North Dakota Wheat Commision
Wheat Growers

WMR-2017 U.S. Durum Production Falls by Nearly 50%

by Jim Peterson

Break Date: 11/7/2017 8:47:09 AM
Last Edit: 11/7/2017 8:47:09 AM

Supplies of U.S. durum are lower in the 2017-18 marketing year (June-May), at 135 million bushels, compared to 162 million in 2016-17. A big factor for the smaller supplies was a sharp reduction in production, 55 million bushels, as compared to 104 million in 2016. Lower planted area, followed by moderate to severe drought conditions across key durum areas of Montana and North Dakota which cut yields by 40 to 60 percent compared to 2016, led to the reduced production.

From a historical perspective, the current production estimate would place it as the fourth smallest crop in the past 15 years. Specifically by state, durum production in Montana fell to 12.6 million bushels in 2017, compared to 31.4 million in 2016. Average yields in the state were a mere 16 bushels per acre, well below the record yield of 41 posted in 2016. Abandoned, or unharvested acres in 2017 were 12 percent compared to just 2 percent in 2016. In North Dakota, average yields fell to 24 bushels per acre, compared to 40.5 in 2016. Unharvested acres were pegged at 4.5 percent compared to 2 percent in 2016 although some feel the actual number could be higher. The balance of U.S. durum production comes from California and Arizona where 2017 combined production was 11.5 million bushels, down marginally from 13.4 million in 2016.

Offsetting a significant share of the production decline is a projected increase in durum imports by USDA. In the 2017 marketing year, durum and durum product imports are projected at 44 million bushels versus 30 million in the 2016 marketing year. Annual imports typically include about 20 million bushel equivalent of semolina and finished pasta products, with the balance being durum from Canada. This means the USDA projection implies a more than doubling of durum imports from Canada, direct to U.S. mills, from 10 million to 24 million. Early season import trends are higher than a year ago, with many mills buying some Canadian supplies pre-harvest due to concerns over the drought in Montana and North Dakota durum regions. This is likely a major reason values for durum in the U.S. market have slipped since harvest.

Current bids for top-end durum to U.S. producers are in the low to mid $6 per bushel range, similar to a year ago, but certainly well below the levels posted mid-summer during the peak of the drought. A year ago, top-end durum bids gained added support due to a shortage of quality, but the 2017 crop has a much high quality profile overall.

On the demand front, USDA is projecting similar exports for the U.S. compared to a year ago, but somewhat lower domestic use, due solely to less feed usage. Exports are projected to reach 20 million bushels, down marginally from 24 million in the prior marketing year. As of the end of October, U.S. durum export sales stood at 9.2 million, compared to 8.8 million a year ago. Export sales are higher into Italy, but similar into the North African region. Domestic use is projected at 88 million bushels, down from 101 million a year ago, with feed use declining from 19 million bushels to 5 million and food use holding steady at 80 million.

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