The Southern region of the United States is more associated with cotton production than wheat. Yet, from 2005 to 2022, a time of high grain prices associated with increased production of biofuels, wheat planted acres in the South, on average, have exceeded that of cotton (Figure 1). Wheat acres and production in the region are dominated by Oklahoma and Texas (Figure 2); Texas also leads cotton planted acres, by far, followed by Georgia (Figure 3). In 2022, the South will account for about 20 percent of total U.S. wheat production (USDA, NASS, Crop Production, August 2022).
The year with the most wheat acres in the South in this ‘biofuel era’ is 2013 at 17.3 million. That year saw the highest plantings in seven of the fourteen states in the region for this period of time: Alabama, Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia. Oklahoma and Texas are not on this list. Acreage increases across multiple states can add up to make a significant difference in total wheat area in the region.
Wheat is a crop with relatively high yield potential across the South. This becomes especially important when drought impacts major producing states. With drought lowering harvested acres and yields, Oklahoma and Texas are projected to produce about 109 million bushels of wheat in 2022 from 4 million harvested acres and 9.8 million acres planted (Figure 4). The states of Kentucky, Tennessee, North Carolina, Maryland, and Virginia combined to plant about 2 million acres of wheat for 2022 and will match the production total in Oklahoma and Texas. Kentucky’s production alone is 90 percent of that of Texas.
Years with high wheat acres in the South tend to be associated with years of relatively low cotton acres (Figure 5). Crop acres are positively correlated with the price received in the previous season (Figures 6 and 7). Wheat acres are negatively correlated to higher cotton prices (Figure 8). Additionally, wheat acres tend to go up following years of high abandonment of cotton in Texas and Oklahoma (abandonment rates in other Southeastern states are minimal) (Figure 9). In 2022, Texas and Oklahoma farmers planted 8.6 million acres of cotton, only to harvest 2.8 million (a harvested-to-planted percentage of 33 percent).
Looking ahead to 2023, what are wheat acreage prospects in the South given:
- record high wheat prices[*]
- record high cotton prices*, and
- high cotton abandonment in Texas and Oklahoma?
A regression model composed of these independent variables and recent trends in wheat planted acres shows that wheat planted area:
- is trending lower,
- goes up when the price of wheat the previous year goes up,
- goes down when the price of cotton the previous year goes up,
- goes up when percent of cotton harvested in Texas and Oklahoma the previous year goes down.
Based on these variables, the model estimate of wheat acres in the South for 2023 is 14.4 million, up from 12.7 million acres planted in 2022 (Figure 10). Many factors will shape farmers’ planting decisions in 2023, among them persistently high input costs, lingering drought, returns from other crops such as corn and soybeans, and price prospects given global economic and geopolitical turmoil and uncertainty. This model suggests that significant factors are in place for an increase in wheat acres in 2023, maintaining wheat as an important crop enterprise in the South.
Figure 1. Southern region planted wheat and cotton acres, 2005-2022
Figure 2. High, low, and average winter wheat acres in the South, 2005-2022
Figure 3. High low, and average cotton acres in the South, 2005-2022
Figure 4. Southern region wheat production 2022, million bushels
Figure 5. Wheat acres and cotton acres in the South, 2005-2022
Figure 6. Wheat acres in the South and the previous year’s wheat price, 2006-2022
Figure 7. Cotton acres in the South and the previous year’s cotton price, 2006-2022
Figure 8. Wheat acres in the South and the previous year’s cotton price, 2006-2022
Figure 9. Wheat acres in the South and percent cotton acres harvested the previous year in Texas and Oklahoma, 2006-2022
Figure 10. Southern region wheat acreage model
[*] U.S. Season Average Farm Price, World Agricultural Supply and Demand Estimates, September 2022