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Report: US wheat production forecast to be up 7 percent, Kansas crop pegged at 272M bushels

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WICHITA, Kansas — The size of the winter wheat crop in Kansas was forecast Tuesday at 272 million bushels, a low estimate that comes amid a global surplus that has already driven down prices.

The estimate released by the U.S. Department of Agriculture's National Agricultural Statistics Service for winter wheat production in Kansas is 10 percent higher than last year's crop, but is somewhat less optimistic than the 288.5 million bushels forecast by participants during last week's three-day winter wheat tour across the state.

The agency's estimate surprised Aaron Harries, marketing director at the industry group Kansas Wheat. But he was quick to point out the Department of Agriculture data used to compile the first production forecast of the season was collected before recent heavy rains throughout Kansas.

"People on the tour saw the impact of the rain, saw that fields were muddy, saw the weather forecast and took that into account when they did their estimate — and USDA didn't necessarily have that benefit," Harries said.

He said he expects the updated production forecast in next month's report to be higher.

Both the estimates compiled by the government and wheat tour participants are more than the 246.4 million bushels cut last year in Kansas amid the drought. But neither forecast comes close to the 328 million bushels the state has averaged during wheat harvests in the past decade.

The National Agricultural Statistics Service also is forecasting the average Kansas yield this year will be 32 bushels an acre, harvested from 8.5 million acres.

Kansas still is expected to lead the nation this year in winter wheat production. Texas is anticipated to come in second with 131.2 million bushels, compared to the 67.5 million bushels the state harvested last year.

Oklahoma is expected to be third in winter wheat production with 118.9 million bushels, more than double the 47.6 million bushels farmers there cut a year ago.

"It certainly doesn't help the fact that Oklahoma and Texas are looking at good crops — which we are happy for them — but that also is going to have an impact on price," Harries said.

The government estimated this year's overall U.S. winter wheat crop will top 1.47 billion bushels, an increase of 7 percent compared to last year. The average yield nationwide is expected to be 43.5 bushels per acre, from more than 33 million harvested acres.

The larger anticipated U.S. winter wheat crop is "not going to help" boost low wheat prices, Harries said.

Wheat prices are being driven down by a global surplus of wheat and anticipated good harvests in wheat-producing countries, he said.

"So we are just in one of those situations where the Kansas number again is not going to make much of a difference on price," Harries said. "It didn't last year, when we had the smallest wheat crop in 30 years."

Wheat prices have been ranging between $5 and $6 a bushel this year. The break-even price for farmers ranges from $5 to $7 a bushel, depending on the region and how much farmers spend to grow the crop. In 2007, a year marked by crop disasters around the world, wheat was selling for between $11 and $13 a bushel, Harries said.

Kansas grows mostly hard red winter wheat, a type typically used to make bread. The Agriculture Department estimated the nation's hard red winter wheat production this year at 853 million bushels, up 16 percent from a year ago.

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