Russia, Ukraine narrowing gap on U.S. wheat exports

For 2002/03, the United States will again lead wheat exports by a huge margin, exporting about 25 million metric tons this year. The European Union is forecast to come in second, about 10 million tons behind the United States. But they will also likely be the world's top wheat importer, giving them net exports of 5.5 million.

Russia and Ukraine will come in with 9.5 million and 9 million tons, respectively, with Argentina taking fifth place with 8.3 million. Following these five are Canada, Australia and India, with export forecasts of 8 million, 7 million and 5 million metric tons.

According to U.S. Wheat Associates, market share by the five traditional exporters (United States, Australia, Canada, EU and Argentina) has fallen from 84 percent to 63 percent in just three years.

The major reason is a 40-million-metric-ton decline in wheat production by the five largest traditional exporters since 1999/2000, or 18 percent. Meanwhile non-traditional exporting countries have increased production. Russia is expected to bump its wheat production from 34.45 million in 2000/01 to a projected 49.5 million tons in 2002/03, while Ukraine has gone from 10.2 million tons in 2000/01 to a projected 21 million for 2002/03.

Projected U.S. wheat production decreased 30 percent from 1999/2000 to 2002/03; with a resulting 15 percent decrease in exports as ending stocks dropped 56 percent.

”While witnessing increased wheat production in many parts of the world, we have limited our own potential to compete, as farmers took wheat out of production for conservation programs and farm programs that encouraged the production of other crops,” said Paul Dickerson, vice president of U.S. Wheat Associates.

“Sadly, we pursued policies that reduced our own wheat production while other parts of the world were doing the opposite.”

Black Sea suppliers are here to stay, Dickerson predicts, referring to the Ukraine and Russia. To compete, U.S. producers will need to increase production, which should occur as a result of price incentives, since more of America's high quality wheat is needed in the world wheat market.

Overall, U.S. farmers seeded a little over 44 million acres of winter wheat for 2003, an increase of 6 percent over the previous year.

Meanwhile winter wheat seeding in the Mid-South dropped 340,000 acres, from 1.91 million acres in 2002 to 1.57 million acres for 2003, mostly due to prevented plantings caused by late harvests of other crops last fall. Most of the reduction in acreage comes from Arkansas, Mississippi and Louisiana.

In 2001, wheat seedings in the Mid-South totaled 2.025 million acres.

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