If consumers follow USDA guidelines: A wheat case study

Posted June 10, 2005: Wheat made up 71 percent of all U.S. grain consumption in 2003. One pound of wheat makes 0.98 pound of whole-wheat flour but only 0.74 pound of refined flour. If manufacturers increased the amount of whole-wheat flour production from 5 percent of flour production (estimated amount in 2003) to the Guidelines recommendation of 50 percent, only 797 billion bushels—versus 912 billion bushels—of wheat will be needed. Unless secondary demand increased to make up some or all of the difference, demand for wheat for domestic flour production would drop by around 13 percent. This would put downward pressure on wheat prices. However, since less than a third of the wheat supply is used for domestic food consumption, the price effect is likely to be limited.

A drop in wheat demand would trigger a change in land allocation. ERS estimates that for each 1-percent increase in domestic production of whole-wheat flours, 50,000 to 70,000 fewer acres of wheat would be harvested (based on the marketing year 2004/05 yield of 43.2 bushels per acre). To put this acreage drop into perspective, there are a projected 58 million acres planted to wheat in 2005, with a projected wheat harvest of 49.3 million acres.

Some farmers will shift wheat acreage to other crops or varieties. More acreage might be planted with hard-white wheat if the demand increases for foods made with it and if the current price premiums of 1 to 3 percent are sufficiently high, or rise, to overcome producers’ hesitation to grow this crop. (Hard-white wheat varieties are more susceptible to pre-harvest rainfall damage than hard-red wheat varieties.) In 2003, plantings of hard-white wheat accounted for 2.3 percent of all wheat grown in major States, largely in the Pacific Northwest and the Plains (e.g., Washington, Kansas, and Colorado). A shift to whole grains could also affect the demand for certain kinds of grains—and the demand for acreage suitable for growing those varieties. Rye flour and oat/barley products, which are mainly whole grain, could become more popular, as could minor grain products such as kasha and bulgur.

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