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Drought market prices climb

By: Jake Putnam
Published in Video on  July 29, 2021

Island Park--AS The 21 Wheat harvest continues across the state, the local wheat market is on a rollercoaster ride. Last week the State saw 20-22 cent surges. Market analyst Clark Johnston says the surge was expected.

"The reason they went up is that spring wheat future was just going through the roof and it pulls everything up with it. While it was doing that we have seen the basis in Portland on soft-white wheat strengthen, it had fallen off about 20-cents but it now strengthen-up again. So between those two, we've seen pretty good cash prices and producers notice that, and producers started selling towards the end of last week and this week. 'Locally with 22-cent wheat is it stay in there a while?' I think we are just going to trade a bit of range of few cents higher and a few cents lower. But we reached a point where producers were starting to sell wheat. That was the purpose of that market going up we needed someone to sell some wheat and that is what producers did. We say in that Southeast Idaho market, flour mills bought in their needs for August and September, so now their bids are for October forward and so the market did exactly what it set out to do: reach a point where producers would sell," said Johnston.

And that's not the only commodity climbing in the black…The Idaho hay market has stayed steady all summer until last week when demand stepped up and prices were up as much as 30-40 dollars per ton:

"Hay right now is in the eye of the beholder who needs it and what are you willing to pay for it," said Johnston. "One producer said, 'If I can get strings around a bale I can sell it. It doesn't matter what the quality is, or the test, dairies are going to buy it. That's what we are seeing right now. I had one producer tell me that he's not going to keep any hay to feed his own cow-calf operation he's going to figure something else out, just because of the fact that hay is a high price for him," added Johnston.

Johnston says Milk prices have held steady all summer, that trend will hold but demand is expected to go up in the fall.

"I think we will see it stay steady just for the fact that demand will pick up as we go into the fall. The cheese fell off in the spring and that demand will pick back up and we will see a little more domestic usage go up with export demand on the cheese market. Milk prices will remain steady to a bit higher going into the new year," said Johnston.

The Farm Bureau’s market analyst says the great 2021 drought will see its greatest impacts after harvest.

"Absolutely, we will see it on feed to start with. Corn started to climb to the $6-dollar mark in that December contract and that will really impact the dairies for sure," said Johnston.

With farmers facing the biggest challenge of the past decade, there’s still the ‘get the crop in attitude’

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