June 2017 Markets and Economic Update

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Today’s wheat prices are slightly improved over 2016’s dismal $3.85 per bu national average price. Nationally, U.S. wheat planted acres are down about 25% compared to 2016, and the national yield forecast of 48.9 bu per acre is more in line with average production. In 2016, the U.S. had a record-high production of 55.3 bu per acre. Season average farmgate wheat prices for 2017 are projected to be $3.90 to $4.70 per bu.

High protein wheat supplies are predicted to be tight, resulting in high premiums for high protein and high discounts for low protein. University of Idaho researchers are advising growers to optimize their nitrogen levels with spring foliar applications to avoid penalties for low protein! 

With the current forecast for low grain prices, non-wheat crops including Austrian winter peas (AWP) and garbanzos (G) are among the  profitable this fall. Spring peas, spring barley, and spring canola are predicted to be quite unprofitable this year (Fig. 1). Price and yield assumptions for the net returns calculations in Fig. 1 are listed in Table 1.

 Fig1_updated
Fig. 1. Estimated 2017 net returns over total costs for northern Idaho crops

  Table 1. 2017 crop yield and price estimates for northern Idaho
T1_updated

Net returns over total costs for winter wheat (WW) are predicted to be $29 per acre, assuming a yield of 90 bu per acre and a port price of $5.06 per bu. Returns for soft white spring wheat (SWSW) are predicted to be -$9 per acre, with a price assumption of $5.06 per bu and a yield assumption of 65 bu per acre. At 65 bu per acre, the break-even price per bu would be $5.21. On the other hand, net returns for some less commonly produced crops for this region are quite profitable, with the highest net returns forecast for Austrian winter peas, at $115 per acre, assuming a 2000 lb yield and a price of $0.25 per lb. Garbanzos are also forecast to be quite profitable, returning $97 per acre with a yield of 1400 lb per acre and a port price of $0.36 per lb. A detailed spreadsheet with cost and returns for each crop is available here. For a printer-friendly version, click here.

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