Sustained drought conditions are expected to reduce wheat production in Australia, Canada, and the United States this year, some of the major wheat producing and exporting countries of the world, allowing for other regions to export a greater share of the total world wheat market, according to reports released by the United Nations Food and Agriculture Organization and the U.S. Department of Agriculture in September and October.

North America

Unusually dry conditions, as shown by the WASP index below, persisted for several months in the wheat growing areas of Canada, contributing to the large estimated decline in wheat production this year.  According to statistics released by the USDA Foreign Agricultural Service in September*, this year's production is forecast to be 15.4 million tons, the worst in 28 years, and down from 20.6 million tons last year.  Canadian wheat exports are also expected to fall to 9.5 million tons, down from nearly 16.8 million tons last year.  Production in the United States is estimated at about 45.9 million tons, down from about 53.3 million tons last year, which would make this the smallest wheat harvest for the United States since 1972.  However, wheat exports from the United States are expected to be around 26.0 million tons, nearly the same as last year.
 

Map courtesy of the Joint Agricultural Weather Facility (NOAA/USDA)

6-Month WASP Index

WASP is an acronym for the Weighted Anomaly Standardized Precipitation index, which is based upon monthly rainfall departures from the long-term (30-year) average.  To compare regions with varying amounts of climatological precipitation, monthly rainfall departures have been divided by their standard deviation, thus standardized.  To avoid an exaggerated influence of standardized precipitation values observed during months which are usually dry, they are weighted by the fraction of annual rainfall which usually occurs during a given month.

Australia

Australian wheat production is estimated to reach only 13.5 to 15 million tons this year, down from 24 million tons last year, due in large part to the unrelenting drought during the course of the growing season*.  The primary wheat-growing regions of Australia have been especially hard-hit by drought conditions in recent months (see the WASP Index map below).
 
 

Map courtesy of the Joint Agricultural Weather Facility (NOAA/USDA)

6-Month WASP Index

WASP is an acronym for the Weighted Anomaly Standardized Precipitation index, which is based upon monthly rainfall departures from the long-term (30-year) average.  To compare regions with varying amounts of climatological precipitation, monthly rainfall departures have been divided by their standard deviation, thus standardized.  To avoid an exaggerated influence of standardized precipitation values observed during months which are usually dry, they are weighted by the fraction of annual rainfall which usually occurs during a given month.

Argentina

While rainfall at the end of August was reportedly favorable for the planting of the wheat crop in the primary wheat growing province, Buenos Aires, the total acreage planted in Argentina declined somewhat due to difficult economic conditions (FAO).  Wheat exports from Argentina for 2002/2003 are forecast to reach only 9.0 million tons, down from nearly 11.5 million tons in 2001/2002*.
 
 

Map courtesy of the Joint Agricultural Weather Facility (NOAA/USDA)

August, 2002 Precipitation Anomaly

Summary

According to USDA estimates*, about 99.7 million tons of wheat will be traded world-wide in the 2002/2003 market year, down from about 107.4 million tons the previous year.  While exports from the U.S., Canada, Argentina, Australia, and the EU, the five largest exporters, will be down nearly 25% from last year, the harvest in Russia, Ukraine, and Kazakstan is expected to be the largest since the breakup of the U.S.S.R.  Exports from these three countries are expected to reach 15.5 million tons, allowing them to grab a larger share of this year's wheat market.
 

*Grain:  World Markets and Trade, United States Department of Agriculture, Foreign Agricultural Service, Circular Series FG 09-02, September 2002.