By Karen Braun
NAPERVILLE, Ill. – Wheat exporters in the United States, formerly the world’s breadbasket, ended 2022 on the lowest note in over four decades as short supplies and cheaper overseas competition continued pushing US wheat aside.
The paltry shipment volumes are not necessarily disappointing considering expectations, and the new year may bring some better luck to exporters as US supplies may build in 2023.
Only 85,672 tons of US wheat were inspected for export in the week ended Dec. 29, the smallest on record for any week in data back to January 1983. That breaks the prior low of 127,306 tons set in late December 2008.
That number was originally published last week, but no adjustments were made on Monday morning, meaning the record is more likely to stand. The meager performance continued into 2023 as preliminary wheat inspections for the week ended Jan. 5 totaled 201,673 tons, the lightest for that week in more than 40 years.
The United States was gripped by a frigid Arctic blast in late December, affecting transportation and commerce. But wheat inspections had already flirted with record lows in the prior months amid very thin demand.
The US Department of Agriculture already projects 2022-23 US wheat exports at a 51-year low of 21.1 million tons (775 million bushels). Late fall through winter is also the slowest period for shipments.
That volume is 26 percent lower than in 2016-17, the last time the United States was the world’s leading wheat exporter. It is projected at No. 4 in 2022-23 with a record-low 10 percent share of global shipments.
One positive for US wheat is that in recent years, exports have declined by a lesser degree than production. Another plus is that exporters got a leg up in the first half of the current marketing year, perhaps leaving room for the weak December showing without needing to further shrink exports yet.
Through the first half of 2022-23, which began on June 1, US wheat exports covered 54 percent of USDA’s December forecast. That is a nine-year high and a few points above average.
Recent shipments have been limited by poor export sales, which are at more than 20-year lows for the date with plentiful, cheaper wheat in rivals like Russia, Canada and Australia commanding market share.
But so far in 2022-23, cumulative US wheat exports as a percentage of total sales are near historical averages, meaning shipments have not been relatively worse than demand levels would suggest.
US wheat supplies have contracted after two disappointing harvests, driven by both low area and yield. Analysts peg US wheat stocks as of Dec. 1, the halfway point of 2022-23, at 1.344 billion bushels, a 15-year low for the date and down 2.5 percent from a year ago.
But stocks may have bottomed out this year if planting ideas are realized and the weather cooperates. USDA on Thursday will publish US winter wheat seedings for the 2023 harvest, and the average trade guess of 34.485 million acres would be a seven-year high, up 3.6 percent on the year.
Widespread drought still threatens much of the US Plains and crop health is low, raising yield risks. However, things are heading in the right direction as 64 percent of all US winter wheat areas were covered by drought last week, down from the November peak of 75 percent.
Winter wheat drought coverage was 65 percent at the start of 2022 and 32 percent the same week in 2021.
