Ag News -
National Ag News
Tuesday, 30 October 2012 13:27
BILLINGS, Mont. (AP) — Montana's wheat crop could reach $1 billion, officials say.
Officials tell the Billings Gazette (http://bit.ly/Y3X8A7) that drought conditions elsewhere are working in the state's favor, with the drought in corn growing regions causing a tight supply of that crop. Ordinary quality wheat is often fed to animals as a replacement for corn.
"When the price of corn goes up, the floor price for wheat — the price of feed wheat — is pushed up because it's a substitute," said Vincent Smith, Montana State University economist.
Though southern Montana experienced drought, the state's wheat crop farther north did well. The Montana wheat crop has reached $1 billion in wheat sales in four of the last five years.
"As far as the quality goes, we look really, really good for both winter wheat, spring wheat and durum," said Cassidy Marn, marketing program manager for the Montana Wheat and Barley Committee.
Marn said production was down somewhat but the wheat crop will probably be 90 percent of normal. Protein values, which increase the value of Montana grain, is averaging 14 percent.
Cash prices at elevators across Montana earlier this week ranged from $8 a bushel to $8.84. In southeastern Montana, though, the price was $7.69.
Officials predict that if demand for corn stays tight, wheat prices should remain strong. Smith said corn has more influence on wheat prices than any other factor. He said demand for corn for animal feed, sweeteners and corn ethanol have helped push up the price.
About 5 billion bushels of corn went to fuel in 2011.