WASHINGTON, D.C., U.S. — With wheat producers expecting high prices, Chile’s wheat production for the 2018-19 marketing year is forecast to reach 1.51 million tonnes, according to a March 25 Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture (USDA).

In the 2017-18 marketing year, wheat production totaled 1.47 million tonnes, about an 8.8% increase over 2016-17. The USDA attributed the gain to an expansion in wheat planting.

Despite an increase in production, wheat consumption in Chile is higher than domestic production, creating the need for the country to import wheat. Consumption of wheat increases at an average of 1% annual growth rate, which is similar to the population growth in Chile.

“Per capita consumption of wheat has not increased, but Chile has the second largest level of annual bread consumption in the world, after Germany, reaching 96 kilograms per capita,” the USDA said.

According to the USDA, food, seed and industrial use of wheat is 87% of total consumption of wheat in Chile. Of that 87%, 96% of all wheat available is used to make bread flour and only 4% (durum wheat) is used to make pasta.

According to the report, there are 76 mills in Chile and 44 of those mills, “do not have the capacity to import wheat due to lack of infrastructure, logistics or financial capacity.”

Wheat production commonly takes place in the southern regions of Chile and a majority of the mills are in the central region, creating an extra transportation cost.

The USDA said wheat milling reached 2.1 million tonnes in the 2017-18 marketing year, a slight increase of 2.7% compared to the previous market year. In the 2018-19 marketing year, wheat milling increased 0.9% from the same period in 2017-18.

The remaining 13% of wheat supplies the salmon feed industry. According to the USDA, Chile is the second largest producer of salmon in the world after Norway.

“The feed residual consumption, including feed for pork, poultry and salmon industry, is expected to reach 350,000 tonnes in market year 2018-19 and increase 4% annually along with the salmon production,” the USDA said.