The War in Ukraine has created uncertainty in a very significant grain producing region, and the very unfortunate happenings there have created a very significant opportunity for Ontario Wheat Growers. #prosperitygrass
First and foremost, this is an agronomic focused newsletter, and none of us intend to make this a marketing focused newsletter, but the grain prices available to book in the futures market are at record breaking highs, and that is worth some serious attention.
Have you looked at the wheat markets recently? I am quite sure you likely have. While the conflict and War in Ukraine is certainly a terrible human tragedy, and we all look forward to a swift resolution, the impacts on the grain markets are very significant. The instability in this region is bringing a large amount of uncertainty to the grain markets. This is being reflected in the very strong commodity prices. The Wheat Market is now a key leader in commodities. The world needs wheat, and although Ontario is a small player in the grand scheme of global wheat production, we generally have consistent yield and a reliable production and export ability.
The 2022 crop volumes can not be altered very much at this stage of the game. The acres are set. Our focus the shifting the 2023 crop potential. At the time of writing, Ontario growers can forward sell 2023 Soft Red Winter Wheat for $13.17 per bushel ($484 per metric tonne). Astounding! There are also buyers willing to pay premium above this for Hard Red Winter wheat. Hard Red Spring wheat can also be sold for over $15.00 per bushel ($550 per metric tonne).
“What about other commodities, aren’t they up too?” Sure they are. But not quite to the same degree. I would challenge you to dust off your favourite cost of production spreadsheet, and look at your 2023 options. When we did this last week, we actually said “Wowza Wheat” out loud when the profit levels calculated. With input of a fair expected yield, a known increase in input costs, and conservative revenue number for sale of straw, the wheat crop enterprise shocked us. There was $200-250 per acre MORE PROFIT in the wheat acres than corn or soybeans.
In the end, we feel it would be well worth your time to look at the possible crops options, and run through your own cost of production. We trust you will see the same advantage supporting a good wheat crop.
While we are at it, lets give another thought to the class of wheat we could grow. If we are going to grow more wheat, should we grow more wheat to use for Bread (Hard Red Wheat), or Cookies (Soft Red)?
#prosperitygrass to a whole new level. There is some opportunity to be had, please consider making some commitments to take advantage of it. Once the War is resolved, it seems like wheat prices will certainly retract closer to pre-war levels.