Market Matters Blog

It's a Wrap! 2019 Hard Red Winter Wheat Harvest Finally Ends

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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Winter wheat harvest on July 2 near Viola, Kansas. (Photo by Scott Van Allen)

In their Sept. 6 weekly harvest report, the U.S. Wheat Association (USW) noted that the 2019 hard red winter (HRW) wheat harvest was winding down. Harvest was 95% complete in Montana, 99% in Washington and 96% in Idaho. Harvest was running slow in those areas, as it was in most of the winter-wheat-growing areas this year.

USW noted that the 2019 crop overall graded a #1 HRW milling quality, 11.3% protein, 60.8 test weight, 0.1 foreign material, 0.3 damage, 0.8 shrunk and broken kernels for a total defect count of 1.2. That grade is very similar to last year, except that the protein average for the 2018 crop was at 12.3%. Remember that flour mills' flavor of choice is 12% protein when it comes to making flour. A mill buyer told me that, while flour mills make a 13% protein flour, the most common is a "mid-mix," 12% protein flour. One thing to note is that 1% of the wheat protein is lost in the flour-making process, meaning mills may be blending this year due to the low-protein crop.

The spread between protein premiums has been widening due to the lower-protein crop produced this year. The Sept. 20 Kansas City HRW spot market showed the high side of 11.2% at +98KCZ and the high side of 11.4% protein through 11.8% protein at +135KCZ. The high side of 12% protein through 12.4% was at +135KCZ and then jumps to +182KCZ for the high side of 12.6% through 12.8%. The premium for 13% through 14% was quoted at +190 for the high side.

DIFFERENT AREAS PRODUCED DIFFERENT CROP

Tim Luken, manager at Oahe Grain in Onida, South Dakota, told me the HRW harvest there started July 23, about two weeks later than normal, and ended about one month later due to weekly rain events.

"This was a war with Mother Nature, but overall, our crop wasn't the end of the world," Luken said. "Yes, almost all the bushels had some sort of tombstone or scab damage, and we did lose test weight due to rains. Some wheat was 61 pounds at the start, and by the time the same field was done, test weight was down to 56 pounds.

"As for the higher-damage crop, we told the producer to take it home and take samples out of each load to come up with a composite sample of the field or bin. There are those bushels on the farm we will deal with later in the marketing season. Vomitoxin levels on loads we dumped here were within the 2 ppm (parts per million) or less range. Some of the samples we sent in to be officially graded were from 2.5 ppm to over 5 ppm. I did hear some delusional samples coming back as high as 19% vomitoxin that insurance companies had sent in to be tested. I have heard yields at 55 to 100 bushels per acre (bpa), but 65 bpa to 70 bpa was more common. In our elevator, we took in 1.2 million bushels and averaged 60 pounds 12.7% protein and 12.3 moisture."

Scott Van Allen, who farms in Sumner County, Kansas, and is a Kansas Wheat Commissioner, told me that the 2019 winter wheat harvest was one for the record books for south-central Kansas.

"It started off with record amount of rain in April, May and June, which delayed harvest approximately two to three weeks," Van Allen said. "When you combine that with the late planting last fall because of rain, it was a pretty mediocre crop overall. Yields were mostly average with some below average, but quality was surprisingly good with 62 to 64 pound test weights and protein in the 11% range."

In north-central Texas, wheat harvest ran in to some rain and humidity early on, but Lindsay Kimbrell of Kimbrell Farms told me that their crop was "above average for around our area, with average protein and quality."

Justin Gilpin, CEO of Kansas Wheat, said, "We had excellent yields out in western Kansas, but not so good in the central corridor that were impacted by flooding and too much moisture."

Kansas Wheat reported in their final harvest report that proteins varied by location.

"In the west, proteins were well below average, ranging from 10.5% to 11.5%, with spotted areas of 12%," Kansas Wheat said in their report. "In central and south-central Kansas, proteins ranged from 10.5% to 12%, which is above a normal average of 10.5% to 11%."

In their July 26 weekly harvest update, USW noted that HRW harvest was finally 100% complete in Texas, Oklahoma and Kansas.

WILL LOWER PRICES DETER PLANTED ACRES THIS FALL?

The 2020 hard red winter crop insurance price has been set at $4.35 per bushel versus $5.74 last year, making the 2020 hard red winter wheat price the lowest crop insurance price since 2006 at $3.52 per bushel. That lower price could push planted acres in Kansas and other states to another historical low.

Van Allen said there will definitely be fewer acres of wheat planted in Sumner County.

"I am personally planting the fewest acres I have since I started farming 40-plus years ago," he said. "Cash prices below $4 per bushel and 2020 prices not much better are the main reason."

"Our acres will probably be flat in north-central Texas," said Kimbrell. "We will likely plant the same as same as last season. It worked well for us this year, so hopefully if weather allows, we'll do the same."

"Winter wheat planting in South Dakota will be interesting," said Luken. "Some fields are so saturated that they can't even think to get them planted. I will say planting will be down and that is due to fields being too wet. I am sure the producer will try to get as much planted as they can with what drier fields they can get into. Wheat is planted in our area to spread the workload and also rotation."

"I tend to think with current economics, low cash wheat prices and low insurance price, there is less incentive to plant HRW in the Southern Plains," said Gilpin. "Also, we are estimating because of the good moisture this spring and interest in the Market Facilitation Program (MFP) program, we saw more acres get planted to corn and less acres of fallow than we've maybe ever had in western Kansas. Those fallow acres in western Kansas that were planted to a spring crop instead of waiting for this fall to plant winter wheat leads me to think there will be lower wheat planted acres in western Kansas.

"It is getting pretty dry here, so that will be a factor farmers also consider. If we are on the verge of a more average-type year with less rain, there may be some interest in double cropping in central Kansas if this fall harvest of other crops happens in a timely manner."

Gilpin added, "Wheat is an important crop for Kansas farmers as the added benefits of weed control in rotation, crop residue for soil health and protection. Improved varieties on the market recently from public and private programs, with improved yield potential, are positives for growers preparing for wheat seeding this fall."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on Twitter @MaryCKenn

(BE/AG)

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