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WMR-Lower Durum Acres a Surprise

By: Jim Peterson
Posted: Apr 19 2021

The March survey of producers in the United States indicated less interest in durum than expected.  Results of the survey put potential acres at 1.54 million bushels, down 9% from last year, and nearly 25% below the 5-yr average.  Interestingly, there was also a divergence in acreage trends between Montana and North Dakota. Montana producers intend to plant 3% more acres at 710,000, whereas North Dakota producers intend to cut by 18% to just 750,000 acres. This is the closest that acres have been between both states, continuing the westward shift of durum acres.

In both states, the initial survey shows that the strong cash price opportunities and improved insurance coverage for canola, flax and soybeans, among other crops are pulling acres from durum.  In addition, although durum prices are about $.80 per bushel higher than a year ago in key parts of the durum region, the price premium to HRS spring wheat is actually narrower.  

Durum prices have not reacted to the potential drop in durum acres, rather holding near pre-report levels as buyers seem content with current supplies and many analysts doubt the initial survey numbers.  In addition, durum has a later planting window compared to other crops, providing incentive for producers to expand durum acres if soil moisture remains too limited to germinate earlier planted crop options, or respond to potential price gains before June.

Desert durum plantings in Arizona and California are estimated at 70,000 acres nearly the same level as the past three years.  Durum prices are not high enough to offset production costs in the region, relative to other crops, and in some parts of the region, there have been expanded water restrictions for irrigation.

If the current acreage forecast holds, and drought conditions prevail through much of the growing season leading to below average yields, U.S. durum production could easily fall below 50 million bushels in 2021.  This would approach production levels seen in the 1988 drought and the challenging 2011 season.  Supplies of durum in the U.S. would be about 20 percent lower than the past three years if that scenario plays out.  It is still early in the season, with many variables still to be determined, but the lower than expected planting intentions heightens the price risk to buyers going forward in 2021, considering it is also quite dry in Canada, and U.S. food use of durum remains at a record high. 

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