High wheat prices mean more winter wheat planting in Idaho

Wheat prices are at record highs in the United States, passing the previous high in 2011 by 44 cents.

For Idaho farmers, that means a price boom just in time for the winter planting season.

Travis Jones, Idaho Grain Producers Association executive director, said Idaho farmers expect to devote more farm acreage to wheat than to other crops.

Wheat prices have climbed in 2012 as much of the country suffered from high temperatures and drought through the summer. That produced a smaller wheat crop than expected and threatens to keep the U.S. winter wheat crop, generally planted in October, small, Jones said.

Wheat seeds need moisture for healthy development. Many regions that have been without water would be planting the crop in a soil that’s no better than dust, he said. Also, Russia’s wheat exports have been restricted this year, and early indicators show Australia’s next wheat crop will be thin. Those factors have driven up the global market price for wheat.

Idaho farmers are largely immune to the drought, as they rely heavily on irrigation to water their fields.

Idaho Wheat Commission Executive Director Blaine Jacobson said the immediate effect of the high prices – more wheat planting – could mean lower prices in the future.

“The prices will hold as long as there is the current uncertainty is in the marketplace,” Jacobson said, adding that a heavy wheat crop from Idaho and other enterprising regions could depress prices in the long run. “The best cure for high prices is high prices, because it leads to more acreage and brings balance.”

Many farmers are locking in their winter wheat prices now at about $8 a bushel in futures contracts. They’re gambling that market conditions won’t improve, sending prices even higher by harvest time, Jacobson said. The move also protects a farmer if conditions do improve and the price drops significantly.

The United States Department of Agriculture lists its estimated wheat price for the 2012-2013 growing season at somewhere between $7.50 and $8.50 a bushel. The 2011-2012 price was $7.24.

With current prices around $8 a bushel, that means the USDA estimates that conditions won’t improve enough to considerably lower prices by the spring harvest, but figure they could get a little worse.

Jones said that although wheat appears to be a somewhat safe bet for planting in the coming year, most farmers remain cautiously optimistic. Weather, a flooded wheat market or some other mishap can always damage a winter crop, he said.

“Anything could happen that could be disastrous by next year,” Jones said.