There's a lot of grain out there.
Winter wheat is Oklahoma's top crop, and the Southern Great Plains produced plenty of it last year, despite mid-harvest rains. But it wasn't the only area with strong yields. Todd Hubbs, Oklahoma State University commodity crop marketing specialist, said countries like Australia and Argentina saw good harvests.
"From an Oklahoma perspective, we had a pretty decent crop here in Oklahoma, and we've still got quite a bit in the bins and storage," Hubbs said.
The U.S. Department of Agriculture's Grain Stocks Report from last month shows wheat is plentiful around the globe. At the same time, he said, Oklahoma has been competitive in the world market and shipping weekly.
But the market is getting more competitive as crops from other countries come in. The bumper production from key countries is playing a part in lower U.S. prices, according to the USDA.
"We have it. We're trying to move it," Hubbs said. "We're dependent on the export markets, and it was just a really good year for wheat around the globe, production-wise."
He said the crop will eventually sell. People tend to store grain to wait for better prices to sell it, and there's another crop coming down the pike.
Hubbs said some producers may reduce how many acres of wheat they grow; in his experience, it takes a couple of years with extended lower prices to see reduced acreage. But ultimately, he said, it depends on each farm's unique financial situation.
"Farm to farm, everybody's different, you know what I mean?" Hubb said.
Because of the bumper crops, Mike Schulte, the Oklahoma Wheat Commission's executive director, said global wheat production is estimated to be 842.2 million metric tons outpacing record demand of 824 million metric tons for the first time in five years.
"So our production is just so much higher than what it has been, I'd say, over the last 15 years," Schulte said. "And that really is impacting us as we move forward."
He said trade is now a challenge for all U.S. commodities, especially in the export market. It also depends on the different policy decisions made on a daily or weekly basis.
As far as wheat exports, Schulte said, they are up. Schulte said the quality of recent U.S. wheat crops has helped..
"I would say that because we have had higher quality crops – just based on quality perspective – over the last three or four years, that really has helped us edge out some of our competition in the export market," Schulte said. "I know producers may not be seeing that right now at the farm gate, but we are moving our product into other places based on quality, so it does matter."
He said producers are weighing options and looking at other opportunities, such as grazing more grain.
In the next few months, Schulte has his eyes on the weather. Winter has been dry, but late January's winter storm resulted in some moisture.
"I'd like to remind producers that during these challenging times, certainly, they may not always see it, but this is probably when we are working our hardest on export markets and export strategy," Schulte said. "So my board of directors are going to be working on initiatives with some of our larger importers of wheat."
This report was produced by the Oklahoma Public Media Exchange, a collaboration of public media organizations. Help support collaborative journalism by donating at the link at the top of this webpage.
