Cash Market Moves

If Growers Plant Less Spring Wheat in 2022, What Crops Might Replace It?

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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USDA March 2022 planting intentions for U.S. spring wheat estimates the area planted to other spring wheat for 2022 at 11.2 million acres, down 2% from 2021. (Map courtesy NASS)

The USDA Prospective Plantings report on March 31 was the first official, survey-based estimates of U.S. farmers' 2022 planting intentions. NASS' acreage estimates are based on surveys conducted during the first two weeks of March from a sample of nearly 73,000 farm operators across the nation.

USDA estimated other spring wheat acres for 2022 at 11.2 million acres, down 2% from 2021, while durum wheat is expected to total 1.92 million acres for 2022, up 17% from last year. I checked with growers, elevator managers and the North Dakota Wheat Commission to find out if the USDA estimates are close.

"The survey seems to parallel what we were hearing from producers through much of this spring, which is increased interest in crops like malt barley, oats, flax, peas/lentils, hay and sunflowers, with steady to lower trends in spring wheat and corn," said Jim Peterson, marketing director, North Dakota Wheat Commission. "Strong and steady market values for those crops for much of the winter, along with somewhat lower input costs, especially for nitrogen fertilizer, were incentives to go with more of the typically minor acreage crops. Of course, the extremely strong hay market in parts of Montana and western North Dakota, and the looks of another dry year drove interest in hay."

Peterson said seed sales of spring wheat have been slower than recent years, according to many seed dealers, even with the recent rally driven by the Ukraine situation. "I think the early peak in spring wheat prices this winter also disappointed some producers, even though we have rallied again since early March."

As for durum acres, Peterson said the level of gains in North Dakota "are near what we had anticipated, although the sharp increase in Montana was more than expected. All the potential gains will likely be in the traditional durum growing areas and not a reflection of "nontraditional" durum areas increasing acres. The recent rally in spring wheat prices, strong malt barley prices and the high cost of durum seed, likely tempered gains in nontraditional areas."

Peterson said he anticipates some shift in planting decisions going forward, with soil moisture and the timing of planting driving some crop shifts in the drier western parts of the state. "In the east, if we get into a delayed planting season, then additional soybean acres will likely be brought in. Also, in the west, if the spring wheat market continues to rally into late April, we could see some of the potential durum acres shift over to spring wheat, especially since the durum market has been flat to declining over the last couple of months."

"Also of interest in the report were the gains in spring wheat plantings in Minnesota and Montana, albeit only single percentages, compared to the potential decline of 5%, or 300,000 acres in North Dakota," said Peterson. "It might be a reflection of greater crop options in North Dakota, spring wheat replacing corn in northern Minnesota areas and thoughts of replacing some poorer winter wheat stands in Montana with spring wheat."

GROWERS, ELEVATORS WEIGH IN

Two states you won't see listed in the USDA report are southwest Nebraska, where 3,000 to 5,000 acres of spring wheat are expected to be planted, and also some acres in southwest Kansas. "As far as spring wheat carving out a niche in the northwest Nebraska and southwest Kansas areas, it's mostly been a way to try and capture premium on acres that aren't committed to something in spring," said Matthew Wiegand, FuturesOne, Lincoln, Nebraska. "I think the last couple of years that wheat mostly made its way out to Denver as an end destination. I don't think the yields are up to North Dakota or Minnesota standards, but the dryland dirt and rain potential isn't as good either. I don't think it will push anything, acre wise, but it's a nice diversification tool for them."

Kerry Baldwin, Hope, North Dakota, said, "From what I'm hearing, corn acres in our area appear to be similar to last year. Wheat acres might be up just a little, and soybean acres might be a little higher. It sounds like different neighbors are decreasing the edible bean acres in favor of $14 soybeans. My acres are very similar to last year. I was fortunate to get my fertilizer all booked and applied last fall and the way spring fertilizer prices are, it looks as of now that it was a good decision. Last year at this time we were very dry here, and in fact, we were applying anhydrous at this time. Fortunately, we had some good rains last fall and have some decent moisture. We will obviously need more rain coming up, but we shouldn't have to worry about planting into dry soil. Praying for some good yields, so with higher prices it could be a fantastic year."

"For our farm, I'd say we are about average on all crops except a bit higher acres of soybeans and lower acres of spring wheat," said Darrin Schmidt, eastern North Dakota. That is mainly because of price action, but there is less risk in soybeans because of input prices, and those inputs are only getting higher as I am finding out weekly. There can be a big treasure at the end of the year, and it just depends on how much risk you're willing to take and that is a big part of any decision we make. We might be willing to risk on average acres, but we are not willing to risk increasing those acres on our farm. A few farmers are choosing alternative crops as well, such as sunflowers and canola are most of what I hear. Those acres are probably coming from edibles and soybean acres and maybe some wheat."

Keith Brandt, general manager of Plains Grain and Agronomy LLC in Enderlin, North Dakota, said, "If we can plant by May 10, spring wheat acres will be up 5% in southeast North Dakota. I don't see any fieldwork or planting starting until after Easter. We have good topsoil and subsoil moisture to start the season. While farmers have adjusted to the higher fertilizer prices, there is more concern with availability. We think we are sitting pretty good with fertilizer supplies here, but NH3 may be tight."

Alan Klain, Turtle Lake, North Dakota, said "In our area we are probably 10 days from starting seeding, barring a weather event. As far as acres, steady would be my call. We may see less corn as anybody without carryover fertilizer from 2021 will have sticker shock and switch some acres to edible beans or soybeans. We are coming off a severe drought, so nitrogen might be applied further into the growing season. We will just have to wait and see I guess."

"We are looking at a mid-April start for us, in dead central North Dakota," said Kim Saueressig, McCluskey, North Dakota. "North Dakota weather for this week is cool and kind of damp. Ground temps are still only about 30 to 32 degrees, and it could be a few days until the frost comes out of the ground. We are hoping to get started with some fieldwork in the next two weeks. Moisture wise, we were able to get some good rains late last fall to help replenish what we lost last summer with the drought. The only concerning thing is that we haven't really gotten a lot of snow over winter. It was more than last year but not a whole lot, and not a lot of moisture in it. Looking back to this time last year we are in a better spot though. Should at least have enough moisture out there to get the crops growing."

Saueressig said their planting intentions are going to basically be about the same as other years, except the only change would be to cut back corn acres and put in a few more lentils. "We will have more acres of durum than wheat and I was able to lock in some $12 and above new-crop contracts, but the acreage between the two won't have a big change from last year. Our biggest change will be barley. It will be the first time we've been able to get back into the malt barley market in about five years. Last time we had a chance at contracts we were down to about 100 acres, but we were able to get 1,000 acres contracted this year, so we are pretty excited about that."

The fertilizer price has played a little role in how we are going to rotate acres, said Saueressig. "Going to be a lot of beans on beans, durum on durum, wheat on wheat and corn on corn. The acres that did get soil tested last fall all came back with amazing amounts for residual fertilizer in the ground. So, those crops needing the fertilizer will be put in the fields, back-to-back. There will be some barley on soybean ground from last year, but that's just because barley doesn't need a lot of fertilizer."

Cory Tryan, grain manager Alton Grain Terminal, LLC in Hillsboro, North Dakota, said, "Farmer plans, as of late March, won't change much in our area. Most their fertilizer needs were covered last fall. It doesn't feel like we will see any big swings, but corn is still king. This area needs small grains in the rotation for beets but west of here, we may see a small amount of wheat go into something else."

Tryan said the ground is still frozen and ground temperatures have a long way to go before they plant, "unless the fields start blowing bad, which is very possible. We have no snow on the ground right now and coverage wasn't much, and it was powder, which melted off in four days here. Our subsoil moisture is lacking, but there should be enough topsoil if it doesn't dry out for us to get the crop started OK. We did have 4 to 5 inches of rain after the growing season last fall. North Dakota State University had said we needed 10-plus inches to replenish what has been lost for sub soil in last years' drought. Home sump pumps that usually are pumping every year at this time haven't pumped anything yet. Good news is the Red River in our area has peaked."

"From what I have been hearing, most guys will be sticking to corn and soybeans, with the few of us that still grow spring wheat keeping that in the rotation at the usual levels," said Ryan Wagner, Roslyn, South Dakota. "We have excellent subsoil moisture here locally and are probably a little on the wet side after all the rain last fall. I don't see high fertilizer prices changing many plans because most guys did get quite a bit prepaid and applied in the fall. I have heard rumblings from some that don't have fertilizer bought and are switching a few acres to soybeans, but even there, it's just a small percentage. Profitability is very good for all crops right now, so it feels like a year where farmers go with their normal rotations unless spring weather says otherwise."

Tim Dufault, Crookston, Minnesota, said "Northwest Minnesota received good fall rains last year, after a very dry growing season. Soil moisture will be fine to start the 2022 growing season. As of midweek, there is a little bit of snow around the area, and I do not see spring fieldwork starting before the second half of April.

"I don't think many acres were shifted because of the run up in fertilizer prices and I think the higher crop prices will have a bigger impact on crop changes. Corn requires a similar amount of nitrogen as wheat, so if wheat acres are shifted to corn it would have more to do with the local fall price of corn versus wheat. Sunflowers look to have an increase in acres, with a high crop contract price and with concerns over lack of moisture in North Dakota."

A grower in northeastern Montana told me that they are "getting out the urea for the planned spring wheat and mustard acres and laying in the inoculate and seed treat for the yellow peas. Certain guys have their 'rotations,' and we tend to change and move to what may be most profitable, productive and still keep us covered with crop revenue insurance so that we're still here to farm again next year," he said.

"We are still dry, dry, dry and more so than last year at this time. Soils are still cold so that is keeping from a rip-roaring start too, but I did see some fields seeded by circle. Our forecast is for a few wet and rainy days but add it all up to the predicted amounts, and we're at about .25 inches for a four-day rain. That's how it's been for 20 months and that is about all we expect."

Peterson concluded, "It will be an interesting spring, and if no significant moisture falls in the western part of the North Dakota, or into parts of Montana in the month of April, we will quickly shift into drought discussion again, unfortunately."

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

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