WHEAT YEARBOOK -- SUMMARY March 26, 1999 March 1999, ERS-WHS-0399 Approved by the World Agricultural Outlook Board --------------------------------------------------------------------------- This SUMMARY is published by the Economic Research Service, U.S. Department of Agriculture, Washington, DC 20036-5831. The complete text of WHEAT YEARBOOK (WHS-0399) will be available electronically about 2 weeks following this summary release. --------------------------------------------------------------------------- Supplies Large, Prices Low The Wheat Yearbook presents preliminary projections for 1999/2000 that were released at the 1999 Agricultural Outlook Forum on February 22-23, 1999. Wheat farmers responded to lower prices and unfavorable planting conditions, particularly in the Southern Plains, by reducing winter wheat plantings for the 1999 crop by 7 percent from a year earlier to the lowest level since 1972. Spring wheat plantings are expected to fall below a year earlier due to more favorable returns from competing crops such as soybeans and minor oilseeds. (USDA's Prospective Plantings report, to be released on March 31, will indicate farmers' planting intentions as of March 1.) If the average wheat yield in 1999 equals the average for the last 3 years, wheat production could decline about 15 percent in 1999/2000 (June/May). However, larger beginning stocks will be partially offsetting, leaving the total supply only slightly below the current marketing year. Total use is expected to expand as larger exports more than offset the smaller feed and residual use. With use exceeding production, ending stocks will decline but remain relatively large. The average price received by farmers will be up, but will likely be below $3.00 per bushel again in 1999/2000. For 1998/1999, U.S. wheat supplies rose to 3,368 million bushels, the highest since 1987/88. Total disappearance is forecast to rise about 4 percent from 1997/98, with most of the increase coming from higher domestic use. Food use is projected up about 10 million bushels, and a 100-million-bushel increase in feed and residual use is expected. Seed use will decline because of reduced acreage planted to the 1999 crop. The season average farm price is projected to range between $2.65 and $2.75 per bushel, down about 20 percent from 1997/98 and well below the record $4.55 farmers received in 1995/96. The farm price has been trending down since the monthly record of $5.75 in May 1996. U.S. exports in 1998/99 are forecast up only 10 million bushels or 1 percent from the previous year's 1,040 million. Another year of disappointing exports is projected because of strong competition and lower global imports. Slower-than-expected food aid shipments to Russia and other needy countries have lowered the export projection in recent months. A portion of these planned donations will not be shipped until the 1999/2000 marketing year that begins in June. This issue contains the following special articles: "Analyzing U.S. Wheat Acreage Response Under the 1996 Farm Act," and "Wheat Shipments Under U.S. Export Programs Will Rebound in Fiscal 1999." Printed copies of the Wheat Yearbook will be available in about 2 weeks. For further information contact Mack Leath (202) 694- 5302. Full text of the report will also be available on the ERS web site at www.econ.ag.gov. THE WHEAT SITUATION AT A GLANCE ------------------------------------------------------------------ All wheat: Supply and disappearance 1/ ------------------------------------------------------------------ Year beginning 1994/95 1995/96 1996/97 1997/98 1998/99 June 1 2/ 3/ ------------------------------------------------------------------ Million bushels Beginning stocks 568 507 376 444 722 Production 2,321 2,183 2,277 2,481 2,550 Imports 92 68 92 95 95 Total supply 2,981 2,758 2,746 3,020 3,368 Domestic Food 853 883 891 916 925 Seed 89 103 102 93 88 Feed & residual 345 154 308 248 350 Domestic use 1,287 1,140 1,301 1,257 1,363 Exports 1,188 1,241 1,002 1,040 1,050 Total disappearance 2,475 2,381 2,302 2,297 2,413 Ending stocks 507 376 444 722 955 ------------------------------------------------------------------ Wheat by class: Supply and disappearance 1/ ------------------------------------------------------------------ Year beginning Hard Hard Soft White Durum Total June 1 red red red winter spring winter ------------------------------------------------------------------ Million bushels 1997/98: 2/ Beginning stocks 143 166 45 59 31 444 Production 1,098 491 472 332 88 2,481 Imports 1 57 0 8 29 95 Total supply 1,242 714 517 399 148 3,020 Domestic use 577 254 257 104 65 1,257 Exports 358 240 180 205 57 1,040 Total disappearance 935 494 437 309 122 2,297 Ending stocks 307 220 80 90 26 722 1998/99: 3/ Beginning stocks 307 220 80 90 26 722 Production 1,182 487 443 298 141 2,550 Imports 1 57 0 9 28 95 Total supply 1,490 764 523 397 195 3,368 Domestic use 604 264 298 111 87 1,363 Exports 435 250 100 225 40 1,050 Total disappearance 1,038 514 398 336 127 2,413 Ending stocks 451 249 125 61 68 955 ------------------------------------------------------------------ 1/Includes flour and products imported and exported in wheat equivalent units. 2/Estimated. 3/ Projected. 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