Drought Tightens Wheat Supplies

From Bloomberg:

A yearlong drought from Kansas to Texas has created the driest conditions on record for farmers preparing to plant winter wheat, dimming crop prospects for a second straight year in the U.S., the world’s largest exporter.

Dry weather already has cut output of hard, red winter wheat, the most common U.S. variety, by 22 percent from 2010, government data show. If drought persists into the planting months of September and October, next year’s harvest will be even smaller, and prices on the Kansas City Board of Trade may jump 50 percent to $13 a bushel, said Dan Manternach, a wheat economist with researcher Doane Advisory Services in St. Louis.

In Texas, where agriculture losses from the drought were a record $5.2 billion, soil moisture is so depleted that plants may not emerge from the ground without more rain, Texas A&M University said in a report yesterday. Kansas, Texas and Oklahoma were the biggest growers of winter wheat in 2010 and supplied 28 percent of all wheat varieties produced in the U.S.

“Most of us are gamblers enough that we will plant a wheat crop,” said John Goodknight, who farms 3,500 acres in Chattanooga, Oklahoma, and saw his wheat output drop by a third this year. “We just live and work in the conditions we have. It’s exceedingly hard to make it work with drought.”