Agricultural News
Strong Demand for Wheat Pushes Overall Value of 2011 Oklahoma Wheat Crop Close to 2010 Value
Mon, 06 Jun 2011 17:35:30 CDT
Oklahoma State University Grain Marketing Extension Economist Dr. Kim Anderson sat down with Ron Hays and discussed the potential value of the wheat crop for this year in comparison to last year. This time last year, wheat was around $3.00 per bushel on a cash basis across most of Oklahoma, while this year wheat is over $8.00 per bushel for those producers hauling wheat to the elevator and selling.. Anderson says this will lead to a strongly valued crop despite the lower bushels this year. Many producers sold at close to harvest time last year- and were not able to take advantage of higher wheat prices that ocurred later in the marketing year. Overall, the value of the 2010 Oklahoma wheat crop was pegged by USDA at $616,590,000, based on 120.9 million bushels and an average price of $5.10 for the full marketing year.
Anderson believes that producers could end up with a 70 million bushel crop in Oklahoma, which at $8.25 per bushel, results in a crop worth almost $580 million. Because of the higher price available to producers, there will not be a big drop in value to producers even though there are fewer bushels this year. In fact, this early estimate is only about 6% fewer dollars back to Oklahoma wheat farmers on the smaller crop in 2011 versus 2010. However, the lack of volume is not good for elevators and the industry that rely on the volume of wheat going through the market, says Anderson. And for those producers who ended up with no crop, they only get proceeds from crop insurance, a far cry from those producers who have thirty bushel an acre wheat or better.
Another concern for producers for the 2012 crop season is the issue of seed wheat. One concern is the limited supply of seed wheat available while another is the cost to produce seed wheat. The cost to produce an acre of seed wheat is about $380, says Anderson. Anderson says producers need to prepare for a short supply in seed wheat and for it to be more expensive than previous years. However, Anderson says to be careful if producers are considering using bin-run wheat because the market is so sensitive to quality.
The good protein levels and test weights for this crop year are a good sign for Oklahoma and will make Oklahoma more competitive in the export market and in the flour market on a domestic level says Anderson.
Click on the LISTEN BAR below to hear the rest of Dr. Kim Anderson's thoughts on the potential value of the 2011 crop season and how it compares to 2010.
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