Friday, May 7, 2021
CapitalPress.com 5
Surging corn prices, tight stocks push wheat near $8 a bushel
and so you see tons of vola-
tility,” Steiner said. “Fifteen
minutes in this market might
mean you get an extra nickel
or you lose an extra nickel. It
moves that fast.”
At one point, wheat was
cheaper as a feed grain than
corn. “When you see China
buying U.S. wheat to feed to
pigs, you know there’s some-
thing going on,” he said.
Steiner suspects prices
still don’t reflect the full
value of the soft white wheat
crop.
“I think soft white stocks
are tighter than USDA thinks
that they are, but we’ll see
what happens with this com-
ing harvest,” he said.
The corn market rally
is the main reason for the
higher wheat prices, but old
crop wheat stocks are as tight
as they’ve ever been, said
By MATTHEW WEAVER
Capital Press
Wheat hovered near $8
per bushel on the Portland
market this week, and experts
say they aren’t sure how high
prices will go, or for how
long.
The increase is partly a
reaction to higher corn prices
and a tighter wheat supply,
said Dan Steiner, grain mer-
chandiser at Morrow County
Grain Growers in Boardman,
Ore.
Soft white wheat prices
April 30 ranged from $6.65 to
$7.90 per bushel on the Port-
land market.
Farmers generally con-
sider prices above $6 per
bushel to be profitable,
according to the Washington
Grain Commission.
“This market freewheels
Negotiated trade minimums for live fed cattle
75% of the robust level (head per week)
Region
Robust threshold*
Minimum threshold
Texas, Okla., N.M.
13,000
9,750
Kansas
21,000
15,750
Neb., Colo.
36,000
27,000
Iowa, Minn.
16,000
12,000
*Levels identified by Stephen Koontz, Colorado State University, as providing robust price discovery.
Source: National Cattlemen’s Beef Association
Negotiated cattle trade
increases but falls short of goal
By CAROL RYAN DUMAS
Capital Press
An analysis of the cat-
tle trade in the first quar-
ter of the year shows nego-
tiated trade fell short of the
National Cattlemen’s Beef
Association’s goals in some
regions of the nation —
but it also showed substan-
tial improvement in some
regions compared to the first
quarter of 2020.
NCBA’s plan is to achieve
at least 75% of robust trade
levels in each region during
at least 10 of the 13 weeks in
a given quarter.
Failure to meet those lev-
els constitutes a minor trig-
ger, and three minor triggers
constitute a major trigger.
The NCBA will seek a legis-
lative or regulatory solution
if there are two major trig-
gers in the most recent four
rolling quarters.
Analysis of the first
quarter by Justin Benavi-
dez, extension economist
at Texas A&M Univer-
sity, found the Texas-Okla-
homa-New Mexico region
failed to meet the minimum
threshold during four weeks
of the quarter.
The Kansas region failed
in six weeks, the Nebras-
ka-Colorado region failed
in two weeks and the
Iowa-Minnesota region did
not fail in any of the weeks.
Fallout from winter
storm Uri and a plant main-
tenance closure in Kan-
sas led to “force majeure”
exclusions during several
weeks, he said.
“I think a lot of people
take the top-line results of
the failure to meet the estab-
lished thresholds and con-
sider these voluntary efforts
to be a failure,” he said in his
online post of the results. “It
is evident that by the mea-
sures of the 75% plan, a
major trigger was tripped.
However, I won’t be quick
to call the results of Q1 an
outright failure.”
First, negotiated trade in
the first quarter increased
substantially compared to
the same period in 2020, he
said.
The
Texas-Oklaho-
ma-New Mexico region
would have failed to meet
the threshold in 10 of 13
weeks in the first quarter of
2020. Trade volumes would
have failed in 3 weeks in the
Kansas region and in five
weeks in the Nebraska-Col-
orado region, he said.
Second, negotiated trade
in the first quarter was up
over the previous five-year
average across the Southern
Plains, he said.
“Third, the proximity of
misses to makes is worth
noting,” he said.
Two failing weeks in
the Texas-Oklahoma-New
Mexico region only fell
short by a few hundred head,
and three failing weeks in
the Kansas region fell short
by less than 1,000 head, he
said.
In addition, the study
NCBA used to set its thresh-
olds to achieve robust price
discovery contained min-
imum thresholds to estab-
lish any price discovery. In
all regions except Kansas,
and during one week in the
Nebraska-Colorado region,
those minimums were
achieved, he said.
“Results for Q1 show an
industry making strides to
achieve negotiated volume
to achieve price discovery
as a result of the voluntary
75% plan,” he said.
Capital Press File
Combines harvest winter wheat on the Polson farm
north of Waterville, Wash., in 2016. Prices have in-
creased in recent months, but analysts say they could
go down faster than they went up.
Byron Behne, senior mar-
keting manager at North-
west Grain Growers in Walla
Walla, Wash.
Farmers might still be
holding onto old crop because
they either don’t need the
money or are waiting to hit a
“home run” and see if prices
go “absolutely crazy,” above
$10 per bushel, Behne said.
He thinks the price range
will be $6 to $10 per bushel.
“I think the only thing that
could undo this bullish mar-
ket would be a wide outbreak
of African swine flu in China
that cuts their livestock herds
down, so they don’t need to
buy all this grain to feed the
animals,” he said.
The market is inverted,
with nearby contracts higher
than deferred contracts. That
indicates the market is con-
cerned about new crop supply
and demand, said Darin New-
som, an Omaha, Neb., market
analyst.
“This comes down to
acres, production, weather
— it takes everything into
account, plus there is an
expectation we could still
see better demand,” Newsom
said.
The higher prices will con-
tinue as long as supply and
demand is bullish, he said.
The market hasn’t hit the tip-
ping point yet, where prices
get so high that demand shuts
down, Newsom said.
“I don’t think we’re there
yet, but it’s a real risk when
we start talking about prices
we haven’t seen in a decade,”
he said.
Steiner recommends farm-
ers be an “upscale seller” and
not miss opportunities.
“I don’t know how high
wheat prices are going to go,
but I know these are good
values,” he said. “At some
point, this thing is going to
break, and when it breaks,
it could break very hard. It
could break faster than it
went up.”
Mexican high court decision allows
more fresh potato imports from U.S.
By BRAD CARLSON
Capital Press
The Mexican Supreme
Court unanimously voted
April 28 to open the entire
country to fresh U.S.
potatoes.
Mexico had limited
fresh U.S. potato imports to
within about 16 miles of the
border. The court has now
lifted that restriction.
Idaho Potato Commis-
sion President and CEO
Frank Muir said the commis-
sion is thrilled with the long-
awaited announcement.
“We don’t know the
details of timing, but we are
anxious to work with Idaho
shippers and Mexican retail-
ers to begin shipping Idaho
potatoes beyond our cur-
rent stores in Mexico,” he
said. “We also anticipate
doing our part in building
the entire potato category in
Mexico, including locally
grown potatoes, through
the advertising and promo-
Capital Press File
Idaho Potato Commission representatives look at
Idaho products on display during a 2011 in-store pro-
motion at a Soriana supermarket in Mexico City. The
nation’s Supreme Court has cleared the way for the
nationwide importation of U.S. potatoes.
tions we will do to further
expand usage of potatoes in
Mexico.”
He
applauded
the
National Potato Council and
Idaho’s senators and con-
gressmen and their staffs in
their “concerted efforts to
see this announcement come
to pass.”
NPC said U.S. fresh
potato exports to Mexico in
2020 accounted for 106,000
metric tons and $60 million.
The council estimates a mar-
ket potential of $200 million
per year within five years.
Mexico allowed U.S.
fresh potato imports in 2003
only in the border area, a
move seen as violating trade
agreements. The Mexican
government then allowed
the U.S. full access starting
in May 2014. The National
Confederation of Potato
Growers of Mexico sued,
claiming regulators lack that
authority. The April 28 rul-
ing rejects that argument and
affirms the government can
issue regulations about food
imports including fresh U.S.
potatoes.
NPC Vice President of
Trade Affairs Jared Bal-
com said in a release that
the ruling is “consistent with
Mexico’s obligations under
the
U.S.-Mexico-Canada
Agreement and World Trade
Organization.”
The ruling “represents
a major step forward in
the U.S. potato industry’s
efforts to provide consumers
throughout Mexico access
to fresh, healthy U.S-grown
potatoes,” he said.
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