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Published November 16, 2010, 10:44 AM

A good year for wheat

MINOT, N.D. — The weather didn’t always cooperate, but area wheat farmers generally have reason to be happy this fall.

By: Jonathan Knutson, Agweek

MINOT, N.D. — The weather didn’t always cooperate, but area wheat farmers generally have reason to be happy this fall.

“We managed to pull off a pretty decent crop,” one featuring improving prices, excellent yields and OK though uneven quality, says Neil Fisher, administrator of the North Dakota Wheat Commission.

Spring wheat fared better than durum wheat, the quality of which was hurt by harvest rains.

Fisher was among the speakers at the annual Crop Outlook and International Durum Nov. 9 in Minot, N.D.

About 100 people, including farmers, grain elevator managers and other industry officials, attended the event, sponsored by the North Dakota Wheat Commission and U.S. Durum Growers Association.

Forecasts for widespread rain and snow on Nov. 10 cut into attendance because some wheat producers stayed home to finish harvesting sunflowers, officials said.

Wheat doesn’t receive as much attention in North Dakota as it once did. Other crops, particularly corn, are playing bigger roles, and the state’s growing energy industry is increasingly prominent.

But wheat remains North Dakota’s most important crop — its 2009 wheat crop was valued at $1.8 billion — and agriculture remains the state’s dominant industry. Fisher says.

“Agriculture still drives the bus,” he says.

Double-digit wheat prices?

The big question at the Minot event — one for which nobody had a good answer — is whether wheat prices will continue to rise.

Spring wheat prices have shot to more than $7 per bushel from about $5 per bushel in the middle of summer, reflecting problems with the Russian wheat crop.

“Everybody’s wondering if wheat is going to hit the double digits ($10 or more per bushel),” says Jim Peterson, marketing director for the North Dakota Wheat Commission.

“Time will tell,” he says.

Several farmers at the Minot event said privately that they’re storing unsold wheat in hopes prices will climb to $10 or higher.

Though world wheat use will set a record this year, there still is a lot of wheat in the world, Peterson and others say.

“But U.S. market share is expected to rise dramatically. It’s already happened in some classes. That’s a positive for us as we go forward,” he says.

The poor Russian wheat crop and the country’s subsequent ban on wheat exports have helped U.S. exports, officials say.

“When Russia isn’t exporting, we usually get some of the business,” says Roger Baker, hard red spring wheat merchandiser for CHS Inc. and a speaker at the Minot event.

Durum market

Durum prices have risen, too.

In early September, they averaged $4.87 at area elevators surveyed weekly by Agweek.

Good-quality durum now brings close to $7 durum per bushel, with low-end durum fetching as little as $3.50 per bushel, Peterson says.

The key durum-producing areas of the United States and Canada were hit with rain during harvest, hurting some of the crop’s quality.

Some areas in Canada received as much as 40 inches of rain this year, says Toby Torkelson, vice president for Rayglen Commodities Inc., a grain broker and consulting firm in Saskatoon, Saskatchewan, and a speaker at the event.

Big crop in region

This year, U.S. farmers harvested 581 million bushels of spring wheat, up from 548 million bushels in 2009, according to information presented at the conference.

North Dakota enjoyed an excellent wheat harvest for the second year in a row. This year, farmers in the state harvested 287 million bushels, the third most on record, down from 290 million a year ago.

Combined, North Dakota, Minnesota, South Dakota and Montana this year harvested 581 million bushels, up from 548 million a year ago.

Montana, which enjoyed plentiful rain this year, led the way, harvesting 105 million bushels this year, up from 71 million a year ago.

Durum farmers in North Dakota and Montana, which together account for about 80 percent of U.S. production of the crop, enjoyed record yields.

North Dakota producers harvested 70.3 million bushels of durum, up from 61.2 million a year ago.

Montana farmers harvested 18.6 million bushels, up from 16.6 million bushels a year ago.

Harvest conditions generally were good for wheat farmers in eastern North Dakota and Minnesota, but producers in parts of western North Dakota and Montana were hurt by rain during harvest, Peterson says.

“We had an excellent production year. We ran into some hiccups in terms of getting the crop off. so we have some issues to work through. But we have a lot of real strong positives in this year’s crop, too,” he says.

Looking at quality

Spring wheat generally is used to make bread and durum goes for pasta, and buyers are looking for high-quality wheat suited to the products they make.

The quality of this year’s spring wheat crop, while good on balance, varies considerably, depending on whether the grain was harvested before or after the September rains, according to the Wheat Commission.

Eighty-five percent of the crop grades as No. 1 Northern Spring, and protein levels, though below their five-year average, are substantially higher than those of a year ago, the Wheat Commission says.

“That’s pretty positive,” Peterson says

The durum crop

With durum, “Quality is the big issue,” Peterson says. “Durum endured more of the September rains than hard red spring wheat.”

On balance, the 2010 durum crop is “of average to good quality,” according to the Wheat Commission.

However, “diligent buyers will find more than adequate supplies” of high-grade durum, thanks in part to large carryover supplies from 2009, the Wheat Commission says.

“The thing to keep in mind is, the first 60 percent of the (2010) crop is of much better quality than the last 40 percent that was harvested,” Peterson says.