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Wednesday, January 20, 2016

Smaller Winter Wheat Crop in 2016

ifr160122–018
Smaller Winter Wheat Crop in 2016
Darrel Good, Agricultural Economist - University of Illinois

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USDA’s Winter Wheat Seedings report showed a lot fewer acres were sown last fall than most had expected. Todd Gleason has this review of the report and its potential consequences for corn and soybean acres across the nation.

Farmers in the U.S. are believed to have planted…
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Farmers in the U.S. are believed to have planted about thirty-six-point-six million acres of wheat last fall. It’s nearly two-point-three million acres less than the year earlier and second smallest number of wheat acres in the United States since 1913 says University of Illinois agricultural economist Darrel Good. And he says it is where those acres are missing, and not missing for that matter, that will make a difference for corn and soybean farmers in the coming year. Nebraska farmers planted a record low number of hard red winter acres, while farmers in the rest of the corn belt states actually increased winter wheat seedings. First, here’s what Good thinks this will mean for the size of this year’s winter wheat crop, and then we’ll look forward to other crops.

Good :23 …be 17 million bushels larger than the 2015 crop.

Quote Summary - Assuming that winter wheat seedings are actually near the January estimate of 36.609 million acres, that 80.6 percent of the planted acreage is harvested (29.507 million acres), and the average yield is near the trend value of 47 bushels per acre, the 2016 crop would total 1.387 billion bushels. Production at that level would be 17 million bushels larger than the 2015 crop.

Obviously, actual production could differ substantially from the projected level based on current calculations. The biggest factor, says Darrel Good, will be weather conditions.

Good :29 …March 31 Prospective Plantings report.

Quote Summary - There is always uncertainty about weather conditions, but expectations that the strong El Nino event will diminish into the spring of the year increases the level of uncertainty. Based on similar conditions historically, the greater risk for unfavorable weather conditions appears to be for the summer months, after the winter wheat crop is harvested. The next estimate of winter wheat seedings will be available with the USDA’s Prospective Plantings report to be released on March 31.

The Prospective Plantings report will provide important information for spring planted crops as well.

The sharp decline in winter wheat seedings has stirred some debate about how planting decisions for spring planted crops will be influenced if prices remain low. Some argue the decline in winter wheat seedings is an indication producers will idle crop acreage in 2016. Others suggest the winter wheat acreage reduction opens the door for increased acreage of spring planted crops. Good says he’ll take up the possibilities and provide further analysis of potential crop acreage in 2016 in a forthcoming farm doc daily article. You may watch for it on the FarmdocDaily website.