Kansas farmers were head-faked out of much of the gain from this summer's spectacular run-up in wheat prices.
But they have another chance for a solid payday with their fall crops, experts say.
As of Friday, a bushel of wheat was selling for $5.92 at the Garden Plain Co-op, a nearly 70 percent increase over the prices following the wheat harvest in late June.
Prices skyrocketed in July as drought took a severe toll on the Russian wheat crop, forcing the government to halt exports. That was coupled with heavy rains cutting into the Canadian wheat crop.
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Prices started rising around July 4, a few weeks after the Kansas wheat crop had been harvested.
Larry Werner, branch manager at the Garden Plain Co-op, said farmers hauling in newly harvested wheat sold about 60 percent of it almost immediately.
Typically, the percentage is closer to 40 percent, he said.
Farmers sold another 10 percent when the price hit $5 per bushel. That means only about 30 percent of the wheat crop, if sold today, would benefit from the $6-a-bushel price.
Selling early cost Kansas farmers roughly $600 million compared to what they would have brought in had sold the entire 369-million-bushel crop at today's prices.
Arlan Suderman, a locally based commodity market analyst with Farm Futures, said that it's impossible to fault the farmers.
Predicting crop prices has become so complex that earning a living from farming is less like bringing home a paycheck and more like playing the stock market.
Suderman advises farmers to know their costs and take profits when prices rise above costs, instead of gambling on a big payday.
When harvest came, most farmers felt that prices, depressed from two years of global bumper crops, would remain low, Suderman said,
They sold heavily at harvest to recoup some operating cash.
Mark Bergkamp, a farmer in southern Sedgwick County, said he sold his wheat at an average of about $4.95 a bushel.
"I'm satisfied," he said. "It's not a bad price."
"You can't wait and wait and wait," he said. "There's no telling what it could do."
So who got rich?
Who does get the 70 percent run-up?
Not the co-ops or the grain terminals, which tend to sell right away, making their margin on handling charges.
The winners are the speculators and consumers, said Dave Smith, manager at CoMark, a marketing company that acts for 11 grain co-ops mostly in south-central Kansas.
Speculators buy and sell wheat futures and options contracts based on their guesses about rising and falling grain prices. Those who took the other side of hedges bought by farmers and middlemen are the ones who got the gain in prices.
Consumers, Smith said, in the U.S. and elsewhere in the world mostly see the gain in getting bread or other wheat product at a lower price for a few weeks longer before higher prices kick in.
But that price increase, Suderman wants to make clear, isn't really that great.
At roughly 70 loaves of bread per bushel of wheat, he said the price increase will raise the price of bread about 3 cents a loaf. Any rise in bread prices beyond that are caused by increases in other inputs, such as the fuel used to haul it.
But if Kansas farmers missed much of the direct benefit of the wheat price run up, they can gain from its ripple effect.
Corn prices are up about 40 percent over where they were on June 15, and grain sorghum is up about 30 percent. Soybeans are less than 10 percent up.
"When wheat took off, the others followed," Smith said.
Part of that is just a bullish feeling in the markets caused by wheat, Smith said. Longer term, he said, markets believe that as wheat prices rise, more farmers will plant wheat, crowding out other grains and reducing their supply.
Suderman said corn, grain sorghum and bean prices usually take a hit at harvest time as farmers sell some of their crop immediately. He expects the fall crops to see volatile price swings, but overall he sees their prices rising into late spring.
The increase might drive more farmers to hang onto their grain longer in hopes of further price increases, Smith said. But, he said, it's hard to predict.
"You can't outguess them," Smith said of the farmers. "We certainly didn't anticipate buying the majority of the wheat crop in a 30-day period."