Wheat production and prices are down, but options are available

Wheat producers are in a tough position due to drought right now, according to a Texas A&M AgriLife Extension Service specialist. However, there are options available that could improve their bottom line.

Last year, coming into March and early April, the drought index was improving, but this year, conditions are worsening as the wheat crop is breaking dormancy and starting reproductive growth, said Mark Welch, Ph.D., AgriLife Extension economist-grain marketing in the Texas A&M Department of Agricultural Economics.

Drought conditions took a critical turn this past week after extreme and relentless wind conditions from Nebraska down to the Rio Grande combined with the lack of rain, leaving wheat producers worried about future production.

“Producers have some real concerns about production potential and are having to ask themselves: ‘Do I spend any more money on it, give it that shot of fertilizer, from a management and marketing standpoint?’” Welch said. “It’s difficult to know which way to jump under these harsh conditions.”

Decisions needed in the coming weeks

Producers will need to decide whether to abandon the idea of going to grain and leave cattle to graze wheat or manage it as wheatlage, which is growing in popularity where water is available. Others will likely abandon the acreage and move on to the next crop if losses are extreme.

“We are getting beyond the graze or grain decision point, but whatever producers do, they need to certainly bring their crop insurance agent into the conversation,” Welch said. “Know where you stand on your policy and its benefits and deadlines.”

Another factor at play this year is enrollment in the farm program. The enrollment deadline to select Agriculture Risk Coverage, ARC, or Price Loss Coverage, PLC, has been extended to April 15. Also, the Emergency Commodity Assistance Program is providing up to $10 billion in direct payments to eligible agricultural producers, including $30.69 per acre to those growing wheat, to help mitigate the impacts of increased input costs and falling commodity prices.

“That’s a significant number,” Welch said. “So, farmers certainly need to take advantage of that. And then I think enrollment in the PLC or ARC program is a very important decision this year.”

He explained the season-average farm price for 2025 is expected to be below the reference price — $5.50 per bushel is the expected season-average farm price, and the reference price is $5.56 per bushel, which would generate a very small PLC payment at those levels.

“We’ve not collected a PLC payment in some time, but if things continue as they are, we could this year,” Welch said. “It might only be 6 cents per bushel if things stay the way they are, but producers need to understand those payments might come into play this year.”

Market prices are down

The cash price was $5 per bushel a year ago, compared to $4.85 per bushel this past week. However, the basis could improve moving into the spring if there is a short crop in other regions — Oklahoma or Kansas — and internationally.

Russia is currently concerned about drought, and it is the world’s No. 1 exporter, so that might create more opportunities for the U.S., Welch said.

Currently, the early projections for U.S. crops show very little change from 2024 to 2025 — harvested acres and yields are about the same, so supply will also change very little. With little domestic-use change expected, the export space is important to increase wheat futures prices.

Wheat conditions are struggling

AgriLife Extension agronomists in the Texas A&M Department of Soil and Crop Sciences, who service different regions of the state, are starting to see varying signs of drought stress on the wheat crop.

Brandon Gerrish, Ph.D., AgriLife Extension statewide small grains specialist, Bryan-College Station, said most of the wheat in south Texas and southern Blackland region looked very good up until recently, but drought stress has become apparent over the past couple of weeks. Spring wheat along the Gulf Coast and into the Winter Garden area southwest of San Antonio is either heading now or already headed.

Dry fall conditions in some areas after planting, along with some very cold periods in January and February, resulted in delayed crop development compared to last year, Gerrish said. Late wheat does not bode well as temperatures rapidly increase with little rain chances in the forecast.

“Also, even though we had some very cold temperatures in January and February, we are still far behind on season-long vernalization hours compared to the five-year average,” he said. “I suspect vernalization issues are probable if producers did not select a low vernalizing cultivar.”

Still potential if rain arrives soon

On a brighter note, Gerrish said the stripe rust has not been as bad as last year. And with the temperatures heating up, he said it is unlikely to see much moving forward. Leaf rust is developing rapidly in some areas, with moderate levels in the lower canopy at College Station and Castroville and trace levels in Uvalde and McGregor. 

Reagan Noland, Ph.D., AgriLife Extension agronomist, San Angelo, said the wheat crop varies tremendously across West Central Texas. Wheat was established well and in decent shape from San Angelo to Abilene and north, but all fields desperately needed rain as they entered the reproductive stage, the greatest water requirement period.

However, moving east into Concho County and particularly in McCulloch County, a considerable amount of wheat acreage will fail this year. Most of that area was too dry through the winter, and much did not germinate until January, Noland said. Since then, conditions have been too dry and windy to maintain any production potential.

“There are areas scattered throughout that were established early enough and still have potential, but are showing symptoms of drought stress too,” Noland said. “The forecast does not look good. We really need rain now to make it work.”

Calvin Trostle, Ph.D., AgriLife Extension agronomist, Lubbock, said near-record and record November rainfall in the South Plains gave wheat an exceptional start. But dryland wheat has had less than a half inch of rain since then. It has hung on, but its margin for performing well as temperatures warm is gone.

Another concern is freeze damage, Trostle said. While none has been noted to date, the most sensitive stages are approaching where flowering wheat is highly vulnerable to 32 degrees if it lasts two hours or more. 

Jourdan Bell, Ph.D., AgriLife Extension agronomist, Amarillo, agreed the fall rainfall significantly benefited all locations, and there has been no winterkill or significant freeze injury at any location.

However, Bell said, while wheat conditions are improved over previous years, fluctuating temperatures, recent windstorms and expanding drought conditions will reduce projected yield potentials if timely spring rainfall is not received.

PHOTO: Wheat variety and nitrogen trials from Texas A&M AgriLife near McGregor show good growth but need additional moisture. (Calvin Trostle/Texas A&M AgriLife)