by Brent Gloy
As we pointed out in an earlier article, the economic situation surrounding wheat production is particularly tenuous. Today wheat prices are very low and the economics of producing wheat are particularly poor. In some areas of the Great Plains cash wheat prices are within cents per bushel of cash corn prices. For instance, you can see the Kansas bids here, Nebraska here. This situation made us wonder about wheat price levels and the value of wheat relative to corn has evolved over time. Continue reading
by David A. Widmar
A few weeks ago we took a look at the trends in U.S. wheat and observed that wheat acres had been steadily declining since the 1980s. This got us (and many readers) to wondering about the trends in global production. This week’s post takes a look at global wheat trends by digging into acres harvested, production, and how the U.S. fits in. Continue reading
by David A. Widmar
Strong wheat yields across the U.S. are proving to be burdensome on wheat markets already struggling to deal with large U.S and global inventories. In many areas producers are facing the lowest cash prices they have seen in years. These weak prices have left wheat production in the U.S. with a bleak economic outlook.
In many areas of the Great Plains cash bids are hovering near, and have sometimes below, the $3.00 per bushel barrier. (Here are some – rather depressing – Kansas and Nebraska bids). It has gotten so bad that in some areas of the country cash wheat prices have reached levels that trigger the ability to collect payments from the USDA’s Loan Deficiency Program (LDP) (something few people seriously contemplated when the last farm bill was written).
The situation in the wheat market is symptomatic of many of the issues facing grain producers and we believe that it likely has many broader implications for the entire grain sector. So over the next few months we are going to feature several posts evaluating the situation in wheat production. Internally we’ve been describing it as our “wheat’s woes” analysis. This week’s posts takes a look at trends in U.S. wheat acres. Continue reading