Dwindling supplies of US durum wheat, a specialty grain used widely for pasta, could serve up higher prices for food manufacturers in the coming months.
US durum production this season is estimated to be down more than 7% year over year, the only major variety of wheat to decrease. Projected ending stocks for the year are seen plummeting nearly 30% from a year earlier, dropping to their lowest level since at least 2010. Lower imports are also hitting US durum supplies — in the June-August period durum imports were down 32% versus last year, mainly because of a smaller crop in Canada.
US durum production, which represents less than 4% of the total wheat crop, was down largely due to sharp acreage cuts in Arizona and California, as high water costs and lower durum prices in the 2022 second half, according to Gro’s cash price data, dissuaded farmers from planting the grain. Meanwhile, exports of US durum increased from a year earlier — with customers mainly in southern Europe and North Africa — which further depleted US stocks.
Durum wheat prices typically trade at a premium to hard red spring wheat, but that premium has widened significantly since the summer, Gro’s cash price data shows.
Canada, the world’s largest durum producer and exporter, has had less grain to export after excessive heat, along with “severe” drought conditions as measured by the Gro Drought Index, plagued the country’s durum wheat-producing areas throughout the growing season, as seen in Gro’s Commodities Tracker application. Canada’s durum stocks in the latest quarter were down 28% from a year earlier, the Gro Tracker shows. Durum accounts for roughly 16% of Canada’s total wheat output.
Long-term climate data indicates that Canada’s durum crop could suffer from increasingly hot conditions in the coming years. By 2050, Canada’s durum-growing regions will see an annual average of 10.17 days above 35C (90F), more than double the number of days in 2023, according to an analysis using the Gro Climate Ensemble model’s “medium” warming scenario, SSP2-4.5. Prolonged temperatures above 32C (89.6F) from June-August can negatively impact the quality and yield of durum crops.
European durum crops also struggled against extreme weather this year. In Italy, excessive rain early in the season, and above-average temperatures later on, damaged the durum crop, as shown by Gro’s Climate Risk Navigator for Agriculture.
Italy is also a major importer of durum, traditionally sourcing mainly from Canada, as seen in this Gro display. But with Canadian supplies tight, Italy has turned to Turkey for a much larger share — nearly 13% of Italy’s durum imports so far in 2023 are from Turkey, up from a five-year average of just 2%.
Turkey this year has sharply ramped up wheat exports by nearly 25% from a year ago on the back of its largest wheat crop since 2017. A steep drop in the value of the Turkish lira — down about one-third against the US dollar year over year, as shown by Gro’s Currency Browser — makes Turkish exports even more attractive to Italy and other EU countries.