KANSAS PLANTING DOWN BY 6 PERCENT

Mar 1, 2009      The Wichita Eagle

Rick Plumlee

Mar. 1, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Decrease 'all boils down to economics'; worldwide conditions may lift prices again

Richard Felts had some good reasons to cut by 25 percent the number acres he planted in wheat for 2009. Input costs, weather and commodity prices were among them. "It all boils down to economics," said Felts, who farms in Montgomery County.

While his reduction in wheat acreage was on the high end, Felts had company among farmers in the state and across the country.

U.S. Department of Agriculture statistics show Kansas cut the acres seeded in wheat for 2009 by 6 percent, dropping it to 9 million acres for the state's lowest level in 52 years.

The state's eastern districts are down 14 to 15 percent. The south-central and central districts are at 5 percent.

Although the northern Plains states won't plant their 2009 wheat crop until spring, USDA figures show the rest of the country has slashed its wheat acreage by 9 percent.

But much of the acreage attention is focused on what Kansas is doing. That goes with the territory of being the country's largest wheat-producing state.

When Kansas' production has a hiccup, the rest of the nation and even the world take notice. But ag economists say there's no reason to ring alarm bells just yet.

"I'm not overly concerned right now," said Mike Woolverton, a grain economist with Kansas State University.

Although world wheat production was at a 30-year low two years ago because of droughts in key parts of the globe and a spring freeze in Kansas, Woolverton said a strong 2008 crop allowed other countries to replenish their reserves.

"So people aren't going to go hungry," he said. "There's plenty of wheat in the world, although some of it is not very good quality.

"The concern is next year. If we get into a drought and have a short crop, we could be in a wheat undersupply situation."

Fewest acres since 1957

Kansas got its name as the Wheat State because it's a steady player in the market.

Even in the past decade, the state has hung around the 10 million mark in acres planted

But Kansas farmers planted 9 million acres for this year's crop, down 600,000 from the previous year and the fewest since 7.2 million were seeded for the 1957 crop. That was a drought year, and 4.3 million acres were placed in the soil bank reserve, according to a wheat history compiled by the Kansas Agricultural Statistic Services.

This year, the state's slice in acres planted in wheat were driven by the weather and the record-high fertilizer costs.

While wheat was seeing record-high prices -- $12 to $13 on futures contracts for last February and March --few farmers were willing to take the considerable risk of contracting for those prices. Memories of the 2007 spring freeze, which in some cases wiped out entire wheat crops, were fresh in their minds.

As planting time drew closer in 2008, wheat prices had dropped considerably, but fertilizer costs remained high.

Farmers weigh options

Farmers considered their options.

Eastern Kansas' wheat acreage fell at a higher rate than the rest of the state for two reasons:

Farmers in that area couldn't get into their fields to plant as much wheat because of late corn and soybean harvests.

Those same farmers also have more crop choices because their region traditionally receives more rainfall. Corn and soybeans are spring-planted crops that require more moisture.

"In the back of their minds, they were probably thinking, 'Well, I'm just going to keep this land open for row crops,' " Woolverton said.

That's what Felts did in Montgomery County. He is replacing a quarter of his wheat acreage from 2008 by planting soybeans this spring.

"It really became a matter of numbers," he said.

Soybeans require far less fertilizer, while Woolverton called corn a fertilizer hog. Still, holding off planting last fall gave farmers the option to wait until the spring in hopes fertilizer prices would drop.

In fact, fertilizer has dropped more than 50 percent since its peak of five or six months ago.

Some farmers delayed putting fertilizer on the wheat they did plant. That gamble paid off because not only did prices drop, but mild January and February weather allowed farmers to add fertilizer as a top dressing.

Sedgwick County extension agent Gary Cramer said he didn't have exact numbers but knew the county's wheat acres were down from the normal 190,000 to 200,000.

Jon Kerschen, who farms near Garden Plain, didn't cut back on the acres of wheat he planted or delay fertilizing. About 80 percent of his cropland is in wheat.

"We would have liked to cut back to about 70 percent," he said, "but the wet weather didn't allow it."

This area had unseasonably high amounts of rain in June and July. Kerschen wasn't able to get into his fields and finish his wheat harvest until after July 15, killing plans to double-crop some of that acreage with milo.

He cringed as he planted his wheat with such high fertilizer prices, but he still applied all the fertilizer.

"It's a guessing game," Kerschen said, "but you can't beat yourself up after last year.

"The ag industry went through such volatility last year, I don't know if you could put together a plan to forecast what happened."

It's still a moving target.

Reduction in acres planted doesn't necessarily translate to decreased production.

Last year, Kansas produced 356 million bushels after planting 9.6 million acres. In 2007, the state turned out 284 million bushels off 10.4 million acres planted.

"If we get some good rains, we could still produce a really good wheat crop," Woolverton said. "That's a little iffy right now. We really need a change in weather pattern."

Worldwide conditions

Wheat prices are now under $5 a bushel. But world conditions might be setting up to push those prices up.

Argentina's government has cut off exporting any of its wheat as the result of that country's driest summer in 50 years, Woolverton said. That means countries like Brazil, which normally gets almost all of its wheat from Argentina, could be looking to the U.S. for the grain.

China is anticipating a poor quality of wheat because of drought damage. The country recently imported 1.1 million bushels from the U.S.

"China will probably buy a couple more purchases along that order," Woolverton said.

Don't think Kansas farmers aren't keeping their eye on such world-market facts as they try to map out the strategies for their acreage.

"You're looking for any edge you can get to manage that risk," Kerschen said. "But you still have to pull the trigger."

Reach Rick Plumlee at 316-268-6660 or rplumlee@wichitaeagle.com.

Newstex ID: KRTB-0218-32430630

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