Continued drought conditions threaten organic wheat supply

Widespread weather challenges are set to impact harvest, quality

The record-breaking heat wave in the Northwest, paired with the continued drought across a broad range of crop-producing states, may challenge the organic wheat supply heading into harvest. According to the recently released Mercaris Monthly Update, the prolonged drought will likely move harvest earlier this year lending itself to other pressures.

“While we’ve seen improving conditions in some parts of Wyoming and eastern Nebraska, other parts of those states, along with the Dakotas, have had drought worsen through the first week of July,” says Megan Thomas, economist for Mercaris. “With these conditions through much of the wheat growing region, we are expecting an earlier harvest, which will likely further reduce yields and impact protein levels.”

In the report, Mercaris explains that the chance of reduced yields and increased protein levels for organic wheat will likely put upward pressure on organic food grade wheat prices. Organic hard red spring wheat already averaged $12.77/per bushel (bu) in the second quarter, a gain of $2.38/bu year over year, while organic hard red winter wheat averaged $13.60/bu for the same time period, up $2.65/bu over the same period last year.

“The full effects of the spring and summer’s drought season will be unknown until harvest fully concludes,” adds Thomas. “There are a number of questions related to producers’ reliance on crop insurance, as well as changing weather conditions that will result in price and supply implications.”

With the organic wheat harvest threatened and already tight organic soybean supplies, Mercaris notes that higher organic food and feed grade prices are likely through the rest of the 20/21 marketing year and beyond.

More details on the organic crop market, along with animal production and imports, can be found in the July Organic Market Update that is available on www.mercaris.com.

Organic & Non-GMO Insights August 2021