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WMR-U.S. Durum Prices Push Toward Historic Highs

By: Jim Peterson
Posted: Nov 16 2021

Cash values for durum are averaging near the $16 per bushel mark for producers in mid-November, the highest since the historic spike to more than $21 per bushel in 2008.  The severity of the drought in both the U.S. and Canada has sharply reduced supplies and caught many mills and pasta manufacturers off guard, especially with how quickly market values escalated.

U.S. durum production is estimated at 37 million bushels, the smallest crop since 1961, with an average national yield of 24 bushels per acre, the lowest since 1967.  In Canada, updated production estimates will be released in early December, but the latest estimate was around 130 million bushels, roughly 50% of 2020’s production.  Quality was generally good in both countries, with the exception of some lighter test weights, and isolated pockets which caught harvest rains, so it is merely quantity issues driving prices.

World durum dynamics are not nearly as tight as North America, with good domestic crops in the EU and North Africa limiting import needs and tempering domestic prices.  Recently, world values have begun to narrow the gap to U.S. and Canadian prices, and continued strength in the world market will be a key factor in supporting further price gains.  In 2008, EU stocks fell to a mere 7 million bushels, whereas this year EU end of year stocks are projected to remain near 60 million bushels.

Canadian ending stocks of durum have been rapidly declining for the past three years, falling from 66 million bushels in July 2019, to roughly 30 million in 2020 and 2021, and projected to be a mere 15 million bushels by the summer of 2022.  This will sharply curtail their exports, projected to only reach 140 million bushels, down nearly 40% from last year.

U.S. ending inventories are currently projected to fall to 17 million bushels, the lowest since the historic low of 8 million in 2008. USDA is projecting U.S. food use of durum at 80 million bushels in 21-22, down from the record of 88 million in 20-21, and back near pre-pandemic levels. Pasta demand remains strong, but this year there is greater blending with HRS wheat. Exports are projected at 15 million bushels, down nearly 50% from a year ago.  The current sales pace of 5 million bushels is down 75% from last year’s pace, as U.S. prices remain well above world values.

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