MarketingWW


	Issue 101 Prairie Grains


	Prairie Grains is the official publication of the Minnesota Association of Wheat Growers, North Dakota Grain Growers Association, Montana Grain Growers Association and South Dakota Wheat, Inc.


	Marketing Winter Wheat Presents New Challenges for Spring Wheat Growers

The increase in winter wheat acres among traditional spring wheat country has farmers and elevators alike struggling to market this other class of wheat. A different futures market, a new basis, and unique protein discounts have many farmers scratching their heads when reading the winter wheat cash prices at their elevator.

Dan DeRouchey, General Manager at Berthold Farmers Elevator in Bethold, ND handles about 85 percent spring wheat, and 15 percent winter wheat. He sees a difference in bids depending on where the winter wheat is going; east or west. “The Portland market is based on 11.5% protein, but going into Minneapolis it is 12% protein.” The farther west you can travel, the more likely your bid will be based on 11.5% protein, and save some dollars in the discount if you have lower protein winter wheat. .

Another difference DeRouchey sees is the timing of domestic wheat buyers. “Domestic mills are bidding for hard red spring wheat in October, November, June and July, but you don’t feel that as much with winter wheat.” The timing of when to market winter wheat may be different than farmers are used to for spring wheat. “Our winter wheat is mostly an export wheat, and we don’t have those big swings in protein scales. The domestic hard red winter wheat market is usually filled with South Dakota or Kansas wheat.”

Randy Henke, a farmer in Sawyer, ND, chooses to market his spring wheat and winter wheat together. Henke watches the price charts, and finds that the Kansas City and Minneapolis futures markets usually give sell signals at the same time. Since cash winter wheat prices are based off the Kansas City futures market instead of Minneapolis, it does mean looking at different price charts and futures prices. Although cash winter wheat prices are usually lower than spring wheat prices, Henke finds the higher winter wheat yields make total revenue per acre higher for winter wheat than spring wheat. “If we could have one good variety it would make a world of difference,” says Henke.

When marketing winter wheat, your best starting point may be your elevator manager who can offer tips on when to market the winter wheat. Since bushel volume is much lower for winter wheat than spring, it is almost a specialty crop for the elevator. With potential changes in basis and discounts, your local manager is probably the best source of information on cash marketing. The Minneapolis and Kansas City futures prices might move together, but cash prices for the two wheat classes can vary greatly, and your cash marketing should include a few changes as well