U.S. Government Wheat Stocks
By Benjamin Gisin
Quietly, the last of the U.S. government’s wheat reserves, held
in the Bill Emerson Humanitarian Trust, were sold in late May onto
the domestic market for cash. The cash was put in a trust for food
aid. With no other government wheat holdings, U.S. government wheat
stocks are now totally exhausted.
The following recent statements by Rebecca Bratter, director of
policy for U.S. Wheat Associates, provides insights:
“While the U.S. wheat industry strongly supports the
administration’s goal of maintaining current food aid programs to
prevent rampant hunger worldwide, there is concern regarding the
impact of selling reserve wheat on the domestic market and over the
lack of commitment from the administration to replenish the Bill
Emerson Humanitarian Trust.
“U.S. Wheat Associates has shared these concerns with high
officials at USDA and on the President’s staff and has asked about
the Administration’s intent regarding replenishment of the Bill
Emerson Humanitarian Trust. Staff from the office of the President’s
Special Agricultural Assistant noted that while there is no
commitment at this time, the administration intends to replenish the
Trust once the supply and price scenario stabilizes.”
(Note: U.S. Wheat Associates works in 90 countries promoting U.S.
The Bill Emerson Humanitarian Trust was established in 1980 by an
act of Congress and is authorized to hold up to 4 million metric
tons of wheat, corn, sorghum and rice, as a reserve for global food
crises. The wheat is purchased and managed by the Commodity Credit
Corporation and included in the total amount of wheat owned and held
by the U.S. government. Holdings by the BEH Trust for corn, sorghum
and rice are also zero.
For the decade of the ‘80s, government wheat holdings (including
those in the BEH Trust) averaged 358 million bushels. For the decade
of the ‘90s, government wheat holdings averaged 133 million bushels.
Since 2000, government wheat holdings dropped steadily until
recently when the last of the government-owned wheat was sold.
With no formal plan for wheat stocks by the U.S. government,
wheat stocks have defaulted to the arena of the private free-market
sector. Unfortunately, the private sector has no plans for any kind
of minimum wheat stocks that would protect the American public from
a price and/or availability standpoint.
Private wheat stocks are divided into two major categories —
on-farm wheat stocks owned by farmers, and off-farm wheat stocks
owned by warehouses and grain companies. These two together held
305.6 million bushels of wheat as of June 1 (or roughly 1 bushel per
person living in the United States) the lowest level in 60 years.
Of these stocks, on-farm wheat stocks are at 25.6 million
bushels, the lowest level of on-farm wheat stocks since the USDA
started keeping tabs back in 1934. So as you are driving in rural
America before wheat harvest, the farmer’s bins have never been so
The USDA, projects America to have a bumper wheat crop in 2008,
producing 2.43 billion bushels and consuming and exporting 2.30
billion bushels. This leaves a meager 133 million bushels (5.5
percent of production) as a margin for error. Globally, the USDA
projects wheat production to be 24.36 billion bushels, consumption
to be 23.74 billion bushels for a relatively smaller margin of 622
million bushels or 2.6% of production.
The recent wheat crises in America was sparked by the nation
exporting more wheat than it produced. This means the true 2008
wheat margin for Americans is really the global margin of 2.6%. Any
decline from global projections could precipitate greater wheat
exports from America and further draw down already low domestic and
global wheat stocks.
Food security is emerging as a global focal point. With the U.S.
government and the private sector lacking visions for stocks, food
security is poised to grow as a grass-roots issue around the nation.
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Benjamin Gisin has visited hundreds of farms in his
agricultural banking, farm consulting and publishing careers. Today
he writes and lectures extensively on the promise of local food
systems, agricultural sustainability and food security.