Drought threatens winter wheat grazing plans

Nov 16, 2012

Crop conditions for U.S. winter wheat across Midwest drought-stricken areas are the worst recorded in 27 years.

According to USDA’s crop and weather report, winter wheat was rated at 21 percent very poor, 32 percent poor, 44 percent fair and 3 percent good. By this time last year, the crop was 98 percent emerged and the five-year average is 97 percent emerged.

As of the end of October, USDA reported the winter wheat condition ratings index at 225. That is down from a rating index of 233 last year at this time and is the lowest index rating in at least the last 27 years.

According to a report by Doane Advisory Services, the only other year that the index was below 230 was in 2001 when it was 229.

October is typically the third wettest month for Texas, but instead, last month was the ninth-driest October statewide since 1895, according to the Drought Monitor report.

The U.S. Drought Monitor still shows drought across more than 62 percent of the nation, and the extreme drought areas cover approximately 6 percent of the nation, including major growing areas like Nebraska, the upper Midwest and Great Plains.

While these early season reports may not be the best indicator of final yields, it could have an impact on winter wheat grazing.

According to Kansas State University Extension (KSU), wheat is an excellent grazing crop in the right condition. Depending on weather and market conditions, producers can consider three basic wheat grain and forage strategies: harvest the wheat as grain only, as forage and grain, or as forage only (graze out). Many Kansas producers view wheat grazing as an opportunity for additional revenue that presents itself periodically in certain locations in Kansas, depending on planting and growing conditions.

Wheat pasture grazing typically begins in mid-October to mid-November, depending on planting date and moisture. Under proper management, research shows little or no effect on yields, according to a KSU report.

The dry spell that has plagued Kansas and Oklahoma has left 36 percent of winter wheat fields in good or excellent condition as of Nov. 11, compared with 50 percent on average the previous five years, USDA said. This is the lowest rating since the government began tracking the data in 1985.

While the wheat may not be emerging, wheat futures in Chicago are up 33 percent this year, more than any of the 23 other commodities in the Standard & Poor’s GSCI Spot Index. Wheat futures on the Kansas City Board of Trade advanced 40 percent since mid-June to $9.0475 a bushel while wheat on the Chicago Board of Trade gained 38 percent to $8.6575 a bushel.

In Texas, some late summer rains have helped, but wheat growers may have some hard decisions to make this winter because of market and weather uncertainties, according to a Texas A&M AgriLife Extension Service marketing expert.

Much of the uncertainty in prices stems from the drought, Dr. Mark Waller said. Most of the state’s wheat got a boost from late summer, early fall rains, with much of the crop emerged, and some already grazeable, said Waller, AgriLife Extension economist in grain marketing and policy, College Station.

“From a traditional standpoint, grain prices are high,” he said. “We’ve been trading in a kind of sideways pattern since June, if you look at future market prices. A lot of that is because grain supplies are tight, and not only wheat supplies. If you look at what happened with the drought in the Midwest, we’re likely to see pressure for more wheat to go toward feeding because there is a shorter corn crop.”

“Some of those look like relatively profitable decisions now,” Waller said.

“With prices at these levels, they at least have something to consider—it’s better than having low prices, but there’s a lot of uncertainty right now.”

And there’s continued uncertainty when it comes to winter weather. As recently as late August, forecasters, including those at the National Oceanic Atmospheric Administration’s Climate Prediction Center, were expecting a stronger than average El Niño to develop in the tropical Pacific. A strong El Niño would have increased the chances for a wetter than average winter, which is exactly what the crop needs, Waller said.

Most experts agree, he said, that because soil-moisture levels were severely depleted during the 2011 drought, this year’s crop will need greater than average rainfall to show an average performance.

“The markets by this time would usually start to decline, but we’re still looking at enough uncertainty, especially with changes in the weather forecast, that we may not see as much rainfall as earlier expected this year,” he said.

But despite the long dry summer of 2011 and continued drought, optimism is still strong in the cattle business.

“There is more optimism, but at the same time [ranchers are] very cautious right now because they’re still trying to allow pastures to recover and make sure they have some forage reserves for the next drought,” said Jason Cleere, AgriLife Extension beef cattle specialist based in College Station. — Traci Eatherton, WLJ Editor