Countries like Russia, Australia and Canada are producing more wheat, leading to a global overabundance of the crop and subsequent lower prices. (jayneadd/Flickr)
Talk to any corn farmer and he or she will likely lament the dropping price of corn. But corn growers are not alone. Farmers who grow wheat are beginning to feel the same pinch.
A USDA report out this week tells farmers to expect wheat prices to dip even further. Not only are corn prices, which directly correlate to wheat prices, on the decline, but a global wheat bumper crop this year will likely spell and even further decrease in price for American wheat farmers.
And it might be a while before they go back up.
The world is growing a lot more wheat. Countries like Russia, Australia and Canada put a lot more wheat in the ground the past few planting seasons and are now on track to set a world record. That overabundant harvest will flood the market with wheat, leaving farmers in U.S. Wheat Belt states like Nebraska, Colorado, Kansas and Oklahoma with a diminished price.
The projections for this year show American wheat farmers will get between $6.65 to $7.15 per bushel for their crop. That’s down 11 percent from a record price of $7.77 last year.
“It’s hard not to pay attention when the price is dropping,” said Darrell Hanavan, director of the Colorado Wheat Growers Association. His members have already noticed a drop in price, mostly due to the slipping price of corn.
During the drought, Hanavan said, many feedlot owners switched their cattle to wheat, or supplemented their corn supplies with the grain. Now that corn is more affordable they’re switching back, leaving wheat in less demand.
Those two factors, the global abundance and the declining corn price, mean wheat farmers are in for the long haul, Hanavan said.
But American farmers can hope for a drought on the other side of the globe.
“We’ve had three record wheat crops in the world,” Hanavan said. “Can we have a fourth? Or are the odds against that? We don’t know because the weather’s the greatest factor.”