- Over 50% of U.S. wheat is exported.
- Asia has remained the largest buyer of U.S. wheat, but significant changes have occurred in shipments to other destinations over the past 40 years.
- South America has replaced Africa and Europe as the second largest importer of U.S. wheat.
- 40% of U.S. wheat remained in the western hemisphere in 2016, which is more than double the amount in the 1990s and early 2000s.
A few weeks ago, I noticed a news release from the U.S. Wheat Associates—an organization that works to develop trade relationships and opportunities for U.S. wheat—that they will be closing their office in Cairo, Egypt. Quite honestly, I was a bit perplexed: Isn’t Egypt a major importer of U.S. wheat? Isn’t Africa a major consumer of U.S. wheat and should, therefore, be a focus of trade development? Why is a potentially economically important office being closed?
Or is it economically important?
To try to explore this question a bit further, I put together approximately forty years of U.S. wheat export data from the USDA Foreign Agricultural Service. Using the data, I looked at the top 25 importing nations (accounting for 88-93% of total U.S. wheat imports) across four decades to determine any trends and dynamics that may have occurred in international trade destinations for U.S. wheat. Below is the table summarizing these data (countries ranked by the percentage of U.S. wheat imported), both by country and by continent. I’ve color-coded the table by continent, where yellow represents Asia, red is Africa, blue is Europe, gray is North America, and green is South American.
Notes: Data are from the USDA Foreign Agricultural Service. Export amounts and ranks determined for 1980 are the average of 1979, 1980, and 1981; for 1990, the average of 1989-1991, and for 2000, the average of 1999-2001.
The data show that countries in Asia have remained the top importers of U.S. wheat over the past forty years, importing between 40 and 50% of all U.S. wheat shipments. However, the mix of those countries has changed. While China imported nearly one-sixth of all U.S. wheat exports in the 1980s and 1990s, it is now a relatively minor player, due primarily to significant increases in domestic production and stronger trade ties with Russia and other former Soviet republics. Similarly, Russia—the world’s top wheat exporter as of 2016/17—has disappeared from the list of the top 25 importing countries of U.S. wheat.
We see similar declining trends with other European countries as well as African nations. In the 1980s, European countries accounted for approximately 20% of U.S. wheat exports, and the same proportion was exported to Africa in the early 2000s. By 2016, however, Europe and Africa combined account for under 13% of total U.S. wheat imports.
Who has replaced European and African countries as top wheat importers? Primarily countries in North America (Mexico) and South America. Combined, these countries accounted for 30% of total U.S. wheat exports in 2016. One likely reason for this is the proliferation of free trade agreements between the United States and South American nations. Less restricted trade has resulted in either the appearance of new South American countries in the top 25 importer list (Guatemala, Peru, Chile, Honduras, and Ecuador) or an increase in U.S. wheat demand (Colombia and Dominican Republic) by South America countries who have entered into free trade agreements with the United States since 2000. (A full list of free trade agreements affecting the U.S. agricultural sector is on the USDA Foreign Agricultural Service website). And, of course, following the implementation of the North American Free Trade Agreement (NAFTA), Mexico has become a major importer of U.S. wheat, rising to the top spot in 2016.
What about Egypt? After being the top U.S. wheat importer in 2000, it has fallen out of the top 25 list in 2016. So perhaps it makes perfect economic sense that the U.S. Wheat Associates have decided to close their Cairo office and re-focus their efforts elsewhere. Economics strikes again!