According to the International Grains Council (IGC), total projected U.S. grain production in 2017-18 will be 421 million tonnes, down from 465.9 million in 2016-17. The figure is dominated by the country’s massive maize production, set to reach 357.7 million tonnes, down from 384.8 million the year before. Wheat production in 2017-18 is put at 49.6 million tonnes, down from 62.9 million. The 2017-18 barley crop is forecast at 3.5 million tonnes, down from 4.3 million. Sorghum production in 2017-18 is put at 8.5 million tonnes, down from 12.2 million the year before.
Output of oats is set to rise to 1 million tonnes from 900,000 in 2016-17, while the rye crop is put at an unchanged 300,000 tonnes.
The United States is the world’s largest grain exporter by a wide margin. In 2017-18 it is set to export a total of 79.5 million tonnes of grain, down from 92.3 million the year before, according to the IGC. It will import 6.5 million tonnes, up from 5.5 million the year before. Those exports include 26.1 million tonnes of wheat in 2017-18, down from 27.6 million; 48.2 million tonnes of maize, down from 57.9 million; and an unchanged 200,000 tonnes of barley. Imports include 3 million tonnes of wheat, up from 2.5 million the year before, and 1.3 million tonnes of maize, up from 1 million.
The United States is also a major producer and exporter of soybeans. In 2017-18 its crop is forecast at 115.5 million tonnes, down from 117.2 million the year before, with 2017-18 exports put at 58 million tonnes, up from 55.3 million the year before. Although the United States is the world’s biggest soybean producer, it has been pushed into second place as an exporter in recent years by Brazil. U.S. production of rapeseed is put at 1.5 million tonnes in 2017-18, compared with 1.4 million the year before. Rapeseed exports were an unchanged 100,000 tonnes.
The IGC explained how the weather contributed to U.S. production declines.
“A severe snowstorm in late-April may have harmed HRW crops in parts of Kansas, Colorado and Nebraska,” it said. “Problems were likely accentuated by freezing temperatures and high winds, but the extent of damage is unclear. Widespread flooding was a concern for SRW in the southern Midwest. With higher-than-normal abandonment anticipated, winter wheat harvested area is projected to drop by 15% year on year, to 10.3 million hectares. Drier and warmer weather allowed spring fieldwork to accelerate in the northern Plains, with planting almost finished by late May, slightly ahead of the five-year average. Mainly reflecting a shift into soybeans, most notably in North Dakota, plantings are forecast to be the lowest since the early 1970s.”
Maize production was also affected by weather.
“Heavy rains early in the month brought flooding to parts of the southern and eastern Corn Belt, where some replanting was necesssary,” the IGC said. “Those producers worst affected may instead opt for a crop insurance payment or switch to alternatives, such as soybeans.”
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Highly consolidated milling industry
According to Sosland Publishing’s 2017 Grain & Milling Annual, there are a total of 168 mills producing wheat flour in the United States with a daily capacity of 1,556,768 cwts, or 70,614 tonnes.
Of those mills, 71 have a daily capacity of 10,000 cwts (454 tonnes) or more. The largest flour mill listed in the United States is that of the North Dakota Mill & Elevator Association at Grand Forks, which has a daily capacity of 52,500 cwts, (2,381 tonnes). The biggest milling company by daily capacity is Ardent Mills, with a daily capacity of 474,800 cwts of wheat flour (21,537 tonnes). The 22 largest milling companies in the United States have a share of 95.3% of capacity.
Jeff Zyskowski, vice-president of supply chain, Ardent Mills, gave his vision of the future of U.S. milling at the IGC’s conference in London recently. Average flour consumption is stable at a trendline of 60.6 kilograms per person per year.
“We think we’re over the hump on gluten free,” he said.
“90 of 191 milling sites are owned by the top five competitors,” he said, referring to the total, including sites that mill durum and rice. “Capacity utilization is 84.4% on a six-day grind. We don’t see it getting better.”
He explained consumer trends.
“Whole grains are certainly huge,” he said, adding that there’s a trend to low sodium. “A lot of our customers are really trying to ratchet that down. There’s a lot of work happening around clean label/free from. Indulgent products are up 6.1% in the last four years.”
Fiber is important and weight management is a priority for consumers, he said, noting that 30% of the U.S. population is considered obese.
He also identified a trend to enlighten consumerism around the ideas of pure, ethical, local food.
“It’s not a big part of the population, but it’s a vocal part of the population,” he said.
Organic flour is growing with 82% of households consuming it, he said.
“Food safety has really come to the forefront in the last 12 months,” he said, pointing to the effect of peanut contamination issues on consumer thinking. There’s also more demand for sustainability.
“What we are seeing more and more is a requirement for transparency,” Zyskowski said.
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Agricultural policy
The USDA’s Economic Research Service explains the basics of U.S. policymaking in agriculture on its website.
“U.S. agricultural policy — often simply called farm policy — generally follows a five-year legislative cycle that produces a wide-ranging ‘farm bill,’” the ERS said. “Farm bills, or farm acts, govern programs related to farming, food and nutrition, and rural communities, as well as aspects of bioenergy and forestry. The most recent of these farm bills, the Agricultural Act of 2014 (2014 farm bill), authorizes policies in the areas of commodity programs and crop insurance, conservation on agricultural lands, agricultural trade (including foreign food assistance), nutrition (primarily domestic food assistance), farm credit, rural economic development, agricultural research, state and private forestry, bioenergy, and horticulture and organic agriculture.”
President Donald Trump has proposed some changes, to vocal opposition.
“Agriculture leaders, including lawmakers from President Donald Trump’s Republican Party ... criticized his planned 21% cut to discretionary spending at the U.S. Department of Agriculture (USDA), saying it could take a toll on the rural communities that helped elect him last November,” Reuters news agency said in March. “Trump has proposed slashing the USDA’s discretionary budget by $4.7 billion to $17.9 billion by halting funding for rural clean water initiatives and rural business services, reducing some USDA statistical services and cutting county-level staff.”
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Ethanol and biotechnology
The United States is the world’s biggest producer of ethanol, using maize as a feedstock. According to the Renewable Fuels Association, in 2016 it produced 15.330 billion gallons, with Brazil, which produced 7.295 billion, a distant second.
“The year 2016 will undoubtedly be remembered as one of the best ever in the history of the U.S. ethanol industry,” the association said. “Driven by unprecedented domestic use and robust export demand, ethanol production reached record heights. And after a lengthy battle, the Renewable Fuel Standard (RFS) was finally put ‘back on track’ when the Environmental Protection Agency announced blending requirements would be returned to statutory levels in 2017.”
Crops developed using biotechnology have been adopted on a large scale by U.S. farmers. According to the ERS, herbicide-tolerant soybeans went from 17% of U.S. soybean acreage in 1997 to 68% in 2001 and 94% in 2014, 2015, and 2016.
Plantings of insect resistant Bt maize grew from about 8% of U.S. maize area in 1997 to 79% in 2016.
