Wheat Acres Could Drop 20% In Places, Analyst Says

September 7, 2016 12:00 PM
Wheat Acres Could Drop 20% In Places, Analyst Says

In places such as the southern Plains, producers could opt to reduce wheat acres from 10% to 20% amid low prices, predicts Angie Setzer of Citizens Grain. For prices to move higher, she says, buyers will need to have an incentive to reenter the arena.

“In the southern Plains area, I wouldn’t be the least bit surprised to see 10% to 20% of acres cut. I haven’t talked myself to growers to see,” Setzer tells Tyne Morgan on the “AgDay” Agribusiness Update for Tuesday, Sept. 6, 2016. “I know a lot of my growers in the Michigan area are really wondering what the heck they planted wheat for and are in no hurry to plant it again. I think there could be some conversations of 10% to 20%. Of course, that feeds into what do we do next spring because that gives you some more in the acreage pie when it comes down to it. Maybe what’s bullish wheat may not be good for corn or soybeans. But overall, these guys that are sub-$3 wheat are not going to be in a big hurry to put more in the ground.”

That possibility comes just a couple of weeks after wheat prices put in a 10-year low. At this point, Setzer says, more buyer interest is the one sure thing that can drive prices higher.

Looking ahead to the next growing season, geopolitical issues tied to wheat production might be supportive for U.S. producers.

“There are already discussions of crop shortages possible in the European Union—France, Germany, Poland, areas like that—everyone keeps saying that the Russia-Ukraine wheat crop’s going to make up for it,” Setzer says. “When it comes down to it, I think could be some issues with some geopolitical tension. That could start to play a role into it. Then of course the million-dollar question is, are we going to see [producers] plant wheat this year? I think when it comes down to it, you’re going to see a lot of discussion about wheat acres dropping, and that could be enough to get these funds back in.”

Watch the complete “AgDay” interview with Setzer below.

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Spell Check

Imperial, NE
9/10/2016 08:16 AM

  Wheat plantings with certified wheat seed will be down 50%. Many farmers opting to plant bin run wheat. Wheat acres in the central plains could be down 30% to 40%. Bin run seed and low fertilizer programs will lead to more poor quality wheat, but at least there will less of it.

Western, NE
9/10/2016 08:45 PM

  I hope wheat producers choose to drop using certified seed by more than 50% this year. I'm sorry, but when wheat is trading at $2.50 per bushel and certified seed dealers have the balls to charge $9.00 to $10.00+ per bushel and some pushing $18.00 per bushel is a crock of crap. As long as your bin run seed isn't more than a couple of years out of certification and it's run through a length and width grader/cleaner, treated, then planted at the optimum rate--guess what, you're going to have a decent crop. Hell, I've used wheat I had stored in an old wood bin for over 15 years--cleaned, graded, treated and walked away with 50+ bushels per acre the next July. I've also had certified seed fail from the get go. Quite frankly, I won't buy certified seed that plays out after the first year. I'm also disappointed that seed wheat suppliers are moving towards the way corn seed is sold. Regardless, wheat acres will drop this year. Pure economics. Unfortunately, it will take a weather or geopolitical problem somewhere in the world to get wheat off its lows

Burlington, CO
9/7/2016 09:35 PM

  Acreage pie in the spring? Umm... everything is below the cost of production. How about summer- fallow. www.afairmarketprice.com


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