No major grain crop has seen more pressure than the wheat industry. From century-low winter wheat acres to fewer spring plantings, this farm staple is under stress.
Wheat is the third largest commodity in the U.S., but acreage continues to dwindle. This season, the USDA is forecasting 46 million acres of wheat, the first time all wheat acres have been below the 50 million acre mark since 1970. As for winter wheat, acres were the fewest in 108 years.
“The low prices are doing its job,” said John Payne, senior marketing analyst with Daniels Trading. “They’re curing low prices. We’ve got the low acreage numbers. The key to the wheat market is overseas.”
Large global stocks are pushing down prices and creating headwinds for the future.
“There are plenty of people in other countries that producer wheat cheaper than we can,” said Tommy Grisafi, branch broker with Advance Trading, Inc. “There’s 50 to 100 countries that produce wheat almost every day of the year, whereas America is just the best in the world at growing corn and soybeans.”
That’s why industry leaders say it’s time to change focus.
“Rather than looking at increasing acres and acres of wheat, we need to be looking at how do we increase our production and make sure our quality is good and that our yields continue to go up,” said Chandler Goule, CEO of National Association of Wheat Growers (NAWG).
It’s a high bar as USDA expects production in 2017 to be down 20 percent from last year.
“When you think about what helps farmers the most, especially when they’re in environments like this, it’s helping them to drive more productivity from each acre in the most efficient way they can,” said John Fietsam, technical product lead with Monsanto Wheat.
Farmers are racing toward a goal of 200 bushel per acre wheat, and efficiency in genetics and agronomics are needed.
“Our genetics are there,” said Brian Arnall, precision nutrient management extension specialist with Oklahoma State University. “We have really nice yield potential in the southern Great Plains from both private and public groups. We probably have the genetic yield potential of 170 bushel wheat, but the challenge is the environment.”
Because wheat often gets planted in less than ideal conditions, pushing the yield curve will require a new mindset.
“Low prices push farmers to produce more, and low prices continue to push innovation,” said Goule.