High Prices Cause Wheat Popularity

Linda Benedict  |  1/27/2010 1:58:45 AM

Louisiana farmers will plant a lot more wheat this year than last. At least that’s what LSU AgCenter experts predict – provided the weather cooperates in October and November.

The reason for increased interest in growing wheat is the higher prices it’s drawing, which is in sharp contrast to the below-average prices for just about every other crop grown in the state.

“We’re seeing tremendous prices right now,” said Steve Harrison, LSU AgCenter researcher in charge of wheat breeding.

“Worldwide, we’re seeing the lowest wheat ending stock levels experienced in the past 20 years,” said Kurt Guidry, LSU AgCenter economist. “So prices have gone up.”
 
The new crop wheat futures contract price (July 2007) is trading at nearly $4.50 per bushel, which is about a $1 higher than this time last year. In the futures market, speculators buy wheat to lock in prices they think will go even higher.

“There’s wheat booked up through 2009,” Harrison said. “This is very unusual. Typically, wheat is not forwardcontracted much more than six months ahead.”

Louisiana growers planted roughly 110,000 acres of wheat last year. The expectation is double that this year, Harrison said. The five-year average is about 200,000 acres in wheat in the state.

Linda Foster Benedict

(This article was published in the fall 2006 issue of Louisiana Agriculture.)

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