The Canada Wheat Board is uptight over the possibility of U.S.-imposed tariffs on Canadian wheat exports. The North Dakota Wheat Commission has petitioned the International Trade Commission on the issue. And though the Canadians deny they're dumping wheat on the market, the U.S. Trade Representative claims Canadian subsidies put U.S. wheat exporters at a disadvantage.
The concern over securing markets for U.S. wheat growers has taken on new urgency with the recent jump in crop prices … and the anticipation those higher prices will lead to a resurgence in wheat plantings.
The 2002 wheat planting marked the second year of reduced acreage and the smallest sowing since the early 1970s. Despite less wheat acres, prices remained depressed due to large world stocks of the grain. That changed mid-season when a host of supply and demand concerns, including drought in China and the U-S, made waves in the markets, creating a bull run that has pushed prices over four dollars a bushel.
The higher prices are impacting planting prospects for the 2003 crop. One Kansas State University economist predicts upcoming winter wheat plantings could increase by almost one million acres over 2002, with roughly 98 percent of those acres in Kansas. Analysts note Revenue Insurance coverage levels currently are up 40 to 50 cents over last year at this time. With increased price protection, farmers are expected to risk extra acres to wheat.
High prices are little consolation to those who have no crop to sell. The drought continues throughout a major portion of the wheat growing areas of the U-S. In response to the ongoing shortage of rain, the U-S department of agriculture has released all Conservation Reserve Program acres nationwide to haying and grazing. Eighteen states were granted C-R-P haying and grazing status in July, but due to the widespread nature of this year's drought the U-S-D-A has dumped the typical moisture deficiency requirements surrounding C-R-P land use until November.