Wheat, beef markets looking for improvement in 2017

Record wheat yields in Kansas hasn’t been good news for farmers.

“It’s been a pretty tough year for the wheat market,” said Justin Gilpin, CEO of Kansas Wheat, which is associated with the Kansas Wheat Commission and the Kansas Association of Wheat Growers.

“We should be celebrating because of the record yields that we reached in Kansas.”

Instead, abundant yields have decreased the price of wheat.

Daniel O’Brien, extension agriculture economist at Kansas State University, said the last few years of good crops have created a “buyer’s market,” where buyers are in no hurry to purchase wheat.

With such a large supply of wheat, O’Brien said Kansas farmers are looking for more export markets in 2017.

“To have a major change in the wheat market, we are probably dependent on crop shortfalls in the world,” O’Brien said.

At this point, O’Brien said there is not a high demand for wheat in the world market, but that could change.

Even with wheat prices so low, O’Brien expects Kansas farmers to still grow plenty of wheat in 2017, but that wheat production nationally will decrease.

The 2017 beef market should start to see some price stability after the market disintegrated in 2015.

Kevin Good, senior market analyst for research firm CattleFax, said beef production should see a 4 to 5 percent increase in 2017 and about the same percent increase in poultry and pork production.

With the increase in production, beef prices should be low in 2017, but still profitable due to low input costs, Good said. He expects the average break-even amount for beef around $1.40 per pound with a selling price around $1.50 per pound.

“A little more price stability, still at some levels that will offer profitability,” Good said.

This story was originally published December 28, 2016 at 2:32 PM with the headline "Wheat, beef markets looking for improvement in 2017."