is likely. Increased flexibility, fewer acreage limitations, continued marketing loan authority, no target prices or deficiency payments, but some type of capped "transition payments" are in most congressional proposals. Outlook for 1996/97 World Wheat Production Expected To Improve in 1996/97 as Plantings Increase Several major wheat exporting countries are anticipated to increase wheat area in response to this year's high wheat prices. The European Union, Canada, and Australia are all expected to plant more wheat for 1996/97. Increased rainfall in the former Soviet Union (FSU) and North Africa is providing improved conditions in those regions. Because wheat prices are expected to continue strong during the next marketing year, several major exporting countries are anticipated to expand wheat plantings for 1996/97. Winter wheat area has increased in the EU, FSU, and at least parts of North Africa. In addition, soil moisture conditions have improved over last year in North Africa, the FSU, and Spain. Global wheat production projections are highly uncertain at this early stage because much of the winter wheat has yet to come out of dormancy and spring wheat in the Northern Hemisphere and winter wheat in the Southern Hemisphere will not be planted for some time. USDA will release its first projections for the United States and country-specific foreign projections for 1996/97 on May 10. Wheat production in the European Union is projected to increase because the EU Commission lowered the 1996/97 mandatory cereals and oilseeds set-aside rate to 10 percent for both the rotational and non-rotational set-asides. This is down from the 12 percent rotational set-aside and the 15 percent non-rotational set-aside for 1995/96. The set-aside was decreased in order to rebuild grain stocks, stabilize internal prices, and satisfy export demand. Due to tight supplies in 1995, the EU Commission first eliminated subsidies, then imposed a wheat export tax in December 1995. Because of the lower set-aside rate and high world wheat prices, winter wheat plantings increased in fall 1995 in the three largest wheat producing EU-member countries: France, Germany, and the United Kingdom. With the good weather conditions at seeding, there was optimism about these countries' crops as they entered dormancy. Because of heavy November-December 1995 precipitation, Spain's wheat production is likely to rebound strongly from its drought-affected output of 1995. The Eastern European region's 1995 wheat production increased, and with higher world prices, permitted considerably more exports than in previous years. For the 1996 crop, however, the start is less promising if preliminary indications prove to be accurate that winter wheat area declined for the 1996/97 crop year in Bulgaria, Romania, and Yugoslavia. Reportedly plantings were reduced by cold weather and shortages of agricultural inputs. In the FSU, soil moisture conditions have improved over last year in the major winter wheat producing areas of southern Russia and Ukraine. Precipitation arrived too late for the 1995 crop in Russia, which was the smallest in 30 years. Because of the hot, dry summer in Russia, farmers were able to accelerate harvesting and seed next year's winter grains far ahead of the 1995 pace. According to the Russian State Statistical Committee, winter wheat area is projected at 10 million hectares, a strong increase. The above-normal late summer precipitation in both Russia and Ukraine continued during September-October 1995, creating moisture conditions that were far more favorable than a year earlier for winter wheat emergence and establishment before the crop entered dormancy. Another major FSU grain producing country, Kazakhstan, has not begun seeding for its 1996 crop because it primarily grows spring grains, mostly wheat and barley. Soil moisture conditions have generally also improved over last year in the North African countries of Algeria, Tunisia, and Morocco, where winter wheat plantings usually occur in November-December. While weather conditions have been favorable to date,much will depend on weather conditions in coming weeks. China's winter grain area seeding for its 1996/97 crop increased 2.3 percent from last year (winter grains are mainly winter wheat in China), according to China's State Statistical Bureau (SSB) survey samples. The conditions for winter wheat in China were generally favorable as the crop entered dormancy. In India soil moisture conditions have been adequate and irrigation reservoirs and wells have been filled to capacity. The crop is normally harvested in March-May. Because of the price premiums for durum wheat in export markets, the Punjab State introduced a new production program for the 1996/97 durum wheat crop by providing high quality durum wheat seeds to farmers. The success of exporting this durum will be dependent on keeping the durum separated from other wheat in the procurement process. Durum is normally mixed with other types of wheat, making it almost impossible to guarantee certain types of wheat to importers. With continued strong world wheat prices, Canadian farmers are expected to shift out of canola and specialty crops and into wheat when plantings begin this spring. Lower input costs compared to canola and the need to introduce a different crop into rotations will also encourage producers to shift to wheat. According to Agriculture and Agri-Food Canada, the increased area will lead to greater wheat production in 1996 and Canada's wheat exports should expand in 1996/97, as lower livestock numbers reduce domestic use. Although Australia's 1996/97 wheat crop will not be planted until April-May, higher wheat prices relative to wool are expected to cause producers to expand wheat area. According to the Australian Bureau of Agricultural Economics (ABARE), Australia is projected to increase wheat plantings to 10.3 million hectares in 1996/97, up from 9.9 million estimated for 1995/96. Situation and Outlook for 1995/96 World Wheat Trade Unchanged Despite Higher World Prices in 1995/96 Despite increased world wheat production in 1995/96, projected consumption is again expected to exceed production, reducing stocks to their lowest since 1975/76. The tight supplies have dramatically raised U.S. and international wheat prices. World wheat production increased in 1995/96 to 535 million tons, but for the third consecutive year, global consumption is projected to surpass production. Consequently, ending stocks are projected to continue declining to 96.7 million tons, the lowest since 1975/76. Even with the much larger Australian crop, export supplies are extremely tight in the major exporting countries and with wheat trade virtually unchanged from 1994/95, U.S. and international wheat prices have risen to levels not seen since 1973/74. Because international wheat prices are significantly higher than in the past several years, the EU at first halted its export subsidies. When domestic prices remained high, an export tax was imposed to reduce exports outside the EU in an attempt to reduce high internal prices. The amount of the export tax on daily foreign sales is 35 ECU per ton or $45/ton, based on the current exchange rates. Also, the last U.S. wheat sale under the Export Enhancement Program (EEP) was to Egypt on July 21, 1995. Despite significantly higher U.S. and international wheat prices during 1995/96, wheat imports by the major players have remained strong. Import Demand Robust Strong economic growth and government concerns about food price inflation in China have made that country the world's largest wheat importer. As economic growth continues, and urbanization increases, there are greater demands by the Chinese population for diversified diets. Domestic wheat production has not kept pace with these increased consumption needs, and wheat imports by China in 1995/96 are projected to increase 27 percent to 13 million tons. Southeast Asia, especially Indonesia, Philippines, and Malaysia, is one the fastest growing grain import regions in the world. Projected milling wheat imports in 1995/96 have risen as economic growth in this region pushes up per capita incomes and shifts dietary patterns from rice towards wheat-based products such as noodles, snack foods, bakery products, and pasta. Indonesia has significantly expanded its flour milling capacity during recent years, permitting a 59-percent projected increase in imports since 1990/91. These gains in Asian wheat trade are being partially offset by reductions in imports by South Korea, as feed wheat supplies are quite limited in 1995/96. North Africa's import demand during 1995/96 is mostly driven by Morocco, which suffered a severe drought in 1994. Production in 1995 was down more than 4 million tons from the record harvest in 1994 and projected imports are triple those of a year earlier. Despite the absence of the EEP since late July, Egypt continued to purchase U.S. wheat on commercial terms and its 1995/96 wheat imports are unchanged at 6 million tons. Because of continued declines in its wheat production in recent years, Brazil has increasingly filled its consumption needs through imports. Brazil's wheat production declined in 1995 as plantings were reduced because of the government's delay in announcing rural credit programs. As a result, projected 1995/96 imports are 6.6 million tons, and with a severe drought substantially reducing Argentina's wheat crop, U.S. wheat exports to Brazil have expanded in 1995/96. The FSU, once a dominant importer in world grain markets, is expected to import only 9.2 million tons of wheat in 1995/96, substantially below the annual average of 23 million tons in 1989/90 through 1992/93. For the last 3 years, FSU wheat imports are smaller mainly because of decreasing livestock numbers, reduced waste of grain used for feed, a halt to state subsidization of bulk agricultural imports, and pressure by Russian farmers on the government to reduce grain imports. However, the FSU is projected to increase wheat imports in 1995/96 from outside the region, primarily because severe drought conditions cut production and exportable supplies in Kazakhstan. Exportable Supplies Tight Exportable supplies are expected to be tight in 1995/96 because of the drought in Argentina, strong domestic demand in the EU, low stocks and increased feed demand in Canada, and a smaller U.S. 1995 wheat crop. However, Australia's exports are projected to increase sharply in 1995/96 as Australia has recovered from its 1994 drought. Shortfalls in wheat supplies from the major exporters have been somewhat offset by Eastern Europe and india. Argentina's 1995/96 wheat crop suffered prolonged drought, which limited planted area and reduced yields. The drought, which began in May 1995, was Argentina's worst since 1954, according to the U.S. National Weather Service. The dryness was particularly evident in southern Buenos Aires, where rainfall was less than 25 percent of normal during May-September 1995. Historically, this province accounts for almost two-thirds of Argentina's wheat output. As a result, Argentina's projected 1995/96 wheat production declined to 8.6 million tons and exports are expected to drop to 4.8 million tons, the lowest since 1990/91. The other major Southern Hemisphere wheat exporting country, Australia, recovered dramatically from its drought-ravaged output of 8.9 million tons in 1994/95, with projected production reaching 17 million tons in 1995/96. Abundant soil moisture in Western Australia and South Australia enabled yields in both states to approach record highs. This more than offset the yield reductions in Queensland and New South Wales caused by drought and frost in earlier months. Projected exports of 12 million tons in 1995/96 are expected to allow Australia's exports to the Middle East and Asian markets to rebound. Canada's wheat production increased in 1995, reversing a 4-year declining trend, caused by farmers shifting from wheat to relatively higher-priced canola and specialty crops. In addition to the expansion in planted area, production was enhanced in 1995 by generally favorable harvest conditions. The sharp increase in world wheat prices during 1995/96 has more than offset the increase in farmer freight costs, which occurred when the Canadian government eliminated the annual $CAN 561 million Western Grain Transportation Act (WGTA) rail subsidy, effective August 1, 1995. Previously, the WGTA paid part of the shipping cost of eligible western Canadian grains, oilseeds, and specialty crops to west coast ports for export only and Thunder Bay for both export and domestic consumption. However, because of low beginning stocks and strong feed demand in western Canada, wheat exports are projected to decline to 18.5 million tons in 1995/96. EU wheat production increased in 1995 because the Common Agricultural Policy (CAP) reform mandatory area set-aside was reduced from 15 to 12 percent for 1995/96. A mild winter and abundant spring rainfall in northern EU-member countries also boosted production. However, the prolonged drought in southern Europe, especially Spain, restrained the production rise. Despite higher production in 1995/96, EU wheat exports to non-EU countries are currently projected at 15 million tons, the lowest since 1985/86. Exportable supplies have declined in the EU as domestic use of wheat has risen during the past 3 years, primarily because CAP reform lowered support prices. However, the tight supplies have resulted in market prices well above support levels. The EU has taken various measures to reduce grain prices, including imposing an export tax in December 1995. The EU Commission had suspended export subsidies in July 1995 and has released intervention stocks into the domestic market. Eastern Europe's wheat production increased in 1995/96 as several countries, including Poland, Romania, Hungary, and the Czech Republic, benefited from generally favorable weather conditions and boosted their harvests. Bulgaria was the only country in the region that suffered significant declines in production. Because of the region's greater production and high international wheat prices, Eastern Europe's exports are projected to be higher for 1995/96. India's wheat production reached a record 65 million tons in 1995, as abundant precipitation during the monsoon season enhanced output. Because of high world wheat prices and large domestic supplies, India is projected to export 700,000 tons of wheat in 1995/96, mostly to Bangladesh and North Africa. However, India is presently limited in substantially expanding its wheat exports because of infrastructure constraints (especially ports) and low quality relative to the major wheat exporters. Situation and Outlook for 1995/96 U.S. Wheat Exports Show Strong Gains in 1995/96 As of February 15, the U.S. Export Sales report shows that U.S. export commitments for wheat sales in the 1995/96 (June/May) marketing year are 2.6 million tons ahead of 1994/95 (commitments are defined as the sum of shipments and outstanding sales). Shipments are also ahead of last year's pace by almost 2.3 million tons. Because of competitors' limited supplies, U.S. export sales are ahead of 1994/95 in most regions of the world, except China, Africa, Eastern Europe, and the FSU, as of February 15. This increase has occurred despite significantly higher U.S. export prices and the absence of Export Enhancement Program (EEP) activity since July 1995. The largest gains in 1995/96 sales have occurred in South America and Asia. The reduction in 1995/96 exportable supplies from Argentina, Canada, and the European Union (EU) has permitted the United States to increase exports to several South American countries, including Brazil, Chile, Colombia, Ecuador, and Peru. The United States also has 1 million tons of outstanding sales to Brazil for the upcoming 1996/97 marketing year. During the 1990s, until 1995/96, the United States had experienced a loss in market share in South America. Asian countries contributing most to increased U.S. export commitments in 1995/96 are China, Indonesia, and the Philippines. The United States sold 2.1 million tons to China during January. This largely was the reason that weekly U.S. export sales for the week ending January 25, were the second highest on record (the record sales week was recorded in July 1979). Indonesia is projected to become the fifth largest wheat importing country during 1995/96. Because of Indonesia's increased import demand and tight competitor supplies, U.S. exports to Indonesia have risen. U.S. export sales to the EU have grown in 1995/96 because of high prices in the EU and reduced supplies of high quality wheat, particularly durum. The EU reportedly has also purchased wheat from Australia. U.S. 1995/96 export commitments for Egypt are behind 1994/95, as Australia's expected increase in exportable supplies has caused U.S. sales to slow in one its largest export markets. The United States gained market share in Egypt last year because of Australia's drought-reduced 1994/95 crop. U.S. export commitments to the FSU for 1995/96 are behind a year earlier, and exports have largely occurred under the Food for Progress Program. Sales to Eastern Europe are behind 1994/95 as abundant supplies in many East European countries are projected to significantly raise their exports in 1995/96. Among the five U.S. wheat classes, commitments as of February 15 were substantially ahead of 1994/95 for hard red spring and soft red winter. Increased commitments for hard red spring are mostly the result of more exports to several South American countries, while greater commitments for soft red winter are primarily due to China and Egypt. P.L. 480 Title I allocations for wheat and flour in fiscal year 1996 include 410,000 tons to Armenia, Angola, Bolivia, Guyana, Jordan, Moldova, Sri Lanka, Suriname, Turkmenistan, and Ukraine. Food for Progress allocations include 175,600 tons for wheat to Albania, Georgia, Kyrgyzstan, and Tajikistan. Because USDA's authority for entering into P.L. 480 agreements expired at the end of calendar year 1995, new agreements cannot be signed until Congress acts to provide new legislative authority. The limited availability of wheat for programming under P.L. 480 led the President to authorize the release of up to 1.5 million tons of wheat from the Food Security Wheat Reserve. This wheat will be used to provide, on a sale or donation basis, emergency food assistance to developing countries in fiscal 1996. Situation and Outlook for 1995/96 Tight Supplies and Strong Demand Generate Record Wheat Farm Prices in 1995/96 U.S. wheat supplies are down more than 200 million bushels, mostly because of below average yields, particularly in the Southern Plains. Total use is projected down less than 60 million bushels because of strong exports. Lower yields, strong exports, and tight global supplies have pushed the 1995/96 wheat farm price to a projected $4.40-4.50 per bushel, much above the 1974/75 record of $4.09. U.S. 1995/96 Wheat Supply Down 7 Percent Reduced production and beginning stocks are dropping 1995/96 U.S. wheat supplies to 2,762 million bushels, nearly the same as in 1989/90, and the second lowest in 20 years. Area planted, area harvested, and yield have declined for 3 years in a row. In each of the last 3 years, unusual planting conditions have contributed to reduced area planted, especially in Montana and Missouri. Despite a 0-percent ARP for the third year in a row, planted area continued to decline. Wheat prices before and during the early planting of winter wheat (August-September 1994) were lower than prices affecting the planting of spring wheat (March-April 1995). Moreover, excess moisture and cool conditions prevented some spring wheat from being planted, especially in South Dakota. In 1995, yields were hurt by late frost and rain at harvest in important winter wheat areas, as well as by delayed planting, disease and insect problems, and summer heat in major spring wheat areas. Favorable rains and mild growing conditions increased plant populations above average in most winter wheat States. However, several States, especially Kansas, had record low head weights as frost damage, disease, and rains during harvest reduced yields. Soft red winter yields were below last year's record. Disease, insects, and hot conditions reportedly limited spring wheat yields in the Northern Plains for the third straight year. U.S. 1995 production is estimated at 2,186 million bushels, down 6 percent from 1994 and less than 5 of the last 10 years. Imports are projected down 24 percent, the second year of decline. On September 11, 1995, the Memorandum of Understanding with Canada that sets tariff rate quotas on wheat imports expired. The United States intends to consult with the Government of Canada to discuss potential problems before imports from Canada reach disruptive levels. However, no surge of imports followed the lifting of quotas. Canada has had strong demand from other customers and no longer faces competition from subsidized exports from the EU in overseas markets. Supplies of top quality wheat are smaller in Canada this year, reducing pressure to sell to the United States. Supplies of grain for feeding are tight in Canada, so Canada has not been aggressive selling feed quality wheat. Also, the Canadian Wheat Board has set a high price at which Canadian producers can buy back their wheat, so it is not very attractive for Canadian farmers to buy back their wheat and sell it in the U.S. market. Beginning stocks in 1995/96 were down 11 percent from the previous year. The farmer-owned reserve (FOR) had no wheat in it for the first time in a couple of decades, and the amount held in CCC inventory for the Food Security Wheat Reserve also declined some. Free stocks (total stocks less government stocks and FOR) dropped 12 percent. Demand Strong for U.S. Wheat Despite high prices, total use of U.S. wheat in 1995/96 is projected to reach 2.42 billion bushels, down only 2 percent from a year earlier. All the reduction is in feed and residual use, with exports, domestic food use, and seed use expanding. U.S. exports in 1995/96 are forecast at 1.275 billion bushels (June/May), up 7 percent from a year earlier, but less than in 1991/92 or 1992/93, and substantially below the 1981/82 record. Although not an exceptional volume, the export expansion is impressive because it occurred in the face of sharply higher prices. The costs paid by most foreign customers increased even more than market prices increased because of the lack of EEP bonuses. Domestic use, forecast down 11 percent, has responded to higher prices to some extent. Food use, the largest part of domestic use, is projected up less than 1 percent. After growing much stronger than the long term trend in 1992/93 and 1993/94, food use dropped in 1994/95. This suggests that food use of wheat is a mature market, characterized by slow growth based on population increases and gradually changing dietary habits, with prices having, at most, a small effect. Seed use is the smallest use category, and can be expected to expand as farmers plant more area in response to high prices. However, the forecast increase of 19 percent is not just the result of increased plantings for 1996 production. Seed use dropped in 1994/95 because spring wheat seeding was so delayed that many farmers in the Northern Plains planted after June 1, 1995. About 6.5 million bushels of spring wheat (including durum) were seeded in 1995/96 for harvest in 1995/96. This unusual late seeding boosts seed use for 1995/96 and lowers it for 1994/95. Feed and residual use is forecast down 42 percent, as feeding of wheat is not attractive because of the high price of wheat compared to feed grains. However, the rain-delayed harvest in the Southern Plains has reduced test weights, and some wheat may have been discounted enough to be fed to livestock. Moreover, rains during harvest could also cause losses during storage and handling, also contributing to residual disappearance. Quarterly Supply and Use Show Tightening Free Stocks On December 1, 1995, U.S. wheat stocks were an estimated 1.34 billion bushels, down significantly from a year ago. The December 1 stocks data make it possible to estimate U.S. wheat supply and use in the second quarter (September-November) of 1995/96 (see table #1). Compared with second-quarter 1994/95, U.S. exports, food, and seed use increased in second-quarter 1995/96, but beginning stocks, imports, feed and residual use, total use, and ending stocks were lower. The greatest decline in use was in the feed and residual estimate. U.S. feed and residual use of wheat is not directly measured, but calculated by taking measured supply (beginning stocks + production + imports) and subtracting known use (food use + seed use + exports) and ending stocks. Often the residual disappearance of wheat includes significant feed use, so it is called feed and residual use. However, during September-November 1995, wheat prices were high enough so that very little wheat grain was fed to animals. The feed and residual use then becomes a statistical residual, reflecting imperfections in the measurement of the other parts of supply and demand, as well as wastes and losses. A negative second quarter feed and residual use is "normal" and means that the December 1 stocks report "found back" some wheat that did not show up in the September 1 report. A possible cause for this is that more wheat may be in transit in September, while in December more of the wheat is in bins and gets counted. The preliminary calculation of a second-quarter feed and residual use of -99 million bushels in 1995/96 would be the largest amount of wheat "found back" since September stocks data began to be collected. However, it is not much greater than the -88 million bushels in 1989/90. Because the first-quarter feed and residual use was 308 million, and the second was -99 million, the forecast annual feed and residual of 175 million bushels implies that the last two quarters will sum to -35 million. This is middle ground between the -3 million for the last half of 1994/95 and the -70 million in 1992/93. High wheat prices and tight supplies are likely to cause wheat to continue to be "found back." Ending Stocks Forecast Lowest Since 1973/74 U.S. 1995/96 ending stocks are forecast at 346 million bushels, down 32 percent from a year earlier, and just above the low of 340 million posted in 1973/74. However, the forecast total use for 1995/96 is 23 percent higher than in 1973/74, so the stocks-to-use ratio projected at 14.3 percent would be the lowest since 1947/48, a time of war-related marketing controls. Although CCC inventory will be down to 120 million bushels, as some of the Food Security Wheat Reserve is used for food aid shipments, more than a third of the projected ending stocks will be government owned. That leaves only 226 million bushels privately owned. It is likely that over 100 million bushels of old-crop wheat is needed to maintain mill grind until the 1996 harvest becomes available. Record Wheat Farm Price for 1995/96 Strong export demand and tight U.S. and global supplies have fueled strong prices. The season average 1995/96 price weighted by marketings is projected at $4.40-4.50. The low end of the range is higher than the 1974/75 record of $4.09 per bushel. However, if past wheat prices are adjusted for inflation, the current prices are not records, as real wheat prices have generally trended down for over a century. The December 1995 wheat farm price was $4.88 per bushel, up 6 cents from November and the highest monthly wheat farm price since $4.96 per bushel in March 1974. Prices so far in 1995/96 have been very strong. The June average wheat farm price nearly matched the previous June record of $3.85 per bushel posted in 1989, and the July price averaged $4.11, a record for the month. The August price increased to $4.26 per bushel, second only to August 1973's $4.45. Farm prices continued to increase through December. The heavy marketings at high prices last summer will push the weighted season average farm price in 1995/96 to a new record even if monthly prices for the rest of the year do not reach the monthly record of $5.52 per bushel set in February 1974. Although the preliminary January 1996 farm price dipped from the previous month, prices have rallied in February. March and May futures contracts indicate the market expects firm, but not record, prices through the winter, followed by a modest decline during the spring. Wheat by Class Total Use of Hard Red Winter Wheat To Shrink, Other Classes Increase Supplies of hard red wheat are down in 1995/96, with the production drop in hard red winter (HRW) a major factor. Smaller HRW supplies are contributing to increased demand for other classes. HRW Production, Use Down in 1995/96 Area planted for 1995 HRW production fell to 33.8 million acres. This was the third consecutive decline. Many farmers in Montana did not get HRW planted because of a cold fall, and dry conditions hindered seedings in the Southern Plains. Despite attractive prices, harvested area declined and frost, dryness, and rains during harvest dropped average HRW yields below 30 bushels per acre for the first time since 1989. Production dropped to 824 million bushels, down 15 percent from the previous year. Although HRW production was larger than the drought-stricken 1989 crop, total HRW supplies are about the same because beginning stocks were much lower. Tight HRW supplies have boosted prices relative to some other classes of wheat and caused a reduction in use. While HRW seed use has increased, all other use categories are expected to decline. Domestic use is forecast down 19 percent, while exports drop only 5 percent. Forecast ending HRW stocks will be the lowest since the mid-1970s, when stocks by class were estimated on July 1, instead of June 1. HRS Supplies Drop, Use Increases in 1995/96 Hard red spring (HRS) production declined 8 percent in 1995, mostly because of reduced planted area. Wet soils and flooding kept significant areas from being planted, particularly in South Dakota. Average yields of 30.2 bushels per acre were slightly below a year earlier, but nowhere near the record 40.9 in 1992. Late planting, hot summer conditions, and disease took their toll. HRS imports in 1995/96 are forecast down more than 40 percent. Canadian data indicate that imports of feed quality wheat from Canada are down. U.S. HRS beginning stocks in 1995/96 were also down slightly, leaving HRS total supply forecast down 9 percent. Despite reduced supplies, HRS use in 1995/96 is forecast up slightly. Domestic use is expected to decline as feed and residual use drops enough to offset increased food and seed use. Prices for HRS in Minneapolis have generally been less than HRW prices in Kansas City, encouraging domestic millers and foreign buyers to purchase HRS. Exports are forecast up 11 percent, but will remain far below the 1992/93 peak. HRS ending stocks are forecast to drop about 40 percent, to the lowest level in decades. However, at over 100 million bushels, there should be enough HRS to keep mills running until the new crop becomes available. Virtually all the HRS stocks are expected to be privately owned, because as the CCC sells some of the Food Security Wheat Reserve, the wheat with the highest storage costs will be sold first. HRS stocks tend to have among the highest costs. Soft Red Winter Exports Increase SRW production increased modestly in 1995 because of expanded area. Yields failed to reach the 1994 record, but were higher than all except 3 years. Lower beginning stocks were partially offsetting, leaving supply up about 1 percent. SRW domestic use is forecast down 15 percent, as high prices reduce feed and residual use. Exports are projected up 25 percent, as purchasers of HRW who can switch to SRW find better prices. While domestic food use of SRW is mostly for those uses it was bred for, such as cookies, cakes, and crackers, much of the SRW exported is being used for bread making. SRW ending stocks are usually low, and in 1995/96 ending stocks are expected to be even lower than usual, but almost all of the stocks will be privately held. White Wheat Production and Use Up in 1995/96 White wheat production increased 10 percent, mostly because of a rebound in yields. Despite excessively dry planting conditions, white average yields almost matched the 1993 record, because of favorable conditions later in the growing season. Increased production boosted supplies and white wheat prices increased less than other wheats. Imports and food use are expected to increase modestly as soft wheat users found white wheat attractively priced. Foreign buyers located to take shipments from the Pacific Northwest have found white the cheapest wheat. The 15-million-bushel increase in domestic use is a larger percentage growth than the 23-million increase in exports. Forecast ending stocks of 41 million bushels would be the lowest in decades. Because storage costs for government inventory are low in the Pacific Northwest, a significant portion of the forecast ending white wheat stocks will be owned by the CCC. Durum Supply and Demand Stable in 1995/96 Durum production increased 5 percent in 1995 because of a sharp increase in area. However, reduced yields offset most of the area increase. Delayed plantings, hot summer temperatures, and disease problems in some areas dropped yields 14 percent. The modest production increase was partly offset by lower beginning stocks and slightly lower forecast imports, leaving U.S. durum supplies almost unchanged from the previous year. Durum use is expected to increase in 1995/96, based on a modest expansion of domestic use. Plantings delayed until after the beginning of the 1995/96 marketing year on June 1 boosted seed use. U.S. exports are expected to match those of a year ago because of strong world demand and low exports of durum and semolina from the EU. Total use of U.S. durum in 1995/96 is expected to be large enough to slightly reduce stocks from already low levels. Low durum stocks have continued to support a premium price. For example, in December 1995, the North Dakota farm price for durum averaged $5.81 per bushel while other spring wheat was $4.51. U.S. Wheat Area: Tracking Flexibility and Regional Shifts Since 1990 by Sara Schwartz and Bryan Just 1/ Abstract: Wheat planted acreage fell in nearly all regions since the 1990 farm legislation was passed, despite increased planting flexibility, lower ARPs, and, in recent years, relatively high prices. Larger declines occurred in regions with greater planting options. Greater planting flexibility is expected under new farm legislation. Future area shifts will depend on wheat's competitiveness with other crops and how much wheat will be planted on land formerly idled under government programs. Key words: wheat, acreage, flexibility, government programs This article examines how and why wheat acreage patterns have shifted since the 1990 farm bill. State and regional data reveal that in regions where other crops provided higher net returns, wheat area declined between 1991 and 1995. Increased flexibility allowed more profitable crops to be grown on wheat base acres. In regions where there are few alternatives to planting wheat, acreage declines have been small. Planting conditions and expected net returns are the major determinants of whether farmers plant wheat or idle land, especially on acreage no longer receiving deficiency payments. 1/Agricultural economists, Commercial Agriculture Division, Economic Research Service. Farm legislation of 1990 increased the planting flexibility of farm program participants, allowing farmers more opportunities to respond to market signals. Also, in 3 of the last 5 years the Acreage Reduction Program (ARP) was 0 percent and season average farm prices since 1991 have equaled $3.00 per bushel or above. These incentives apparently were not strong enough to attract more acres into wheat. U.S. planted wheat acres fell from 69.9 million in 1991 to 69.2 million in 1995. However, in the fall of 1995, farmers increased winter wheat plantings (1) in response to the projected 1995/96 record season average farm price and expectations of continued strong prices in 1996. It is likely that spring wheat plantings will expand as well, but much less than winter wheat. The United States appears to be entering a period of acreage expansion in response to strong global demand and relatively high prices. In the fall of 1995, U. S. winter wheat plantings increased 7 percent from a year earlier, and were the highest since 1990 (1). In a scenario that assumes that the 1990 farm legislation is continued, USDA projected that wheat planted acreage would rise to 74.5 million acres by 2000 and 76.5 million by 2005 (2) which would return acreage to the levels of the mid-1980s. Most of the additional acreage is expected to come from less area under contract in the CRP, reduced enrollment in the 0/85-92 program, an increase in flex acres planted to wheat, and increased wheat plantings by producers who do not participate in the wheat program. Future changes in farm policy are likely to increase flexibility in farm programs, spurring great interest in how crop acreage might shift. Not all wheat growing regions will respond to changing government programs in the same way. Demand for wheat is expected to remain strong over the next 10 years, both domestically and internationally. Since 1990, about a third of global exports has originated in the United States. However, with U.S. yield growth slowing and demand increasing, there are concerns about how much U.S. land will be available if global demand increases sharply. The conditions in different regions that might encourage farmers to plant wheat and reduce idled wheat acreage in the coming years are examined. U.S. Acreage Patterns More acreage is planted to wheat in the United States than any other crop, except corn. An average of 71 million acres was planted annually between 1991 and 1995, accounting for about 20 percent of total cropland. However, current acreage is relatively low by historical standards. Since the early 1980s (1980-82 average) when wheat planted area was record high, planted acreage declined 17 percent (nearly 15 million acres). Over two-thirds of that decline can be accounted for by land enrolled in the Conservation Reserve Program (CRP). Between 1991 and 1995, there was no growth in yields. The average yield for 1991-1995 is 7 percent higher than the 1980-82 average. However, the slow yield growth and reduced area have led to an 11- percent drop in production in the first half of the 1990s compared to the 1980-1982 average. Wheat production is centered in the Central and Southern Plains (Kansas, Oklahoma, Texas, Colorado, and Nebraska) and the Northern Plains (North Dakota, South Dakota, Montana, Minnesota, and Wyoming). The two regions have accounted for an average of 75 percent of U.S. wheat acreage and 66 percent of production since 1991. In general, producers tend to flex more acreage out of wheat into other crops when there are more cropping choices. Planted wheat acreage has remained stable in the Central and Southern Plains since 1991. Planted area in this region did not expand when the ARP dropped from 15 percent in 1991 to 5 percent in 1992 nor when the ARP fell to 0 percent beginning in 1993. Producers have begun to plant some wheat base to corn, sorghum, cotton, and soybeans where possible. In the Northern Plains, planted wheat area rose sharply in 1992 when the ARP was reduced (but has declined since then) as there are fewer alternatives to growing wheat there. However, with nearly 14 percent of the two regions' wheat base enrolled in the CRP (the majority of it enrolled between 1988 and 1990 and mostly in Kansas and North Dakota), less area has been available for production purposes. Producers in the North Central region (Ohio, Missouri, Iowa, Indiana, Illinois, New Jersey, New York, Pennsylvania, Michigan, and Wisconsin) and Southeastern region (North Carolina, South Carolina, Mississippi, Georgia, Delaware, Tennessee, Maryland, Virginia, Louisiana, Kentucky, West Virginia, Arkansas, Florida, and Alabama) have more cropping choices than do wheat farmers west of the Mississippi River where average annual participation is lower. Therefore, these producers have more flexibility to plant crops other than wheat when expected net returns for wheat are less favorable and to plant more wheat when ARPs are low and wheat prices are relatively high. Wheat planted area declined in those two regions between 1991 and 1995. Greater flexibility and low participation allowed farmers to plant crops with higher net returns, primarily corn and soybeans in the North Central region and soybeans and cotton in the Southeast. The Pacific region (Washington, Oregon, Idaho, California, Arizona, Utah, New Mexico, and Nevada) does not have as many options as the North Central and Southeastern regions. Rather than expand wheat acreage, producers in this region tended to idle acres in response to a decrease in payment acres. The Role of Government Programs Since the early 1980s, producers' planting flexibility has been constrained by a number of government programs designed to reduce surplus production and preserve the environment. Crop-specific bases were established in 1985 as an average of acres planted or considered planted to a specific crop in the previous 5 years (3). To receive loans, deficiency payments, and other program benefits, producers must abide by any acreage reduction requirement and other restrictions. The ARP requirement is applied as a uniform reduction from the acreage base of each participating farm (4). Producers can only "build" base by not participating in the commodity programs for any crop on the farm for at least a year and planting more acres than the current base to the program crop for which they want to build base (5). Because this provision requires the producer to forgo deficiency payments on all program crops grown on the farm for at least a year, it is a huge disincentive to expand base acreage of any program crop unless the net returns from the market plus expected future benefits of the new base acres are high enough to offset the 1-year loss of government payments. Net returns per acre for wheat on land enrolled in government programs generally exceed the net returns for land not enrolled (6), and participation between 1991 and 1995 averaged 86 percent of base acres, about 67 million acres per year. Between 1993 and 1995, when the ARP was 0 percent, nearly 25 percent of wheat base (about 19 million acres) was idled. Two major programs have given producers the option of idling land and still receiving some form of government support. The CRP is a long term program, accounting for the largest share of idled wheat base, 10.8 million acres by 1993. Most of this acreage was enrolled in the CRP by 1990. The 0/85-92 is an annual program, allowing farmers to idle acreage and still receive deficiency payments or plant certain alternative, approved crops. This program is often used to idle marginal land not enrolled in the CRP and in years when weather problems greatly reduce expected yields or prevent planting. Wheat base can also be idled on normal flex acres, but those acres do not receive deficiency payments. Will Idled Land Return to Production? Producers have expanded winter wheat acreage for 1996 and, assuming normal weather, will likely increase spring wheat plantings as well. Some acreage will shift to wheat from other crops and some land enrolled in the 0/85-92 program in 1995 will likely come back into production. The contracts for about 60 percent of wheat base held under the CRP are scheduled to expire in 1997 and 1998, although a small number of producers will take advantage of a recently announced "early out" provision and plant more wheat this spring. Whether producers will plant wheat on land idled under the 0/85-92 program or from the CRP when contracts expire depends on several factors. These include alternative uses of the land, ease of conversion to a given crop, availability of equipment, and even the age, occupation, and residence of the farmer. However, attractive prices would provide an incentive to bring idled land back into production. Wheat's net returns compared to those of competing crops will be important in determining what crop is planted. Those returns depend on each producer's cost of production, yields, and price expectations for wheat and those of alternative crops, and expectations for government support. The net return relationship between wheat and alternative crops has become more important since the 1990 farm legislation because producers are now allowed to flex up to 25 percent of their wheat base into other crops without losing acreage base. Deficiency payments are no longer paid on 15 percent of the producer's base, called normal flex acres (NFA). Producers are also allowed to flex an additional 10 percent of their base, called optional flex acres (OFA), to alternative crops. However, if producers choose to flex to an alternative crop on OFA, they lose deficiency payments on those acres. The response to the flex program has been limited. Only an average of 19 percent of eligible wheat NFA and OFA has flexed to alternative crops each year between 1991 and 1995, compared to about 25 percent of eligible corn NFA and OFA. Producers have chosen to plant nearly 50 percent of NFA to wheat, although that percentage declined between 1992 and 1995 and the percentage of NFA flexed to other crops or idled increased. In recent years, net returns have been higher for soybeans and corn than for wheat in all regions. However weather and soil types can be more important than relative net returns in the selection of crops planted on flex acres. Spring wheat plantings in the Northern Plains were hampered by wet conditions in 1993 and 1995. Dry conditions at planting constrained seedings in the Central and Southern Plains in the fall of 1993 and 1995 and in the Pacific Northwest in 1994. Proposals for farm legislation have included provisions for greater flexibility. In places where weather and moisture conditions permit, producers have used the flexibility provisions to flex land out of wheat or to idle land during the last 4 years. In the long run, wheat area in these regions could decline. However, in the short run, high wheat prices are likely to slow the decline or lead to small increases in planted area. Regional Diversity Producers in different regions have experienced diverse reactions to market conditions and therefore have responded differently to government programs that enable them to idle land or flex to alternative crops. Examining acreage shifts on a regional and State basis may provide some clues as to how producers in different regions will respond to changes in market prices and government support in the future. Production decisions are made based on soil conditions, producers' price and yield expectations, input costs, rotational practices, environmental factors, and conservation compliance requirements. Aggregating the results of individual decisions to the State and regional level disguises the myriad of outcomes faced by each producer. And the lack of detailed cost of production data adds to the problem. In this study, regional cost of production data (7) were applied to each State and region even though cost of production in each State and county certainly varies considerably. Also, cost of production data do not separate out the costs of irrigated versus non-irrigated land. Annual net returns data between 1990 and 1994 by State (6) indicate that the net returns per acre for wheat are generally lower than any other program crop, except barley. But those data do not reveal that in many States west of the Mississippi River, weather and soil conditions permit few alternatives to growing wheat, or that disease and insect problems might require rotations to minor oilseeds or fallow, even when wheat prices are high. Different regions produce different classes of wheat. Hard red winter wheat production is centered in the Central and Southern Plains, while durum and other spring wheat are primarily grown in the Northern Plains. Soft red winter wheat is grown mostly in the North Central region and the Southeast and white wheat is concentrated in the Pacific Northwest (Washington, Oregon, and Idaho). The different classes of wheat are used for different end-product purposes and are only partially substitutable. They sell at premiums or discounts to each other depending on the supply and demand of each class domestically and globally. The net returns data presented here are based on an "all wheat" price for each State. Individual producers' returns might be higher or lower than the State's average net return, particularly in areas where more than one class of wheat is grown, mostly in the Pacific and Northern Plains regions. Although the 1990 farm bill covered the 1991-95 crops, in States like Kansas there was limited flexibility during the first year because wheat was planted before the 1990 farm bill was passed. However, in States like North Dakota, where most wheat is planted in the spring, farmers were able to use planting flexibility in the first year. The two largest wheat producing States with the most wheat base acreage, Kansas and North Dakota, flexed a relatively small amount of NFA or OFA to other crops. During the 1980s, less productive land or land susceptible to erosion was probably idled under the annual ARP program or long term CRP. Therefore, in recent years with 0-percent ARPs and only 85 percent of base eligible for payments, marginal base was likely idled. However, in States like Missouri, with different weather patterns and crop mixes, a larger percentage of NFA and OFA was flexed to other crops. In the Pacific Northwest, the importance of fallow and limited crop alternatives caused 40 percent of NFA to be idled and 50 percent to be planted to wheat. The 0/85-92 program tends to be used in different ways, depending on the region. The 0/85-92 program allows producers in North Dakota to plant minor oilseeds and industrial crops. This option can be used in rotation to discourage disease. In Kansas, Missouri, North Carolina, and Washington, wheat base in the 0/85-92 program was mostly idled. The timing of program sign-up allows winter wheat producers to plant winter wheat in the fall and, as market conditions change over the winter, make a final enrollment decision in the spring. Wheat base planted to wheat can qualify as 0/85-92 idled, if not harvested. In North Dakota, farmers face planting decisions and enrollment decisions almost simultaneously. However, the crop production possibilities permit the planting of wheat, minor oilseeds, or industrial use crops in 0/85-92 acreage. Central and Southern Plains Planted wheat area has remained stable since 1991 in the Central and Southern Plains despite the drop in the ARP. There was only a 2-percent increase in the region's plantings despite very high wheat prices at planting time. All other regions registered stronger increases (1). However, the region's response to lower ARPs and higher prices is often muted because some producers, particularly those in Texas and Oklahoma, plant their entire base acreage or more, even in years with ARPs, planning to graze out, hay, or destroy low-yielding acres. These acres can be enrolled in the 0/85-92 or used for the ARP or NFA. Wheat is considered a cover crop under the 0/85-92 program. Therefore, producers can plant wheat in the autumn, let cattle graze if wheat prices are not high enough or expected yields are low, and these acres will still earn payments in the 0/85-92 program as "idled" land, provided producers follow haying and grazing restrictions. The harvested-to-planted ratio is often affected by weather but can also be influenced by the producer's expectations for wheat's price relative to cattle prices. When wheat prices are strong and cattle prices are weak, the harvested-to-planted ratio increases. The opposite has occurred in years when wheat prices are weak and cattle prices are strong (8). Since 1993, the region's harvested-to-planted ratio has been relatively stable at about 81 percent. Participation in government programs in the Central and Southern Plains has averaged close to 90 percent since 1991, second only to the Northern Plains. The reduction in payment acres introduced in 1991 accounts for some of the lack of response to the 0-percent ARP. The flex program has allowed producers to shift wheat base area to other crops, such as corn, sorghum, soybeans, and minor oilseeds. Flex acres planted to wheat have been declining since 1992. Net returns for corn and soybeans are higher than net returns to wheat, and both crops commonly substitute for wheat where moisture is adequate or land is irrigated. In more arid parts of the region, higher net returns for sorghum are leading to increased plantings on wheat flex acres. Some producers have chosen to leave NFA idle either as a part of a rotation or because they expect that net returns on this acreage without government subsidies will not be high enough to cover costs. About a third of the region's NFA (nearly 1.5 million acres) has remained idle since the ARP was reduced to 0 percent in 1993. About 25 percent of the region's wheat base has remained idle since 1993, with over half of that area (nearly 4.5 million acres) enrolled in the CRP. The 0/85-92 program is also important in the Central and Southern Plains. Kansas is the largest wheat producing State and has more than 12.5 million acres of wheat base. Since 1991 wheat planted area has been mostly unchanged, but is down significantly from 1989 and 1990, years when prices at planting time were high because of drought-reduced supply and strong demand. Some wheat base has been shifted into other crops or idled because of the increased planting flexibility, the 0/85-92 program, and a reduction in payment acres. Producers able to plant soybeans or corn on wheat base have done so, increasing overall plantings of these commodities in the State. However, production limitations due to soil and climate conditions, and the lack of marketing alternatives have caused a large percentage of wheat NFA to be planted to wheat or idled, and limited flexing of OFA. Less than 20 percent of potential NFA and OFA were flexed out of wheat. Even though planted acreage has remained stable, participation in the 0/85-92 program has contributed to more variability in harvested wheat acreage. About 95 percent of 0/85-92 acreage is idled in Kansas. However, based on conversations with extension economists in Kansas, much of this "idled" acreage was planted to wheat in the preceding fall. Therefore, in the spring, weather conditions, yield prospects, and market prices strongly influence the decision to enroll in the 0/85-92 program or to harvest the wheat for grain. Another factor is the profitability of using planted wheat area for livestock forage. Long term CRP contracts continue to idle about 1.3 million acres in Kansas, more than 10 percent of the State's wheat base, and limit wheat acreage for expansion. The inelastic short term acreage response is evident by winter wheat area seeded for 1996. Seedings increased to 11.8 million acres, up less than 1 percent from 1995. In September and October, 1995, the hard red winter July 1996 Kansas City futures contract price averaged about 60 cents per bushel higher than the July 1995 contract during September and october 1994. Also, winter wheat farm prices during September and October 1995 were about 90 cents per bushel higher than a year earlier. The Northern Plains In the Northern Plains, planted wheat area expanded sharply in 1992 when the ARP fell from 15 percent to 5 percent, but has declined each year since then. There are fewer alternatives to growing wheat in this region and participation is over 90 percent, the highest in the country, so there was a stronger response to the reduced ARP than in the Central and Southern Plains. Since 1991, however, producers have been able to idle wheat base or flex land to other crops without penalty. This, together with weather and disease problems, has prevented area from expanding. However, there have been some shifts among classes of wheat in the Northern Plains. Low durum prices and increasing imports from Canada during the early 1990s provided incentives to farmers to shift area from durum to hard red spring wheat. After excessive moisture lowered production in 1993 and 1994, farmers responded to high durum prices by increasing durum area 22 percent in 1995. A greater proportion of NFA (an average of nearly 60 percent since 1991) is planted to wheat than in the Central and Southern Plains, but as in the Central and Southern Plains, producers have been reducing the amount of flex acres planted to wheat and flexing more area to other program crops, soybeans, and minor oilseeds each year since 1992. In recent years, scab outbreaks have forced some wheat producers to shift acreage into minor oilseeds and other crops as a rotational practice that discourages disease. Adverse weather conditions at planting in the spring of 1995 may have forced some producers to use flex acres to plant crops such as barley, even though net returns for barley are usually lower than for wheat. This region's generally dry conditions and hot summers make planting corn and soybeans risky, but in the parts of the States with adequate moisture, these crops provide higher net returns than wheat in most years. The resiliency that soybeans showed in South Dakota in 1995 despite wet planting conditions and hot summer temperatures has made soybeans increasingly attractive. As in the Central and Southern Plains, a large proportion of Northern Plains' wheat base (about 20 percent) has remained idle since 1993. Nearly two-thirds of the idled base (about 3.3 million acres) is enrolled in the CRP. And despite the rising trend to flex NFA to other crops, about 20 percent of NFA is idled each year. North Dakota is the largest durum and spring wheat producing State. Large wheat base acreage, second only to Kansas, and high participation rates create great potential for planting flexibility. As with Kansas, climate and crop alternatives make flexing increasingly limited moving from east to west. However, some North Dakota farmers are able to plant a variety of crops, including major program crops, minor oilseeds, and industrial use crops. In general, wheat still provides the highest net returns among the major field crops in North Dakota, especially on NFA. However, disease problems and rotational requirements may encourage producers to shift NFA to other crops. Total wheat acreage has increased since 1991. However, each year there has been a large amount of NFA idled or planted to another crop. Also, participation in the 0/85-92 program has shifted some wheat base to minor oilseed production. Wheat base enrolled in the CRP reached 1.14 million acres in 1993, nearly 10 percent of the State's wheat base. Since 1991, North Dakota's planted wheat acreage has averaged 11.2 million acres. Although planted wheat area reached a 12-year high of 11.75 million acres in 1993, prolonged wet, cool weather caused a very high abandonment rate. The importance of the 0/85-92 program as a disaster assistance program was demonstrated in 1993 when idled acreage under this program increased dramatically to 254,000 acres. Although most wheat is planted in the spring, winter wheat seedings for 1996 doubled from 40,000 to 80,000 acres, and, assuming normal weather, spring wheat plantings are set to expand as well. Pacific Region The Pacific region is more varied in terms of its wheat classes than the other regions. Producers in this region often plant winter wheat, but if planting conditions are unfavorable or if the crop is damaged, some producers can replant their acreage with spring wheat. White wheat is predominant in the Pacific Northwest. California grows mostly hard red winter wheat and, along with Arizona, some "desert" durum. Compared with other regions, a larger percentage of the Pacific region's wheat area is irrigated and therefore is higher yielding, but most wheat is grown on non-irrigated land. Participation in the wheat program is lower than in the Plains States, averaging about 86 percent between 1991 and 1995. Planted acreage in the Pacific region has declined since 1991, despite the ARP reductions. Idled flex acreage accounts for much of the decline. Over 40 percent of the region's NFA has been idled annually since 1993. About 40 percent of NFA is planted to wheat and less than 20 percent of NFA has been flexed to other crops. Barley is one of the few alternatives to growing wheat in the Pacific Northwest, but barley's net return per acre is generally lower than for wheat and its area has also been declining. Area planted to hay expanded between 1991 and 1995. About a third of the Pacific region's wheat base is idled under government programs, on a percentage basis, the largest share for any region. Planted wheat area in the Pacific region accounts for about 9 percent of the U.S. total, but the region accounts for about 12 percent of the idled acres on a national level, with over half enrolled in the CRP. One reason for such a large proportion of idled area is that there are few alternatives to growing wheat or barley on non-irrigated land. On these acres, fallowing is an important part of the planting rotation to improve soil moisture. In addition, when net returns do not appear favorable, idling land might be the only economic alternative to planting wheat. Washington is an important wheat producing State, accounting for an average of 6 percent of U.S. production and averaging about 2.9 million planted acres from 1991 to 1995, mostly white wheat. During the 1990s, white wheat prices have been relatively strong compared with other wheat prices and wheat plantings have been mostly level since 1992. Since 1991, barley and oats planted area has decreased, and corn area has been mostly flat. In Washington, the largest use of NFA is to plant wheat. However a large portion of NFA has been idled. Net returns on NFA acres planted to wheat are much higher than for barley, and fallowing NFA has become the major alternative to growing wheat. Currently, CRP enrollment is idling about 15 percent of Washington's wheat base. The potential for increased wheat area is limited by CRP acreage and rotational practices that fallow large amounts of acreage. However, winter wheat seedings for 1996 are 2.4 million acres, up 7 percent from 1995, demonstrating that when prices are high enough and planting conditions favorable, producers will reduce idled acres and bring land back into wheat production. The North Central Region The North Central region has accounted for an average of 8.5 percent of planted wheat acreage and 11 percent of production since 1991. Planted acres declined between 1991 and 1995, despite the drop in the ARP requirements as producers shifted acres to alternative crops that provided higher returns, such as corn and soybeans. Adverse weather reduced the wheat crop in this region in 3 out of the last 5 years, contributing to low net returns for wheat. However, in response to high wheat prices and expectations of higher net returns, producers in this region expanded 1996 winter wheat plantings 16 percent from 1995, to the highest level since 1990. Participation in the government wheat program is the second lowest in the country, averaging about 60 percent since 1991. Low participation allows producers to shift land in and out of wheat production. In addition, producers participating in the program have flexed a large proportion of both NFA and OFA to other crops, mostly soybeans and, to a lesser extent, other program crops, such as corn. However, even in the North Central region, where soil and moisture conditions allow for more crop options than in the Western States, producers still planted an average of 46 percent of their NFA to wheat. Net returns to wheat acres in this region are low relative to other field crops, but high relative to net returns for wheat in other regions because of the region's relatively high wheat yields. Only a small proportion of the region's wheat base is idled, an average of about 15 percent annually between 1993 and 1995. Over 80 percent of the idled land is enrolled in the CRP. The balance has mostly been in the 0/85-92 program. Only an average of 4 percent of NFA has been idled since the program began. Missouri is an important producer of soft red winter wheat. Flooding, inclement weather, and the ability to flex out of wheat have all played a significant role in declining wheat area since 1990. The geographic location allows the production of other crops and flexibility provisions may have contributed to some acreage shifts. Net returns for corn and soybeans are much higher than for wheat and, since 1990, corn and soybean acreage has increased. Many Missouri farmers most likely have experience growing these commodities and have access to necessary, additional equipment. Some winter wheat area in Missouri could not be harvested in 1993 because of flooding, and continued wetness kept planted area low in 1994 and 1995. However, producers were also taking advantage of the profitability of competing crops and the ability to flex out of wheat by using more NFA and OFA than in Western States. Since 1991, Missouri had an average of 336,000 normal and optional flex acres and nearly 43 percent were flexed to other crops. About two- thirds went into soybeans and the remainder into other program crops. There is some wheat base idled under the 0/85-92 program that could come back into wheat production if prices were high enough. The largest use of this program in 1993 was for disaster purposes. Winter wheat seedings for 1996, at 1.7 million acres, are up 26 percent from 1995. However, part of this sharp increase is because weather conditions at planting time were much improved from those in the fall of 1994. Winter wheat seedings for 1996 are only 6 percent higher than the 1991-93 average. Southeast Planted wheat area in the Southeast also declined between 1991 and 1995, but not as much as in the North Central region. The Southeast accounts for an average of 6.6 percent of U.S. planted wheat acreage and 12 percent of production. Primary crop alternatives to wheat include soybeans and cotton. Double-cropped wheat and soybeans were popular in the early 1980s when both wheat and soybean prices were attractive, but this practice has declined sharply since 1985 when soybean prices plunged and soybean yields fell region-wide. High wheat and soybean prices suggest a strong acreage response in 1996. However, 1996 winter wheat plantings expanded only 4 percent from 1995 to the highest level since 1990, but only slightly above 1991 when a 15-percent ARP was in place. Participation in government programs for wheat is the lowest in the country, averaging less than 60 percent since 1991. Net returns on wheat acres in this region are far lower than for other field crops and, in most years, the lowest in the country when compared to net returns on wheat acres in other regions. Similar to the North Central region, over 40 percent of NFA and OFA flexes to other crops. However, less NFA is planted to wheat (about 30 percent since 1991) and more is idled (about 15 percent annually). OFA and NFA are flexed to soybeans and program crops, such as cotton, in recent years. The Southeast region also idles a larger proportion of its wheat base (28 percent since 1993) than the North Central region. Over half the idled acreage is enrolled in the CRP, but the 0/85-92 program plays a larger role in this region, accounting for over 40 percent of idled wheat base. North Carolina is a minor wheat producing State, producing only about 1 percent of the U.S. wheat crop. However, unlike many States in the region, North Carolina's wheat acreage has been expanding since 1990. Double-cropping wheat with soybeans remains popular when wheat prices are high and using no-till technology keeps wheat production costs relatively low, and net returns high relative to corn. In addition, a strong Wheat Growers Association has been successfully promoting wheat production in the State. Participation in the wheat program is low in North Carolina, less than 50 percent in most years since 1990. Wheat area accounts for about 13 percent of principal crop acreage and other major commodities include soybeans, corn, cotton, and tobacco. Cotton acreage has increased sharply, soybean acreage has been mostly flat, and corn acreage has declined slightly. In 1996, wheat seedings of 640,000 acres in North Carolina are down 11 percent. During the fall planting period it was very wet, preventing some producers from planting. Some of this land may shift into cotton or single-cropped soybeans. North Carolina's planted wheat area in the 1990s is approaching highs achieved in the mid-1980s. Only 9 percent of North Carolina's wheat base was idled in 1995, about 50,000 acres, half of which was in the CRP. Prospects for the Future It is uncertain how new farm legislation, yet to be finalized, will affect planting decisions in the future. However, directions of change can be inferred from current market conditions. Season average prices for wheat in 1995/96 are the highest on record. Ending stocks are forecast to be the lowest since 1973/74 and the stocks-to-use ratio may be the lowest in nearly 50 years. At the same time, world demand has eased only slightly in response to high prices. While global supplies are expected to expand in 1996 and prices to decline from this year's highs, demand will remain strong, supporting prices near $4.00 per bushel. Winter wheat area expanded 7 percent in response to high prices at planting and spring wheat area is expected to increase as well. But, while the increase in the North Central region was strong, it was very small in the largest growing region, the Central and Southern Plains. Adverse weather may have prevented a stronger response, but corn, sorghum, and soybean prices were moving upwards at planting time as well. Producers who can successfully flex their acres to alternative crops may expect net returns from those crops to exceed those from wheat in 1996 and thus may have chosen to plant other crops on wheat flex acres. In February 1996, USDA projected 0 percent ARPs for 1996 through 2005 in a scenario based on an extension of 1990 farm legislation. The long-term projections show continued growth in domestic and foreign use. Wheat acreage is projected to expand as prices increase. Most of the projected acreage gain comes from reduced acreage enrolled in the CRP. The least marginal land will return to wheat production. To a lesser extent, additional acres will come from fewer acres flexing into other crops and less acres enrolled in the 0/85-92 program. How much of the currently idled land in government programs will be planted to wheat, other crops, or idled will depend on wheat's absolute and relative net returns in the coming years. References 1. Winter Wheat and Rye Seedings, National Agricultural Statistic Service, U.S. Department of Agriculture, January 16, 1996. 2. Long-term Agricultural Projections to 2005, Interagency Agricultural Projections Committee, World Agricultural Outlook Board, U.S. Department of Agriculture, Staff Report, WAOB-96-1 , February 1996. 3. Comparisons of Commodity and Conservation Provisions for the 1985 and 1990 Farm Bills Titles I-XI, XIV, USDA, ASCS, November 23, 1990. 4. Provisions of the Agriculture and Food Act of 1981, James Johnson, Richard Rizzi, Sara Short, and R. Thomas Fulton, Economic Research Service, USDA, Staff Report No. AGES811228, January 1982. 5. Understanding USDA's Crop/Commodity Programs, Craig Jagger and Joy Harwood, January 1995. 6. See Box. 7. Economic Indicators of the Farm Sector, Costs of Production, 1993-Major Field Crops and Livestock and Dairy, Rural Economy Division, Economic Research Service, U.S. Department of Agriculture, ECIFS 13-3, July 1995. 8. Wheat Situation and Outlook Report, Commodity Economics Division, Economic Research Service, U.S. Department of Agriculture, WS-293, May 1991, p. 4. 9. Long-term Agricultural Baseline Projections, 1995-2005, Interagency Agricultural Projections Committee, World Agricultural Outlook Board, U.S. Department of Agriculture, Staff Report WAOB-95-1, February 1995. Box /Net Returns Calculations (9) Net returns influence producers' decisions regarding the use of their land. Producer returns influence decisions whether to enroll in farm commodity programs. Returns affect cropping choices among competing crops, including the use of planting flexibility provisions. Net returns for participants and non-participants are shown in table A-3. Net returns can also be calculated for normal flex acres and optional flex acres. Below are general formulas used to calculate producer returns net of variable expenses for each of these four categories. All calculations used in this article are evaluated at State or regional averages of relevant variables. Also, calculations for participant returns assume all flex acreage remains in the original program crop. Participant returns per acre: (1 - ARP) [(price * yield) - variable production costs] + (1 - ARP - 0.15) (deficiency payment rate * payment yield) - ARP * variable costs of idled land Nonparticipant returns per acre: price * yield - variable costs Normal flex returns per acre: price * yield - variable costs Optional flex returns per acre: price * yield + deficiency payment rate * payment yield - variable production costs List of Tables Text Tables Page The Wheat Situation at a Glance 1. Wheat supply, disappearance, and stocks, June-May 2. HRW supply and demand 3. HRS supply and demand 4. SRW supply and demand 5. White wheat supply and demand 6. Durum Supply and demand 7. Durum: Quarterly supply and disappearance Special Article A-1. Base, planted and idled wheat acreage by region, 1990-1995 A-2. U.S. Summary of wheat flex acres A-3. Comparison of participant and non-participant net returns for wheat, corn, barley, sorghum, and cotton in the U.S. and selected States Appendix 1. Wheat: Marketing year supply, disappearance, area, and price, 1989/90-1995/96 2. Wheat: Area, yield, and production by major States, 1986-95 3. Wheat: Estimated acreage, yield, and production, 1965-95 4. Wheat classes: Production, 1950-95 5. Wheat classes: Acreage, percentage breakdown by State 1993-95 6. Wheat classes: Estimated acreage, yield, and production, 1982-96 7. Wheat: Marketing year supply and disappearance, 1960/61-1995/96 8. Wheat: Quarterly supply and disappearance, 1975/76-1995/96 9. Wheat: Farm prices, support prices, and ending stocks, 1950/51- 1995/96 10. Wheat: Status of price support loans on specified dates, 1966/67-1995/96 11. Wheat classes: Marketing year supply and disappearance, 1976/77-1995/96 12. U.S. wheat exports: Grain, flour, and products, by month, 1973/74-1995/96 13. U.S. wheat imports: Grain, flour and products, by month, 1983/84-1995/96 14. Wheat: Inspections for export by class and country of destination, June-May 1994/95 15. Wheat farm programs and participation 1976-95 16. World wheat production, consumption, trade, and ending stocks, 1960/61-1995/96 17. Wheat production, trade, and ending stocks, world and United States, 1965-95 18. Wheat: Production and exports, major foreign exporters, and total foreign, 1965-95 19. Wheat and wheat flour: World trade, production, stocks, and use, 1988/89-1995/96 20. Wheat farm prices for leading classes in U.S. regions, 1977/78-1995/96 21. Wheat cash prices for leading classes at major markets, 1950/51-1995/96 22. Domestic and foreign wheat prices, 1980-1995 23. Wheat flour: Supply and disappearance, United States, 1960-95 24. Wheat and flour price relationships at milling centers, annual and by periods, 1982/83-1995/96 25. U.S. wheat production cash costs and returns, 1975-96 26. U.S. wheat production economic costs and returns, 1975-96 27. On-farm receipts of major crops, United States, 1983-96 28. Schedule of wheat base acres released from expiring CRP contracts 29. Wheat: supply and disappearance, United States, 1910/11-1995/96 30. Quarterly government stocks activity for wheat, 1990/91-1995/96 31. U.S. wheat exports: By selected programs 32. Rye: Supply disappearance, area, and price, 1985/86-1995/96 33. Rye: Production by major states, 1985-1995 34. Former Soviet Union wheat: Supply and disappearance, 1960/61-1995/96 35. China's wheat: Supply and disappearance, 1960/61-1995/96 36. European Community wheat: Supply and disappearance, 1960/61-1995/96 37. Canada's wheat: Supply and disappearance, 1960/61-1995/96 38. Australia's wheat: Supply and disappearance, 1960/61-1995/96 39. Argentina's wheat: Supply and disappearance, 1960/61-1995/96 END-END-END