Posted 17 August 2007. Crop Management.
Consider Winter Wheat This September
North Dakota State University. www.ndsu.nodak.edu
Fargo, North Dakota (August 9, 2006)--In 2006, a drought year, winter wheat yields (44 bushels per acre) and sales per harvested acre ($185) were higher than for spring wheat at 31 bushels per acre and $140 per acre harvested, according to North Dakota Agricultural Statistics Service data.
This year, winter and spring wheat will have strong revenue, but reports of exceptional yields have been more common for winter wheat. In September, it will be time for producers to decide whether to plant winter wheat to harvest next year.
The question for producers is whether the strong showing of winter wheat the past few years is an aberration or part of a long-term trend.
There are a couple of trends, such as higher yields and lower acreage abandonment, that indicate winter wheat is worthy of serious consideration for increased acres.
Thirty-year yield trend lines show an annual increase of more than one-half bushel per acre for winter wheat, compared with about one-third bushel per acre for spring wheat. The result of this long-term trend now is evident. The five-year (2002 through 2006) state average winter wheat yield per harvested acre is 20 percent higher, at 42 bushels per acre, compared with 35 bushels for spring wheat.
The other positive trend relates to the most serious concern about winter wheat, which is crop failure. The 30-year average abandonment of winter wheat plantings is 18 percent, the 10-year rate is 14 percent and the five year average only is 10 percent. This improvement is a testimony to better production practices by farmers and possibly a nod to the weatherman. Acreage abandonment of spring wheat averaged between 4 percent and 5.5 percent during the same time periods.
Winterkill is the reason that the likelihood of crop failure is greater for winter wheat than spring wheat. Fortunately, the crop year usually is not lost for the acreage on which winterkill occurs because there often is time to plant a different crop in the spring. This can limit the economic loss from winterkill to the sunk costs of the winter wheat seeding operation and any other inputs that were made, but cannot be utilized by the substitute spring-seeded crop.
Successful winter wheat plantings will reduce the spring workload for producers. Producers should have a "plan B" crop to plant in case the winter wheat fails to survive the winter. If this occurs, the greater than expected spring workload may hurt the timeliness of operations.
A negative for winter wheat is a lower price relative to spring wheat. Historically, winter wheat price averages 10 percent to 15 percent lower than spring wheat. In the 2006 marketing year, the cash price of winter wheat averaged $4.20, compared with $4.50 for spring wheat, a 7 percent discount.
There are positive and negative aspects to crop insurance for winter wheat in North Dakota. The positive is that winter wheat is insured at the same price per bushel as spring wheat. The negative is that winter wheat cannot be insured unless it has an adequate stand in the spring.
Another consideration is that, even though winter wheat is in the ground, it is probably too risky to forward price before spring when the condition of the crop and determination of insurability are known and the price level on revenue insurance products are established.
The economic competitiveness of winter wheat to spring wheat will vary by region of the state. For example, an analysis that I made in 2006 for eight of nine cropping regions projected a greater return in 2007 for winter wheat relative to spring wheat for the eight regions. It ranged from $8 in the southern Red River Valley to $29 in the south-central region.
Winter wheat acreage is increasing, which reflects its improved economic competitiveness, but the acreage still is small. This crop year, the plantings of winter wheat grew 86 percent, to 370,000 acres, which is the highest in more than 20 years. In contrast, spring wheat acreage dropped 14 percent, to 6.3 million acres.
However, new winter wheat growers should be aware of recommended practices, such as no-tilling into sufficient standing stubble and destroying any volunteer wheat, at least two weeks before planting.
In summary, winter wheat plantings this September for the 2008 crop year will increase. However, as usual, whether it turns out to be a good decision will be up to Mother Nature.