Wheat & Grain Outlook Overview World Grain Situation
Overview
• World Situation Wheat & Grain Outlook Economic Issues & Outlook December 6, 2007 Pasco, WA Dr. Thomas L. Marsh Associate Professor Economic Sciences
Total Grains Wheat • US Wheat Situation Wheat by Class Prices • Flour & Food Prices
School of Economic Sciences
World Grain Situation
Wheat Bread
School of Economic Sciences
School of Economic Sciences
1
School of Economic Sciences
600.0
400.0 Production Consumption Ending Stocks
200.0
0.0
School of Economic Sciences
19 60 /6 19 1 62 /6 19 3 64 /6 19 5 66 /6 19 7 68 /6 19 9 70 /7 19 1 72 /7 19 3 74 /7 19 5 76 /7 19 7 78 /7 19 9 80 /8 19 1 82 /8 19 3 84 /8 19 5 86 /8 19 7 88 /8 19 9 90 /9 19 1 92 /9 19 3 94 /9 19 5 96 /9 19 7 98 /9 20 9 00 /0 20 1 02 /0 20 3 04 /0 5
/6 19 1 62 /6 19 3 64 /6 19 5 66 /6 19 7 68 /6 19 9 70 /7 19 1 72 /7 19 3 74 /7 19 5 76 /7 19 7 78 /7 19 9 80 /8 19 1 82 /8 19 3 84 /8 19 5 86 /8 19 7 88 /8 19 9 90 /9 19 1 92 /9 19 3 94 /9 19 5 96 /9 19 7 98 /9 20 9 00 /0 20 1 02 /0 20 3 04 /0 20 5 06 /0 7
19 60
Million Metric Tons
World Maize Situation World Wheat Situation
School of Economic Sciences
700.0
World Wheat Situation
World Wheat Situation: Ratio of Ending Stocks to Consumption
45.0
500.0
40.0
35.0
30.0
300.0
25.0
20.0
15.0
100.0
10.0
5.0
0.0
School of Economic Sciences
2
All Wheat: Production
World Market: Key Determinants
70 USA Australia 60
• World Supply
50
Adverse Weather – Southern Hemisphere
40
Increasing Input Costs
Million Tons
• Australian production is forecasted down 30% • Energy 30
• Demand for Exports Exchange Rate
20
10
0 2004
2005
2006
School of Economic Sciences
g
School of Economic Sciences
U.S. Wheat (Area Planted 1998)
Hard Red Winter / Hard Red Spring / Soft Red Winter / White / Durum 1 dot = 5,000 acres at the county level (counties with less than 5,000 acres do not appear) Source: Economic Research Service, USDA
2007
From 2006/2007 to 2007/2008
School of Economic Sciences
3
From 2006/2007 to 2007/2008
School of Economic Sciences
From 2006/2007 to 2007/2008
School of Economic Sciences
From 2006/2007 to 2007/2008
U.S. Wheat Prices: 1973-1999 8
7
HRW HRS SRW SWW DUR
6
($/bu)
5
4
3
2
1
19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99
0
School of Economic Sciences
School of Economic Sciences
4
USDA- Daily Grain Review
School of Economic Sciences
USDA- Daily Grain Review
School of Economic Sciences
USDA- Daily Grain Review
Flour & Food Prices
School of Economic Sciences
School of Economic Sciences
5
Changes in Food Price Indexes, 2004-2008
20
18
Cost of wheat to produce flour Total wholesale price Total wholesale price less cost of wheat
6 Food at home Cereals and bakery products
16
5 14
4 Percentage Change
($/cwt)
12
10
8
6
3
2
4
1 2
0 19 85 /8 6 19 86 /8 7 19 87 /8 8 19 88 /8 9 19 89 /9 0 19 90 /9 1 19 91 /9 2 19 92 /9 3 19 93 /9 4 19 94 /9 5 19 95 /9 6 19 96 /9 7 19 97 /9 8 19 98 /9 9 19 99 /0 0 20 00 /0 1 20 01 /0 2 20 02 /0 3 20 03 /0 4 20 04 /0 5 20 05 /0 6 20 06 /0 7
0
School of Economic Sciences
Thank You!
2004
2005
2006
2007
2008
School of Economic Sciences
Sources
• USDA Wheat Outlook • USDA- Daily Grain Review • USDA-ERS Briefing Room • International Grain Council
School of Economic Sciences
School of Economic Sciences
6
• World Situation Wheat & Grain Outlook Economic Issues & Outlook December 6, 2007 Pasco, WA Dr. Thomas L. Marsh Associate Professor Economic Sciences
Total Grains Wheat • US Wheat Situation Wheat by Class Prices • Flour & Food Prices
School of Economic Sciences
World Grain Situation
Wheat Bread
School of Economic Sciences
School of Economic Sciences
1
School of Economic Sciences
600.0
400.0 Production Consumption Ending Stocks
200.0
0.0
School of Economic Sciences
19 60 /6 19 1 62 /6 19 3 64 /6 19 5 66 /6 19 7 68 /6 19 9 70 /7 19 1 72 /7 19 3 74 /7 19 5 76 /7 19 7 78 /7 19 9 80 /8 19 1 82 /8 19 3 84 /8 19 5 86 /8 19 7 88 /8 19 9 90 /9 19 1 92 /9 19 3 94 /9 19 5 96 /9 19 7 98 /9 20 9 00 /0 20 1 02 /0 20 3 04 /0 5
/6 19 1 62 /6 19 3 64 /6 19 5 66 /6 19 7 68 /6 19 9 70 /7 19 1 72 /7 19 3 74 /7 19 5 76 /7 19 7 78 /7 19 9 80 /8 19 1 82 /8 19 3 84 /8 19 5 86 /8 19 7 88 /8 19 9 90 /9 19 1 92 /9 19 3 94 /9 19 5 96 /9 19 7 98 /9 20 9 00 /0 20 1 02 /0 20 3 04 /0 20 5 06 /0 7
19 60
Million Metric Tons
World Maize Situation World Wheat Situation
School of Economic Sciences
700.0
World Wheat Situation
World Wheat Situation: Ratio of Ending Stocks to Consumption
45.0
500.0
40.0
35.0
30.0
300.0
25.0
20.0
15.0
100.0
10.0
5.0
0.0
School of Economic Sciences
2
All Wheat: Production
World Market: Key Determinants
70 USA Australia 60
• World Supply
50
Adverse Weather – Southern Hemisphere
40
Increasing Input Costs
Million Tons
• Australian production is forecasted down 30% • Energy 30
• Demand for Exports Exchange Rate
20
10
0 2004
2005
2006
School of Economic Sciences
g
School of Economic Sciences
U.S. Wheat (Area Planted 1998)
Hard Red Winter / Hard Red Spring / Soft Red Winter / White / Durum 1 dot = 5,000 acres at the county level (counties with less than 5,000 acres do not appear) Source: Economic Research Service, USDA
2007
From 2006/2007 to 2007/2008
School of Economic Sciences
3
From 2006/2007 to 2007/2008
School of Economic Sciences
From 2006/2007 to 2007/2008
School of Economic Sciences
From 2006/2007 to 2007/2008
U.S. Wheat Prices: 1973-1999 8
7
HRW HRS SRW SWW DUR
6
($/bu)
5
4
3
2
1
19 73 19 74 19 75 19 76 19 77 19 78 19 79 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99
0
School of Economic Sciences
School of Economic Sciences
4
USDA- Daily Grain Review
School of Economic Sciences
USDA- Daily Grain Review
School of Economic Sciences
USDA- Daily Grain Review
Flour & Food Prices
School of Economic Sciences
School of Economic Sciences
5
Changes in Food Price Indexes, 2004-2008
20
18
Cost of wheat to produce flour Total wholesale price Total wholesale price less cost of wheat
6 Food at home Cereals and bakery products
16
5 14
4 Percentage Change
($/cwt)
12
10
8
6
3
2
4
1 2
0 19 85 /8 6 19 86 /8 7 19 87 /8 8 19 88 /8 9 19 89 /9 0 19 90 /9 1 19 91 /9 2 19 92 /9 3 19 93 /9 4 19 94 /9 5 19 95 /9 6 19 96 /9 7 19 97 /9 8 19 98 /9 9 19 99 /0 0 20 00 /0 1 20 01 /0 2 20 02 /0 3 20 03 /0 4 20 04 /0 5 20 05 /0 6 20 06 /0 7
0
School of Economic Sciences
Thank You!
2004
2005
2006
2007
2008
School of Economic Sciences
Sources
• USDA Wheat Outlook • USDA- Daily Grain Review • USDA-ERS Briefing Room • International Grain Council
School of Economic Sciences
School of Economic Sciences
6
