According to reports, US wheat farmers foresee ongoing profitability challenges in 2024 due to global oversupply, low prices, and high equipment and transportation costs.
On Thursday, wheat futures for May contracts rose by 0.76% to $5.41 per bushel in the Asian afternoon session.
Meanwhile, the condition of the US wheat market will severely impact winter wheat farmers in the Great Plains. Despite a promising crop, they might face financial losses due to prolonged drought.
Furthermore, the recent decline in American wheat prices is attributed to the influx of inexpensive grains from the Black Sea and Europe, alongside abundant global corn supplies, affecting the overall commodity grains market.
With winter wheat set to be harvested first, it forebodes a challenging year for U.S. farm income and rural communities.
Meanwhile, the International Grains Council, headquartered in London, predicts a record-breaking global grain harvest for the 2024-2025 marketing period, heightening worries about oversupply worldwide.
The magnitude of the US winter wheat harvest will become more evident in the weeks ahead, notably during the annual wheat tour in May.
According to the US Department of Agriculture’s (USDA) report on Monday, 55.00% of the crop is rated as good-to-excellent, marking the highest rating for this period since 2020.
US Wheat Farms Slump in the Past 20 Years
According to data, in the past two decades, the count of wheat-growing farms in the US has sunk by more than -40.00% as farmers shifted focus to other crops.
Furthermore, the USDA anticipates a reduction of over -4.00% in the total wheat acreage planted by farmers for the 2024 growing season compared to 2023.
Despite the recent plummeting wheat prices, farmers are grappling with steep increases in expenses for farm equipment, repairs, and labor.
Consequently, post-harvest, they find themselves financially strained as crop insurance policies only offer partial compensation, falling short of covering their losses entirely.
Meanwhile, this year, the USDA anticipates a nearly $40 billion decline in U.S. farm income from the previous year, primarily due to reduced direct government payments, rising production costs, and abundant supplies causing crop prices to plummet.
