The U.S. winter wheat industry is bracing for a weather phenomenon that could harm an already water-deprived crop and bolster already record high prices.
In its Nov. 29 weekly newsletter, U.S. Wheat Associates said the shouting of a little girl known as La Nina is becoming more audible each month, a voice that is sending chills up the spines of American farmers.
The U.S. National Oceanic and Atmospheric Administration has prepared long-term outlooks showing the potential impact of La Nina. The event is a cooling of Pacific ocean water near the equator, but its impact affects a large part of the globe.
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Most of the southern half of the United States is coloured some shade of brown on the map, indicating the region could experience below normal precipitation during the first half of 2008.
The brown completely covers Kansas, Texas and Oklahoma, the three key hard red winter wheat states.
“That don’t look good. It don’t look good,” said Bill Tierney, executive vice-president of research and marketing with John Stewart & Associates Inc., and former grains economist with the U.S. Department of Agriculture.
A U.S. Wheat Associates spokesperson stressed the map is simply a projection of what could happen if La Nina strengthens this winter and that is still to be determined.
But Tierney has spoken to a “well qualified” crop meteorologist who said the current conditions are similar to the fall of 1995 when La Nina played a big role in decimating the U.S. winter wheat crop, spurring prices up to record levels not surpassed until this year.
The wheat crop this fall is already suffering inadequate topsoil moisture in the central and southern High Plains and poor subsoil reserves in the Ohio Valley and the southeast. There are reports that some winter wheat fields didn’t germinate and emergence rates are well below the five year average in Texas and Oklahoma.
The wheat could be in dire need of timely spring rains, said the meteorologist, rains that likely wouldn’t arrive under La Nina.
He told Tierney that 1995-96 represents an unfortunate harbinger for the 2007-08 crop. Twelve years ago there was a rapid transition from wet to “super dry” across the entire southwest and south-central U.S., in part due to La Nina.
“What this guy is essentially saying is that you can see some analogy between the pattern of weather in the fall of 2007 and the fall of 1995,” said Tierney.
That is a worrisome comparison because in 1996 farmers abandoned 27 percent of their hard red winter wheat acreage compared to the average of 19 percent, and their yields were 29.5 bushels per acre compared to the long-term average of about 42 bu.
Tierney said there are valid concerns for the crop, which have boosted wheat prices past the previous all-time peak set in October. If La Nina weather occurs, that trend will likely continue.
“That would be something that one would expect would support prices,” he said.
Tierney’s proof is that before this year’s run-up in wheat prices, the previous high was set in 1996, the year in which La Nina contributed to high abandonment rates and low yields in the important U.S. winter wheat crop.
But he added that a shortfall in the U.S. wheat crop might not be enough to offset the substantial rise in global acreage and production that analysts have projected.
The International Grains Council predicts a four percent surge in global wheat acreage. Tierney anticipates an even bigger increase in production, with global output rising seven percent to 645 million tonnes from 603 million tonnes this year.
