Winter wheat popularity expected to last

Solid yields, an early harvest and the narrow price spread with spring wheat should help winter wheat hold onto its acreage in Manitoba and Saskatchewan, says a grower from Birtle, Man.

“I don’t know if we’ll have more acres than last year … but I would anticipate it would be similar,” said Garth Butcher, who expects to plant 500 acres of winter wheat on his 3,000 acre farm.

Prairie producers harvested more than 1.2 million acres of winter wheat this summer, with 1.1 million acres in Manitoba and Saskatchewan. The acreage was more than double the 575,000 acres recorded in 2011.

Many farmers seeded the crop into unplanted fields because of extensive spring flooding in Manitoba and Saskatchewan last year, but winter wheat advocates hope to hang onto those growers and the acreage gains.

“I don’t think it was a stop gap. I think the people that tried it are going to keep going (with it),” said Winter Cereals Canada executive director Jake Davidson from his office near Minnedosa, Man.

“(The) Hutterite colonies are out seeding winter wheat. I’ve got some down the road from me that is already out of the ground.”

Traditional winter wheat producers will continue to grow the crop, but a couple of factors will determine if new growers join the club. For one, producers will compare spring wheat yields to winter wheat yields when deciding between the two crops, Butcher said.

Winter wheat yields were good this year around Birtle at 70 bu. per acre, he added. In comparison, spring wheat yields were 50 to 55 bu. an acre, which may impact a growers’ decision, Butcher said.

Across Manitoba, winter wheat yields were slightly above average, ranging from 55 to 100 bu. with an average of 70 bu., Davidson said.

“I heard a lot of 70s and 80s.”

Another factor is the price spread between winter and spring wheat. As of early September, spring wheat on the Minneapolis Grain Exchange was trading at $9.35 per bu. for the December 2012 futures contract, while a December contract for Chicago Board of Trade wheat, or soft wheat, was trading at $8.74 per bu.

Spring wheat has previously traded at a premium of $1.50 a bushel over winter wheat, but Greg Kostal of Kostal Ag Consulting in Winnipeg said that premium will likely narrow in coming years.

Analysts attribute this summer’s tight gap between hard and soft wheat to the drought in the U.S. Midwest and its impact on the corn crop. As a result, demand has pulled up the value of soft wheat because it is a replacement feed for corn.

While corn represents a substantial factor behind the tight wheat spread, the post-CWB era is also affecting the market in Canada, Kostal said.

The CWB monopoly in Western Canada encouraged the planting of high protein varieties and fostered a price premium for quality. However, Kostal said the hard wheat premium will likely shrink in the open market because of increased north-south trade. As a result, it’s possible Canadian growers will shift to winter wheat because it generates higher yields, he said.

“All other variables being equal, including the agronomic risks, over time tighter spreads between spring wheat and other wheat classes will gravitate more (acres) to the winter wheat or the high yielding CPS (wheat).”

In the short term, growers may want to plant winter wheat this fall to take advantage of the feed shortage in North America. Winter wheat planted now will be harvested next summer so prices should be based on old crop demand, Kostal said.

“You’ve got more confidence … that you would have an outlet to market winter wheat in July, at a high old crop corn price substitute, before the corn crop is harvested.”

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