Record average wheat price despite big world wheat crop

Farm and Ranch April 15, 2009 The U.S. wheat marketing year will end next month and USDA analysts have added another nickel to what they think wheat prices are going to end up averaging in the 2008-2009 marketing year. USDA Outlook Board Chairman Jerry Bange says the new forecast is for a national average season wheat price of $6.95 a bushel. Bange: "That is a pretty strong price. In fact it is a record price." Of course growers are not necessarily getting that price right now. Bange: "If you remember back at the very beginning of the marketing year, even when the crop was being planted in the fall of 2007, there was some forward contracting going on at fairly strong prices then. And then we got into the spring of last year when we had record prices. So the bottom line here is a lot of that wheat was marketed at pretty strong prices. To date we are looking at about 90% of the crop having been marketed at just short of $7." Bange points out there was no huge collapse in wheat prices despite a 12 percent larger world crop this past season. Bange: "Which in terms of tonnage is about 73 million tons, which I would hasten to add the 73 million tons is more than the entire production of the United States in 2008-09. So one may take a look at this and say essentially we have added a major wheat producing country to the world in 2008-09 with the addition of 73 million tons." I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.