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Agriculture Today


Uncertainty the name of the game with wheat




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Robert Burns
November 14, 2012 | 2,855 views | Post a comment

COLLEGE STATION -- Texas wheat growers may have some hard decisions to make this winter because of market and weather uncertainties, according to a Texas A&M AgriLife Extension Service marketing expert.

Much of the uncertainty in prices stems from the drought, Dr. Mark Waller said. Most of the state’s wheat got a boost from late-summer, early-fall rains, with much of the crop emerged, and some already grazeable, said Waller, AgriLife Extension economist in grain marketing and policy, College Station.

“From a traditional standpoint, grain prices are high,” he said. “We’ve been trading in a kind of sideways pattern since June, if you look at future market prices. A lot of that is because grain supplies are tight, and not only wheat supplies. If you look at what happened with the drought in the Midwest, we’re likely to see pressure for more wheat to go toward feeding because there is a shorter corn crop.”

“Some of those look like relatively profitable decisions now,” Waller said. “With prices at these levels they at least have something to consider -- it’s better than having low prices, but there’s a lot of uncertainty right now.”

And there’s continued uncertainty when it comes to winter weather. As recently as late August, forecasters, including those at the National Oceanic Atmospheric Administration’s Climate Prediction Center, were expecting a stronger-than-average El Niño to develop in the tropical Pacific. A strong El Niño would have increased the chances for a wetter-than-average winter, which is exactly what the crop needs, Waller said.

Most experts agree, he said, that because soil-moisture levels were severely depleted during the 2011 drought, this year’s crop will need greater-than-average rainfall to show an average performance.

“The markets by this time would usually start to decline, but we’re still looking at enough uncertainty, especially with changes in the weather forecast, that we may not see as much rainfall as earlier expected this year,” he said.

AgriLife Extension district reporters compiled the following summaries for the week of Oct. 30 through Nov. 5:

AgriLife Extension district reporters for the Southwest District, including Wilson, Gonzales, Guadalupe, and Bexar counties, reported cooler temperatures continued, with some counties receiving 0.5 inch of rain. More moisture was needed. Winter wheat planting continued. Pastures looked good, and producers were cutting hay. Livestock were benefiting from the good conditions.

AgriLife Extension district reporters for the Coastal Bend District, including Karnes County, reported warm, humid weather returned, with scattered showers providing some moisture. A few areas experienced severe thunderstorms, small hail, and high winds. However, most areas remained dry. Fall fieldwork continued, though most fields were worked, with producers waiting for better conditions for planting. Wheat planting continued. Warmer-than-normal temperatures resulted in more forage production, though most winter forages were moisture-stressed. Producers were trying to take a last hay cutting before the first frost. Livestock producers were supplementing cattle with protein and hay. Pecans were being harvested in most areas. Many homeowners reported bad pecans, which was most likely associated with poor nutrition as a result of last year’s drought, as well as stinkbug damage. Commercial pecan growers had some problems with pecans sprouting, but otherwise the crop looked very good.

Robert Burns has nearly 30 years’ experience writing about agriculture and agricultural-related research. He writes about Texas AgriLife Research and Texas AgriLife Extension Service activities at the Overton Center and centers in Stephenville and Temple.
 

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