Wheat prices are at their highest level in three years, which means farmer Merrill Nielsen should be getting more for his crops out of his 2,500-acre (1,010-hectare) Kansas farm.
asserted
Nielsen → mean → farm
Yet even as future prices for bread-type wheat are up 39%, Nielsen is unsure whether increased prices will raise his bottom line.
asserted
prices → increase → line
The price of diesel fuel, which he needs to run his tractor, has hit record highs.
asserted
he → need → highs
Then there’s the erratic weather that made him lose his entire wheat crop in the spring, and drought has overtaken the southern Great Plains.
asserted
drought → ’ → Plains
“We’re not looking to plant any more wheat than we probably normally would, or maybe we won’t even plant that much.
asserted
we → look → much
I don’t know.
asserted
I → know → ?
Really, we’ll have to see what the weather does for us,” Nielsen said.
asserted
Nielsen → have → us
The combination of high costs, poor weather and geopolitics leave US farmers such as Nielsen with an uncertain growing season despite higher prices for their yields.
asserted
combination → leave → yields
It also leaves consumers, from millers and bakers to restaurants and grocery shoppers, at risk of feeling the pinch.
asserted
It → leave → pinch
Droughts across the US and Europe have been shriveling harvests, and weather forecasts for a “super” El Niño this year means “there are some alarming signals” about the impact of weather on wheat crops, said Joao Lampreia, a market strategist at the Lisbon-based Freedom24.
asserted
Lampreia → shrivel → Freedom24
The weather phenomenon, exacerbated by the climate crisis, causes warm waters to rise to the surface across the equatorial Pacific Ocean, along the coast of South America, and is known to imperil agriculture in the southern hemisphere significantly.
asserted
waters → exacerbate → hemisphere
Experts say wheat supplies in key exporting countries are at their second-lowest levels on record.
asserted
supplies → say → record
Already, Australia’s wheat plantings are down 12% due to expectations of dryness and increased fertilizer costs.
asserted
plantings → increase → dryness
The good news for farmers and consumers is that El Niño can also bring wetter conditions for the southern Great Plains in the fall and spring.
asserted
Niño → bring → fall
During the last big El Niño in 2015 and 2016, the US set an all-time record-high winter wheat yield, said Mark Welch, an economist who researches grain marketing at Texas A&M University.
asserted
who → set → University
Even if the weather impacts turn out better than expected, recent Russian attacks on port facilities in the Black Sea, where one-third of the global wheat trade passes through, have also disrupted grain shipments.
asserted
third → turn → shipments
Black Sea farmers, who were some of the few global wheat exporters to experience a bumper crop, had just wrapped up their harvest before the attacks.
asserted
who → experience → attacks
Because of the fighting, supply is largely inaccessible, which has pushed prices up, Welch said.
asserted
Welch → push → prices
But if Black Sea farmers and shippers can find alternative routes, prices will backtrack somewhat.
asserted
prices → find → routes
At best, about 35% to 50% of that wheat could find a way out, but it will take longer and cost more to get, Lampreia said.
uncertain
Lampreia → find → more
Dan Basse, president of the agricultural market research company AgResource, worries the that combination of weather-damaged harvests and the impact of geopolitics on wheat exports could leave global food prices even higher than they are today.
uncertain
they → worry → prices
The United Nations’ Food and Agriculture Organization’s food price index, which tracks a basket of widely traded food commodities, was up 2.5% in August over a year ago, he said.
asserted
he → track → August
The spike in wheat prices “has tentacles that go far beyond the war between the Ukrainians and Russians”, Basse says.
asserted
Basse → have → Ukrainians
“The world needs more harvested acreage of every grain.
asserted
world → need → grain
All of this resonates in higher grain and food prices for the world looking forward.”
asserted
All → resonate → world
In the immediate future, US farmers will need to help make up the shortfall.
asserted
farmers → need → shortfall
Basse said he expected planted acreage for wheat this winter to expand about 10% more than last year as producers seek to capture higher prices.
asserted
producers → say → prices
But harvested acreage for wheat in the US has been at its lowest levels since 1877, as US farmers have found it more profitable to plant corn and soybeans rather than wheat.
asserted
it → harvest → corn
One year of high prices isn’t likely to change a structural decline.
asserted
year → change → decline
Farmers will need higher production and strong values to benefit.
asserted
Farmers → need → production
“If it’s not an average yield or better, the breakeven cost really gets high very quickly,” Welch said.
asserted
Welch → ’ → ?
And it’s unclear how much weather will continue to affect harvests.
uncertain
weather → ’ → harvests
Vance Ehmke, a wheat-seed seller in south-west Kansas, said he’s been busy fielding more calls for seeds this year.
asserted
he → say → seeds
But the weather in the southern Great Plains is now too dry for seeds to germinate and grow.
asserted
seeds → germinate → Plains
“If you get your wheat up, you’ve got 90% to 95% odds that you’ll harvest something.
asserted
you → get → something
But if you can’t even get it up, I mean, you’re just screwed,” he said.
asserted
he → get → it
Prices will need to stay high to accommodate a surge in input prices, which have been exacerbated by ongoing trade wars.
asserted
which → need → wars
“We are the ones that get hurt by those policies,” Ehmke said.
asserted
Ehmke → hurt → policies
The Aporia
