Midwest drought conditions could mean higher prices for PNW

By MATTHEW WEAVER

Capital Press

GARFIELD, Wash. -- Precipitation levels in the Pacific Northwest and the Midwest will play key roles in determining wheat prices this season, industry insiders say.

Garfield, Wash., farmer Rich Olson raises winter wheat, spring wheat, canola and lentils on about 3,000 acres for 10 landlords.

Olson farms with his wife Judy -- the state executive director of the USDA Farm Service Agency -- and his son and daughter-in-law.

He isn't concerned about moisture levels yet, noting that recent rains in the Pacific Northwest were appreciated.

But getting rain in June is more important, he said, as it will determine the filling of the wheat. He averages 80-100 bushels per acre.

"If we have anywhere close to our normal June rainfall, we should do fine," he said. "If we don't, we're going to experience a lot of the same problems they have in the Midwest."

USDA Chief Economist Joseph Glauber testified to the U.S. Senate Committee on Agriculture, Nutrition and Forestry that about 60 percent of U.S. winter wheat production was under drought conditions.

Farmers in some affected areas welcomed the moisture that came with last week's blizzards, Olson said.

But some reports indicate the lack of moisture has stunted the Midwestern wheat to the degree that it will not be a very good crop, said Scott Yates, director of communications for the Washington Grain Commission.

"Once again the Northwest for the most part is sitting in the catbird seat when it comes to the wheat crop in the nation," Yates said. "We have adequate moisture, we haven't had any arctic express come down, we've got snow cover over some of the land."

That's an opinion running throughout the region, as farmers like Olson work in their shops on their equipment and anticipate the arrival of spring weather.

"Most of what I've heard is the crop looks good -- it sounds like it's gone through winter fine," said Blake Rowe, Oregon Wheat CEO.

February was relatively dry, but no one's concerned, Rowe said.

"I haven't heard yet that there are any real issues," he said, noting it's still early in the season. "They're just watching the weather and how wet the soil is."

Travis Jones, executive director for the Idaho Grain Producers Association, said moisture levels are slightly below normal across his state, but there's still time for more rain or snow to fall.

"Really, people are pretty positive right now," Jones said.

Another drought in the Midwest is positive price-wise for Northwest producers, Jones said. More will be known as the picture in the Midwest becomes clearer in May and June.

The United States is the only region in the world having drought difficulty, Yates said. Overseas wheat competitors look to have good growing conditions. But poor conditions in the Midwest and northern and southern Plains could have an impact on price, he said.

"It's a world commodity, so we'll see how that works out," he said.