High Wheat prices in 2007 were good news if you could grow a crop. But for many U.S. wheat growers in 2007 who suffered heavy yield losses due to bad weather, those prices were like a desert mirage to a thirsty man.
Great Plains growers lost yields to late-season frosts while summer drought sucked the life out of wheat crops in the Pacific Northwest. Those farmers found themselves scrambling to fill early contracts and missed windfall prices.
Wheat prices are expected to be even higher this year. The January '08 USDA report predicts that the wheat season-average farm price will range from $6.45 to $6.85/bu. That's well above the current record of $4.55/bu. for 1995/1996.
“Both the '08 and '09 markets are offering prices well above historical peaks,” says Idaho farmer and ag consultant Dick Wittman. There don't appear to be any clouds on the price horizon. With all the major world wheat exporters short on wheat, U.S. wheat exports are expected to account for 31% of the global trade.
Record prices put additional pressure on wheat growers to protect and price their production in 2008. That's complicated by production costs that have started to catch up with the price spikes. “The biggest uncertainty is the cost structure,” Wittman says. “If your breakeven was $3/bu. a couple of years ago, what is it now? Rent, fuel, fertilizer, labor, seed and machinery costs have all gone up.”
It's a year for efficiency, not deficiency, points out agronomic consultant Larry Murphy, Murphy Agro, Manhattan, KS. “Growers may want to look at spending money in areas they otherwise wouldn't consider when prices are lower,” he says.
“For the 2008 winter wheat crop, you might want to think about split N applications if you're going to topdress in the spring,” he continues. “The added application costs and effort usually discourage growers from split applications. There may or may not be a huge benefit to split applications, depending on conditions, but with these commodity prices you definitely don't want to be N deficient.”
You might want to add chloride in your topdress application too, Murphy says. “If you've got good yield potential and plenty of N, chloride provides nutritional benefits and also aids in disease suppression,” he explains. “It helps keep the crop standing. At $0.40/lb., and a maximum rate of 20 lbs./acre, you're only looking at $8/acre. A soil test will tell you what you need. The same is true for sulfur.”
Looking ahead to this fall, Murphy cautions growers to consider more efficient phosphorous applications. “All my remarks are predicated on phosphorous needs being taken care of,” he says. “That said, there are a number of ways growers apply phosphorus. You need to ask if broadcasting $500/ton DAP is the way you want to go. If you put it down in a pre-plant band, you improve the use efficiency significantly and cut down on fixation.”
Murphy has been testing a polymer product, Avail, from Specialty Fertilizer Products that can be applied to granular fertilizers or blended in liquid fertilizers and delay the normal phosphorus fixation. Research at several universities supports the efficacy of the product, according to Murphy. “It's something to consider,” he says. “P fixation is there all the time. You can count on it happening.”
Great Plains growers may want to apply fungicide treatments, according to Murphy. “It's a practice that growers in Kansas, Oklahoma and Texas haven't paid much attention to,” he says. “With these high commodity prices, it may be something to consider.”
Jay Goos, North Dakota State University soil fertility specialist, isn't convinced that things have changed much for wheat growers in eastern Montana, the Dakotas and western Minnesota. He thinks high commodity prices have been offset with increased input costs, and except for spending more dollars, the issues for wheat in 2008 really aren't much different than in other years.
“For maximum yield, you need to shoot for a million plants per acre and manage the crop to achieve 90% initiation of T1 and T2 tillers,” he says. “You need to avoid any nutrient deficiencies and manage the crop so you have healthy, vigorous plants going into July. After that, you can't control late-season weather conditions that may affect the yield potential you've established.”
Growers in the northern states started building their crop last fall. “A lot of nitrogen went on last fall, partly because farmers were concerned about price and availability this spring,” Goos says. “In most years, a fall nitrogen application is no different than putting it on in the spring. But we had a long fall, which allows more ammonium nitrogen to convert to nitrate. And farmers will have to watch the winter weather. If we have heavy snows and deep frosts, or heavy rains after the frost is out, there may be significant denitrification. In the Red River Valley area, that happens about one year in three. They'll need to monitor the fall-applied N and, if the conditions dictate, use starter to even out nitrogen levels.
“Depending on the soil type and conditions, farmers who fall-applied N in 2007 may want to think about putting on an extra 30 lbs. of N ahead of spring-planted crops, especially if we have conditions for abnormally high overwinter loss of N.”
Goos says that the idea from Oklahoma State, where strips or “calibration stamps” of extra nitrogen are applied in the field and used to diagnose nitrogen deficiency, is worth considering. “If there's no color difference between the farmer's practice and the color of the small areas where extra N was applied, you know you've got adequate N there for the crop,” he says.
Goos cautions farmers to start thinking about growing their '09 crop during '08. “The cheapest bushel a farmer can gain, regardless of input costs, is the one he gets from controlling volunteer growth after harvest,” he says. “If you have volunteer grain growing after harvest, you can easily give up two inches of water.”
Inputs that might be a marginal investment with low wheat prices make a lot more sense when prices are higher, according to Goos. “Upgrading to new varieties, seed treatments to protect seedling health, herbicides to control grassy weeds, and foliar fungicides to protect the flag leaf are sometimes seen as optional investments when prices are low, but are much easier to justify when prices are high,” Goos says.
The world weather events of '07 still leave Wittman of Culdesac, ID, a bit stunned. “We were selling into a $5 to $6 market, and farmers saw the potential to make more money than they had realized in decades,” he says. “Then everything that could happen adversely in world weather did, and prices went even higher.”
In Wittman's part of the world, the Pacific Northwest, above-average yields for next year aren't likely under the current moisture conditions. That puts Wittman in a mood to buy crop insurance.
“It's a no-brainer,” he says. “With an 85% guarantee and a high APH, it's a cheap investment. A farmer in this area with a 90-bu. yield, insured at the 85% level and a $6.23 insurance price, can gross $477/acre. It used to be you'd sell 80 bu. at $3/bu. So you've got twice the revenue guaranteed. Isn't that worth the $20 to $25/acre it costs for insurance?”