Wheat

Wheat updates

Wheat acres decline, but global market dynamics could shift outlook.

Western growers are expected to reduce wheat acres in 2025, driven by persistently low wheat prices and challenging planting conditions. USDA projects total wheat acreage for 2025-26 at 45.4 million acres, a 2% decline from the previous year. If this holds, this would be the second smallest crop on record since 1919. Winter wheat plantings remain steady at 33.3 million acres. Spring wheat acreage is expected to drop 6% to 10.0 million acres, continuing a 30-year downward trend. This decline reflects an ongoing shift from spring wheat acres in the Midwest to corn and soybeans acres, supported by biofuel subsidies and higher per-acre returns. Durum wheat acreage is projected at 2.02 million acres, down 2% from the previous year. Arizona, California, and Montana all had significant decreases in durum wheat prospective planted acres.

Global and domestic market dynamics could, however, reshuffle the wheat planting outlook. A historically tight global wheat stocks-to-use ratio, coupled with crop damage in key regions, could inject volatility into prices. Drought and frost damage to winter wheat in the Black Sea region, alongside a strengthening Russian ruble and slowing Russian exports, may push export demand toward U.S. wheat. Additionally, concerns over drought and potential winterkill impacting the U.S. winter wheat crop in the Central and Southern Plains could drive a recovery in prices and partially limit reductions in spring wheat acres.

Considering alternative crops, barley planting incentives have diminished. With maltsters holding excess inventory, barley acreage is forecasted to decline by 2% to 2.31 million acres. Canola acres are also expected to decline 7% to 2.56 million acres. Meanwhile, pulse crops demonstrate stronger profitability potential, driving increases in acreage. Forecasts show significant growth in flaxseed (up 52% in Montana), chickpeas (up 23% in Montana), lentils (up 8% in Washington and 14% in Montana), and dry edible peas (up 55% in Idaho and 12% in Washington).

Small grains producers stand to benefit from the Emergency Commodity Assistance Program, which offers $9.8 billion in relief payments for 20 crops and is currently open for enrollment. With a payment rate of $30.69 per acre for wheat, this program aims to address financial losses that occurred last year due to low prices. This one-time payment is based on 100% of planted acres and 50% of prevented planting acres for the 2024 crop year. Additional assistance includes $21.76 per acre for barley, $31.83 for canola, $19.30 for lentils, $16.02 for dry peas, $20.97 for flaxseed, $31.45 for small chickpeas, $24.02 for large chickpeas, and $11.36 for mustard seed. Payments are capped at $250,000 for producers who derive more than 75% of their income from farming.

Profitability

March 12, 2025

Wheat: Slightly unprofitable - Neutral 12-month outlook

Global export competition and a strengthening U.S. dollar will create headwinds for wheat growers. While bearish price signals add to these headwinds, winter wheat conditions are improving as drought eases.

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