A record-breaking heat wave in the Northwest, paired with the continued drought across a broad-range of crop-producing states, may challenge the organic wheat supply heading into harvest.
According to the latest Mercaris Monthly Update the prolonged drought will likely move harvest earlier this year, lending itself to other pressures.
“While we’ve seen improving conditions in some parts of Wyoming and eastern Nebraska, other parts of those states, along with the Dakotas, have had drought worsen through the first week of July,” says Megan Thomas, economist for Mercaris.
“With these conditions through much of the wheat growing region, we are expecting an earlier harvest, which will likely further reduce yields and impact protein levels.”
In the report, Mercaris explains the chance of reduced yields and increased protein levels for organic wheat will likely put upward pressure on organic food grade wheat prices.
Organic hard red spring wheat already averaged $12.77/bushel in the second quarter, a gain of $2.38/bushel year over year, while organic hard red winter wheat averaged $13.60/bushel for the same time period, up $2.65/bushel over the same period last year.
“The full effects of the spring and summer’s drought season will be unknown until harvest fully concludes,” says Thomas.
“There are a number of questions related to producers’ reliance on crop insurance, as well as changing weather conditions that will result in price and supply implications.”
With the organic wheat harvest threatened and already tight organic soybean supplies, Mercaris notes that higher organic food and feed grade prices are likely through the rest of the 20/21 marketing year and beyond.
More details on the organic crop market, along with animal production and imports can be found in the July Organic Market Update available by clicking here.
