Drought Has Negative Impact on US Wheat Production Despite Increased Acreage

Farmers in the United States increased winter wheat plantings by 11% year on year to an eight-year high, boosted by high prices linked to concerns about food supplies following Russia's invasion of major wheat producer Ukraine, as well as relatively low input costs and expanded crop insurance programmes.

Even with the additional acres, a multi-year drought that has gripped the key Plains wheat belt casts doubt on harvest prospects, particularly in states such as top producer Kansas and Oklahoma, which was the No. 3 winter wheat producer last year. The recent increase in precipitation is beneficial, but it will not be enough to revive the crop, according to experts.

Winter wheat accounts for roughly two-thirds of US production, with the remainder planted in the spring, and the US has recently lost market share to other wheat exporters, including Russia.

"Because the crop was planted so late, and it's stressed from a lack of moisture, we're likely to see a yield drag," said Mike Schulte, executive director of the Oklahoma Wheat Commission.

The crop was planted last fall and has lain dormant over the winter, awaiting spring rains that will determine whether farmers commit to harvesting the crop or cut their losses and plant something else. Monthly condition ratings for winter wheat fell sharply in Oklahoma during January, while ratings increased in top producer Kansas, according to the US Department of Agriculture on Monday.

Wheat prices have been unusually high. This fall prompted farmers to increase their acreage, particularly in the Midwest, a secondary wheat-producing region that grows soft red winter wheat varieties used to make cookies and snack foods. Soft red wheat acres in the United States increased by 20% year on year, with planting increasing by 45% in Illinois, the eighth-largest winter wheat state by acreage.

"We are up on acres because we sold (wheat) last year for $10 to $11 per bushel; we haven't done that in my lifetime," said Illinois farmer David Justison, who increased his wheat plantings to 1,530 acres by about 25% for 2023. As an added incentive, the Biden Administration increased the number of counties in the United States where farmers can obtain crop insurance on a second crop planted after wheat, typically soybeans in the Midwest or sorghum in the western Plains, in July of last year.

"Guys might be encouraged to plant a little more wheat," said Eric Brammeier, an agent with Illinois-based SC Crop Insurance, referring to the expanded "double-crop" coverage options in 1,500 counties. While soft wheat in the Midwest is doing well, crops in the Plains, where farmers grow hard red winter wheat, the largest U.S. wheat class used to make bread, are suffering from drought.

Similarly, if the current drought continues into spring, farmers in Plains may decide to skip planting corn and sorghum in 2023 and instead plant winter wheat this fall for harvest in 2024, according to Haag.