US Wheat Farmers Face Profit Squeeze Despite 39% Price Jump as Drought and War Disrupt Supply
Updated
Updated · The Guardian · Sep 18
US Wheat Farmers Face Profit Squeeze Despite 39% Price Jump as Drought and War Disrupt Supply
2 articles · Updated · The Guardian · Sep 18
Summary
Three-year-high wheat prices have not translated into confidence on US farms, where Kansas grower Merrill Nielsen says record diesel costs and crop losses leave him unsure whether to plant normal acreage.
Drought across the southern Great Plains, weather threats tied to a potential super El Niño, and low exporter stockpiles are tightening supply even as Australia’s wheat plantings fall 12%.
Russian attacks on Black Sea port facilities have added another shock to a route handling one-third of global wheat trade, with only 35% to 50% of disrupted grain potentially moving through costlier alternatives.
US farmers may plant about 10% more winter wheat to capture higher prices, but harvested acreage is still near its lowest since 1877 and profitability depends on achieving at least average yields.
Food inflation risks are spreading beyond farms: the UN FAO food price index was up 2.5% in August from a year earlier, raising pressure on millers, bakers, restaurants and shoppers.