America's wheat growing is on a steady decline
On a foggy morning in May, Dennis Schoenhals drove a carload of crop scouts around the wheat fields of northern Oklahoma, part of an annual tour to evaluate the health of the crop. But on some fields, Schoenhals and other farmers had already abandoned plans to harvest the grain for sale because prices had sunk to five-year lows. Farmers cut their losses early this year across the US wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005. For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model.
The Great Plains have long been celebrated for the 'amber waves of grain' in the popular hymn 'America the Beautiful.' The region's states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread.
But with prices hovering around $5 per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop.
Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest.
In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively.
'They can't sustain that,' said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state's wheat growers association. 'Eventually you either change to other crops if you're able to, or you go out of business,' he said.
Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May.
Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show.
Nationwide, corn and soybeans dominate crop fields, with wheat a distant third in planted acreage.
Hard red winter wheat exports hit historic lows in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity's competitiveness.
In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn's value of production was more than twice as high.
Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices.
'We're below profitable levels for these guys,' said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton.
The way things stand, he said, many farmers have 'eaten a lot of their own money and burned up working capital. These bankers are going to say: 'show me some profits or we're going to have some farm sales.''
HERITAGE BUT NO PROFIT
Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area's dry soil, harsh winters and extreme temperature swings.
The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown in the U.S.
Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing 'the miles of fresh-plowed soil, heavy and black, full of strength and harshness.'
Now, U.S. wheat growing is on a steady decline, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud.
When Royce Schaneman joined Nebraska's wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state's most productive wheat-growing land, about one in five fields was abandoned this year.
'The feeling out in the country is not good,' he said.
Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields.
Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more.
Profits remain elusive.
'It's heritage, but there's no profit,' said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices. Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 percent of his farm's total output. 'There's certainly profit in corn,' he said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
7 hours ago
- Gulf Today
America's wheat growing is on a steady decline
On a foggy morning in May, Dennis Schoenhals drove a carload of crop scouts around the wheat fields of northern Oklahoma, part of an annual tour to evaluate the health of the crop. But on some fields, Schoenhals and other farmers had already abandoned plans to harvest the grain for sale because prices had sunk to five-year lows. Farmers cut their losses early this year across the US wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005. For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model. The Great Plains have long been celebrated for the 'amber waves of grain' in the popular hymn 'America the Beautiful.' The region's states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread. But with prices hovering around $5 per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop. Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest. In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively. 'They can't sustain that,' said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state's wheat growers association. 'Eventually you either change to other crops if you're able to, or you go out of business,' he said. Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May. Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show. Nationwide, corn and soybeans dominate crop fields, with wheat a distant third in planted acreage. Hard red winter wheat exports hit historic lows in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity's competitiveness. In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn's value of production was more than twice as high. Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices. 'We're below profitable levels for these guys,' said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton. The way things stand, he said, many farmers have 'eaten a lot of their own money and burned up working capital. These bankers are going to say: 'show me some profits or we're going to have some farm sales.'' HERITAGE BUT NO PROFIT Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area's dry soil, harsh winters and extreme temperature swings. The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown in the U.S. Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing 'the miles of fresh-plowed soil, heavy and black, full of strength and harshness.' Now, U.S. wheat growing is on a steady decline, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud. When Royce Schaneman joined Nebraska's wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state's most productive wheat-growing land, about one in five fields was abandoned this year. 'The feeling out in the country is not good,' he said. Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields. Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more. Profits remain elusive. 'It's heritage, but there's no profit,' said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices. Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 percent of his farm's total output. 'There's certainly profit in corn,' he said.
Zawya
13-06-2025
- Zawya
Four must-see charts following USDA's latest data drop: Braun
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois: Another month, another fresh set of numbers. While the U.S. Department of Agriculture's monthly supply and demand report on Thursday did not shake things up too much versus trade expectations, there were some adjustments – and lack thereof - that are certainly worth a closer look. U.S. CORN EXPORTS USDA raised 2024-25 U.S. corn exports on Thursday, perhaps by a bit more than expected. The new 2.65 billion-bushel target would be the second-best on record. But there is an argument for an even higher number. As of June 5, total U.S. corn sales for export in 2024-25 covered 98% of USDA's forecast, which is about as good as it gets. In the previous 18 years, there were eight instances where sales coverage by this date exceeded 95%. In seven of those eight years, final exports were higher than what USDA had estimated in June. The record volume year of 2020-21 is the one outlier, which could raise concerns about additional increases for 2024-25 given how strong the expectations already are. But there is no evidence that this is necessarily a limiting factor. U.S. WHEAT EXPORTS Right before the 2025-26 U.S. wheat marketing year began on June 1, cumulative pre-season export sales had reached a 12-year high. But as of June 5, the 5.9 million-metric-ton total was only an eight-year high for the date. The shift can be explained. Large, unshipped balances at the end of a marketing year sometimes get rolled over to the new one. Still, the 2025-26 progress is impressive. Total sales now cover 26.3% of USDA's freshly increased, full-year export forecast of 22.45 million tons. That portion is a 12-year high and compares with a five-year average of 21.9% by this same date. Although U.S. wheat exports are expected to hit five-year highs, they may still lack on the world stage. The United States is seen accounting for 10.5% of global shipments in 2025-26, down slightly from the prior year and the third-lowest share in decades. USDA VERSUS CONAB Forecast discrepancies between USDA and its Brazilian counterpart Conab have been in focus over the past year or so, but those deviations took a new turn this month. Conab on Thursday increased its 2024-25 Brazilian soy crop estimate to 169.6 million tons from 168.3 million last month. For an unprecedented 13th consecutive month, USDA left its projection unchanged at 169 million. That marks the first time in eight years that USDA's estimate is lighter than Conab's. However, the two numbers are very close, as are the two agencies' figures for Brazil's 2024-25 soybean ending stocks. This means they may have found synchrony on both supply and demand assumptions, though the agencies may have to revisit pending the outcome of Brazil's in-progress soy export program. On the corn side, Conab increased its 2024-25 Brazilian harvest outlook while USDA's was unchanged. USDA's projection sits 1.4% above Conab's, the smallest discrepancy in four years. WORLD CORN STOCKS Global corn stocks and stocks-to-use are still expected to hit respective 12- and 13-year lows in 2025-26, though the numbers tightened further on Thursday with a reduction in old-crop stocks. The 2025-26 stocks-to-use figure of 18.7% is down from 19.7% a year earlier and 22.3% in 2023-24. That is above the 12% to 15% levels seen between 2010 and 2013, a period of high grain prices and ongoing supply struggles. But it still suggests there is not a ton of play in the global corn numbers, and major exporters' crops must meet expectations. That includes a record U.S. crop target, and things are off to a decent start. That recently sent new-crop CBOT corn futures to six-month lows, and prices are at five-year lows for the date. A big test is coming on June 30. Not only will USDA reveal more information about current U.S. stockpiles, but volume expectations for the 2025-26 U.S. corn harvest could be completely reset if the acreage survey offers a surprise. Such a surprise would not at all be … surprising. Corn acreage has landed outside the range of trade predictions in four of the past six Junes, meaning this month could conclude with some volatile trade. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X.
Zawya
12-06-2025
- Zawya
What's up with the wacky CBOT corn spreads?
(The opinions expressed here are those of the author, a market analyst for Reuters.) NAPERVILLE, Illinois - U.S. corn supply estimates for the waning 2024-25 marketing year have been dwindling in recent months, though a notable rebound is expected for 2025-26. But the futures market might not be reflecting these trends, leading many to wonder if old-crop stockpiles are actually larger than the government has predicted. Normally, that supply trajectory might put Chicago futures in an inverse, where old-crop corn is pricier than new-crop. But so far this month, CBOT July corn has traded at an average of around 3 cents per bushel cheaper than December corn , reflecting a small carry in the market. Analysts think the U.S. Department of Agriculture on Thursday will trim its forecast for 2024-25 U.S. corn ending stocks to 1.392 billion bushels, rendering stocks down 21% on the year. In past Junes, such a decline in corn stocks has been associated with July-December inverses exceeding 50 cents. The closest comparison in terms of stock declines would be 2018, when July-December corn traded at a 21-cent carry during the first two weeks of June. At that time, U.S. 2017-18 ending stocks were pegged to ease 8% on the year, but the actual estimate was more than ample at 2.1 billion bushels. This demonstrates that contracting year-on-year supplies can be associated with market carry in June. Additionally, there are examples (2008, 2018) where this carry existed despite a reduction in stock estimates over the previous several months. Still, the current setup may suggest that either July futures are too cheap versus December, old-crop stocks are being understated, or some combination of both. PARSING PROBABILITIES Given the present market structure, what might this mean for old-crop corn stocks – and trade expectations – moving forward? If old-crop stocks are too low, it may not come to light on Thursday. There is no relationship between the old-new crop futures spread and the trend in USDA's old-crop ending stock estimates from May to June. Fast-forward to June 30, when USDA publishes its June 1 stock survey, and the chance for a bearish bomb increases. Since 2008, whenever July-December corn traded near flat or in a carry during early June, analysts underestimated June 1 corn stocks about 73% of the time. On the flip side, analysts underestimated June 1 corn stocks in just one out of six years when old-new crop corn featured a strong inverse relationship. Since 2008, there is also a 73% hit rate for final corn ending stocks to be the same or higher than was estimated in June whenever July-December corn traded near flat or in a carry during early June. This same early June spread, however, does not suggest that final ending stocks will be bearish as the trade has gone on to both underestimate and overestimate September 1 corn stocks. WAKE ME UP WHEN SEPTEMBER ENDS The outcome is still wide open for the end of September, when USDA will publish final 2024-25 corn ending stocks. But right now, CBOT corn for expiration in mid-September is the cheapest of the bunch. July-September corn is trading at an inverse averaging 12 cents per bushel so far this month, which is unusual given the slight carry in July-December. The historical relationship between these spreads suggests that one or both are a bit out of sync. With multiple anomalies in the futures market setup having been identified, this might simply mean that 2025 is an outlier year. And if that's the case, historical odds may be increasingly less reliable from here. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI can help you keep up. Follow ROI on LinkedIn and X. (Writing by Karen Braun; Editing by Matthew Lewis)
