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David Sparks Ph.d Poor Winter Wheat
by David Sparks Ph.d, click here for bio

Program: Idaho Ag Today
Date: May 18, 2017

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Eric Hasselstrom farms just over 2-thousand acres of wheat, barley and garbanzo beans in the rolling hills of Winchester.  After months of snow and rain the sun broke through the clouds and the wet soil started to dry. “We haven't moved a piece of equipment yet, it's too wet,” said Hasselstrom. Besides months of endless dreary weather, last years wheat prices hang over his head like winter clouds. “Beside terrible market prices, the falling numbers made last year one we’d love to forget, this sunshine helps us forget, but we'll need lots of it,” he said. 


Theres another ray of sunshine, the wheat futures report is out and new-crop wheat futures have climbed as much as 20-cents per bushel after heavy snow in the Midwest flattened winter wheat.  “I’m optimistic but our winter wheat doesn’t look all that great and I still have to plant the spring wheat,” said Hasselstrom.  The National Weather Service reported heavy snow and freezing last week in the nation’s bread basket, the part of Colorado, the western part of Kansas and parts of Nebraska. Their report reveals that the storm severely damaged the wheat crop, flattening or lodging thousand of acres of wheat. 


Lodging can reduce crop yields as much as 1-percent per day and increase the threat of disease. Crop tours earlier this week predict lower wheat yields. What the reports mean is that recent crop damage could further reduce wheat production in 2017/18, lowering ending stock levels and lifting marketing year prices above the current projection of $4.30 per bushel. New-crop wheat futures climbed to 20 cents per bushel following the late season snowstorm. “Not everyone can have a good year, every year,” said Clark Johnston of Agrisource. “I’ve said this a time or two this spring, I think we’ll even this market out and it could happen this year.” 


The USDA’s May 1st, Crop Progress report showed that 13 percent of the winter wheat crop was in poor or very poor condition but 6 percent higher than the prior year level. Crop conditions are even much worse in portions of the U.S that were flattened by the winter storm.  “We had rain and lots of it, we’re a month behind where we were last year,” said Hasselstrom. “We got to be optimistic, if it’s a hot dry summer the wheat could ripen fast and we’d be fine. It was 76-degrees yesterday, but the temperatures are supposed to drop again.” These conditions show that Idaho wheat is 6 to 10 percent in poor shape. That percentage could get better with sunshine and warming temperatures. 


On an acreage basis, the 13 percent US poor-or-very-poor rating is equivalent to 4.3 million winter wheat acres. More acres are likely to be in poor or very poor conditions in the coming weeks. The areas hit hardest by the midwest blizzard had substantial acres of wheat acreage in poor or very poor conditions already. Based on the Crop Progress report, more than 3 million acres in Colorado, Kansas, Oklahoma and Texas were in poor or very poor condition at the end of April, Figure 2. These 3 million acres represent approximately 70 percent of the winter wheat acreage in poor or very poor condition. 


 For the 2017 crop year, USDA Risk Management Agency reveals that 23 million wheat acres are covered under crop insurance policies. More than 20 million of these acres are covered under a revenue-based crop insurance policy. Revenue policies indemnify a grower when the actual revenue falls below the policy guarantee. These indemnities will help producers offset losses due to unanticipated declines in crop yields and prices.  


 Still, its too early to tell the full extent of the damage to the US wheat crop. 

This damage to the wheat crop comes on top of the fact that USDA’s January 12, 2017, Winter Wheat and Canola Seedings report shows that for the fourth consecutive year US farmers reduced acres of winter wheat. Total winter wheat acreage planted for 2017 harvest shows 32.4 million acres, down 10 percent, or 3.8 million acres, from last year. Winter wheat seedings in 2017 were the lowest levels in a century. 


“When you look at the futures market and those projected prices you have to be very cautious, they don't always match whats happening on with the ground, while prices look good for us, if you look at the fields, they don’t look all that good right now either, but that’s just my opinion,” said Hasselstrom.   For the 2016/17 marketing year, U.S. wheat yields were record-high at 52.6 bushels per acre and wheat production climbed by 12 percent last year. Idaho had the highest yields in the nation averaging 91 bushels per acre. Now, with winter wheat acreage at the lowest level in nearly a century, forecasts are for total wheat production to fall for the 2017/18 marketing year. USDA’s February 24, 2017, Grain and Oilseeds Outlook projected wheat yields in 2017/18 to fall by approximately 10 percent, and total production to fall 20 percent to 1.837 billion bushels. Crop damage reports across the US shows that the size of the 2017/18 crop will be down, which could bring prices up by the fall harvest. 


 “The wheat market is volatile compared to 10 years ago, we have to watch the market like a hawk. Through it all, I’m optimistic that our wheat will be worth something in the fall,” said Hasselstrom.

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