Producers Shift Focus On High Quality Grain Production To Survive In An Evolving Global Marketplace

Feb 23, 2017

As attentions begin to focus more and more on new crop wheat in 2017, Radio Oklahoma Ag Network Farm Director Ron Hays sat down with Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson to get his outlook for this year’s harvest and what market demands producers will be competing to deliver on.

“I think the big news is reduction in planted acres and then the belief around the industry we’re going to have a higher percentage of our planted acres either grazed out or baled or taken up for the summer crops,” Anderson said, adding that Oklahoma’s next crop will be in the spotlight. “But, as you look around the world, there’s a shortage of milling quality wheat and the next exportable crop is the Oklahoma Hard Red Winter Wheat crop. I think the market’s wanting a quality product produced.”

Anderson says the recent rally in the market that brought the forward contract price up to $4.10/bu. for harvest delivered wheat is proof of that.

“I think they’re wanting nitrogen put on there,” he said. “Our price has come up I think to stimulate some of that increase of the top dress and to offer them a little better price.”

Farmers in the US now also find themselves with increased competition in the global marketplace as well. This past year, Russia became the No. 1 exporter of wheat, along with impressive performances by the Ukraine and other former Soviet states. Adding to this, Anderson reports the new president of Argentina has plans to ramp up the country’s exports by 25 percent.

“What we’re seeing is the impact of improved conditions, production equipment, the infrastructure in Eastern Europe and the former Soviet Union countries,” Anderson said. “You look back at the last 20 years to where they are today - they went from exporting maybe 5 percent of the world wheat exports to 30 percent.”

In order to survive these evolving dynamics in the world markets, Anderson says farmers will need to focus on producing a superior product.

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