The USDA's Wheat outlook showed that world wheat production in 2012/13 is projected to fall to 677.6 million tons, down 17.1 million, or 2.5 percent from last year’s record of 694.6 million tons. Foreign wheat production is projected to decrease even more, down 23.8 million tons, or 3.7 percent compared to 2011/12.

If realized, this year’s wheat output would be the fourth largest in history, behind the record harvests of 2008, 2009, and 2011. Though total world grain area is projected to increase, wheat area declines slightly, by 0.2 percent, as wheat has become comparatively less attractive to producers in a number of countries (Argentina, Australia), and as winterkill and dryness take its toll in a number of others (EU-27, Ukraine).

The declines are partly offset by the weatherinduced recovery in planted area in Canada and Russia. Foreign yields are projected to be marginally lower (by 2.9 percent) than last year’s record, though at the high levels of 2008 and 2009. World wheat yields are projected to decline about 2.2 percent, though yields will still be at the second-highest level in history.

Wheat production in the EU-27, which is by far the largest world wheat producer, is projected to decline 5.4 million tons to a 5-year low of 132.0 million tons in 2012/13. Wheat yields are projected at a level of the last 5-year average, with lower yields in Spain, Poland, Hungary, Romania and higher yields in France and the United Kingdom. The winter wheat crop in the EU experienced adverse fall and winter weather conditions that are projected to reduce wheat harvested area, and have an impact on yields. Fall dryness persisted in the eastern part of the EU- 27—Romania, Hungary, Slovakia, and southern Poland.

As winter unfolded, dryness subsided in the east while extremely dry conditions started to develop in Spain and in Italy’s Po valley, affecting water reserves for irrigation. Winter had normal average temperatures, though with severe cold snaps at the end of January and beginning of February. The frosts are likely to have affected some snow-free areas in northeastern France, Germany, Hungary, Slovakia, and areas with patchy snow cover in western Poland. However, primary EU wheat areas were spared the extreme cold or had appropriate snow cover.

In late March, wet weather returned to major countries and wheat areas ending prolonged drought, dramatically improving crop conditions in France and Italy, and partly alleviating crop damage in northern Spain, while dryness still persisted in southern Spain where much of European durum wheat is grown. Despite improved precipitation, Germany, Poland, Czech, Slovakia, and Hungary are still drier than normal, with the Vegetation Health Index (VHI) confirming winterkill of crops.

China is expected to be the second largest wheat producer in 2012/13, reaching a record 120.0 million tons, an increase of 2.1 million tons from the previous year. Area planted is reported up slightly. Planting conditions for winter wheat (the major part of China’s wheat crop) were quite favorable, and current crop-growing conditions are reported to be generally good in the major wheat areas in north China.

Wheat yields are projected slightly up, as in general wheat yields in China are pretty stable, rising slowly but steadily with improved irrigation since 2000. In the former Soviet Union (FSU-12), wheat production is forecast at 97.8 million tons in 2012/13, down 16.7 million from the previous year, with lower expected yields and slightly lower area (down less than 1 million hectares). The main decrease in wheat area and production is for Ukraine, where area is projected down 1.4 million hectares and production is down 9.1 million tons on the year to 13.0 million tons, the lowest since the disastrous harvest of 2003/04.

Area that was planted for winter wheat in Ukraine in the fall was almost the same as last year, and according to some estimates, even higher. However, dry conditions in the fall, with about only 10 percent of normal precipitation in some areas, and poor establishment of winter wheat (winter wheat occupies on average 95 percent of wheat area) is expected to result in about 1.5 million hectare losses in wheat area.

Precipitation improved in December–January, but spring has been increasingly dry in southern and eastern Ukraine, which threatens to impact wheat yields even further. In European Russia, winter wheat planting is expected to be up this year, reflecting abundant moisture during the planting season.

The Volga valley and part of the Central District are the main beneficiaries, after planting area was reduced because of soil moisture deficiency a year ago in a number of drought-affected regions. Average winterkill is expected this year, at around 6 percent of planted area. Some damage is anticipated in the South District, where VHI indicates areas that could be interpreted as winterkill, but conditions improve substantially further east. Spring wheat planting has just started in European Russia.

In Siberia, the country’s mainspringwheat producing area, planting starts in mid-May.

Wheat yield for Russia is forecast at a level slightly higher than the 5-year average, but lower than last year, and 2012/13 production is projected almost at last year’s level at 56.0 million tons. In Kazakhstan, the third main FSU wheat producer, area for 2012/13 is projected slightly down, reflecting a government program to diversify crop production away from wheat. While the spring wheat crops are just being planted, Kazakhstan is expected to have an average yield, resulting in a substantial projected decrease in wheat production, down 7.7 million tons to 15.0 million, following last year historical record yields.

India in 2012/13 is projected to produce another record wheat crop, up 4.1 million tons to 91 million, or almost 5 percent from a year earlier. Growing conditions and irrigation supplies have been good, and a record yield is expected. The wheat harvest is almost complete, and official reports are in line with the projection.

In Pakistan, wheat area has been declining for several years, and is projected down 2.7 percent on the year, as wheat planting in November was delayed and some area was left fallow for future cotton planting. Wheat yields are also projected down, slightly below trend, reflecting lower water availability for irrigation and the higher cost of inputs. Good precipitation in both autumn and spring of 2012/13 in the major wheat-producing rain-fed areas in the northern part of Afghanistan allowed farmers to plant above-average areas for winter wheat, and is expected to support high yields, wheat production is forecast up 1.3 million tons to 3.8 million.

In the Middle East, wheat production is projected down 2.4 percent to 39.3 million tons, with higher area planted in Turkey, Iran, Syria, and Jordan more than offset by a reduction in Iraq. In Iran, growing conditions have been mostly favorable, and with good fall rainfall and decent snow coverage, another large wheat crop is expected.

In the rest of the region, growing conditions were mixed, and most areas received good rains at some time. In Turkey, however, unusually low temperatures and slowly melting snow cover delayed crop development. While wheat plantings along the Turkish Mediterranean coast are doing very well, only 50 percent of plants emerged in Anatolia Plateau in the central-western part of the country where winterkill is expected to be fairly high.

Wheat production is projected below the bumper crop last year and near the 5-year average at 17.5 million tons. In Iraq, wheat area is projected down more than 20 percent compared to a year ago. Dryness persisted in the northern part of the country, where the wheat crop is purely rainfed, and planted area is strongly correlated with precipitation. At the same time, the southern and central areas of the country are doing well, with higher projected area partly offsetting a drop in the north. With trend yields, wheat production for 2012/13 in Iraq is projected down 18 percent.

In Syria, beneficial rainfall in April-May, after March dryness, is expected to enhance area planted for wheat, with production up 9 percent on the year. Rains were generally favorable across North Africa, with above-normal precipitation in the fall. However, starting in December, dryness began to develop in Morocco, which received only 20 percent of normal rainfall in the three winter months, and even good rain in March missed the main growing areas as it fell in the mountains. Rains started in earnest in April, quickly countering existing dryness, but perhaps too late to alleviate damage.

Consequently, the wheat yield is projected to be down about 45 percent on the year. Morocco’s wheat production is expected to drop by 2.6 million tons to 3.2 million. Algeria and Tunisia fared quite well this winter, and wheat production is projected higher in both countries by 0.7 and 0.2 million tons (or by 25 and 12 percent), respectively. Total 2012/13 wheat output in North Africa is down 1.7 million tons. Surveys of Canadian planting intentions indicate about a 10-percent increase in total wheat sowings, a rebound from the last year’s planting. The wheat area upswing is a response to high wheat price expectations and to good weather prospects for spring grains with expected early planting as drier and warmer weather motivates producers to return land to production after last year’s floods.

The intended planting of Canadian western red spring wheat is up 9 percent, planned area for durum wheat is up 27 percent (mainly in Saskatchewan, but also in Alberta), and winter wheat seeding is up almost 25 percent in eastern Canada (mainly in Ontario), due to improved planting conditions last fall. Assuming a 10-year trend yield, wheat production in 2012/13 is forecast up 7 percent to 27.0 million tons.

South America is expected to produce 22 million tons of wheat, down 12 percent from the previous year. In Argentina and Brazil, wheat planting has just started. In Argentina, wheat area is projected sharply down 1.0 million hectares to 4.0 million, as there are early strong indications that those farmers who have alternatives to wheat intend to decrease wheat planting.

The government’s restrictive export policies are turning farmers away from wheat in favor of barley (also a winter grain in Argentina), and among summer crops, away from corn in favor of soybeans, cotton, and sunflowers. In Brazil, wheat area slips slightly, with lower area in Parana mostly being offset by an increase in Rio Grande de Sul. With expected trend yields, wheat production in Argentina and Brazil is projected down 2.5 and 0.8 million tons (17 and 14 percent) to 12.0 and 5.0 million, respectively.

In Australia, early indications suggest a decline in wheat area by 0.6 million hectares to 13.5 million. Production is projected to decline from last year’s all-time record by 3.5 million tons to 26.0 million.

There are signs that local producers reacted to lower domestic prices by planning to shift part of their wheat area to canola, which is priced very favorably. Winter wheat planting is about to start in May, and overall moisture and weather conditions look favorable.