Wheat outlook carries half-a-loaf message
By Art Hovey on May 12, 2011
© Lincoln Journal Star
The first wheat forecast for Nebraska for 2011 suggests total bushels could fall almost 12 percent from a year ago.
That's actually one of the better outlooks for the seven states that produce the vast majority of hard red winter wheat, the major source of bread flour.
A similar look ahead for Kansas, issued Wednesday by the National Agricultural Statistics Service, drops total production for the nation's leading hard red supplier by almost 100 million bushels, or 27.2 percent.
Oklahoma's expectations are off 38.1 percent, Colorado's 39 percent and Texas a whopping 63.3 percent.
Royce Schaneman, executive director of the Nebraska Wheat Board, is monitoring developments at a time when the wheat supply looks shaky and the wheat price already has soared past $9 a bushel.
That's more than twice what it was at the start of the 2010 harvest.
"Basically, if you look at the whole hard red growing region, especially Texas and Oklahoma, it's been hit pretty hard with drought conditions," the Lincoln-based Schaneman said.
Especially in states toward the north end of the wheat belt, there's still some time for rain and recovery.
"I really think, overall, Kansas is not terrible," the Nebraska wheat official said. "As you come up into Nebraska, we've had a little more rain. We just don't have the number of acres."
Once-loyal wheat producers are feeling tempted by even better prices for corn and soybeans on a per-acre basis, and that's a factor in a falloff of about 140,000 acres on the wheat side.
The first state-by-state production outlook holds important economic implications for wheat producers clustered in Southeast Nebraska and for the bigger share of 1.35 million acres farther west.
But the numbers are also important in such food aid advocacy settings as the Bread for the World Institute in Washington, D.C., and to Senior Editor Todd Post.
When grain prices rise toward historic territory, Post said, export customers in developing countries with modest purchasing power tend to drop out of the market. Also, food aid groups with fixed budgets find it costs more to buy less.
And the implications don't end there.
"What's happening in the Middle East over the last few months is, in part, about food costs -- and wheat is a major issue," he said. "It's a huge import for Egypt.
"They've got all these frustrations that are pent up ... and it brings up a lot of stuff that people think they can afford to live without, until they can't afford to eat," he said.
In a related development, World Agricultural Supply and Demand estimates released Wednesday by the U.S. Department of Agriculture pointed to a drop in demand from overseas buyers who have come to regard U.S. corn as too expensive for their budgets.
That could take some pressure off the corn supply, but it also suggests a disconnect between the land of plenty and places where hunger pangs run especially deep.
Back in the wheat world, the outlook for production for hard red spring wheat, normally a cushion against production problems for winter varieties, is not good either.
In North Dakota, the biggest supplier of the spring-planted option, only 7 percent of the crop was planted by Monday, compared to the five-year average of 51 percent.
"It's too wet," Schaneman said. "They're going to have a hard time getting that spring wheat crop in. And if they don't get it in soon, they're going to have to look at some alternatives."
Weather conditions have slipped toward extremes, he said.
"It's sad that, just a few states away, they're burning up with drought and other guys are flooded," he said.