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Wheat Journal: Higher Wheat Acreage a Return to Normal

February 8, 2011

Higher Wheat Acreage a Return to Normal

In January, USDA reported that nearly 41 million acres of winter wheat was planted in the U.S. this past fall, up 10% from 2009.

"That is 3.7 million more acres of winter wheat, which reduces acres available for crops in much shorter supply, such as corn, soybeans and cotton," says Purdue University ag economist Chris Hurt. "Thus, higher wheat acres intensifies the battle for acres this winter.

"Indiana had a 72% increase in wheat acres seeded this past fall," Hurt says. "While that’s a large amount compared with the previous year, the 430,000 acres is close to what we’ve seen in Indiana in recent history. Acreage for the 2010 crop was low because of poor economic returns on wheat and conditions that were too wet to seed wheat in late 2009."

Helping fuel this past fall’s renewed interest in wheat were better economics and favorable planting conditions, Hurt says.

"The price of wheat escalated in the fall of 2010 with the poor wheat production in Russia and Canada," he says. "Secondly, conditions for planting wheat improved dramatically with the early harvest of corn and soybeans, which helped producers get the crop planted in a timely manner."

Cash prices for wheat are hovering around $7 per bushel. Corn is trading at a cash price of about $6, with soybeans at $13.50.

While $7 is an attractive price, wheat might not be able to compete with $6 corn, Hurt says. Farmers can produce far more bushels of corn per acre than wheat.

There also are concerns about the quality of the current wheat crop. The last crop condition

report for the 2010 fall-seeded wheat crop indicated that 4% of the country’s crop is in very poor condition, 12% is poor and 37% is fair. This leaves 47% to be at a good or excellent rating.

"That raises the question of whether wheat stands will be strong enough to provide good yield opportunities for the 2011 harvest," Hurt says. "Those producers with wheat in poor condition do have alternatives. They can tear up the wheat crop and plant corn or soybeans this spring. That’s not only a [practical] alternative but a very viable alternative economically, especially for those producers who usually cannot grow double-crop soybeans with a wheat crop."

Hurt says he isn’t recommending that farmers give up on poor wheat crops, but they need to consider all of their options before spring planting.

"Wheat is high-priced, but corn and soybeans are very high-priced," he says. "This leads to the possibility that returns may be higher to tear up existing wheat and plant to single-crop corn or soybeans this spring."

USDA Invests in Wheat Research

USDA’s National Institute of Food and Agriculture (NIFA) announces a competitive grant program, the Agriculture and Food Research Initiative (AFRI), that will award 56 scientists from 28 institutions a total of $25 million throughout five years.

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FEATURED IN: Farm Journal - Mid-February 2011

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