The United States is a major wheat-producing country, with output typically exceeded only by China, the European Union, and India. During the first decade of the 2000s, wheat ranked third among U.S. field crops in both planted acreage and gross farm receipts, behind corn and soybeans.
The U.S. wheat sector has faced many challenges in the past decade, including a weak domestic market for wheat products. U.S. wheat harvested area has dropped off more than 30 million acres, or more than one-third, from its peak in 1981, for two reasons: 1) the profitability of U.S. wheat has declined relative to other crops, stemming in large part from foreign competition, and 2) farm legislation allows farmers more flexible crop choices. U.S. wheat exports have fluctuated around an average of 1.0 million bushels over the last 10 years, but the U.S. share of the global market has eroded in the past two decades.
For charts on wheat, see the annual writeups on the supply-and-demand issues underlying the baseline for wheat on the Market Outlook page.
U.S. Wheat Classes
Wheat is the principal food grain produced in the United States. Wheat varieties grown in the United States are classified as "winter wheat" or "spring wheat," depending on the season when each is planted. Winter wheat production represents 70-80 percent of total U.S. production. Winter wheat varieties are sown in the fall and usually become established before going into dormancy when cold weather arrives. In the spring, plants resume growth and grow rapidly until summertime harvest. In the Northern Plains, where winters are harsh, spring wheat and durum wheat are planted in the spring and harvested in the late summer or fall of the same year.
The five major classes of U.S. wheat are hard red winter, hard red spring, soft red winter, white, and durum. Each class has a somewhat different end use and production tends to be region-specific.
- Hard red winter (HRW) wheat accounts for about 40 percent of total production and is grown primarily in the Great Plains (Texas north through Montana). HRW is principally used to make bread flour.
- Hard red spring (HRS) wheat accounts for about 20 percent of production and is grown primarily in the Northern Plains (North Dakota, Montana, Minnesota, and South Dakota). HRS wheat is valued for high protein levels, which make it suitable for specialty breads and blending with lower protein wheat.
- Soft red winter (SRW) wheat, accounting for 15-20 percent of total production, is grown primarily in States along the Mississippi River and in the Eastern States. Flour produced from milling SRW is used in the United States for cakes, cookies, and crackers.
- White wheat, accounting for 10-15 percent of total production, is grown in Washington, Oregon, Idaho, Michigan, and New York, and its flour is used for noodle products, crackers, cereals, and white-crusted breads.
- Durum wheat, accounting for 3-5 percent of total production, is grown primarily in North Dakota and Montana and is used in the production of pasta.
Wheat milling byproducts-such as bran (outer seed coat of a wheat kernel), shorts (more inward layers of the seed coat that contain some starchy or floury components), and middlings (an intermediate fraction that consists of a combination of bran and shorts)-are used by feed manufacturers in the production of animal feeds.
U.S. Wheat Supply
Wheat area has dropped from its highs of the early 1980s, due mostly to declining returns relative to other crops and alternative options under Government programs. Authorization of the Conservation Reserve Program (CRP) in the 1985 Farm Act, followed by planting flexibility provisions in the 1990 Farm Act, provided wheat farmers with other options for use of their acreage. Under the 1990 Act, farmers participating in commodity programs could plant up to 25 percent of their base wheat acreage to crops other than wheat without losing base acreage. Base acreage refers to cropland on a farm, not to specific parcels of land, and consists of crop-specific acreage of wheat, feed grains, upland cotton, rice, oilseeds, pulse crops, or peanuts eligible to participate in commodity programs. Farmers thus had an incentive to grow crops promising higher returns or to earn rental payments from idling land under the CRP.
Planting flexibility facilitated expansion of soybeans, corn, and other crops in traditional wheat areas. The 1996 Farm Act strengthened the market orientation of crop planting by eliminating the requirement to maintain base acreage of program crops in order to qualify for Government payments.
The role and nature of Government assistance to the farm sector is under intense debate because of variable commodity prices. While the comparatively low profitability of wheat has encouraged some farmers to switch to other crops, many farmers cannot easily switch from wheat. Farmers in the Eastern United States, with higher rainfall, have more profitable alternatives to wheat than in other wheat-growing regions. However, in the Plains regions, profitable alternative crop choices to dryland wheat do exist, although they are more limited.
Loss of wheat acreage to row crops on the Plains reflects strong genetic improvements in corn and soybeans, producing varieties that could be planted farther west and north in the region, areas with drier conditions or shorter growing seasons.
Genetic improvement has been slower for wheat because of the grain's genetic complexity and lower potential monetary returns to commercial seed companies, which discourage investment in research. In the corn sector, where hybrids are used, farmers generally buy seed from dealers every year. However, many wheat farmers, particularly in the Plains States, use saved seed instead of buying from dealers every year. In addition, U.S. food processors are wary of consumer reaction to products containing genetically modified (GM) wheat, so no GM wheat is commercially grown in the United States.
U.S. Wheat Use
U.S. consumer demand for food products made from wheat flour is relatively unaffected by changes in wheat prices or disposable income. However, demand is closely tied to population, tastes, and preferences.
The strength of the domestic market for wheat has developed out of the historic turnaround that occurred in the 1970s in U.S. per capita wheat consumption. For nearly 100 years, per capita wheat consumption declined in the United States, as hard physical labor became less common and diets diversified. Wheat consumption dropped from over 225 pounds per person in 1879 to 180 pounds in 1925 before bottoming out at 110 pounds in 1972. By 1997, consumption had rebounded to 147 pounds per capita. The rise in consumption benefited the U.S. wheat processing industry while that industry expanded and modernized.
For further detail, see Wheat's Role in the U.S. Diet Has Changed Over the Decades.
The decades-long growth ended in 1997 as changing consumer preferences, led by the adoption of low-carbohydrate diets, reduced per capita wheat consumption once again. Consumer interest in these diets spiked after 2000. Per capita flour use dropped rapidly at first and then fell more slowly until reaching a low of 134.4 pounds in 2005. Per capita use rebounded slightly for 3 years, but then dropped off again. ERS estimates per capita wheat flour use at 132.5 pounds in 2011. This reduced consumption in recent years resulted in the closure of older, less efficient mills.
Almost half of the U.S. wheat crop is exported. However, the importance of exports varies by class of wheat. By class, the share of the crop exported is:
- White wheat, two-thirds
- HRS, half
- SRW and durum, less than half
In the 1990s and the first decade of the 2000s, world wheat consumption continued to expand in response to rising population and incomes, and world trade since 2008/09 has increased sharply, surpassing previous years by a significant amount. Distribution of global wheat trade broadened as small purchases by a larger number of importing countries-in Southeast Asia, North Africa, and the Middle East-have together become more important than the very large purchases in the past by the former Soviet Union and China.
The United States has lost share in global wheat trade over the years, and export competition will not abate in the foreseeable future. Traditional exporters (Argentina, Australia, EU and Canada) are expected to continue to be very competitive. Other suppliers, such as Ukraine and Russia, also are providing increased export competition.
U.S. Wheat Prospects
Challenges for the U.S. wheat sector will not abate in the foreseeable future. Other crops will be included in farmers' production decisions under current farm legislation. Wheat products have been less competitive with other foodstuffs in the domestic market in recent years, and foreign competition will continue to pressure U.S. wheat producers.