Hopes for the recovery of the struggling U.S. hard red winter wheat crop took a big blow with a new forecast calling for worsening drought conditions this spring.
The National Oceanic and Atmospheric Administration issued a map on March 17 predicting persistent and expanding drought in the key winter wheat growing states of Kansas, Texas, Oklahoma, Nebraska and Colorado during the April through June period.
“We’re going to have a very poor harvest if this (drought) holds and it looks like it will,” said Kim Anderson, crop marketing specialist with Oklahoma State University.
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The five and 10-year average national winter wheat yield is 44 bushels per acre. The average dipped to 41.7 bu. in 2006 and 2007, two previous drought years.
“Could we go back to there looking at this map? Yes we could,” said Anderson.
The U.S. Department of Agriculture is forecasting 663 million bu. of carryout in the U.S. at the end of the 2011-12 campaign, which is slightly above the five-year average of 648 million bu.
But that number could be in jeopardy if the drought forecast holds true. A large portion of the crop is already rated in poor to very poor condition in key states.
“The odds are pretty strong that we’ll have a much lower crop,” said Daniel O’Brien, extension agricultural economist at Kansas State University.
He thinks it’s not too much of a stretch to suggest abandoned acres and sagging yields will cut production by one-third in Texas, Oklahoma and Kansas, three states that typically grow one-quarter of the U.S. wheat production.
That would slice 200 million bushels out of total supplies. O’Brien believes the USDA has not fully accounted for that big of a hit in its latest production estimates, so the carryout number could easily drop in future reports, lending strength to wheat prices.
But he doesn’t see supplies falling to 2007-08 levels when ending stocks plummeted to a 60-year low of 307 million bu., prompting Chicago wheat prices to peak near $13 per bu. in March 2008.
Anderson said U.S. ending stocks will be heavily influenced by production in other wheat growing countries. The U.S. crop accounts for nine percent of global wheat supplies.
If world supplies are adequate in 2011-12, then the U.S. would likely export less and maintain average ending stocks. But if there’s trouble elsewhere, watch out.
“The stage is set. If we have some crop failures, we’re going to have tight wheat stocks and relatively high prices,” he said.
Anderson noted that spring wheat growing regions of the U. S have good moisture.
On the same day that it issued its drought forecast, the NOAA released another map calling for an above average risk of flooding from the north-central U.S. through the Midwest and on to the northeast.
“For the third consecutive year, the stage is set for potential widespread, record flooding in the north-central United States,” said Jack Hayes, director of the NOAA’s National Weather Service.
Anderson noted that although the winter wheat crop appears to be in serious trouble, it can’t be written off yet. It is an incredibly resilient crop capable of fully recovering from early season drought.
He recalled a conversation with an Oklahoma farmer in the 1980s who harvested a 35 bu. wheat crop that was so thick he couldn’t see the ground.
“I talked to him the next year and he says, ‘Kim, I can see the rabbits running down the rows and I’m cutting 35 bushel wheat.’”
