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WMR-2023 Wheat Acreage Outlook

By: Jim Peterson
Posted: Mar 02 2023

The results of the USDA planting intentions report will be released at the end of March, and it typically is a report that draws a lot of market focus, even though final plantings can deviate significantly from the initial estimates.  This year’s estimates may not carry as much anticipation as last year, when already strong market prices for multiple crops were elevated further by the Russian invasion of Ukraine, but relatively tight ending stocks of key commodities will still command the attention of market participants on potential 2023 acreage trends.  

The January USDA winter wheat survey indicated that both hard red winter and soft red winter had notable increases in plantings last fall, up 10 and 20 percent, respectively, or a combined 3.6 million acre increase. This would place HRW acres at 25.3 million acres, and SRW at 7.9 million, and continue their recent uptrends.  

Factors that supported gains in the HRW region included failed corn and sorghum crops which allowed for earlier planting, and a notable increase in crop insurance coverage prices.  HRW insurance values were $8.79 per bushel, up notably from $7.08 the previous year.  This encouraged producers to continue planting, despite dry soils over a large part of the region.  For SRW, producers had better moisture conditions at planting, and interest was bolstered by recent years of high yielding, high quality crops, and attractive insurance coverage levels.  In addition, elevated production costs for corn, and tightening profit margins for both corn and soybeans shifted interest to wheat. Later surveys can adjust those initial projections, and actual harvested acres will be the more important variable for hard red winter going forward, considering the extent of drought that still exists across the production region.

Will spring wheat producers respond in a similar fashion as in the winter wheat regions?  The trend line in HRS acres has been down for 4 straight years. Odds favor a rebound in plantings, and reversing the recent trend of declining acres.  

Early private and government projections range from just a marginal increase to double digit percentage gains.  A Farm Futures survey is hinting at a potential 11% increase in spring wheat acres, or a 1.5 million acre gain.  The primary factors indicated for a potential increase are the lower relative input costs on wheat, and the fact that intended spring wheat plantings in 2022 were tempered by the extremely delayed planting season, leading to a large number of prevent plant acres across North Dakota and Minnesota.  

At the recent USDA wheat outlook conference, government forecasters only implied a marginal increase in spring wheat acres.  Projecting a 3.8 million acre increase in total wheat acres, up to 49.5 million.  This just leaves around a 100,000 acre increase for spring and durum acres, as winter wheat gains already accounted for 3.7 million, based on that January survey.  In that same Outlook Conference, USDA projected a 2.5 million acre increase in national corn acres to 91 million and no change in soybeans at 87.5 million acres.

The recent sell off in market prices, and increasing odds for a colder, wetter start to spring may work against the level of gain in HRS acres in 2023, but wheat certainly will compete in much of the region. Market values still remain at historically high levels, and crop insurance prices will be near $8.90 per bushel, although down from $9.19 last year. Actual planting season conditions, the need to keep rotations in balance, and price trends will be the ultimate deciders in 2023 final HRS planted area.

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