Expect another year of drought-reduced US hard red winter (HRW) wheat production, according to Gro’s machine-learning US Hard Red Winter Wheat Yield Forecast Model. Despite a 10% increase in HRW wheat acres, this year’s challenging growing conditions increase the likelihood of low production.
A significant portion of this year’s HRW wheat crop could also be abandoned, or plowed under, this spring, contributing to reduced production. A previous Gro analysis indicates dry years tend to have higher percentages of abandoned acres.
The HRW wheat crop, which emerged from winter dormancy last month, accounts for about 40% of total US wheat production.
Gro’s Climate Risk Navigator for Agriculture currently shows soil moisture levels in Kansas, Oklahoma, and Texas — which together account for about 70% of US HRW wheat production — at one of their lowest levels in more than two decades.
Last year, similarly dry growing conditions slashed HRW wheat yields by 20% year over year, and by a similar amount from the preceding five-year average. HRW wheat production last year fell 29% from a year earlier.
So far this year, accumulated precipitation in the US’ key HRW wheat growing areas has been 40% below the 10-year average, and only limited rainfall is in the forecast, as shown by this GFS display in Gro Navigator.
Compared with HRW wheat, the US’ soft red winter wheat crop, which is grown in states east of the Mississippi River, is in much better shape, as reflected in the relative weakness of Chicago prices. The spread between the two winter wheat classes has widened recently.
This growing season US farmers also expanded their soft red winter wheat acreage by 20%, but soft red winter wheat only represents about 20% of the US’ total wheat production. Another 30% of US production comes from spring wheat, with the remainder split between white and durum.
Soft red wheat contains less protein than HRW wheat, and it is generally used for making crackers, pretzels, pastries, and cookies.
HRW wheat is used by millers to make all-purpose flour, making it a key input for bakers (breads and hard rolls, for example). It is also used to make items such as Asian-style noodles. As such, the price and availability of HRW wheat are key variables for a number of industries, including bakers, restaurants, food service, and food retailers. This means that another year of poor production could negatively affect the profitability of these industries, as well as US farmers and companies that sell into the agricultural space.
To plan effectively, seed, fertilizer, and other companies that sell into the agricultural sector need up-to-date information about current and future demand for their products. With this in mind, Gro has developed the US Farmer Profitability & Crop Budgets Application, a tool that provides detailed, holistic views into US farmer profit and loss prospects. It does this by aggregating and structuring public data sources and combining this information with Gro’s proprietary models across yields, input and selling prices, supply and demand, climate and weather, and trade.
Contact us at firstname.lastname@example.org to learn more about Gro’s new US Farmer Profitability & Crop Budgets Application.