Heat Worries US Wheat Farmers Just as Crop Prices Are Surging

jm1oo}jdn15od6e}ydkhc{nt_media_dl_2.jpg Photo by Erin Ailworth /Bloomberg

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(Bloomberg) — For farmers in North Dakota surveying their wheat as harvest closes in, scorching heat is threatening yields just as crop prices rise to a three-year high.

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A recent spate of 100-degree days is stressing fields in the key US wheat-growing state while escalating attacks between Russia and Ukraine put exports at risk in the Black Sea.

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“I’m actually surprised they’re holding out as well as they are,” grower Jim Pellman said of his fields. Speaking during the Wheat Quality Council’s annual spring and durum wheat crop tour, he was more focused on his own farm than the ongoing turmoil in Eastern Europe.

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“We’ve still got harvest season to go through, so it’s a matter of getting the bushels in the bin,” said Pellman, who farms in McClusky, near the center of North Dakota.

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For Pellman, the current volatility in the market stoked by turmoil in the Black Sea is just the latest development in a conflict that has repeatedly roiled the wheat market since 2022.

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Still, any reduction in American supply in the US would contribute to a decline in world supplies. While it remains to be seen how North Dakota’s wheat fields will turn out, the risks come just as global supply disruptions have sent futures soaring.

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Attention on the North Dakota crop is particularly high after a May tour of wheat fields in Kansas pegged yields for the hard red winter crop there well below last year’s forecast. Overall, farmers in the US have been moving away from wheat as Russia dominates the global market. The USDA estimates total American wheat production this season as the lowest since 1970-71.

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Russia, the world’s top wheat exporter, on Thursday warned that it was unsafe to navigate in the Black Sea region, citing threats from Ukraine. The two countries together account for more than a quarter of global wheat shipments. Wheat futures, which have rallied nearly 40% this year, eased by as much as 1.8% after soaring the previous day.

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“It escalates and it de-escalates,” said Pellman, who also grows barley, canola, soybeans and corn. “The price of wheat goes up one day and it’s back down the next, so it’s kind of getting old news.”

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Other farmers across North Dakota echoed Pellman’s sentiments during the three-day crop tour, which surveyed fields across the state to estimate potential yields. The group of more than 40 participants included milling company employees, university researchers and US Department of Agriculture staff.

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Results after two days were a mixed bag, with results below a year ago on the first day of the tour and above on the second. Final results are due later Thursday.

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Expectations heading into the tour were tempered, with growers monitoring elevated temperatures that could push their wheat to mature too fast and undercut the number of bushels per acre they see at harvest in the upcoming weeks. Earlier in the season, variable weather left some areas with too much rain and others with too little, while wind and cold also hit fields at inopportune times.

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“The crop is definitely stressed a bit — maybe some of the top potential taken out — but it’s still hanging in there,” Erica Olson, director of marketing and research at the North Dakota Wheat Commission told scouts gathered Monday night to kick-off the tour.