Wheat Price Drop Likely By Mid-‘96 Increased Planting Expected To Undercut Market Prices
Farm experts say near-record wheat prices prompted growers to increase acreages this fall, which will cause the market price to drop by mid1996.
A Midwest drought and below-average worldwide production pushed wheat prices to an average of $4.50 a bushel this year. That’s the highest price since 1973.
But 20-year lows projected for the marketing year’s worldwide grain stocks in May will not buoy prices indefinitely, University of Idaho agricultural economist Larry Makus said.
“The ability to sustain current wheat prices throughout the 1995-96 marketing year is a serious concern,” Makus said. “We will probably see some weakening in the latter half of the year.”
Acreages and yields are expected to increase by 8 percent in the United States next year, said Mark Samson of the Idaho Wheat Commission.
Much of the increase in production already has taken place in Idaho, as growers planted more winter wheat this fall.
“A lot of growers in this area have put in more grain this year,” said Warren Roberts, who planted 80 acres of grain this year on his farm west of Caldwell. “Many area farms with fallow ground have now put in wheat,” he said.
“It won’t be a free-fall tumble,” Samson said, “but the prices will come down.”
Soft white wheat - the Pacific Northwest’s dominant market class - will be the most vulnerable should a price drop occur in the spring, Makus said.
Because of an above-average Pacific Northwest crop, soft white wheat supplies are not as limited as other classes.
U.S. wheat production, now slightly under 2.2 billion bushels, dropped 5.9 percent between 1994 and 1995 because of late frosts and late planting. But in 1996, U.S. production is likely to expand to between 2.4 billion and 2.6 billion bushels, Makus said.
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