By: Jim Peterson
Posted: Dec 23 2024
World durum production in 2024 is estimated to be 1.3 billion bushels, up 12% from last year and the largest crop since 2018. Canada, the U.S., Turkey, Russia, Tunisia and Algeria all saw larger production, while the EU, Mexico and Morocco had reductions. These year to year shifts in production are influencing early season trade dynamics, and the lack of transparency in emerging export markets is adding uncertainty to predicting future market trends.
The EU had it’s third consecutive year of lower production, as growing season conditions were overly wet in key areas, impacting both yields and quality. This is leading to a dramatic shift in export and import volumes. In the current year, the EU is projected to need nearly 100 million bushels of imports, similar to the previous year, and well ahead of 40 million bushels just three years ago. Exports are anticipated to fall to 24 million bushels, about one-half the level of three years ago. Production shortfalls are the largest variable driving trade trends, but quality shortfalls in the 2024 crop are also curtailing exports and enhancing import needs.
2024 Canadian durum production is estimated to be 220 million bushels, up nearly 50% from 2023, supported by higher planted area and improved yields. A strong quality profile and weakened Canadian dollar will support robust exports in the coming months. Current projections are for Canadian durum exports to reach 184 million bushels, up from just 130 million last year. Shipments through the end of October stood at 35 million bushels, up 45% from a year ago. Sales have been the strongest to Italy, Morocco and into the United States.
Mexico will be less of a trade competitor for export demand in 2024 and 2025 due to much lower production. Production has declined for a third straight year due to water costs and restrictions, as well as a shift in government policies. Due to the strong import levels of non-durum wheat in recent years, the Mexican government is shifting subsidy priority to non-durum wheat, resulting in much lower durum planted area.
Emerging competitors for world durum demand are Turkey and Russia. As the accompany chart shows, Turkish production has made two consecutive years of steady increases, and Russia, contained in the other category has made similar gains. The favorable price spread of durum to non-durum wheat is driving the larger production, as well as government incentives, resulting in a much higher level of exports from both countries. These exports have had a notable impact on typical trade dynamics in both the EU and North Africa the past two years. The lack of transparency on volumes and values has added uncertainty to trade. In the current year, Turkey, has been holding out for higher bids which has been supportive, but analysts expect them to become more aggressive in early 2025. Russian durum has eroded U.S., Canada and EU export share into North African markets.
U.S. durum production in 2024 is estimated at 80 million bushels, up more than one-third from 2023, supported by a notable gain in planted area and strong yields in North Dakota. Quality is high in the crop. These two dynamics position the U.S. well to compete in the export market.
The most recent USDA supply and demand projections remain very similar to a year ago for demand. Domestic food demand at 83 million bushel remains stable while exports are projected to fall slightly from 27 million bushels to 25 million. Current export sales are 11 million bushels, down from 12 million a year ago. Italy, Nigeria and Algeria are the largest markets for sales through late November. An improved U.S. export sales pace will be needed in early 2025 to reach the USDA projection, and keep potential ending stocks from building further, given the larger crop.
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