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Wheat prices have seen a recent spike, mostly due to bad weather in the world’s wheat-growing regions. However, the spike can also be attributed to less wheat in the U.S., as farmers here cut their wheat crops over the last decade in favor of growing more corn and soybeans — which were seen as more profitable.
At the Minneapolis Grain Exchange on Friday, spring wheat for September delivery rose another 11 cents to $7.71 a bushel — setting another record. Wheat is trading more than $8 a bushel at exchanges in Kansas City, Mo., Chicago and elsewhere.
“Especially with these high prices, we’re certainly expecting to see wheat (plantings) coming back in a big way,” said Elaine Kub, a commodity analyst with DTN. “Wheat is, by far, more profitable (for farmers) than soybeans or corn right now. ... That would be true even if wheat fell to $7 a bushel.”
In recent years, the ethanol boom made growing corn more attractive to farmers, and foreign competitors boosted their wheat production. As a result, U.S. wheat prices were around $4 a bushel for years.
“In Minnesota over the last 15 years, we’ve cut our wheat acres down quite a bit, down 40 percent,” said David Torgerson, executive director of the Minnesota Association of Wheat Growers. “We’ve been raising other, more profitable crops.”
Analysts say current wheat prices will entice farmers to plant more wheat, so the prices will eventually retreat. But for a few months, wheat consumers will be paying significantly more.
Ed Usset, a grain-marketing specialist at the University of Minnesota, said: “I was at FarmFest last month, and I took a question from a southern Minnesota farmer who wanted to talk wheat prices because he’s thinking of growing (it). It’s weird — but it’s not weird. Just because we don’t typically grow wheat in southern Minnesota doesn’t mean we can’t grow wheat.”
