05/08/08 USDA official doesn't see wheat price collapse with big crop

Farm and Ranch May 8, 2008 Historically high wheat prices attracted increased wheat plantings around the world this year including the United States. So what happens to wheat prices when that grain hit's the market? Some worry about a price collapse. But Mike Yost who runs the U.S. Department of Agriculture's Foreign Agricultural Service, doubts there will be that much to worry about. He does not think there will be a gut wrenching wheat price collapse even if crops come in big. Yost: "I would expect that if we do have good crops in the northern hemisphere we will see easing of prices but we are also going to see a lot of these countries, I think, develop more of a strategic reserve. So I think there will be considerable buying particularly if prices moderate somewhat." The U.S. and the world will also be starting a new marketing year with very low carryover stocks, so Yost says all of those factors should help to keep a good floor under wheat prices. Harvest of this year's wheat crop is already underway in some parts of the world, like India, Pakistan and Egypt. The U.S. southern Plains is expected to begin harvest later this month. The USDA's National Agricultural Statistics Service issues its May crop report tomorrow morning and that will include the first survey-based estimate of the U.S. 2008 winter wheat crop along with a spring wheat crop based on trend line yields. USDA's weekly crop ratings show the U.S. winter wheat crop is not in as good of condition as last year's at this time. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.