The United States winter wheat crop is in worse condition than has been reported, says CWB.
Bruce Burnett, CWB’s director of weather and market analysis, toured fields in Kansas, Nebraska, Colorado, Texas and Oklahoma in early December.
His 2,900 kilometre trek through the prime U.S. hard red winter wheat area left him with the impression that the crop is in even bigger trouble than markets are anticipating.
CWB had expected before the trip that U.S. HRWW production would be 2.7 million tonnes less than last year, despite an estimated 900,000 acre increase in planting.
Burnett said the forecast was based on disturbing reports from the U.S. Department of Agriculture that only 33 percent of the winter wheat crop was rated good to excellent heading into dormancy, down from 52 percent the previous year. It is the worst rating in nearly three decades.
He now thinks yields could be 20 percent below last year’s levels, resulting in a 5.5 million tonne reduction in production.
“That number, I feel, at least right now, is somewhat conservative,” he said Dec. 20.
“I think it possibly could be lower given some of the weather events that have happened since then.”
Many of the wheat crops had been in the ground for up to two months by the time Burnett arrived, but there was little growth because of the ongoing and expanding drought in the U.S.
A lot of the wheat was still in the two to three leaf stage of development without any tillering happening. Damage will be extensive if temperatures drop below -20 C for a prolonged period of time unless the crops receive plenty of snow cover.
“Generally speaking, the abandonment is going to be quite a bit larger than in recent years,” said Burnett.
He is forecasting 25 percent abandonment, up from 18 percent last year and the long-term average of 15 to 20 percent.
Kansas typically accounts for 36 percent of the U.S. hard red winter wheat crop, and Burnett wasn’t impressed with what he saw there.
He disagrees with the USDA rating that 29 percent of the Kansas crop is in good to excellent shape heading into winter. That may be the case in the central and north-central parts of the state, he added, but there are significant issues elsewhere.
“The chance of Kansas having an average yielding crop are very, very slim,” he said.
Burnett thinks yields will be 25 to 38 bushels per acre, depending on spring rain. He didn’t see many viable crops in any of the states he toured. Conditions were terrible even in irrigated areas where farmers use wheat as pasture until they plant corn.
“You didn’t see a lot of cattle out in any wheat pastures at all,” he said.
Burnett has been touring the U.S. winter wheat area since 1989 and can’t recall worse conditions.
The news is similarly gloomy in Russia, where the agriculture ministry is forecasting 38.8 million acres of winter grain, down from earlier estimates of 41.6 million acres. The latest forecast includes 32.1 million acres of winter wheat.
The ministry is predicting average yields, resulting in 38.6 million tonnes of winter grain production this year, up from 29.2 million tonnes last year but slightly below the 2011 harvest of 39.5 million tonnes.
However, Burnett said farmers in southern Russia are experiencing the same kind of establishment problems seen in the U.S. because of extremely dry conditions.
Russian farmers are going to need a good snowfall in advance of the cold fronts that will hit that important winter wheat producing region.
Ukraine’s crop was in good shape heading into winter.
Strategie Grains is reporting a 4.8 percent increase in winter wheat acres in the European Union and is forecasting a 9.2 percent increase in production.
CWB forecasts a five to seven million tonne increase in EU output.
Burnett said global winter wheat acres are up this year, but troubling developments in the U.S. and Russia raise legitimate concerns about achieving the kinds of yields he has seen in supply and demand forecasts.
“In order to hit some of the numbers I’m seeing, you’d have to have some pretty good growing conditions, and I would say that we haven’t had that to date in Russia and in the U.S.,” he said.
He advised Canadian growers to keep a close eye on winter temperature and snowfall levels in Russia and the southern U.S. Plains.
Burnett said wheat price prospects will be good if conditions don’t improve in those two important winter wheat regions.
The USDA is scheduled to issue its first winter wheat production forecast Jan. 11.