‘We Decided to Pull the Pin’: Wheat Misery Spurs a Shift to Corn
(Bloomberg) -- Sparse spring rains and soaring corn prices have North Dakota farmer Paul Anderson doing something he’s never done in his 30-year career: ditching his wheat.
Anderson planted wheat in late March and early April, but he said a lack of moisture has plants emerging from the ground that make his fields look like “hairless Chihuahua dogs, patchy and ugly.”
“We decided to pull the pin and replant with corn,” Anderson said Friday by phone, adding that about 20% of his farm will switch from wheat.
Chicago corn futures climbed to eight-year highs earlier this month amid record-large demand from China that has drawn down U.S. reserves. Relatively ample global wheat supplies meant prices for the grain haven’t kept up with corn’s rally. A blast of rains this week in U.S. wheat-growing regions also prompted heavy declines in wheat futures. Minneapolis spring wheat futures are on track for a weekly drop of 6.3% and hit the lowest levels in a month.
“Minneapolis has not defended those acres,” Anderson said of wheat futures.
Spring wheat, used to make flour for pizza and bagels, generally trades at a lofty premium to corn. Looking at July contracts, however, the premium shrank to the smallest since 1996.
Other growers in North Dakota, where 100% of the state is suffering from drought, are also considering abandoning fields of wheat and barley, he said.
Such switching is likely to be relatively rare, since fields unable to sustain wheat may not be able to support corn, which generally is more nutrient-dependent.
To get rid of his wheat, Anderson will kill the plants with an herbicide and then replant the fields with corn at a lower seed population than normal to give it the best chance of making a crop.
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