The bad news with this year’s durum crop is that harvest is delayed and there are a number of quality issues. The good news is that prices have risen as a result.
“With harvest underway and the corresponding quality concerns, we have seen cash bids come up,” said Erica Olson, marketing specialist for the North Dakota Wheat Commission, adding that at a lot of locations prices are between $5.50 and $6. “However, that’s for top milling quality durum and most producers don’t have that,” she added.
“When you start doing the discounts for any quality issues – and this year there are plenty – that price drops fairly quickly,” she continued. “In fact, a lot of elevators are just posting bids of around $2.50 for durum with low color or low falling number value, and again, there’s a lot of that out there.”
Olson pointed out that crop insurance plays a part as there’s a quality provision, and depending on the producer’s policy, that may help soften the blow a little bit, but not entirely.
After a tough planting season producers are now having to deal with a tough harvest season as frequent and sometimes very heavy rains have caused many problems, notably slowing harvest progress and causing quality concerns.
“There is some of the crop that came off under good conditions with good quality, but most of September was very wet and that severely delayed durum harvest,” Olson said.
The Sept. 30 crop progress report indicated that about 78 percent of the durum crop in North Dakota had been harvested, however many feel it could be even less than that.
In Montana, only 55 percent of the drum had been harvested as of the end of September.
“Intermittent rain delays during harvest are normal, but since Labor Day, the rains have been relentless,” she said. “For example, some parts of northwest North Dakota have received six times the normal amount of precipitation, so they’re furthest behind and some of the crop may not be harvested. Some of the fields are just too wet, and obviously, the quality on some of that is not going to be good.”
The quality lab at North Dakota State University is analyzing this year’s durum crop for quality, but thus far, actually only have half of the expected samples in.
“What we’re seeing so far is okay protein, good test weights, some lower falling number values – the average is still at around 370, but vitreous kernel content is all the way down to 60 percent,” Olson said. “The crop is grading a No. 1 hard amber durum so far, but again, that’s from only half the samples.”
Compounding the issue, Olson noted, is the Canadian situation because they have been having the same harvest struggles as in the U.S. For example, in Saskatchewan, durum harvest is only half done. Production in the U.S. and Canada combined is estimated to be down 23 percent this year, and with the quality issues, that’s obviously going to tighten supplies of higher quality durum.
“I think the big issue will be figuring how much is milling quality and how much is feed grade,” she said. “Some estimates out there are that 30-40 percent or more could be of feed quality. That’s really tough to say at this point.”
On Sept. 30, USDA released its small grain summary which included updated planted and production numbers. USDA reduced planted acres for durum by 60,000, which puts planted acreage in the U.S. at 1.3 million. That’s down from 2 million acres a year ago. In the U.S., desert durum region planted acres dropped by 30,000 from the previous report. USDA also reduced acreage in Montana by 50,000, but increased acreage in North Dakota by 20,000.
“Those are not huge amounts, but we had small acreage to begin with, so they do add up,” Olson said.
“A bit surprising is that USDA did increase the yield from the previous report,” she continued, adding that the U.S. yield estimate went from 42.3 bushels per acre to 44.8. North Dakota’s yield was kept at 42 bushels per acre, but USDA made a huge change in Montana going from 33 bushels per acre to 42.
“I’m a little unsure about that number. Some of the early crop did have good yields, but that’s a pretty big jump,” she said.
Production ended up about the same at 57 million bushels in the USDA report.
“The big question is going to be the harvested acreage number. Just because of the delays and some of the quality issues, we may not harvest all of the crop,” she said. “That would put that production number lower as well.”
The other report released by USDA was the Sept. 1 stocks numbers report. For durum, there was not much change from a year ago. Stocks in the U.S. are at 93 MB, up only 3 MB from a year ago, which is quite similar to 2018.
“We do have some stocks on hand to help mitigate some of the lower quality crop this year,” Olson said. “But going forward, obviously quality is going to have the biggest impact on prices and just figuring how the U.S. and Canadian crops will shape out quality-wise.”
On the demand side, sales continue to outperform last year’s sales pace by quite a bit. So far durum sales are at 18.5 MB, which is almost double last year’s total at this time.
“So we are still seeing good demand, particularly from Italy, and that’s been the main driver,” she concluded.