Crop prices aren't exactly known for their legendary stability, but the ride wheat prices have taken in the past few months would give even the monster roller coasters at Six Flags and Disneyland a run for their money.
"Starting back this summer in July we started to see a run-up in prices," said Erica Olson, marketing specialist for the North Dakota Wheat Commission, in an Oct. 29 phone interview.
Olson said several factors have contributed to the volatility of wheat prices this summer, namely Russia's shocking export ban on wheat and other grains in August. Russia announced the ban would remain in effect through the rest of the year.
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A combine harvests a field of wheat south of Minot in late September. Although much of September was wet and dreary, the sun finally peeked out near the end of the month and allowed farmers to get back in the fields.
"So that was a big factor since they are a large exporter," Olson said.
Also the United States and Canada both had delayed spring wheat harvests because of extremely wet weather conditions, which pushed back even further many crops that had already been planted late due to rain earlier in the season.
Now drought in western Texas, Oklahoma, Kansas and eastern Colorado big winter wheat-producing areas has made prices jump yet again.
"Now we've seen recently, actually mainly just this week, we've seen prices come up again primarily due to concerns in the winter wheat region," she said. "They've had some very dry weather there and the crop isn't off to a very good start in that area of the country."
Also contributing to high U.S. wheat prices are quality concerns about harvests from competitors. Olson noted Canada's wheat harvest has been lower in quality than usual this year, making U.S. wheat even more attractive to international buyers.
Jeremy Burckhart, grain merchandiser for SunPrairie Grain in Minot, agreed that Canada's wheat harvest is having some quality issues.
"The Canadian Wheat Board has said 62 percent of their durum and spring wheat will not be at No. 1 or No. 2 grade spec," Burckhart said.
On top of all that, Burckhart said Australia is also having problems with a delayed harvest and quality concerns due to excessive rain.
For both spring wheat and durum, Olson said North Dakota's harvest got off to a good start before cool, wet conditions throughout much of September slowed things down and delayed the last portion of the harvest.
"It was kind of an extended harvest period this year, and some producers just recently finished up," she said. "But production was good, yields were strong."
She said the rain didn't have a big effect on spring wheat except for a small amount of the last portion of the crop. Overall Olson called the quality of North Dakota's spring wheat harvest fairly good, with few disease issues and higher protein levels than a year ago although protein was still below the average because of high yields and a cooler growing season.
The wet weather did have a bigger impact on durum because there was more of it on the ground when the rains came. Olson said color was affected on the last portion of the crop, which was also hit by falling numbers.
Overall, though, she felt this year's wheat harvest was a good one.
"I would say that the majority of producers were fairly satisfied with harvest, the yields that they had, the good quality," she said. "Unfortunately those that had the delayed harvest, the issues with quality was a problem. But in general, yeah I would say it was a fairly good harvest."
Olson said cash prices for wheat are currently hanging around $6.80 to $7.20 per bushel. Prices have actually been spiking up and down since July, with the current rate matching that of a few months ago. Last year at this time Olson said wheat was going for about $1 less per bushel.
Burckhart said in the middle of July prices were hovering around $5 a bushel, and at the close of market on Oct. 29 the price was $7.22.
Prices usually tend to come down as farmers go into harvest, but this has been far from a typical year, Olson said.
"This year we saw prices increasing up through harvest because of some of the concerns. So that's an unusual thing," she said. "You know, anytime we get some of these market factors coming into play, that's going to move prices up or down."
The spike in wheat prices has caused some in the media to speculate that products like bread and pasta that are made from wheat will see an increase, too. Olson said that really isn't the case, noting wheat is only responsible for about 12 cents of the total cost of a $2 loaf of bread. This means even if rising wheat prices do contribute to a larger grocery bill, the increase would be measured in cents, not dollars.
"I think there's been a little bit of information in the news, but really I would say it isn't having a huge impact right now," she said.
As to when prices might start coming back down, Olson said it's tough to say at this point because demand is so strong.
"The other issue is that in the spring wheat needs to compete with other crops for acreage so it needs to stay price competitive compared to corn and soybeans, canola and all the other crops out there," she said. "So it's really tough to say right now, but we've been seeing strong demand and expect it to continue."
While the exit of a major wheat exporter like Russia from the market and wheat that is lower quality than expected from Canada and Australia might sound alarming at first, Olson said there's absolutely no concern about a worldwide wheat shortage.
Olson said what markets will see, however, is shifts in where wheat comes from. She noted buyers who normally get wheat from Russia will simply take their business to other countries like the United States.
"There's wheat out there to meet everyone's needs," Olson said. "It's just we're seeing a shift in where some of that is sourced from."
Even though wheat prices have been unusually high around harvest, Burckhart said he was surprised that more farmers haven't hauled in a load or two to the elevator.
"We've bought a fair amount of wheat, but not as much as you would anticipate at these levels because, you know, everyone has that idea maybe in the back of their head that (wheat prices) can run up even more so they don't want to sell," Burckhart said.
Burckhart said wheat prices are at a pretty comfortable level right now, and he doesn't see them getting much higher. If prices do go up any more, he said, the United States wouldn't be competitive in world markets and buyers would turn to other countries with lower wheat prices.
"I think right where we're at now, it'll probably stay here for a little while unless something else unforeseen happens," he said.