Global wheat production is forecast at a record 777 million tons, rebounding 46 million from last year, the U.S. Department of Agriculture said in its latest report.
Production among the top exporting countries is projected up a combined total of 34 million tons as nearly all are expecting larger crops, it said, adding that the EU wheat production is forecast up about 17 million tons from last year’s crop.
Australia is expected to have a larger crop after experiencing drought in back-to-back years, while Russia and Ukraine are also expected to have larger crops based on good winter conditions in both countries.
Argentina and Canada are both expected to have larger crops based on expanded area, according to the report that said that also forecast U.S. production up as higher projected yields more than offset a smaller harvested area. Kazakhstan is also expecting a smaller crop based on reduced area. Outside of the major exporting countries, production is also projected higher. China is up slightly at 132 million tons.
- For 2019/20, global wheat production is forecast up with larger crops in most major exporting countries.
- Production for Argentina, Australia, Canada, the European Union, Russia, and Ukraine are all forecast higher than the previous year.
- Food consumption continues to rise due to changing diets and growing incomes, especially in developing regions of Asia and Africa.
- Feed and residual use is expected to be higher this year on lower prices from large global wheat supplies.
- With consumption and production up, trade is also forecast higher.
- Global ending stocks are forecast to grow as well, with China continuing to account for about half of the total
India is up marginally to a record 100 million tons, which would be its third straight bumper crop, the USDA said. Pakistan and Turkey are projected up with higher yields in both countries.
The world’s largest importer, Egypt, is expected to have a slightly bigger crop due to larger area. Key importers Algeria, Brazil, Ethiopia, and South Africa are all expected to have crops about the same size as last year. Favorable weather has led to expectations of a larger crop in Tunisia. On the other hand, dry conditions in Morocco have cut the expectations for that crop by nearly 3 million tons from the previous year.
According to the USDA, global consumption is projected at a record in 2019/20 but will be surpassed by surging production. This would be the sixth time in 7 years that production has been larger than consumption.
FSI consumption seen steadily trending upwards
Food, Seed, and Industrial (FSI) consumption makes up the bulk of wheat use and exhibits a steady trend upwards over time. In 2019/20, FSI is forecast at a record with growth seen across nearly all regions. Growth is particularly significant in South Asia and East Asia based on rising food use in India and China. Sub-Saharan Africa also demonstrates strong growth in food use based on rapid population growth and changing tastes and preferences.
Consumers continue to move toward a more wheat-based diet with rising incomes and increased urbanization. FSI use in most other regions continues to rise mainly related to population growth, the report said.
Feed and residual use, on the other hand, is generally more variable and depends on price relationships with other grains. In 2019/20, feed and residual is forecast to rebound based on larger supplies in major producing countries.
While feed and residual often rises based on competitiveness with other grains, it also represents expectations of losses at various stages of the marketing chain, the report pointed out. Generally, such losses are greater in years of abundant supply. The European Union represents the largest year-to-year increase in feed and residual with a much larger domestic crop. Feed and residual is also up in China and Ukraine with large supplies in both countries.
Global ending stocks projected higher
The report projected global ending stocks for 2019/20 up about 17 million tons from the previous year to 292 million. China, with stocks projected up about 6 million tons, still accounts for half of global stocks.
Those stocks, however, are generally unavailable to the world market. Stocks in the major exporting countries collectively are projected to rebound 13 percent from a 5-year low. U.S. ending stocks are forecast to grow even larger as global competition will limit the U.S. share of trade.
Stocks in the European Union are projected up significantly with greater supplies and strong competition from Russia. Similarly, Australia and Canada will also have larger production and are expected to rebuild stocks, the report said.
Among the Black Sea exporters, stocks are also up mainly on larger crops in Russia and Ukraine. Kazakhstan is projected to have tighter stocks with small exportable supplies. Stocks in Argentina are forecast up but remain tight with robust export, it added.