A month of rain has largely rescued the wheat crop in Kansas, turning an abysmal harvest into an average one.
“Everybody’s a lot happier since it started raining,” said Brett Courson, assistant manager at OK Coop in Kiowa. “I don’t mind seeing them come through the door, now.”
With harvest in Kansas starting in seven to 10 days, the U.S. Department of Agriculture rated the state’s crop last week as 30 percent good or excellent, 41 percent fair, and 29 percent poor or very poor. That’s not good, but better than the parched fields of last year.
And while the rain has filled the metaphorical glass more than half full, some farmers may still see it as half empty.
Heavy rains in Texas and Oklahoma may have have kept some farmers from getting into the field in time, but, globally, wheat production is expected to be close to last year’s record high. Plus, there has been plenty of supply sitting in storage. The result is that over the last year, the price of wheat futures traded on the Kansas City Board of Trade has fallen from about $7.20 per bushel a year ago to about $5.35 now.
Last year’s drought-stricken wheat harvest in Kansas, coupled with sharply falling prices for corn, soybeans and grain sorghum, made last year a disappointment for many crop farmers. In south central Kansas, the worst hit area, farmers saw net income of just $53,000 for the year.
“It’s like a casino, only with more money,” sighed Scott Van Allen, who farms in northern Sumner County, five miles south of Clearwater.
One farmer prepares
Van Allen, who has about 2,000 acres of wheat and about 350 acres of grain sorghum, has what looks like the teeth of a dozen sharks stretched across the floor of his barn next to two hulking combines.
His son, Jake, is in the midst of replacing scores of the serrated triangular steel teeth that ride on the front of the combines’ cutting heads.
It’s all part of the long run up to harvest. They have spent months cleaning and replacing equipment. Van Allen hired a custom cutting crew to help with harvest as well.
Along with Jake, his daughter Lindsay, two hired men, and the custom crew, Van Allen will hit the fields in about two weeks. They will go from late morning, after the dew has dried, to late evening for eight or nine days, assuming no rain.
The combines will chop the wheat stalks and winnow out the wheat kernels. When the combine is full, it will shoot the grain into a grain cart being pulled by tractor. As the combine gets back to cutting, the grain cart will offload the grain to a truck, which will haul the wheat off to the elevator at Conway Springs about 10 miles away.
This is Van Allen’s 40th harvest as an adult. He knows how to read his fields.
This week he picked a stalk of wheat from the field behind his house and held it up. The number of rows — or, more properly, meshes — on the wheat head, set early after emerging from dormancy in March, is critical to determining yield, he said. Each mesh contains three, or sometimes four, wheat kernels.
“The longer you get the head, 10, 11, 12 rows, the better,” he said. “That’s your yield.”
This year, the average is closer to six rows. In good years, he’ll see 50 to 60 bushels of wheat per acre. This year, he expects 30 to 35.
And he’ll get less for each bushel, too, than he has in the past.
“It’s never a bad year to be a farmer,” he said. “But losing $2 a bushel on the price? You just have to tighten up a bit, not buy any equipment that year. As a farmer you know some years are better than others.”
The rest of the state
The outlines of the situation — a dry winter and early spring, followed by four to six weeks of rain which revived the crop a bit and brought on some plant diseases — are the same across the state, but the emphasis differs in each location.
John Beckman, the agriculture agent in Scott County in western Kansas, said there was a lot of winter kill in his area, and no rain until about the first of May. He may be too much of an optimist, but he’s predicting an average yield in the low 40s for bushels per acre range.
“As the spring started, things were looking pretty bleak, and we were on the edge of coming out with nothing, and then May turned on the spigot,” he said.
Marty Gleason, agriculture agent in Edwards County in central Kansas, estimated the rain had added 10 to 15 bushels per acre onto the average yield, which he estimated would be about 40 bushels per acre.
Sandra Wick, crop production agent based in Smith Center for the Post Rock district in north central Kansas, said leaf rust has shown up in many fields, particularly those planted with the Everest wheat variety, the state’s most popular. Those who had strong stands of wheat in March and April spent the money to spray fungicide, she said. Those who had weak stands did not — to their regret as the fields recovered.
“They were thinking their yields were below 20 so they didn’t bother,” she said. “They didn’t want to put any more money into it.”
Due for a bounce
Farmers are going into harvest with prices that are pretty low compared to the last four years.
Unlike corn and soybeans, wheat is produced broadly across the globe. World production of wheat hit a peak last year and is projected to come within 1 percent of that figure this year. Stockpiles are abundant.
In addition, the rise in the value of the dollar since last year makes U.S. wheat less competitive in the export market, reducing demand. Compared to the euro, the dollar is about 20 percent more expensive than it was a year ago.
That’s what has brought the price for Kansas wheat down, said analysts.
“The strong dollar is one thing, and the supply? Well, we are not short of wheat in the U.S. and not short of wheat in the world,” said Augusta-based commodity broker Tom Leffler. “We are not price competitive. That makes it a bad situation for U.S. farmers.”
That said, prices for Kansas farmers are starting to rise, he said.
The rain messed with Texas wheat farmers pretty badly, cutting the hard red winter wheat harvest. Global demand is predicted to rise, stockpiles are likely to shrink and the dollar has fallen about 5 percent off an April high.
“It’s due for a bounce,” Leffler said. “They have a tendency to push it too low. It’s getting a little too cheap.”
Darin Newsom, an analyst with DTN, said that he, too, expects prices to rise.
“The market has been under pressure for some time,” he said. “Hard red wheat has had nothing but problems: freeze, drought, disease and, now, flooding. It’s seen four of the five horsemen of the apocalypse, missing only hail.”
He said he expects wheat farmers to be able to make a profit at these prices, especially if they rise some.
Kansas farmers have enjoyed an extraordinary run of high prices over the last five years, he said, so they may feel a little squeezed now. They’ll have to learn to live with prices that are lower, but still generally higher than they were in the decades before 2008.
“It looks like it may not be hugely profitable this year,” Newsom said. “But whether it’s a good price is a matter of perspective.”