Kim Anderson

Oklahoma State University
A preview of 2017 wheat, canola, corn, and sorghum costs and returns
The most profitable farmers tend to keep good records and calculate costs after each harvest.
No surefire way to make a profit in wheat
So the question is not, “How can a loss be avoided?” The question is, “How can the odds of a loss be minimized?
Producing wheat will be profitable — for some
The market will provide a profit for wheat production. That profit may only be for the top 60 percent.
Wheat: A perfect storm has occurred
Wheat prices near $2.60, compared to $4.50 cost of production, is the market telling producers around the world that production must decline
Positive signals amid mostly negative wheat news
For the 2016/17 wheat marketing year, the world price is projected to be $3.70.
Market offering $3.80 for June 2017 wheat
Wheat-for-grain-only budgets for north central Oklahoma estimate total operating (out–of-pocket) costs to be $194 per acre.
Low wheat prices need to hang around
Wheat prices will not increase until world production declines.
Marketing strategies when wheat’s at 17-year low
The current market supply and demand situation doesn’t support higher wheat prices.
Minus $1.25 wheat basis — and that may be good
If wheat is hedged (owned in storage and sold using the KC December contract) and the basis remains at a minus $1.25, there would be no loss in the net price.
“Biggest Ever Russian Grain Crop”
The market’s price reaction—prices remaining in the current sideways pattern rather than continuing the downtrend—is good news.
Wheat producers between a rock and a hard place
The question is, do you accept the current low price (rock) or risk lower prices to take a chance on higher prices (hard place)?
Wheat producers expecting higher returns in 2016 than 2015
The Oklahoma wheat tour estimated 2016 Oklahoma wheat production to be 129 million bushels.
Two connected stories: The KC July wheat contract price and the basis
When wheat prices got low, the basis became the most important story.
Yield and quality more important than price
At this writing, the KC July wheat contract price is $4.77. For harvest-delivered wheat, Oklahoma elevators are offering between minus 75 cents and minus 50 cents basis.
Either you’re a wheat farmer…or you’re not
After the recent freeze, a relatively large wheat producer posted that they had lost five out of the last six wheat crops. “It’s like two farmers were talking. One says, ‘If it doesn’t rain, I’ll need to rob a bank.’ The other replies, ‘If it doesn’t rain, I will have robbed a bank.’”
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