NAWG Leader: Cost of Wheat Production
by Matthew Weaver
USDA estimates the break-even price for wheat farmers is about $6.32 per bushel.
The cost of production is likely to increase for U.S. wheat farmers as a result of the Russian invasion of Ukraine, the leader of the National Association of Wheat Growers says.
"First of all and most of all, it's a very unfortunate and sad situation what's going on with the invasion of Ukraine by Russian military forces," Chandler Goule, CEO of NAWG, told the Capital Press.
Goule adds the invasion to a list of factors wheat farmers have faced in recent years: trade wars, tariffs, COVID-19 supply chain issues, drought, higher input costs and now even higher fuel and fertilizer prices as a result of Russia's invasion.
USDA estimates the break-even price for wheat farmers is about $6.32 per bushel. Goule declined to estimate an amount, but said the cost of production could increase "significantly."
"Even though we're seeing very high and really unprecedented prices for wheat right now, it's all going to get gobbled up because of the increased cost of production," he said. "And on top of that, we've got an inflation issue right now. It's not dire, but it's definitely going to cause instability and uncertainty for growers."
Russia is the world's largest exporter of wheat and Ukraine is the world's fifth-largest exporter of wheat, Goule said. Together they produce one-third of the world's wheat.
"To think we're not going to see market and supply disruptions, not only domestically but worldwide, I think would be somewhat foolish," he said.
Wheat futures prices were up and down to the limits last week, and the market has already limited up several times this week, Goule said.
"That volatility really adds to a lot of uncertainty for U.S. wheat growers, as well as for the world market," he said.
NAWG continues to monitor the situation and keep growers informed, Goule said.
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