Red winter wheat earning its keep


COLUMBUS – Ohio is seeing a bumper crop of soft red winter wheat this growing season, topping other wheat-growing, Midwest states in production and acres planted.

According to the Ohio Agricultural Statistics Service, producers are expected to harvest 65.3 million bushels this year, a 30 percent hike from last year’s production.

Additionally, 960,000 acres of grain are expected to be harvested from the 1 million acres seeded in the fall – 150,000 acres more than what was harvested in 2002. The high production numbers double that of other Midwest states.

Expert’s perspective. Matt Roberts, Ohio State University Extension agricultural economist, said the boost in Ohio’s wheat production spawned mainly from high wheat prices at planting and last year’s poor performance of corn and soybeans because of the drought.

According to Roberts, the simplest driving factor was the fact that before planting began, new crop wheat prices hovered in the $3.50 range. At this time, soybean prices were projected at $5 or lower and corn was just above $2.

So on a relative basis, wheat looked like it would be a reasonably profitable crop given a good growing year.

Benefits. Further, one of the advantages of planting wheat is that there is a big cash flow benefit. Ohio had the largest increase in acreage this year of any other Midwest state.

“I think it’s because farmers, who suffered from last year’s drought, were interested in the early cash flow wheat would offer,” said Roberts.

Ohio wheat growers weren’t the only ones jumping on the production bandwagon. Attractive at-planting prices drove producers in other states to flood the country with wheat. The result was a steady decline in prices – from $3.50 in September to $2.80 in March.

Concerns. “Those farmers who did not lock in their selling price at planting saw their profits whittled away and almost entirely evaporate over the months,” said Roberts. “The winter we had nationwide was excellent for wheat, and there was a concern that the country would be awash in the crop.”

For Ohio wheat growers, however, growing soft red winter wheat, compared to other wheat varieties, has turned out to be profitable.

The USDA reported that nationwide plantings of soft red winter wheat have been lower than expected.

Good prices. “For Ohio producers, the last two weeks have been very good, since prices have rallied to $3.20 to $3.30 a bushel,” said Roberts.

Roberts added favorable wheat prices and high wheat production may continue, albeit temporarily.

“We had large harvests of wheat in the mid ’90s, both nationally and worldwide, and inventories were high. Since that time American production of wheat has declined dramatically. I think Ohio’s acreage has been cut two-thirds since 1996,” said Roberts.

Consumption. Now consumption is outstripping production and wheat is a much more competitive commodity. That’s where the boost in acreage is coming from and prices may be in the $3.15 to $3.20 range until that equilibrium is met.

Roberts said that the rise in wheat prices and boost in acreage is almost a necessity to balance consumer demand and declining production.

Counteraction. “If we produced the same amount of wheat this year as we did last year, one can make a realistic scenario where soft red winter wheat comes in tight supply in the coming year,” said Roberts. “To counteract that force, prices had to rise and acres had to be planted.”

U.S. winter wheat production is forecast at 1.56 million bushels, up 37 percent from last year.

Yield is expected to be nearly 43 bushels per acre, almost 4.5 more bushels per acre than last year.


Up-to-date agriculture news in your inbox!