Canadian wheat production last year fell to its lowest level in nearly three decades, resulting in a 50 percent slashing of its exports to Latin America, according to a just-released report by USDA’s Foreign Agricultural Service.

Canada is the primary competitor for wheat exports to Central America, the Caribbean, and northern South America, shipping about 4 million tons to the region annually.

Report author Levin Flake said many of the markets, for which Canada had been the main supplier, turned to the U.S. to fill their import demand.

About one-fourth of total U.S. wheat shipments usually go to Latin America, he said; last year, they totaled one-third.

Hard red spring wheat accounted for over 80 percent of the growth, as imported substituted it for Canadian spring wheat.

While the U.S. market share in non-Brazilian Latin America had stagnated at just below 50 percent for the previous three years, last year the U.S. was able to capture nearly two-thirds of the market.

“U.S. wheat was even able to make inroads into the Brazilian market, because of higher Argentine prices, which resulted from farmers holding their grain,” Flake said.

With the beginning of the new marketing year, the U.S. has continued to benefit from this environment of reduced competitor supply, and sales and shipments to Latin America “have continued at a brisk pace.”

Commitments to Venezuela, Mexico, Chile, Guatemala, and Colombia are all significantly above year-ago levels, he said.

“Additionally, Cuba has emerged as a new market for U.S. wheat, with commitments to date for over 200,000 tons.”

However, Flake said, as the marketing year progresses, “competition will intensify.”

Wheat production is forecast to jump nearly 40 percent in Latin America’s traditional supplying countries and Canadian production is expected to rebound to 22 million tons, up by 6 million.

“Canada will be eager to regain lost market share,” he said.

Argentina’s production is also forecast to improve by more than 2 million tons from last year’s low level.

“This, coupled with less import demand in Brazil due to higher domestic production, will mean more Argentine wheat available to compete with the U.S. and Canada in South American countries such as Bolivia, Chile, and Peru,” Flake said.

“So, in a year in which U.S. total wheat exports are expected to rise to their highest level in four years, due to less exportable supply in Europe, the U.S. will nevertheless have to struggle to maintain its gains in Central and South America.”