Depressed wheat prices are taking the bloom off Colorado farmers’ outlook for a bountiful crop this year.
Prices for wheat aren’t far from their long-term averages, but they have dropped sharply since hitting record highs in 2008.
That means Colorado growers are likely to harvest a respectable 87 million bushels next month, yet receive the lowest prices since 2005.
“Overall, our crop will look better than average, basically due to the good moisture we’ve received this winter and spring,” said Kent Kalcevic, a fourth-generation wheat farmer in Adams County.
“On the other hand,” he said, “the market is currently in pretty bad shape. We’re looking at prices at least a dollar a bushel below break-even levels.”
Cash prices for Colorado wheat recently have hovered in a range of $3.50 to $4 per bushel. The 2008 crop won a record average price of $6.47 a bushel after a worldwide grain shortage caused spot prices to briefly spike at higher than $12.
Now, the market has reversed, with the biggest wheat glut since 2002.
“Our problem is that there’s a lot of wheat lying around since last year’s harvest, and nobody’s buying,” said Tom Neira, a wheat farmer south of Bennett who has 1,300 acres in wheat this year.
“My input costs keep rising,” he said. “With wheat prices down, I won’t be able to cover my costs.”
The average wheat price collected by Colorado farmers over the past decade is $4.05 a bushel.
This year’s projected harvest of 87 million bushels would compare favorably with the 10-year average of 63 million bushels — a number that reflects several years of substandard production from drought earlier in the decade.
“Our growers are pleased that they’re going to have an above-average crop, but clearly they’re disappointed in prices,” said Darrell Hanavan, executive director of the Colorado Association of Wheat Growers.
Kalcevic noted that although good moisture has contributed to a strong crop this year, hot and dry days in June and July, as well as hailstorms, could alter the harvest outlook.
Colorado typically ranks as the nation’s fifth- or sixth-largest wheat producer.
Most of the state’s crop is winter wheat — a dryland, or nonirrigated, crop that is planted in September and October. The wheat germinates and grows through the fall, becoming dormant in winter. It begins another growth cycle in spring until the harvest in July.
About 80 percent of Colorado’s wheat is exported to Europe and Asia. Most of the remaining 20 percent goes to wheat mills in Commerce City and Platteville for use in bread and rolls.
Variations in wheat prices typically don’t have much effect on retail food prices because the wheat content in food items is a relatively small part of total manufacturing and marketing costs.
Steve Raabe: 303-954-1948 or sraabe@denverpost.com
