Kim Anderson Says if Producers Can’t Raise Wheat for Less Than $5 a Bushel in 2020, They Should Look at Another Winter CropThu, 01 Aug 2019 16:11:46 CDT
Analysts around the world are coming to the conclusion that Russia will likely produce a smaller crop than previously expected. While some may expect this to raise the domestic price of wheat, Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson says that probably will not be the case, remarking that a small rally might occur but nothing more substantial. During his appearance on SUNUP this weekend, Anderson explains why his outlook is so pessimistic.
“What’s going on right now might be good news but I don’t think prices are going to go up much,” he argues. “If you look around the world, other countries are making up for that lost Russian production.”
According to Anderson, Argentina for example is expected to produce a crop 3% larger than normal. Australia’s crop will be up compared to last year by 21% (keep in mind this is on the heels of multiple failed crops). Canada’s crop is 5% above average and Ukraine up 16% with record crop over 1 billion bushels. Although lower than expected, Russia’s crop will still be about 4% above average. Anderson says the supply pressure from around the world will mostly likely suppress any support this adjustment creates for domestic prices. From a protein standpoint, domestic wheat has fallen short of the firm 12% minimum standard set by exporters. Oklahoma’s wheat has only averaged 11.3% protein content this year. Russia and Ukraine are providing 12.5%.
Given the situation, Anderson believes that the market will likely not improve and advises producers with grain still in the bin to start thinking about selling it off. Anderson points out that in nine of the last 11 years, producers who sold their wheat before the end of August were paid more for their wheat than those who waited.
For those producers making considerations about whether or not to plant wheat again this year, Anderson cites the latest ten-year projections which peg the average wheat price near $5.00 a bushel. He says if you can not viably produce wheat for that price, you should be considering your alternatives.
You can watch his visit tomorrow or Sunday on SUNUP- but you can hear Kim's comments right now by clicking on the LISTEN BAR below.
Beyond their weekly chat with Dr. Anderson- the SUNUP crew has a very full lineup for your viewing this weekend:
This week on SUNUP we learn from Dr. Barry Whitworth about the first case of the Vesicular Stomatitis Virus (VSV) in Oklahoma since the 1990s and how it is transmitted between animals.
- Then, in the Mesonet weather report, Wes Lee says July is usually dry, but this year was exceptionally dry. Gary McManus shows us where drought is reentering the state and warns of possible expansion.
- Larry Sanders explains how the USDA’s Market Facilitation Program can help producers impacted by trade. He also has information about where producers can sign up for Market Facilitation Program payments.
- Tom Royer show us how sorghum producers can save time while scouting for sugarcane aphids.
- In Cow-Calf Corner, Glenn Selk explains research into shorter gestation periods of summer calving cows.
- Finally, Derrell Peel says the cool and wet start to summer has impacted hay quality and beef prices.
Join us for SUNUP:
Saturday at 7:30 a.m.
Sunday at 6 a.m. on OETA-TV
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