If the trend continues, this will be the first time Colorado produces above average back-to-back wheat crops in several years.
“We have the potential to hit 40 bushels to the acre average wheat yield again,” said Darrell Hanavan, executive director of the Colorado Wheat Administrative Committee. That would match last year’s exceptional performance, the best in a decade.
Yield potential this year is especially high south of Interstate 70 because the wheat tillered better there, a reverse of the norm, he noted.
Farmers and agronomy experts attending a series of wheat variety trials held statewide said the wheat in many fields could use of a drink and questioned the impact of stripe rust at “epidemic” levels. But overall the state is still on track to bin an above average crop of nearly 90 million bushels.
Taking some of the bloom off of this year’s promise is the price.
Ross Hansen, who hosted one of the wheat tours, said, “I’m not so much worried about discounts as I am the basis (the difference between the futures price and the local cash bid.) Our local basis right now is $1.50. That’s the widest I’ve ever seen it.”
In a typical year, the basis would be closer to 50 cents, he noted.
“It’s been frustrating,” added his neighbor Steve Beedy. “The basis has been $1.10 all year. We’re at the end of the pipeline here.”
“It will be interesting to see what happens this fall,” Hansen added. “I think there will be fewer acres planted.”
John Fenderson, central plains region commercial manager for WestBred, a wheat seed development company owned by Monsanto, worried chronic marketing problems could turn more growers against wheat. “This is really the worst possible scenario with the acreage the lowest it’s been in years,” he said, after traveling from Kiowa, Kan., to talk about the varieties in his company’s portfolio. “It’s going to drive more wheat acres to corn, soybeans and sorghum, probably.”
Historically high basis levels are the result of high ending stocks and an excess of low protein wheat, Hanavan told growers who gathered at the Hansen farm.
“We were hoping for a high protein wheat crop this year,” he said. “What’s happened so far is that this crop is coming in below average for protein. In Oklahoma, it looks like the average will be around 11 percent, and they don’t have a lot of on-farm storage there, so it’s going to back-up in our system.”
Hanavan urged Colorado growers to consider testing, segregating and storing their wheat at harvest, similar to advice offered a month ago to producers in Oklahoma, where harvest is now moving rapidly across the state. Posted prices at some elevators in Southwestern Oklahoma were as low as $2.97 a bushel early in the week.
Mark Hodges, an independent agronomist and director of Plains Grains Inc., a private nonprofit wheat marketing entity based in Stillwater, Okla., said ideal grain fill conditions and exceptional test weights in Oklahoma were being offset by elevator bids bedeviled by surplus carryover and uncertainty in the market. The farmer needs at least $4.50 a bushel just to cover costs, he said.
“Breaking even will look pretty good to a lot of guys right now,” he said, as he left the Ag Research Service lab in Manhattan, Kan., where he delivered wheat for quality testing. Plains Grains conducts a variety of lab tests throughout harvest to help identify what’s available in local markets and to connect buyers and sellers.
He suspects the seeds of current protein deficiencies were planted a couple of years back.
“With the price of fertilizer two or three years ago, I think producers backed off a little on their fertilizer program,” he said. “They couldn’t afford to pay prices that high, and I’m not sure we’re back to where we need to be (in terms of soil nitrogen.)”
He said the wheat industry is working to clear the pipeline by targeting foreign buyers like Egypt that don’t need high protein wheat for their traditional bread products and urging them to capitalize on fire sale prices. But it will take time.
“These are issues we are going to have to work through,” he said. “If farmers can just put their wheat into storage for awhile, this situation will work itself out.”
Another potential solution is a program put together by Colorado Wheat and ConAgra that guarantees growers premiums for delivering quality wheat from two top-performing hard white wheat varieties. The final product appears on store shelves as Eagle Mills Ultragrain flour. About 10,000 acres are currently enrolled with a goal of 50,000 acres by next year.
“It’s an incentive. It tells them they’ll get rewarded for good management,” Hanavan explained.
This year’s Colorado wheat field days conclude on June 16 with stops at the Central Great Plains Research Station at Akron and the Cary Wickstrom Farm near Orchard.
|
|
|
If the trend continues, this will be the first time Colorado produces above average back-to-back wheat crops in several years.
“We have the potential to hit 40 bushels to the acre average wheat yield again,” said Darrell Hanavan, executive director of the Colorado Wheat Administrative Committee. That would match last year’s exceptional performance, the best in a decade.
Yield potential this year is especially high south of Interstate 70 because the wheat tillered better there, a reverse of the norm, he noted.
Farmers and agronomy experts attending a series of wheat variety trials held statewide said the wheat in many fields could use of a drink and questioned the impact of stripe rust at “epidemic” levels. But overall the state is still on track to bin an above average crop of nearly 90 million bushels.
Taking some of the bloom off of this year’s promise is the price.
Ross Hansen, who hosted one of the wheat tours, said, “I’m not so much worried about discounts as I am the basis (the difference between the futures price and the local cash bid.) Our local basis right now is $1.50. That’s the widest I’ve ever seen it.”
In a typical year, the basis would be closer to 50 cents, he noted.
“It’s been frustrating,” added his neighbor Steve Beedy. “The basis has been $1.10 all year. We’re at the end of the pipeline here.”
“It will be interesting to see what happens this fall,” Hansen added. “I think there will be fewer acres planted.”
John Fenderson, central plains region commercial manager for WestBred, a wheat seed development company owned by Monsanto, worried chronic marketing problems could turn more growers against wheat. “This is really the worst possible scenario with the acreage the lowest it’s been in years,” he said, after traveling from Kiowa, Kan., to talk about the varieties in his company’s portfolio. “It’s going to drive more wheat acres to corn, soybeans and sorghum, probably.”
Historically high basis levels are the result of high ending stocks and an excess of low protein wheat, Hanavan told growers who gathered at the Hansen farm.
“We were hoping for a high protein wheat crop this year,” he said. “What’s happened so far is that this crop is coming in below average for protein. In Oklahoma, it looks like the average will be around 11 percent, and they don’t have a lot of on-farm storage there, so it’s going to back-up in our system.”
Hanavan urged Colorado growers to consider testing, segregating and storing their wheat at harvest, similar to advice offered a month ago to producers in Oklahoma, where harvest is now moving rapidly across the state. Posted prices at some elevators in Southwestern Oklahoma were as low as $2.97 a bushel early in the week.
Mark Hodges, an independent agronomist and director of Plains Grains Inc., a private nonprofit wheat marketing entity based in Stillwater, Okla., said ideal grain fill conditions and exceptional test weights in Oklahoma were being offset by elevator bids bedeviled by surplus carryover and uncertainty in the market. The farmer needs at least $4.50 a bushel just to cover costs, he said.
“Breaking even will look pretty good to a lot of guys right now,” he said, as he left the Ag Research Service lab in Manhattan, Kan., where he delivered wheat for quality testing. Plains Grains conducts a variety of lab tests throughout harvest to help identify what’s available in local markets and to connect buyers and sellers.
He suspects the seeds of current protein deficiencies were planted a couple of years back.
“With the price of fertilizer two or three years ago, I think producers backed off a little on their fertilizer program,” he said. “They couldn’t afford to pay prices that high, and I’m not sure we’re back to where we need to be (in terms of soil nitrogen.)”
He said the wheat industry is working to clear the pipeline by targeting foreign buyers like Egypt that don’t need high protein wheat for their traditional bread products and urging them to capitalize on fire sale prices. But it will take time.
“These are issues we are going to have to work through,” he said. “If farmers can just put their wheat into storage for awhile, this situation will work itself out.”
Another potential solution is a program put together by Colorado Wheat and ConAgra that guarantees growers premiums for delivering quality wheat from two top-performing hard white wheat varieties. The final product appears on store shelves as Eagle Mills Ultragrain flour. About 10,000 acres are currently enrolled with a goal of 50,000 acres by next year.
“It’s an incentive. It tells them they’ll get rewarded for good management,” Hanavan explained.
This year’s Colorado wheat field days conclude on June 16 with stops at the Central Great Plains Research Station at Akron and the Cary Wickstrom Farm near Orchard.
