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U.S.
Wheat Classes
U.S. Wheat
Supply
U.S. Wheat
Use
U.S.
Wheat Prospects
The United States is a major wheat-producing country,
with output typically exceeded only by China, the European
Union, and India. During the 2000s,
wheat ranked third among U.S. field crops in both planted
acreage and gross farm receipts, behind corn and soybeans.
The U.S. wheat sector enters the 21st century facing
many challenges, despite a strong domestic market for
wheat products. U.S. wheat harvested area has dropped
off nearly 30 million acres, or nearly one-third from its peak
in 1981, for two reasons. First is declining returns relative
to other crops, stemming in large part from foreign competition.
Second is the availability of alternative options under
government programs. U.S. wheat exports have fluctuated around an average of 1.0 million bushels over the last 10 years, but the U.S. share of the global
market has eroded in the past two decades.
For charts on wheat, see the annual writeups on the supply and demand issues underlying the baseline for wheat on the Market Outlook page.
U.S. Wheat Classes
Wheat
is the principal food grain produced in the United States.
Wheat varieties grown in the United States are classified
as "winter wheat" or "spring wheat,"
depending on the season each is planted. Winter wheat
production represents 70-80 percent of total U.S. production.
Winter wheat varieties are sown in the fall and usually
become established before going into dormancy when cold
weather arrives. In the spring, plants resume growth and
grow rapidly until summertime harvest. In the Northern
Plains, where winters are harsh, spring wheat and durum
wheat are planted in the spring and harvested in the late
summer or fall of the same year.
The five major classes of U.S. wheat are hard red winter,
hard red spring, soft red winter, white, and durum. Each
class has a somewhat different end use and production
tends to be region-specific.
- Hard red winter (HRW) wheat accounts for about 40
percent of total production and is grown primarily in
the Great Plains (Texas north through Montana). HRW
is principally used to make bread flour.
- Hard red spring (HRS) wheat accounts for about 25
percent of production and is grown primarily in the
Northern Plains (North Dakota, Montana, Minnesota, and
South Dakota). HRS wheat is valued for high protein
levels, which make it suitable for specialty breads
and blending with lower protein wheat.
- Soft red winter (SRW) wheat, accounting for 15-20
percent of total production, is grown primarily in States
along the Mississippi River and in the Eastern States.
Flour produced from milling SRW is used in the United
States for cakes, cookies, and crackers.
- White wheat, accounting for 10-15 percent of total
production, is grown in Washington, Oregon, Idaho, Michigan,
and New York, and its flour is used for noodle products,
crackers, cereals, and white-crusted breads.
- Durum wheat, accounting for 3-5 percent of total
production, is grown primarily in North Dakota and Montana
and is used in the production of pasta.
Wheat milling byproducts—such as bran (outer seed coat of
a wheat kernel), shorts (more inward layers of the seed coat that
contain some starchy or floury components), and middlings (an intermediate
fraction that consists of a combination of bran and shorts)—are
used by feed manufacturers in the production of animal feeds.
U.S. Wheat Supply
Wheat area has dropped from its early 1980s highs, due mostly to
declining returns relative to other crops and alternative options
under government programs. Authorization of the Conservation Reserve
Program (CRP) in the 1985 Farm Act, followed by planting flexibility
provisions in the 1990 Farm Act, provided wheat farmers with other
options for use of their acreage. Under the 1990 Act, farmers participating
in commodity programs could plant up to 25 percent of their base
wheat acreage to crops other than wheat without losing base acreage.
Farmers thus had an incentive to grow crops promising higher returns
or to earn rental payments from idling land under the CRP.
Planting flexibility facilitated expansion of soybeans, corn, and other crops
in traditional wheat areas. The 1996 Farm Act completed the market
orientation of crop planting by eliminating the requirement to maintain
base acreage of program crops in order to qualify for government
payments.
The role and nature of government assistance to the farm sector
is under intense debate because of variable commodity prices. While
low profitability of wheat has encouraged some farmers to switch
to other crops, many farmers cannot easily switch from wheat. In
addition to watching market prices to decide what and how much to
plant, farmers are strongly influenced by loan deficiency payments
(for more information, see the Policy
page in this briefing room). Farmers in the Eastern United States,
with higher rainfall, have more profitable alternatives to wheat
than in other wheat-growing regions. Profitable alternative crop
choices to dryland wheat in the Plains regions, while more limited,
do exist.
Loss of wheat acreage to row crops on the Plains reflects strong
genetic improvements in corn and soybeans, producing varieties that
could be planted farther west and north in the region, areas with
drier conditions or shorter growing seasons. The pace of genetic
improvement has been slower for wheat than for some other field
crops, making wheat less competitive for cropland. Genetic improvement
is slower because of genetic complexity and because of lower potential
returns to commercial seed companies, which discourage investment
in research. In the corn sector, for example, where hybrids are
used, farmers generally buy seed from dealers every year. However,
many wheat farmers, particularly in the Plains States, use saved
seed instead of buying from dealers every year.
U.S. Wheat Use
U.S. consumer demand for food products made from wheat flour is
relatively unaffected by changes in wheat prices or disposable
income. However, demand is closely tied to population, tastes,
and preferences.
The strength of the domestic market for wheat has developed
out of the historic turnaround that occurred in the
1970s in U.S. per capita wheat consumption. For nearly 100 years,
per capita wheat consumption declined in the United States, as hard physical
labor became less common and diets diversified. Wheat consumption dropped
from over 225 pounds per person in 1879 to 180 pounds
in 1925 before bottoming out at 110 pounds in 1972. By 1997, consumption had rebounded
to 147 pounds per capita. (For further detail, see Wheat's
Role in the U.S. Diet Has Changed Over the Decades.) The
rise in consumption benefited the U.S. wheat processing industry,
which has operated near full capacity
over the last 25 years, while expanding and modernizing.
The decades-long growth ended in 1997 as changing consumer preferences, led by the adoption of low-carbohydrate diets, reduced per capita wheat consumption. Consumer interest in these diets spiked after 2000. Per capita flour use dropped rapidly at first and then fell more slowly until reaching a low of 134.2 pounds in 2005. After a decade of declining flour use, ERS estimates per capita wheat flour use at 137.9 pounds in 2007, up 2.3 pounds from a year earlier, but still down 8.9 pounds from its high in 1997.
Almost half of the U.S. wheat crop is exported. The importance
of exports varies by class of wheat. The white and HRS classes rely
more than others on sales into export markets:
- White wheat, two-thirds of the crop exported
- HRS, half of the crop exported
- SRW and durum, about one-third of each exported
- HRW, slightly over one-third exported
In the 1990s and 2000s, world wheat consumption continued
to expand in response to rising population and incomes, and world trade recently has reached record levels. Distribution of global
wheat trade broadened as small purchases by a larger number of importing
countries—in Southeast Asia, North Africa, and the Middle East—have
together become more important than the very large purchases in
the past by the former Soviet Union and China.
The United States has lost share in global wheat trade over the
years, and export competition will not abate in the foreseeable
future. Agricultural policy reforms in the European Union (EU) are expected to promote wheat production in EU
countries over other crops. Traditional exporters (Argentina,
Australia, and Canada) are expected to continue to be
very competitive. Other suppliers, such as Ukraine and Russia, also are providing
increased export competition.
U.S. Wheat Prospects
Challenges
for the U.S. wheat sector will not abate in the foreseeable future.
Other crops will be included in farmers' production decisions under
current farm legislation. Although wheat products have proven to
be competitive with other foodstuffs in the domestic market in recent
years, foreign competition will continue to pressure U.S. wheat
producers.
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