The U.S. wheat industry is bracing for a tight supply of premium pasta wheat this year after the U.S. Department of Agriculture projected durum acres this week to be the lowest in 50 years as heavy rains and flooding prevented seeding.
Some industry specialists expect the number to get even smaller as the U.S. Department of Agriculture surveyed farmers in early June when they expected to seed more wheat.
“There’s no doubt — whatever the final number comes out to on acreage — that it’s going to put pressure on stocks. Prices for durum will certainly increase,” said Steve Mercer, spokesman for U.S. Wheat Associates.
USDA on Thursday projected U.S. seedings of durum — a specialty wheat that represents just five per cent of the U.S. wheat crop and is used to make pasta — at 1.7 million acres, down 30 per cent from its March plantings intentions report.
Most of the decline came in North Dakota, the top U.S. wheat state. According to the North Dakota Wheat Commission, USDA’s durum wheat plantings number is the lowest since 1960.
“We’re certainly concerned by it,” said Walt George, president of the American Italian Pasta Co., North America’s largest dry pasta producer, based in Kansas City, Mo.
“Look to the Canadians”
“The reduction in acreage is going to make the supply much lower and the demand is not waning for pasta. We will have to look to the Canadians for help,” he added.
Canada is the world’s top durum grower, followed by Italy and the United States. Top exporters are Canada and the U.S.
The U.S. imports some durum from Canada each year to meet demand. This marketing season, for example, millers imported 34 million bushels of durum, or 20 per cent of the domestic supply.
“However, Canada is in a very similar situation and their supply was fairly tight last year because they had low acreage last year and will have another below-average year again,” said Erica Olson, marketing specialist with the North Dakota Wheat Commission.
Durum is already pricey, running about $14-$15 a bushel in the country and the highest level pasta makers have seen since the 2008 price spike when it reached $20 (all figures US$).
What helps is having a fairly good U.S. supply of durum wheat carried over from the marketing year ended May 31, at 35 million bushels — a five-month supply. U.S. millers and exporters consume about seven million bushels a month.
Also, higher durum prices should boost durum seeding in the U.S. Southwest this fall and in Europe next spring, crop specialists say.
“The impact on the pasta business will be fairly dramatic in the short term until those two harvest cycles occur and take some pressure off. This is very akin to what we saw in 2008,” said George.
“We saw durum pricing as high as the mid-$20s a bushel. It took about a year and a half for the supply to return to more normal level and bring the price of durum back into a reasonable position,” he added.