By Kim Anderson, Oklahoma State University Extension grain marketing specialist
Is there a shortage of wheat and/or a shortage of milling quality wheat? United States' wheat ending stocks are projected to be 858 million bushels (mb) compared to a five-year average of 596 mb. World wheat ending stocks are projected to be 6.5 billion bushels (bb) compared to a five-year average of 5.6 bb. On the surface, there does not appear to be a shortage of wheat. However, world wheat consumption has increased 3.0 billion bushels since 2001 and 1.8 billion bushels since 2006.
The five-year U.S. wheat ending stocks average for 1996 through 2000 was 790 million bushels. The five-year average U.S. ending stocks for 2001 through 2005 was 585 million bushels and the five-year average for 2006 through 2010 is 590 million bushels. With a 3 billion bushel increase in demand, current average ending stocks are 200 million bushels less than in 2001 and about the same as in 2006. Because of increased demand, wheat stocks may be tighter than the comparison of the five-year average and current ending stocks estimate implies.
The five-year average annual (2006/10) wheat price is $5.50 compared to $3.31 for 2001/05 and $3.09 for 1996/00. Higher prices due to increased demand may be justifiable.
Reports indicate that because of wet harvest weather in eastern Australia about 50 percent of the eastern Australian wheat is milling quality. Wheat protein in Canadian hard spring wheat is below average and wheat quality in parts of the European Union and some Former Soviet Union countries were below average. Indications are that milling quality wheat is not as available as would be expected with a 23.75 billion bushel world wheat crop and with world wheat ending stocks projected to be 6.5 billion bushels.