October 23, 2017
Trends in Global Wheat Production
By David Widmar
A few weeks ago, we reviewed trends in U.S. wheat acreage. The 35-year downward trend has become more evident in recent years as U.S. wheat acreage dropped 9 million acres (-16%) since 2015. The persistence of this wheat acreage trend prompted us to wonder about overall trends in global wheat production.
This post follows the process and methods used in our earlier posts, which have considered corn, soybeans, and beef production. More specifically, data from the USDA’s Foreign Agricultural Service Production, Supply, and Distribution database from 1990 to 2016 were summarized.
Global Wheat Production
Table 1 highlights the trends in global wheat production for the top-ten counties, as of 2016. The European Union (E.U.) led global wheat production in 2016 accounting for 19% of global production. China and India, accounting for 17% and 12% of global production respectively, were among the top-three wheat producing nations. The United States, the largest producer of corn, soybeans, and beef, was the fourth largest wheat producer in 2016, accounting for 8% of production.
Global wheat production increased 28% from 1990 to 2016. On an annual basis, wheat production increased at an average rate of 1.0% annually. For reference, this rate is slower than production growth in corn and soybeans, at 3,0% and 4.8% annually, but faster than expansion in beef production.
Wheat production expanded the fastest in India (2.2% annually), Pakistan (2.2% annually), and Australia (3.1% annually). On the other hand, production contracted in the U.S. (-0.6% annually) and Ukraine (-0.5% annually).
Thinking about the top producing countries, the concentration of wheat production is less than that observed in corn and soybeans. In 2016, the top-three wheat producers accounted for 48% of global production while the top-ten accounted for 84% of production. The top-three producing countries accounted for 66% of corn production and 81% of soybean production. This dispersion of wheat production limits the impacts of a single-country weather event.
Change in Acres
Changes in production derive from two sources – changes in acres and yields. Shown in table 2 are the trends in global wheat acreage since 1990.
Accounting for 14% of acres, India harvested the most wheat acres in 2016. The gap between India’s acreage and total production will be a trend to monitor over time as efforts to increase yields will likely have significant impacts on global production.
Overall, global wheat acreage decreased 4% since 1990. By country, Australia and India increased acreage the most while Canada (-1.8% annually) and the U.S. (-1.7% annually) have harvested fewer acres over time.
Yield vs. Acres – Which has Driven Production More?
With global wheat production trending higher (Table 1) as global acres settled lower (Table 2), it is not surprising that higher yields have been important to increased production.
Consistent with earlier posts, the impact of yields and acres were calculated by 1) holding area constant for a given year and calculating the yield impact, and then 2) holding yield constant and calculating the area impact. The combined impact is roughly equal to the total change in soybean production. Again, more sophisticated and precise methods for measuring these impacts could be used, but we will stick with this approach.
In figure 1 are the changes in global wheat production from yield and area. More than 121% of the increased wheat production was the result of higher yields. The decrease in global wheat acres had an impact on production equal to 21% production gains since 1990.
In Figure 2 are the wheat production gains from yield and acres in India. While India had one of the largest production increases since 1990, 61% of its production gains from higher yields and 39% from increased acreage.
In figure 3 the trends are shown for the U.S. What makes the U.S. different is that overall wheat production has declined since 1990 – down a total of 37% (Table 1). This decline was driven by fewer acres as 125% of the total decline was attributable to fewer acres. Higher yields offset production declines. For every 100 bushels of production decline since 1990, 125 bushels of the decrease came from fewer acres while an offsetting 25-bushel increase occurred from higher yields.
Wrapping it Up
Global wheat production has increased in recent years, but at a rate much slower than observed with corn and soybeans. Furthermore, global production of wheat is more dispersed across countries and less concentrated than corn and soybean production.
Globally, wheat acres have decreased in recent decades; an extension of the trend here in the U.S. This has resulted in overall global production increases driven solely by higher yields offsetting fewer acres.
In India, significant increases in production were the result of increases in both acres and yields. In the U.S., where production has decreased since the 1990s, the production declines from reduced acres have been greater than gains from yield increases.
Since the 1990s, U.S. wheat production has declined as global production has increased; this has resulted in the U.S. being a smaller player in global wheat production. While the U.S. accounted for one-third of soybean production and 37% of corn production in 2016, it only accounted for 8% of wheat production. This is a decline from accounting for 12% of wheat production in the early 1990s.