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Kansas wheat acres continue downward trend

Agriculture.com Staff 01/14/2009 @ 10:12am

The USDA Agricultural Statistics Service reported January 12 that U.S. acres planted to winter wheat for the 2009 harvest will be down a dramatic 9% from the 2008 total, to 42.1 million acres. Planted acres in Kansas are down 600,000 from Fall, 2007 to 9 million acres in Fall, 2008. The late row crop harvest due to wet weather and lower prices at planting time were two major limiting factors in acres.

"We are now faced with the hard fact that winter wheat acreage in Kansas has decreased 1.4 million acres in the past 3 years," says Dusti Fritz, Kansas Wheat CEO. "Weather, prices and crop rotation are obvious factors, but there are other factors in this trend that cannot be denied."

Specifically, Fritz says wheat continues to lose acres because it lags behind other commodities in adoption of advanced technologies such as biotechnology.

The roller coaster in wheat markets from historical record-high prices just months ago to less than breakeven prices at planting time also leave Kansas farmers confused when it comes to cropping decisions.

Record-high prices in marketing year 2007-08 can be attributed to the extraordinary alignment of, dismal wheat harvests in the world's largest wheat-producing countries, high demand and global stocks that had been depleted to 30-year lows. That the U.S. was the only completely open market in this tight supply situation paid dividends with excellent exports. The U.S. market presence overseas through offices of U.S. Wheat Associates in 16 countries provided access to countries that were turned away by Canada and Australia.

However, those high prices also led to the recently completed record global wheat harvest, which pushed prices lower and decreased U.S. exports. The rising value of the U.S. dollar and lower crude oil prices have also depressed commodity prices, which are linked to oil through ethanol.

According to Ian Flagg, U.S. Wheat Associates Market Analyst, global wheat supplies have increased, but are nowhere near comfortable levels.

"Global wheat stocks are down considerably after production deficits in seven of the last 10 years. In fact, even though carryover stocks are projected significantly higher this year, the stocks-to-use ratio is up only slightly from last year's record low and is well below the 10-year average," Flagg says. "The current stocks-to-use level provides a very small cushion for marketing year 2009/10 should production problems arise. This leaves wheat prices susceptible to evolving production developments through the planting and harvest cycle, which could result in continued price volatility -- and that will affect planting decisions."

Global wheat consumption will no doubt continue to increase. The USDA projects global consumption will increase 6% in 2009, with a large part of this as feed wheat to cattle. Food use of wheat is also expected to increase for the foreseeable future.

The USDA Agricultural Statistics Service reported January 12 that U.S. acres planted to winter wheat for the 2009 harvest will be down a dramatic 9% from the 2008 total, to 42.1 million acres. Planted acres in Kansas are down 600,000 from Fall, 2007 to 9 million acres in Fall, 2008. The late row crop harvest due to wet weather and lower prices at planting time were two major limiting factors in acres.

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