The USDA’s downgrade to US small grain production offered the latest example of how hot and dry weather is taking a toll on food production. In its Small Grains Annual Summary, released this afternoon, the USDA nearly quadrupled its spring wheat harvest loss estimate, essentially putting US spring wheat production on a path to its lowest production level since the late 1980s.
Since March Gro has been warning about the hot and dry weather across the US Northern Plains that has been zapping yield potential and forcing farmers to abandon acres in key growing states.
The USDA is now forecasting an 11% harvest loss for spring wheat, placing spring wheat production at its lowest level in 33 years. Durum wheat production is pegged at the lowest level since the 1960s. Year-to-date Minneapolis spring wheat futures are up 47%.
The latest USDA spring wheat abandonment estimate is now in line with Gro’s projections, as we wrote about here. This adjustment, along with reduced yields, takes the US balance sheet to even tighter territory and adds support to prices that are at their highest levels since 2012.
As NOAA’s latest seasonal forecast points to drought continuing in western and central US this year and impacting next year, breakfast cereal makers, bakers and brewers should prepare for continued tight supplies and high prices.
The US’ ongoing drought is also wreaking havoc on oats and barley, and CBOT oat futures, which are up 85% year-to-date, are reflecting the strain. The USDA estimates that US oat production will come in at a record low 39.8 million bushels, down 39% from 2020, and that US barley production will be at 118 million bushels, down 31% from the revised 2020 total of 171 million bushels.
Idaho, the largest US barley producing state, suffered a severe blow to this year’s crop. Gro’s Navigator for Agriculture - Growing Conditions app highlights the crop’s poor conditions, as seen through NDVI along with inadequate soil moisture.
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