With cash grain prices at all-time highs and Russia's war in Ukraine likely to push them even higher, one might expect farm trucks to line up a mile long at grain elevators in the hopes of cashing in like they have in the past.
Mitch Konen disagrees. Many farmers, including the Fairfield wheat farmer, were hit so hard by the 2021 drought, he said, that it took everything they had to harvest just to fill contracts that were only supposed to be 30 percent of what they would cut in a normal year.
Now you can see $10 cash prices. "That's only good if you've got it in the bin," said Konen, president of the Montana Grain Growers Association in the past. "It's unlikely that many people have grain in the bin to sell because they've already sold it.
According to the USDA's National Agricultural Statistics Service, Montana's 2021 wheat harvest of 100.85 million bushels was only 49% of the 10-year average.
Wheat prices were last in this range in 2008, at the start of the Great Recession, when positive Montana grain sales bolstered a state economy reeling from the collapse of the housing market. It was the first time the state's wheat sales exceeded $1 billion.
As Montana farmers enter the second year of an extended drought with little wheat in reserves and farmers concerned about whether spring moisture will turn things around, this round of strong prices may not produce the same result.
Before Russia invaded Ukraine, prices had been rising, raising doubts about whether one of the world's largest wheat-exporting regions would be shipping grain in 2022 or selling at a price harmed by sanctions. Depending on the weather, Ukraine exports 20 million to 29 million metric tonnes of wheat to the rest of the world. According to the United States Department of Agriculture, this accounts for 10% to 15% of global exports.
Export prices will be influenced if Ukraine wheat does not ship or planted acres are down, according to Vincent Smith, an economist at Montana State University's Department of Agricultural Economics and Economics.
Depending on the year and the weather, exports from all countries, all exporting countries, are approaching 200 million metric tonnes," Smith said.
Depending on the year and the weather, exports from all countries, all exporting countries, are approaching 200 million metric tonnes," Smith said. "As a result, we're looking at a significant portion of global exports."