Ag census data a jolting reminder of continuing US wheat decline

In and of itself, data in the quinquennial Census of Agriculture showing a sharp drop over the course of the 2000s in the number of US farms cultivating wheat would not be cause for alarm. Added to so many other data points of concern, the figures released in February deserve the attention of industry executives.

While there has been considerable scrutiny of the gradual loss of acres planted to wheat in the United States over the past 40-plus years, less note has been directed toward the drop in the number of wheat farms, defined by the US Department of Agriculture as any farm producing at least $1,000 worth of wheat per year. In 2022, the wheat farm count fell to 97,014, a drop of 34% from 10 years earlier and a startling 62% decrease from 243,568 in 1997.

Again, the data isn’t necessarily so meaningful without broader context. The number of a wide range of farm types fell sharply over this period, including dairy farms dropping 71% and corn farms falling a more modest but still significant 36% between 1997 and 2022. Over this same period, though, the size of the dairy herd grew despite the smaller farm count, and acreage devoted to corn climbed more than 10% to 80.1 million, from 71.1 million. Wheat area, by contrast, tumbled 40% to 37 million acres from more than 62 million.

Sounding the alarm about this trend has been Justin Gilpin, in his 15th year as chief executive officer of the Kansas Wheat Commission. At a district meeting of the International Association of Operative Millers earlier this year, Gilpin flagged the wheat farm data together with the underlying economics of wheat production. While the USDA estimated wheat generated farmers a net return of $184.64 per acre in 2022, Gilpin, citing USDA figures, said corn generated $651.07 and soybeans, $440.53. Where land is suitable for corn and soybean production, wheat has been relegated to the role of a rotational or a cover crop.

In supply and demand, the ramifications of the shrinking US wheat economy are seen most clearly in trade data. Wheat exports in 2023-24 are projected at only 710 million bus, down 6% from a depressed total in 2022-23 and the smallest figure since 1971-72. From the peak of 1.77 billion bus in 1981-82, exports have plunged 60%. Even from a more recent average of 1.04 billion bus between 2000 and 2010, exports are down 31%. The US share of world wheat trade fell to 9% in 2023 from 15% in 2016, 26% in 2010 and 48% in 1981.

The share of exports is even lower when wheat imports are netted into the equation. A negligible figure for most of the 1900s, wheat imports, mostly from Canada, grew following the passage of the North American Free Trade Agreement and have been climbing over the past two years with the shipment of wheat from Europe to US flour mills in the eastern United States. Imports in 2023-24 in April were projected by the USDA at 140 million bus, up 46% from 96 million bus in 2021-22. The import growth offers another significant data point emphasizing the ebbing global competitiveness of US wheat.

Geopolitics adds still another important dimension to the picture given the radical change in the composition of the leading global exporters of wheat. Not only is Russia now the largest global exporter of wheat, but its lead over the second largest, the European Union, has been widening considerably. Global food security concerns prompted by Russia’s ranking are exacerbated by its war with Ukraine, another major exporter, and Russia’s status as the most heavily sanctioned country in the world, subject to more sanctions than the next five countries combined — Iran, Syria, North Korea, Belarus and Myanmar.

While a smaller figure than in the past, US wheat production currently is 61% greater than projected domestic use. The United States is not in imminent peril of “running out of wheat.” Still, millers, bakers, political leaders and the country at large have a great stake in maintaining a healthy US wheat economy, a descriptor that increasingly seems like a stretch in the aftermath of the latest Census of Agriculture.

Tags: exports, Canada, US, wheat, imports, farms, cultivating