WICHITA, Kan. (AP)
-- A global drought in major wheat-producing countries coupled
with the lowest world grain stocks in a quarter century are
fueling rising wheat prices amid predictions of shortages,
farm economists said.
"It has been a steady climb", Mike Woolverton, a grain
marketing economist at Kansas State University said Thursday,
adding that he expects prices to continue rising.
Among the latest indicators is a 10-day forecast for the
Great Plains showing hot and dry weather, he said.
Wheat prices have surged to well over $5 a bushel on major
commodity exchanges since the Agricultural Statistics Service
released its forecast last week for the nation's winter wheat
crop, down 12 percent to 1.32 billion bushels.
Hard red winter wheat, the premier wheat used to make
bread, is forecast to be down 23 percent.
The last time wheat prices surpassed $5 a bushel was
But not since the winter of 1995-96 have prices stayed at
that level or higher for months, said Terry Kastens, an
agricultural economist at Kansas State University. Prices then
briefly hit $7.50 on the futures markets after drought and
massive freezes in Kansas.
Prices for wheat have been on a steady upturn as drought
decimated U.S. winter wheat crops in the nation's Southern
Plains, where the hard red winter wheat is grown. They surged
last week after the agency said Texas would have a little more
than a third of its normal crop and Oklahoma would have maybe
half a crop left.
"We are going into this harvest with a relative shortage of
good milling wheat, which we grow in Kansas, and it looks like
that shortage will continue into next year", Woolverton
In Kansas, the nation's biggest wheat producer, the
forecast of 319.6 million bushels is down 16 percent from a
year ago. But if the latest weather forecast holds true, the
state could see an even smaller wheat harvest than last week's
estimate, Woolverton said.
The first early harvest reports started coming out this
week in Texas, which started cutting wheat two weeks earlier
than normal. Early indications on yields and quality are poor,
thousands of acres have been abandoned and in some parts the
crop is so bad it can't even be baled for hay.
Texas is going to harvest the fewest number of acres since
1925, Woolverton said.
Another indication of a worsening global drought came this
week in a report from the United Nations Food and Agricultural
Organization indicating nearly two-thirds of the winter wheat
crop in western and northern China has been wiped out by a
prolonged drought. Some other areas have experienced a 40
percent to 50 percent cut in winter wheat harvest.
"There is this band around the world where wheat is
produced that is affected by this drought", Woolverton said,
citing droughts in Russia, Ukraine, India and east Africa,
among other countries.
The Agriculture Department last week forecast global wheat
production to be down 3 percent. The agency predicted lower
exports for Russia and Ukraine would be partially offset by
increased exports for Argentina, Australia and Canada.
But the agency noted the world's wheat stocks are at the
lowest level they have been in the past 25 years.
"The stage is set for real high wheat prices", Woolverton