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Kansas Laments Low Wheat Yields: Producers Already Dealing With High Fuel Costs Will See Less Income.

Posted on: Wednesday, 14 June 2006, 18:00 CDT

By Victoria Sizemore Long, The Kansas City Star, Mo.

Jun. 14--The combines rolling through Kansas could be cutting potentially the smallest wheat crop in four years.

The effects could be devastating for some farmers who already have been ravaged by higher fuel prices.

"It's a pretty big deal if you're producing it," said Kendall Hodgson, a Little River, Kan., wheat farmer and president of the Kansas Association of Wheat Growers. "It's going to mean a loss of income for farmers."

In its latest crop production update on Friday, the U.S. Department of Agriculture projected the Kansas hard red winter wheat crop at 291.4 million bushels, down from last month's projection of 319.6 million bushels. Last year, Kansas farmers harvested 380 million bushels.

The Kansas harvest is progressing at a quicker pace than usual. The department said Monday that 15 percent of the Kansas crop was harvested as of Sunday, compared with 1 percent this time a year ago. Recent warm temperatures helped with maturity and allowed for harvest, crop experts said. Cooler temperatures this time a year ago caused development to lag and slowed the harvest.

Hard red winter wheat is planted in fall and harvested in summer, and Kansas is the leading producer of the commodity -- used for baking bread, hamburger buns and similar products.

Experts said uncooperative weather, especially warm and dry conditions during key growing periods, were largely responsible for the projected cut.

"We started out with a crop that looked average, then the weather got hot and dry, and then it got cool," said Eddie Wells, deputy director of the Kansas field office of the USDA's National Agricultural Statistics Service. "And moisture did not come at the right time."

Oxford, Kan., wheat farmer Tom Morton said not only had dry weather been a problem, but also pests.

Morton, who has harvested about 60 percent of his wheat, said that while some areas in Kansas were reporting good yields, they "are all over the board." He anticipated Kansas wheat production could drop even more than the latest government estimate.

"Wheat farming is complex, and there are a lot of things to be factored in," he said. But for Morton, who is chairman of the Kansas Wheat Commission, between weather and pests, "we lost a tremendous amount of wheat."

Hodgson said the potential loss of income comes on top of sharply higher production costs, particularly for fuel and fertilizer, as well as machinery, the last few years.

He and others said the potential exists for higher wheat prices as a result of the shortfall. Contributing to higher wheat prices are global supplies of 143.99 million metric tons, the lowest level in 25 years.

"The market is watching the global wheat supply," Wells said. "And the market is saying the global supply is not enough to offset the production shortage."

Data from USDA's National Agricultural Statistics Service shows the average price to farmers for a bushel of winter wheat has risen from $2.51 in 2000 to $3.30 in 2005 because of supply and demand.

But at the Kansas City Board of Trade, where hard red winter wheat is traded, prices recently rose to their highest level in about 10 years as traders speculated on the condition of the crop. Although wheat futures closed lower Tuesday, prices at the exchange remained just short of $5 a bushel in some contracts.

"What's sad is that a farmer has to go out of business because they lack the production to benefit from higher prices," Wells said.

Hodgson said farmers have asked for assistance from the federal government, but "it's not in the cards, at least in the near term."

The last time Kansas wheat farmers produced fewer than 300 million bushels was in 2002, when the harvest was 270.6 million bushels. Kansas produced a record high crop of 501.4 million bushels in 1997, while the lowest Kansas crop in recent history was 255 million bushels in 1996.

Kansas farmers planted 10.2 million acres of hard red winter wheat in the fall. The average yield is projected at 31 bushels an acre, compared with 40 last year.

Meanwhile, all U.S. winter wheat production this year is projected at 1.264 billion bushels, the smallest since 2002 and 16 percent below a year ago.

Updated production data will be released at the end of June.

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To reach Victoria Sizemore Long, call (816) 234-4374 or send e-mail to vlong@kcstar.com.

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Copyright (c) 2006, The Kansas City Star, Mo.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Kansas City Star (Kansas City, Missouri)

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