Surplus Wheat
What in the world do we do with all this wheat?
Alan Tracy, USW President , says after riding a commodity price roller coaster over the last two or three years, everyone involved in the wheat business should realize that change has become a constant; there is no returning to the tamer markets of the past. Tracy has argued before to many wheat farmers that there’s a new paradigm in wheat pricing in that wheat will no longer bounce off feed grain prices as their bottom and that the old highs had become the new lows. Even in the face of a big 2009 crop and the resulting price drop as wheat (and corn) crop estimates grow, it appears to Tracy that the underlying demand growth for wheat is strong enough to keep supplies from becoming as burdensome as in the past. Easy to say, unless you’re a wheat farmer and you’re sitting on a huge harvest with nowhere to sell it. Blaine Jacobson with the Idaho Wheat Commission: “The number of the customers see the stocks building and they don’t feel any urgency to buy so they tend to buy as late as possible instead of buying ahead. So right now demand is very slow very sluggish and producers are probably better off if they have some storage options putting it into storage until the prices recover. Kinda like owning a house in Las Vegas or California. Yeah, you don’t want to dump it when the market is low, you want to ride it out and wait for better prices.”