WASHINGTON, DC, US — Already the world’s largest agricultural producer and second largest trader, the United States is anticipating record-high corn and soybean crops in the coming market year. 

However, it is grappling with dropping wheat production that is opening the market to cheaper imports from Europe and is in discussions with Mexico over a presidential decree banning genetically modified corn, which US officials said could harm its significant exports to the nation. 

Agriculture, food and related industries are a significant part of the US economy, contributing roughly $1.264 trillion in gross domestic product in 2021. 

Exports and imports have grown significantly in the last 25 years as emerging economies grew and foreign and domestic policies expanded US access to foreign markets, the US Department of Agriculture (USDA) said. Exports grew from $62.8 billion in 1997 to $196 billion in 2022. 

But a May report from the USDA shows agricultural exports dropping to an estimated $181 billion. 

Crop production 

The United States is expecting a record-high corn crop of 387.8 million tonnes, up 11% from 2022 and a soybean crop of 122.7 million tonnes, up 5% from 2023, according to the USDA’s May 12 World Agricultural Supply and Demand Estimates. 

If realized, 2023 corn production would pass the prior record of 384.8 million tonnes set in 2016 and would be the third time production has exceeded 381 million tonnes since 2016. Soybean production, if realized, would surpass the previous record of 121.5 million tonnes set in 2021. 

The United States will be the top corn producing nation with 32% of global production, according to the USDA. Total US feed grain production is estimated at 402 million tonnes, up from 350 million tonnes in 2022-23. 

Total US corn use for 2023-24 is estimated at 367.9 million tonnes with increased use for feed and residual, ethanol and exports. Feed and residual use is projected at 143.5 million tonnes, up 9.52 million tonnes from 2022-23, while food, seed and industrial use is estimated at 171.1 million tonnes. 

The United States is the world’s second-leading soybean producer and exporter. Soybeans comprise about 90% of US oilseed production, while other oilseeds such as peanuts, sunflower and canola make up the remainder. 

Crush volumes are expected to reach a record 62.6 million tonnes on growth in soybean meal demand and soybean oil use as a primary feedstock for biofuels production, the USDA said. 

Soybean oil production is forecast at 27.15 billion pounds, an increase of 950 million pounds from 2022-23. Meal production is estimated at 49.35 million tonnes.

Canola production is getting a boost in the 2023-24 crop year, with growing domestic demand for canola oil for renewable diesel production, the USDA said. Production is estimated to surpass 4 billion pounds, a 200-million-pound increase from 2022-23. Use for biofuels in 2023-24 is estimated at 2.4 billion pounds. 

Production of wheat is expected to reach 45.2 million tonnes, up 1% from last year, but 7% down from the five-year average. 

The United States has experienced a general downward trend in wheat plantings over the last two decades due to lower relative returns, changes in government programs that give farmers more flexibility and increased competition in global markets, the USDA said. 

The US share of the global wheat market has declined from an average of 25% from 2001-06 to a projected 10% in the 2022-23 marketing year.

US hard red winter (HRW) production is forecast at 14 million tonnes, down 3% from 2022-23 and the lowest since 1957-58, the USDA said. Production was affected significantly by persistent drought that resulted in lower yields and higher abandonment. Soft red winter production is estimated at 11 million tonnes, an increase of 21% from the previous year while white winter production is projected down 11% to 5.7 million tonnes.

Durum and other spring wheat is estimated at a collective 14.4 million tonnes, down 3% from the previous year. 

Trade

With HRW production severely affected by drought, prices are high, making it less competitive with other countries such as Russia and France, the USDA said. 

Exports in 2022-23 are estimated at 21.1 million tonnes, the lowest since 1971-72. As of May 4, wheat export commitments were at 18.9 million tonnes, down 3% from the same time last year. Total commitments at this point represent 90% of the projected full marketing year total, which is slightly ahead of the percentage at the same time last year but below other years in recent history. 

Total US wheat imports are estimated at 3.4 million tonnes for 2022-23, increasing to 3.67 million in 2023-24, a six-year high. At least one US flour mill has reportedly turned to imports from the EU as prices have made it cheaper to bring wheat across the Atlantic instead of the US plains, raising concerns and frustrations for US wheat stakeholders.  

A perfect storm of events — US drought, a significant increase in exportable volume from Eastern Europe due to Russia’s invasion of Ukraine in 2022, increasing US rail tariffs and fuel costs — have made some European wheat more than $100 cheaper per tonne than US HRW Gulf FOB export price.

US corn exports for 2022-23 are estimated at 45.1 million tonnes but are expected to rebound in 2023-24 to 53.3 million tonnes, the USDA said. They are projected to represent 28% of the global trade share, up from 26% in 2022-23. 

US officials are concerned about the impacts of a Mexican presidential decree that would prohibit genetically modified products for certain uses by 2024. The uses would include tortillas and dough, which is mainly made from white corn. Mexico imports about 17 million tonnes of corn from the United States, most of which is yellow corn that is used in feed production. 

The United States has said Mexico’s policies are not based on science and are in violation of the United States-Mexico-Canada Agreement (USMCA). The United States has taken the next step in trying to resolve the dispute by requesting dispute settlement consultations under the USMCA.

US soybean exports are forecast to decline to 53.9 million tonnes in 2023-24 on higher competition from South America. 

Flour milling

The United States has 148 flour mills with a total daily capacity of 1,531,714 cwts (69,737 tonnes), according to Sosland Publishing’s 2023 Grain & Milling Annual. Seventy of the mills have a capacity of 10,000 cwts (453 tonnes) or more while 18 have a capacity under 1,000 cwts (45.35 tonnes).

The largest mill in the United States as of publication was North Dakota Mill & Elevator Association in Grand Forks, North Dakota, US, with a capacity of 54,500 cwts (2,471 tonnes). The largest milling company is Ardent Mills with a total capacity of 471,560 cwts (21,386 tonnes) at 32 wheat flour mills.

Several flour mills have expanded or announced plans for expansion in the last year. Bartlett Milling added a third milling line to its mill in Wilson’s Mill, North Carolina, US, bringing total capacity to 20,000 cwts (907 tonnes). 

Miller Milling announced on March 29 that it is planning another major expansion, following a major project four years ago, that will increase daily capacity at its Saginaw, Texas, US, mill by 10,000 cwts (453 tonnes). The increase will make the Saginaw flour mill the third largest in the United States at 34,000 cwts (1,542 tonnes) of daily flour production capacity.

Star of the West Milling Co. plans to build a new flour mill at its Ligonier, Indiana, US, flour mill that will increase its daily flour milling capacity by 45%. The mill currently has a daily capacity of 8,000 cwts (363 tonnes) and plans to add 15,000 cwts (680 tonnes) of additional soft wheat flour and 5,000 cwts (227 tonnes) of pathogen mitigated flour daily production capacity.