There’s little doubt the planting of the 2018-19 U.S. winter wheat crop is off to what could be the slowest start in history.
But the most jarring fact is that the lag appears to be at its worst in the top-producing state, Kansas, which brings the intended acreage — and thus production potential — under scrutiny.
The lag in Kansas is so severe relative to history that it seems impossible for there not to be an additional explanation aside from the common planting headaches, which are usually related to weather.
Planting weather has been far from perfect, but the progress discrepancy could be rooted in the idea that farmers, particularly those in Kansas, intend to plant even less wheat than they did a year ago.
October is the primary planting month for winter wheat in the United States. Considering the last decade, about 44 per cent is planted by Oct. 1 and by Nov. 1 the progress is typically at 89 per cent. By Oct. 15, U.S. farmers had sown 60 per cent of the crop, but 71 per cent is normal for the date.
The progress data for Kansas is rather alarming. According to the U.S. Department of Agriculture, some 42 per cent of the state’s winter wheat area was sown as of Oct. 15, a whopping 33 percentage points behind the five-year average. The next slowest pace for the date is about 69 per cent in records dating back to 1981.
Kansas is the leading U.S. state in wheat production, accounting for 16 per cent of the national total. The state’s crop is the hard red winter variety, which is predominantly used for bread making as opposed to soft red winter wheat that is used for pastries and snacks. Kansas produces 28 per cent of the U.S. HRW wheat crop.
Traders do not appear worried about the hard red winter wheat crop, though, as futures have slid along with Chicago wheat, which typically represents the SRW variety.
According to USDA’s latest figures, the U.S. hard red winter wheat supply by mid-2018 will be down nearly 20 per cent from a year earlier. However, the projected volume of 487 million bushels is comfortably larger than it was in most other recent years.
But supply concerns could come into focus if the implied planting delays have deeper consequences than simply a later-developing crop.
When discussing USDA’s planting progress numbers, one of the first questions is just how much acreage is in play. Since no official estimates exist yet for new-crop wheat plantings, USDA has to make assumptions, which are described at the end of each weekly crop progress report.
The report states, “National crop-planting progress, progress of development stages, and condition estimates are weighted using the program state’s average planted acres over the previous three crop years.”
Nationally, the three-year average amounts to 36.2 million acres of winter wheat and 8.4 million acres in Kansas. But both U.S. and Kansas winter wheat plantings fell by 18 per cent between autumn 2014 and autumn 2016. So even if farmers kept area identical to last year, USDA is overpegging winter wheat acres by 3.5 million nationally and nearly one million in Kansas.
But the downtrend in winter wheat acres over the past four years is very pronounced, so it would not be surprising if farmers cut acres even further for the 2018 harvest. If this trend is simply extrapolated forward with no other adjustments, U.S. area would land around 29.6 million acres, the lowest since 1909. Kansas winter wheat acres would come in at 7.05 million, the lowest since 1910.
This highly simplified assumption could explain the planting delay at the national level, as the new area number would shift the Oct. 15 progress to 73 per cent – normal for the date – instead of 60 per cent.
However, the adjusted Kansas progress of 50 per cent would still be nearly 20 percentage points lower than the second-slowest year. This could mean that some other factor has slowed the field work in Kansas, or the state’s acreage has taken a historic nose-dive.
This analysis does not necessarily confirm that U.S. winter wheat acres will be sharply lower this year in Kansas or elsewhere, but it does highlight how the acreage estimates could skew the progress picture.
The recent trend in Kansas plantings provides good evidence as to where farmers are finding the best profitability, and last year is a prime example.
For the 2017 harvest, Kansas farmers reduced wheat acres by 900,000 acres (11 per cent) from the previous year. However, they increased corn plantings by 400,000 acres (eight per cent) and soybean plantings by 1.1 million acres (27 per cent).
Corn plus soybean acres outnumbered those of wheat for the first time in 2010 and then again in 2011 and 2016, but the difference was always less than one million acres. In 2017, corn and soybeans edged wheat by over three million acres.
In the case of Kansas, recent wet weather has not been helpful in the planting efforts.
Over the past six weeks, the state has had 4.4 suitable field work days on average, according to USDA’s statistics service. This is approximately one fewer day than neighbouring Oklahoma, the No. 2 HRW wheat state, where planting progress is 19 points behind normal.
Kansas has dealt with locally heavy rainfall events this month, which may end up among the wettest on record. But preliminary monthly totals suggest that overall, there have been other years in which October was similarly as wet in the Plains state, and planting delays were nowhere near as extreme.
Emergence of the Kansas wheat is slow at just 25 per cent by Oct. 15, but the 21-point departure from normal does not lag as much as the planting pace, suggesting that emergence is not necessarily the issue.
Kansas and Oklahoma are the only two states with winter wheat planting delays in the double digits when compared with average levels, and there are a handful of states that are ahead of their normal paces.