Wheat crop shaping up better than past two years, but prices are low

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April 16, 2024

wheat

Wheat production across Texas looks better than in years past, providing producers some optimism despite low wheat prices. Texas A&M AgriLife Extension Service specialists said several opportunities could exist for cashing in on good forage.

Mark Welch, Ph.D., AgriLife Extension economist-grain marketing in the Texas A&M Department of Agricultural Economics, said while the U.S. Department of Agriculture doesn’t start its national winter wheat conditions reports until April 1, updates from the Southern Plains, which include the biggest winter wheat-producing states – Kansas, Texas, Oklahoma and Colorado – are showing conditions are really good, much improved from last year.

“We’re setting ourselves up for what could be a really good winter wheat crop,” Welch said. “Prices have struggled for several years now, with the lowest wheat prices in three years, but the counterbalance to that is what the production possibilities might be. If we are looking at dollars per acre, how much does the improved production prospects make up for weakness in the price outlook.”

Russia still biggest wheat price influencer

Welch said the wheat price outlook is tough and still revolves around Russia. A couple of years ago, there was concern about the invasion of Ukraine. Wheat prices skyrocketed over concerns about production and participation in the global grain markets.

“But since then, Russia is supplying record wheat exports at really cheap prices,” Welch said. “That’s the overall price-depressing feature of the world market.”

He said the stocks-to-use ratio has been very tight worldwide. While the ratio is starting to turn around in the U.S., globally, the ratio is still tight. But apparently, Welch said, the market has determined “we are going to be OK in spite of those supply concerns we had at the beginning of the invasion.”

“Russia holds the leverage on the world wheat market, which is giving us lower prices,” he said.

Wheat conditions across the state

Jourdan Bell, Ph.D., AgriLife Extension agronomist, Amarillo, said while wheat is extremely variable in the Panhandle, “there is some of the best wheat we’ve had in recent years.”

Dryland wheat from Amarillo north looks great, Bell said. South and southwest of Amarillo, it is more variable. In and around the Lubbock area, some good rains are helping the wheat.

The region had decent moisture going into September, which helped producers to plant early to establish their wheat crop. The southwestern portion of the region, however, did not have the subsoil moisture needed to carry through the fall, and some wheat didn’t start coming up until February due to a lack of moisture.

She said the needed winter snowfall did not appear, so the rainfall to date is only 1 inch in the western Panhandle and 2-3 inches in the eastern Panhandle. This has slowed some development.

Reagan Noland, Ph.D., AgriLife Extension agronomist, San Angelo, said good winter moisture set the Central Texas wheat crop up well and, overall, it is looking better in most areas than it has in several years.

However, he said, the past few weeks have seen some fluctuations in heat, and the crop is starting to dry out after several forecast storms didn’t materialize over the region.

The crop in the South Plains and Rolling Plains has received more timely rains and is in good shape. The Rolling Plains saw some wheat rust due to the abundance of moisture.

Weather concerns remain

The biggest concern across much of the wheat production acreage is the need for rain.

“Even though wheat looks to be in better condition than in past years, if we do not receive more rainfall this spring, we will have a severe reduction in production,” Bell said.

Noland also said wheat further south was needing the rain now while the crop is between the joint and boot stages – early reproductive stages that require water and decent temperatures.

“We’ve had 100-degree weather in April in years past, and if it does that without rain, our wheat crop could burn up.”

He said the potential exists to produce a really good crop in some areas and average in others, but it all depends on the near-term weather.

“Aside from drought conditions, a late frost could also severely damage the wheat,” Noland said. “One old saying claims if it thunders in February, there will be a freeze in April, but another claims that budbreak in the large mesquite trees indicates the last freeze has passed. Both have happened here, so the signs are at odds regarding our risk of a late frost.”

Bell said freeze is a concern in the High Plains as well, with temperatures falling below freezing at the beginning of this week. Depending on the duration of the freeze and how low the temperatures drop, that could be yield-limiting.

Wheat has been in a joint stage for a couple of weeks, and if the duration below 24 degrees is more than two hours at this stage, there could be significant yield losses. But the condition of the field really will make the difference. Wheat in good condition can better withstand stress conditions.

Finding the best price per acre

Taking wheat to grain harvest might not be the best avenue for producers this year, Bell said, as the price of cattle gain has made it more favorable for producers to graze their wheat out. With an overall reduction in wheat acres, producers were able to charge a premium for grazing this year.

“A lot of our wheat will go to forage, especially if it is irrigated, or it will be chopped for silage and not taken to harvest,” Bell said. “We have seen an increase in wheat harvested for silage because it is a good quality forage.”

Welch agreed, saying there are multiple opportunities ahead if the wheat stays in good shape.

“People are wary of the Easter freeze, and that weather scare – just the mention in the forecast – could get us a bump in the market,” he said. “So, producers need to be watching for that opportunity to price some wheat if they are taking it to harvest.”

But if those dollars per acre are not adding up for harvest, there are other opportunities, whether it’s as a hay crop, a silage crop or turning out cattle with the record high cattle prices, Welch said.

“There is some opportunity to create some revenue – if a producer has good fences, good water and ability to provide good care, there might be some opportunity between now and graze out into the middle or late May.”

Southern Livestock

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