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Wheat prices are on a rally

By Sean Ellis

Idaho Farm Bureau Federation

POCATELLO – Wheat prices for farmers have flirted with $8 a bushel over the past week and are substantially higher than they were this time last year. 

In fact, they are higher than they have been in a long time. 

“Wheat prices are higher than they have been in quite a few years,” said Soda Springs wheat and barley farmer Scott Brown. 

Wheat prices were in the upper $7 a bushel range last week. That’s about $2.50 per bushel higher than they were this time last year.

“That’s a pretty good price,” said Ririe wheat farmer Gordon Gallup. “Wheat prices are pretty bullish right now.”

The last time wheat prices were this high was in January 2013, according to grain marketing specialist Clark Johnston, owner of JC Management Co., a consulting and grain merchandising company.

The last really big wheat rally was in July 2012, when wheat prices were pushing $9 a bushel, Johnston said. 

By comparison, the low wheat price over the past 10 years was $3.60 per bushel in August 2016. 

Idaho and U.S. wheat farmers suffered through depressed wheat prices for several years following the 2012 and 2013 wheat rallies but that’s not the case right now. 

Johnston said several factors are behind the current wheat price rally, including the fact that corn prices are up significantly. When corn prices rise, so do wheat prices because when corn prices rise, people start feeding their livestock more wheat.

Wheat export markets for U.S. farmers are also good right now because of favorable exchange rates, he said, and wheat crops in some major wheat-growing states could be down this year. 

In addition, wheat stocks are tight. 

“It’s like a perfect storm of factors pushing wheat prices higher right now,” Johnston said. “It’s not just one thing. It’s kind of everything together.”

“I think there are a lot of factors behind the current wheat prices and higher corn prices is one of them,” said Idaho Wheat Commission Executive Director Casey Chumrau. “There is quite a bit of wheat being fed (to livestock) around the country right now.”

Wheat farmers said it should be noted that while wheat prices are up substantially, input costs have risen significantly this year as well. 

“There has been a pretty substantial increase in input costs,” said Meridian farmer Richard Durrant. “I would say that input costs, across the board, have probably gone up 20-25 percent.”

A year ago, wheat farmers needed to make about $4.50 to $4.70 per bushel just to break even; this year that break-even point is closer to $6 per bushel, Johnston said. 

“Wheat farmers have to make six bucks (per bushel) to keep their nose above water,” he said. 

If the current wheat prices hold, it could be a big year in Idaho for the state’s wheat farmers. Idaho wheat farmers brought in a record $841 million in farm cash receipts during the big wheat price rally in 2012.

Wheat is the state’s No. 2 crop in terms of total farm cash receipts, behind potatoes, and the crop is grown in 42 of Idaho’s 44 counties and is a part of many Idaho farmers’ rotations. 

If 2021 does turn into another major year for wheat revenue in Idaho, it would help numerous communities across the state where wheat is an important crop, Brown said. When wheat farmers make more money, that helps out farm implement dealers, chemical and fertilizer dealers and all segments of the farm economy, he said.

“Higher crop prices help out everybody,” Brown said. “It results in more dollars in growers’ pockets and that ends up helping everybody in these local communities.”