Rising wheat prices may not help

By Ja’Rena Lunsford

Published: September 14, 2007

The price of wheat is at historic highs — but not everyone is celebrating.

Although wheat in Oklahoma was selling for $7.36 to $7.71 per bushel Thursday, compared with $4.16 to $4.45 this time last year, many wheat producers have been unable to benefit from the high prices because they did not yield a large enough crop.

"High prices don't mean a lot to you if you don't have anything to sell,” said Mark Hodges, executive director of the Oklahoma Wheat Commission.

"These are historic highs, and these guys can't even take advantage of it.”

The future price for December wheat on Thursday at the Kansas City Mercantile closed at $8.25.

Between April and June, Oklahoma lost 40 percent of its wheat crop, mostly because of weather-related issues. Hodges said freeze, disease and insect damage started reducing the crop early in the year.

"Then the rain started and finished it off,” he said.

Kim Anderson, a crop marketing specialist at Oklahoma State University, said before the April freeze, the state had a 190 million bushel crop — 50 million bushels above average.

"It looked like it was going to be a banner year with a good price, and it turned out to be a good price with almost nothing to sell,” Anderson said.

Although the state only produced 60 percent of a normal crop this year, there are some producers in southern Oklahoma and the Panhandle who had record yields, Anderson said. He said those crops helped the state surpass last year's production.

"Everyone says this year is so bad, but last year was worse,” Anderson said. He said 2006's crop was 81 million bushels, compared to this year's 116 million.

Wheat producers with small crops aren't the only ones who aren't benefiting from record cash prices. Elevators — which make money from storage — are suffering because of another year with a small crop.

"We have elevators that are in deep financial stress,” Hodges said. "High prices don't help them.”

Some elevators in the northern part of the state are handling 33 percent of the amount of wheat they normally store and market, Anderson said.

"Some of them are handling as low as 20 percent as they are used to,” he said.

Hodges said the wheat commission is concerned about losing elevators because of lack of product.

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