Wednesday, September 06, 2006

$4 wheat making money for farmers

FARGO (AP) - North Dakota's leading crop is making money for farmers now that the price is up to $4 per bushel, a farm management specialist says."At these prices, you'll see more farmers making a profit on wheat, which hasn't always been the case recently," said Andy Swenson, farm management specialist with the North Dakota State Extension Service.Hot, dry weather in Texas and Oklahoma has hurt winter wheat yields, reducing wheat supplies and driving up prices to their highest levels in four years. Hard red spring wheat is selling for $4 to $4.50 per bushel in North Dakota and western Minnesota, up at least 50 cents from last year.North Dakota is the nation's leading grower of hard red spring wheat, most of which is used for bread. The state produced an average of 225.7 million bushels of spring wheat over the past 10 years, according to the North Dakota Wheat Commission.A 10-cent increase on 200 million bushels would mean an extra $20 million for state farmers.Dave Torgerson, executive director of the Minnesota Association of Wheat Growers, said area farmers sold most of last year's crop before the price rally. But farmers can lock in part of this year's crop at current prices. They often contract to sell a portion of their crop before it's harvested.
Many farmers likely will consider selling some of this year's wheat crop now, said Ray Grabanski, president of Progressive Ag Marketing, a marketing service in Fargo.Paul Overby, who grows wheat in Rolette County, about 20 miles from Cando, has sold some of the bushels he expects to harvest this fall. Prices rose even more after the sale, he said. That was frustrating, but overall, he is pleased with the trend."Once wheat got over $4, we should be able to make a little money," he said.Area farmers generally need $4 to $4.40 per bushel to make money, Swenson said.Before the price rally, wheat looked to be even less profitable this year, given rising prices for fuel and nitrogen, a key fertilizer used to grow wheat. But farmers grow wheat because it fits well into their crop rotation, Swenson said.Whether wheat prices remain strong depends in part on how many acres farmers plant this spring. More acres could increase the supply, which could hurt prices.The federal Agriculture Department this spring projected 7.9 million acres of wheat in North Dakota and 1.6 million acres in Minnesota.The upturn in wheat prices almost certainly will result in more wheat acres than projected, said Torgerson and Jim Peterson, marketing director for the North Dakota Wheat Commission. They expect the increase to be modest.Wayne Johnson, general manager of Bottineau Farmers Elevator, said he knows of only a few farmers in his area who switched acres to wheat.Overby said he planted wheat on a few acres that otherwise would have gone into barley.As of Sunday, spring wheat planting was 97 percent finished in Minnesota and 96 percent done in North Dakota, the Agriculture Department said.


Post a Comment

<< Home