Iowa Public Television

 

Poor wheat harvest meets poor grain prices

posted on June 16, 2000


THE FEDERAL RESERVE REPORTS SOME INFLATIONARY PRESSURE PERSISTS IN THE FORM OF HIGHER PRICES FOR SOME RAW PRODUCTS – NOTABLY PETROLEUM. HOWEVER, AS FARMERS ARE ALL TOO AWARE, ANY PRICE PRESSURE FOR AGRICULTURAL COMMODITIES HAS LARGELY DISSIPATED WITH TIMELY RAINS ON THE PLAINS.

IN TEXAS, 71 PERCENT OF THE WINTER WHEAT CROP IS RATED POOR TO VERY POOR. IN NEBRASKA, NEARLY HALF. ACROSS THE PLAINS THIS SPRING, TEMPERATURE READINGS OF 100 DEGREES OR MORE HAVE COMBINED WITH GUSTY WINDS TO WORSEN DROUGHT CONDITIONS.

NEBRASKA'S GOVERNOR THIS WEEK DECLARED A DROUGHT EMERGENCY FOR SOME AREAS OF THE STATE. FARTHER SOUTH IN TEXAS, WHERE THE HARVEST IS HALF DONE, THE WHEAT CROP IS PROJECTED TO SHRINK BY SOME 44 PERCENT FROM LAST YEAR'S OUTPUT.

IN ADDITION, A LABOR SHORTAGE IS HAMPERING THE HARVEST AS IT MOVES NORTH INTO KANSAS. THE SHORTAGE HAS FORCED MANY CUSTOM-COMBINING BUSINESSES TO LOOK OUTSIDE THE U.S. FOR WORKERS. ANALYSTS SAY THAT'S A COSTLY AND TIME-CONSUMING PROCESS.

DESPITE THE PROSPECT OF A SMALLER CROP, WHEAT FUTURES PRICES ARE BEING DRAGGED LOWER BY SLUMPING CORN AND SOYBEAN PRICES. RAINFALL ACROSS THE CORN BELT SENT PRICES ON THE NEARBY CONTRACT TO SIX-MONTH LOWS. THE PRECIPITATION CONVINCED TRADERS THE U.S. IS CAPABLE OF PRODUCING A NEAR-RECORD CORN CROP THIS YEAR.

ANALYSTS SAY A RECORD CORN CROP, COMBINED WITH LACKLUSTER DEMAND, WILL KEEP PRICES UNDER PRESSURE RIGHT THROUGH THE FALL HARVEST.


Tags: agriculture commodity prices crops harvest news wheat