February 24, 2006

USDA forecasts increased wheat acreage for the next decade

US wheat consumption and exports over the next decade will show a marginal increase, according to USDA Baseline Projections released by the Economic Research Service (ERS).

The agency forecasts a 9 percent increase in US domestic wheat consumption over the next decade, reversing downward trends since 2000/01.

ERS expects foreign competition to dent the US share of the world market, from 25 percent in 2005/06 to 23 percent in 2015/2016.

Australia, Argentina, and the Black Sea region will capture a larger share of the market while Canada and the EU will likely lose ground.

By 2015/16, ERS expects total world wheat trade to rise 20 percent above current levels.

The EU is expected to have the highest import growth of 2.5 million tonnes.

US corn acreage is expected to increase by 4 percent due to growth in ethanol production while soybean acreage is expected to fall by 2 percent as foreign competition puts downward pressure on prices.