to the top of the page
background image design

News


WMR-2021 Hard Red Spring Wheat Acres Expected to Decline

By: Jim Peterson
Posted: Apr 19 2021

The USDA March survey of producers indicated that U.S. HRS wheat plantings will likely decline by 5 percent, or 600,000 acres from 2020.  The final planted area is still highly uncertain however with many variables at play.  Producers across the primary HRS wheat states of North Dakota, Montana, Minnesota and South Dakota have no shortage of cropping choices with strong year to year price gains on soybeans, corn, canola, flax, pulse crops, and others.  

Although HRS wheat prices are higher than a year ago in new crop positions, and crop insurance coverage levels are also higher, those gains are even stronger with other cropping options.  Still, the level of drop in HRS wheat intended plantings shown in the survey was less than many analysts had anticipated.  Revealing the importance of wheat in producer rotations, producer optimism for further price strength in wheat  and the impact of other variables in planting decisions.

The sharpest decline is expected in Montana, down 12%, or 400,000 acres, as producers there planted more HRW in the fall of 2020.  Barley and lentil acres are also expected to gain in the state.  The survey showed declines in South Dakota and Minnesota of 3% each, or 20,000 and 50,000 acres, respectively.  Corn and soybeans are replacing spring wheat acres in both states.  In North Dakota, the survey showed a 2% decline or 100,000 acres.  The level of decline was cushioned by the significant level of prevent plant acres across eastern areas of the state last year, as both corn and soybeans are expected to increase by 1.35 and 1.25 million acres, respectively, from 2020.  

What will the final level of HRS wheat acres be, and what variables will impact producer decisions going forward?  Obviously, price trends will be important, along with fertilizer prices, planting dates and soil moisture conditions.   At this time, the market continues to press for more corn acres on a national level, as the March survey came in about 2 million acres lower than expected for corn.  December corn futures have gained more than $.50 per bushel since the end of March and are pushing above $5 per bushel.  Minneapolis HRS December futures are trying to keep pace, gaining about $.40 per bushel and pushing above $6.75 per bushel.  Part of the gain in HRS futures is due to drought concerns, but also buyers attempting to keep the price incentive to plant wheat, and limit the switch to corn in the Northern Plains.  

Soybeans are clearly the crop offering the best profit opportunity for producers this year with new crop cash pricing opportunities that are $2 per bushel or more above the cost of production, the advantage of a later planting date to wait on moisture, and also much lower fertilizer costs compared to wheat and corn.  Across North Dakota, Minnesota and South Dakota even higher soybean acres, than indicated in the March survey, cannot be ruled out based on current dynamics. 

As for planting dates and soil moisture, the early start to the planting season, and a shorter growing season, do favor wheat, compared to soybeans and corn, especially in more western areas of the region.  However, the extreme drought conditions, and sharp reduction in subsoil moisture compared to 2020 are challenges for whatever crops producers decide to plant.  The early concerns about pasture and potential hay shortages also need to be considered, as producers may seek out annual hay crop choices or plant wheat with the dual intent to harvest for hay early if drought conditions continue into early summer.

In contrast, there are some analysts that feel HRS wheat acres may increase in parts of Montana and western North Dakota due to the current lack of soil moisture, as it is more of a hindrance to more shallow seeded crops like canola and pulses.  Clearly a lot of unknowns yet as the 2021 planting season gets underway.  Recent precipitation in the region, although far from adequate to ease drought concerns, does give some hope for improved germination conditions.  The lack of subsoil moisture will keep markets on edge throughout the growing season however, as most of the region will be relying on timely rains.  Based on extended weather outlooks for the region, average to below average yields are a strong possibility, adding even more importance to final planted acres of HRS wheat.

Stay Informed with our E-Newsletter


copyright © 2024 North Dakota Wheat Commision
designed and programmed by odney