Record freeze in U.S. extending wheat crop damage

Severe Drought

As of April 16, 73% of the six-state High Plains region that covers North Dakota, South Dakota, Nebraska, Wyoming, Kansas and Colorado was in severe drought, which means crop losses are likely, according to the Lincoln, Nebraska-based U.S. Drought Monitor. Drought in the southern Plains caused blowing dirt similar to the Dust Bowl era of the 1930s.

While the situation has improved from an 87% severe drought rating three months ago, it compares with 4% a year earlier. In Kansas, every county is classified as being in some level of drought, with 61% rated extreme.

June, July and August may bring extreme heat that would further sap moisture from the soil, MDA Weather Services in Gaithersburg, Maryland, said in a report on April 18. Temperatures will be “warmer than the 30-year norm,” MDA said.

Growers from South Dakota to Texas seeded 28.9 million acres with hard, red winter wheat late last year, a variety that accounts for 44% of U.S. wheat output, government data show.

When plants went dormant in November, about 33% of the U.S. winter-wheat crop was in good or excellent condition, the worst for that time of year since at least 1985. As of April 21, 35% got the top rating, below the five-year average of 51%.

‘Dirty Thirties’

“I’ve never seen the ground as dry as it is,” said Millershaski, who is also the president of Kansas Area Wheat Growers, an industry group. “We’re drier than we were in the Dirty Thirties.”

The USDA is forecasting record farm income of $128.2 billion this year and the ratio of debt to equity is the lowest ever at 11.3%. Many farmers were protected from the drought last year by crop-insurance payouts that reached an all- time high of $17 billion.

Unusually cold weather may delay planting of spring wheat in North Dakota, Minnesota and Canada, the second-largest exporter. Ice delayed the start of grain-barge shipments by about three weeks on the upper Mississippi River until April 8, the USDA said April 11.

Investors should buy Kansas City wheat because of the damage from drought and freezing weather, Christopher Narayanan, the head of agricultural research at Societe Generale in New York, said in a report on April 18. Yields will tumble about 15% to 34.6 bushels an acre, he said.

“We were struggling without moisture, and now we’ve added this cold weather to the situation,” said Larry Glenn, an analyst at the Frontier Ag grain elevator in Quinter, Kansas. “I don’t think farmers are putting a lot of hope that yields are going to be great.”

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