Midwest drought impacting wheat crop as supply remains tight

Midwest

(NewsNation) — An untimely drought in the southern U.S. plains is threatening the winter wheat crop here at home, as the war between two of the world’s largest wheat exporters rages on.

The new challenge comes at a time when global wheat prices are skyrocketing, in part, due to the ongoing war in Ukraine and economic sanctions against the world’s top wheat exporter, Russia.

This year’s U.S. season-average farm price is projected to reach a record $10.75 per bushel. As recently as the 2020-2021 season, that price was below $6 per bushel.

Earlier this month, the United States Department of Agriculture (USDA) released its first winter wheat production forecast, estimating that output is set to decrease 8% from 2021. Winter wheat accounts for approximately 70% of the total U.S. wheat production on average.

That decline is largely attributed to an ongoing drought across much of the Great Plains. In fact, 68 percent of winter wheat production is in areas experiencing drought as of early May, according to the USDA.

In Kansas, the nation’s top wheat producer, the 2022 winter yield is projected to be 25% less than a year ago.

“It’s too late to save the wheat,” Kyle Deaver, a third-generation Kansas farmer, told NewsNation affiliate KSN-TV. “Dryland wheat is basically done and it didn’t get enough rain for it.”

It’s too soon to know what impact, if any, the challenging conditions will have on prices at the grocery store.

According to the latest inflation data, prices for cereal and bakery products have risen 10.3% since April 2021.

In the Northern Plains, areas of Montana and the Dakotas have had the opposite problem. Wet conditions have slowed down planting of the spring wheat crop. As of May 8, only 27% of the U.S. spring crop had been planted. Usually, 47% has been planted at this point, according to USDA data.

The bad weather is just the latest setback for farmers who have seen operating costs rise dramatically over the past year. Diesel fuel prices have surged to record highs in recent weeks and the price of fertilizer has also risen.

But it’s not all bad news. Despite the decrease in winter wheat production, overall U.S. wheat production is forecast to increase more than 2% after a rough drought year in 2021.

The United States is the world’s fourth largest exporter of wheat behind Russia, Australia and the European Union.

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