Higher wheat prices may mean more Michigan acreageGRAND RAPIDS, Mich. — Climbing U.S. wheat prices on the heels of a drought and wildfires in Russia are among the factors that have some Michigan farmers considering planting more of the crop this year.
GRAND RAPIDS, Mich. — Climbing U.S. wheat prices on the heels of a drought and wildfires in Russia are among the factors that have some Michigan farmers considering planting more of the crop this year.
Wheat prices have been steadily climbing since June, and rose 42 percent in July on the Chicago Board of Trade — its largest monthly gain for the crop in more than a half-century. With no immediate end in sight for the drought, analysts expect prices to continue to rally.
The higher prices have some Michigan farmers recalculating how much wheat to plant this fall, for harvest next year.
“I think we’ll see an increase,” Bob Boehm, manager of commodity and marketing at the Michigan Farm Bureau, told The Grand Rapids Press for a story Saturday. “The price increase is an indication that the market is looking for more wheat and an indication that farmers should plant more.”
The U.S. Department of Agriculture has forecast that Michigan farmers will harvest 490,000 acres of wheat this year. Production was estimated at 36.26 million bushels, down 6 percent from 2009.
Russian has banned exports of the grain for most of the rest of the year due to the drought and wildfires that have claimed one-fifth of its crop.
The U.S. is the world’s largest wheat exporter at 23.6 million metric tons a year. Russia is the fourth largest at 17.5 million, according to the U.S. Department of Agriculture.
Farmers have reasons other than the decline in Russian exports to increase their wheat acreage. A good growing season this year means soybeans will be harvested early, which means fall planting of wheat can begin earlier.
“It’s a nice feeling,” said farmer Troy Johnson, who plans to plant 50 to 70 acres of wheat this year near Casnovia, about 20 miles south of Grand Rapids. “Usually the earlier wheat tends to be a little better yielding wheat.”
Herb Zahm of K&H Grain in Marne, about 10 miles west of Grand Rapids, locked in prices between $6 and $7 a bushel last week for some of the 250 acres of wheat he will plant. That’s below Thursday’s recent high of $7.86.
“Just because it’s up right now doesn’t mean it will stay that way. We try to stay even,” Zahm said.
Over time, it all evens out, said Zahm, who’s farmed for 20 years.
“To be in this business, you kind of have to be immune to that,” he said.