Farmers cut their losses early this year across the U.S. wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005.

For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model.

Wheat farmers reach inflection point

The Great Plains have long been celebrated for the “amber waves of grain” in the popular hymn “America the Beautiful.” The region’s states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread. But with prices hovering around $5 (C$6.86) per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop.

Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest.

In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively.

“They can’t sustain that,” said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state’s wheat growers association. “Eventually you either change to other crops if you’re able to, or you go out of business,” he said.

Farmers abandon wheat crops

Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May.

Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show.

Nationwide, corn and soybeans dominate crop fields, with wheat a distant third in planted acreage.

Hard red winter wheat exports hit historic lows in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity’s competitiveness.

In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn’s value of production was more than twice as high.

Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices.

“We’re below profitable levels for these guys,” said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton.

The way things stand, he said, many farmers have “eaten a lot of their own money and burned up working capital. These bankers are going to say: ‘show me some profits or we’re going to have some farm sales.’”

Heritage but no profit

Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area’s dry soil, harsh winters and extreme temperature swings.

The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown in the U.S.

Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing “the miles of fresh-plowed soil, heavy and black, full of strength and harshness.”

Now, U.S. wheat growing is on a steady decline, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud.

When Royce Schaneman joined Nebraska’s wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state’s most productive wheat-growing land, about one in five fields was abandoned this year.

“The feeling out in the country is not good,” he said.

Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields.

Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more.

Profits remain elusive.

“It’s heritage, but there’s no profit,” said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices.

Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 percent of his farm’s total output.

“There’s certainly profit in corn,” he said.

1 acre = 0.405 hectares

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Yesterday the meat processor said it was working with structural engineers to stabilize the roof and implement contingency plans to resume operations as soon as possible, according to an emailed statement.

One of four major U.S. beef processors, Cargill is using its broad supply chain to minimize disruptions to customers and livestock producers, according to an emailed statement. It said the Kansas plant resumed operations on Tuesday on its fabrication floor, where meat is cut into pieces.

—Reporting for Reuters by Tom Polansek

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The company said it plans to resume production on Monday, following a blaze Wednesday night in the facility’s loading dock area. The plant processes about 6,000 cattle per day, which accounts for roughly five per cent of daily U.S. production.

Local media outlet KSN News reported the fire began in loading trailers and spread to the building. All employees were safely evacuated. Most of the damage was to trailers loaded with boxed beef, however overhead doors in the loading dock and the building’s exterior walls were also affected.

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Blizzard-like conditions had left meatpacking workers stranded on highways on Monday while others spent the night at the slaughterhouses where they work, the companies and state officials said.

Disruptions at plants slashed beef production at a time prices remain high after U.S. ranchers reduced their herds. Nationwide, meatpackers slaughtered an estimated 94,000 cattle on Tuesday, down 25 per cent from a week earlier, the U.S. Department of Agriculture said.

Cargill, a major producer of ground beef, said it idled a plant in Dodge City, Kansas, due to snow, cold and a loss of power. The plant will re-open once power returns and conditions are safe, which could come as early as Wednesday, the company said.

Cargill is “committed to minimizing any disruption” to customers, spokesman Chuck Miller said. He confirmed that “some employees got stuck on the road outside the plant” and said the company hired tow truck drivers to assist them.

About 50 employees out of 2,850 stayed at Cargill’s plant due to road closures, while the majority “made it home,” Miller said.

“Half of our plant has had power and heat for a majority of the winter storm, and everyone has had access to food, water and assistance,” he said.

In the eastern half of the U.S., wintry weather knocked out power to over 418,000 homes and businesses in 12 states.

Tyson Foods said it canceled both shifts at its sprawling beef plant in Holcomb, Kansas, after allowing some workers the option of “sheltering in place” there with a hot meal and drinks on Monday night. Employees were able to leave by Tuesday morning, the company said.

The winter storm left about 60 to 100 vehicles stuck on roads near Cargill’s plant on Monday, and others stranded near Tyson’s facility, said Steve Hale, spokesman for the Kansas Department of Transportation. The department advised Cargill on Monday that highways were being closed, he added.

“The roads are already treacherous and now we’ve got lots of vehicles that are all over the place, either stranded or waiting to get in or out of these plants,” Hale said.

Outside of Tyson’s plant, a highway resembled a parking lot with vehicles left overnight in the middle of the road and on the shoulder, said Trooper Anthony Calderon of the Kansas Highway Patrol.

“It looked like you were at the mall,” he said.

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Seeding plans may be scaled back in the U.S. breadbasket despite historically high prices for this time of year, reflecting rising global demand and thin world wheat supplies projected to end the 2022-23 marketing year at a six-year low. The tight supplies have been exacerbated as the conflict in Ukraine has disrupted grain exports from the Black Sea region.

The drought threatens Kansas, the top winter wheat growing state, and Oklahoma in two ways: discouraging farmers who have not yet planted from trying, while threatening crops already in the ground from developing properly.

“It’s sort of a grim situation,” said Kent Winter, who farms in Andale, Kan., outside Wichita. He said he normally seeds by mid-October but has yet to plant any wheat this year.

If rain does not fall in the next 10 days, he will begin “dusting in” the crop and hoping for moisture. Final seeding dates to receive full crop insurance coverage are approaching, ranging from Oct. 15 in northwest Kansas to Nov. 15 in the southeast.

Without moisture, wheat shoots may fail to emerge from the ground. Even a delayed emergence would threaten yield potential by narrowing the window for plants to develop a hardy root system and push out more stems, known as tillers, before winter.

“That puts a nail in the coffin,” said Mark Hodges, an agronomist for Plains Grains Inc, an Oklahoma-based group that tests wheat for quality. Hodges said, “If you don’t have the tillers in the fall, it’s really hard to make up that number in the spring.”

Fears of a supply squeeze are underscored by the July Kansas City wheat futures contract trading around $9.40 a bushel, the highest price on record for a new-crop July contract at this time of year, the thick of the fall planting season.

About two-thirds of wheat in the U.S., among the top five global exporters, is grown as a winter crop rather than spring.

While Plains farmers would like to take advantage of high prices, the dry weather may discourage producers from committing to supplies of high-priced seeds and fertilizer.

As a result, Justin Gilpin, chief executive of the Kansas Wheat Commission, expected the number of Kansas wheat acres planted for harvest in 2023 to remain steady with the 7.3 million acres seeded for 2022.

Winter concurred. “With the price of wheat, a lot of operators were planning to at least match or even up their acres for this coming year. But this drought is having a huge influence on plans,” he said.

Poor emergence could have a longer-term cost as well. Wheat helps anchor topsoil in the Plains, protecting it from wind erosion.

“No farmer wants to see his ground blowing. So you go ahead and plant wheat, and hope like heck you get it up before winter comes,” said Martin Kerschen, who farms in Garden Plain, Kansas.

Wheat is a famously hardy crop that can bounce back from struggles with poor weather. But forecasts are for drought to persist in the southern Plains through December.

In Kansas, 27 per cent of the state is in “exceptional drought,” the most extreme category, and virtually the entire state is abnormally dry, according to the latest weekly U.S. Drought Monitor report prepared by a consortium of climatologists.

A key driver of the drought is the La Nina weather phenomenon, which tends to favour warm and dry conditions in the Plains. The current La Nina is in its third year.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago.

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The deaths add pain to the U.S. cattle industry as producers have reduced herds due to drought and grappled with feed costs that climbed as Russia’s invasion of Ukraine tightened global grain supplies.

The Kansas Department of Health and Environment knew of at least 2,000 cattle deaths due to high temperatures and humidity as of Tuesday, spokesperson Matthew Lara said. The toll represents facilities that contacted the agency for help disposing of carcasses, he said.

Kansas is the third largest U.S. cattle state behind Texas and Nebraska, with more than 2.4 million cattle in feedlots.

Cattle began suffering heat stress as temperatures and humidity spiked over the weekend in western Kansas and cooling winds disappeared, said Scarlett Hagins, spokesperson for the Kansas Livestock Association. The animals could not acclimate to the sudden change, she said.

“It was essentially a perfect storm,” said AJ Tarpoff, beef extension veterinarian for Kansas State University.

Temperatures reached 42 C in northwest Kansas by Monday, said Drew Lerner, president of World Weather Inc. This weekend, parts of western Kansas and the Texas panhandle will near 110 F (43.3 C), though stronger winds and lower humidity levels will help minimize cattle deaths, he said.

“It’s going to be oppressively hot and stressful for the animals,” Lerner said.

To survive, ranchers are providing cattle with extra water and checking their health.

“You can’t say, ‘Oh, I checked them three days ago,’” said Brenda Masek, president of the industry association Nebraska Cattlemen. “When it gets hot, you’ve got be to out every day and making sure that their water is maintained.”

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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Wheat futures also fell, sinking to the lowest level in more than a month as prospects for a bumper U.S. winter crop and rising global competition in export markets weighed on prices.

“People are taking risk premium out of the market. We were worried about dry conditions in Iowa, Wisconsin and part of the Dakotas. All that changed with the rain, at least for now,” said Don Roose, president of U.S. Commodities.

“And with the crackdown on inflation in China, people are wondering if they’re going to keep buying,” he said.

Beijing last week announced stepped-up measures to restrain soaring commodities prices that threaten to undermine China’s economic recovery.

Chicago Board of Trade July corn ended down 2-1/4 cents at $6.57-1/4 per bushel, while July soybeans were down 3-1/2 cents at $15.22-3/4 a bushel (all figures US$).

U.S. farmers are nearly finished planting corn and soybeans, and early crop condition ratings have been favourable.

Analysts polled by Reuters expect the U.S. Department of Agriculture (USDA) to report 91 per cent of corn has been planted as of Sunday along with 80 per cent of the soy crop. USDA is due to release its weekly crop progress and conditions later on Monday afternoon.

Wheat futures retreated after crop scouts on an annual tour last week projected record-high yields in Kansas, the top winter wheat state.

Rising export competition from rival suppliers in the Northern Hemisphere added pressure.

July soft red winter wheat fell 12 cents to $6.62-1/4 a bushel, the lowest for a most-active contract since April 20. July hard red winter wheat dipped 8-3/4 cents to $6.15-1/4 a bushel.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.

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Corn futures fell on a round of profit-taking after rising in three of the previous four sessions. Soybeans also closed lower, with concerns about demand outweighing a bargain-buying attempt after prices for the most-active contract sagged to a three-week low.

Traders noted slowing activity from soy crushers as well as export buyers.

“High prolonged prices (are) finally starting to trim overall demand as we head into the summer months,” Arlan Suderman, chief commodities economist at StoneX, said in a note to clients.

The most-active soybean futures contract dropped 3.9 per cent this week, its biggest weekly decline in four months.

Chicago Board of Trade July soybean futures settled down seven cents at $15.26-1/4 a bushel (all figures US$).

CBOT July soft red winter wheat futures were one cent lower at $6.74-1/4 a bushel. The contract bottomed out at $6.65-3/4 a bushel, the lowest on a continuous basis for the most-active contract since April 21.

Scouts on an annual tour of Kansas wheat fields found record yield potential in the top U.S. winter wheat state’s crop after late-season rains.

CBOT July corn was down five cents at $6.59-1/2 a bushel. The contract rose 2.4 per cent this week after plunging 12.1 per cent last week.

Forecasts for good crop weather in the U.S. Midwest added pressure to corn futures.

“The weather is still wet to start the weekend up and down the spine of the Midwest,” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a note to clients.

Warmer temperatures and further showers forecast in the U.S. Midwest in the next three weeks could boost harvest prospects for recently planted corn, traders said.

— Mark Weinraub is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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Soybeans and wheat weakened after firming early in the session.

Private exporters reported the sale of 1.224 million tonnes of corn to China for delivery in the 2021-22 marketing year, the U.S. Agriculture Department said on Thursday morning. It was the sixth day in a row the government has announced a corn sale to China, with the deal topping one million tonnes on five of those days.

“Corn has made a relatively impressive rebound from yesterday’s lows despite overall commodity and marketplace turmoil and liquidation,” Matt Zeller, director of market information at StoneX, said in a note to clients. “The bears face a tough road … each morning with Chinese corn buying not slowing.”

USDA also said corn export sales totaled 4.339 million tonnes in the week ended May 13, the most in nearly two months.

“The obvious implication is that the USDA is egregiously too low on Chinese corn imports for both the old crop, and the new crop, and thus too low on U.S. export (estimates),” Charlie Sernatinger, global head of grain futures at ED+F Man Capital, said in a client note.

Chicago Board of Trade July corn futures settled up 6-1/4 cents at $6.64-1/2 a bushel, with new-crop contracts posting bigger gains (all figures US$).

Consultancy Agroconsult slashed its forecast for Brazil’s upcoming second annual corn crop by 15 per cent to 66.2 million tonnes on Wednesday afternoon.

CBOT July soft red winter wheat was four cents lower at $6.75-1/4 a bushel.

Scouts on an annual tour of Kansas wheat fields found record yield potential in the top U.S. winter wheat state’s crop following late-season rains.

CBOT July soybeans were down five cents at $15.33-1/4 a bushel.

— Reporting for Reuters by Mark Weinraub in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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The investigation adds scrutiny on the small group of meat companies such as Tyson Foods and Cargill that dominate U.S. beef processing.

“This is a good decision to address potentially unfair practices,” Republican U.S. Senator Deb Fischer of Nebraska said on Twitter.

The investigation will expand a probe USDA launched into the beef market in August after a fire that shut a Tyson plant at Holcomb, Kansas, sent beef prices soaring and tanked cattle prices. The agency has not released the results of the investigation that began last year.

Tyson said it would co-operate with USDA.

“During the current pandemic and following the fire at our Holcomb, Kansas, facility last August, we have taken steps to minimize the impact each situation had on our producers, production volume and our ability to cover customer needs,” the company said in an emailed statement.

Cargill did not immediately respond to a request for comment. The company said previously it had been a committed buyer in the cash market for cattle, to the benefit of farmers.

U.S. senators asked the Justice Department last month to investigate whether beef processors engaged in price-fixing during the ongoing COVID-19 pandemic.

The National Cattlemen’s Beef Association, an industry group, separately called for the USDA to work with the Justice Department to investigate whether “inappropriate influence occurred in the markets.”

The association also asked the U.S. Commodity Futures Trading Commission to assess speculation in CME Group’s cattle futures to determine whether they “remain a useful risk-management tool” for farmers.

“USDA’s Packers and Stockyards Division will be extending our oversight to determine the causes of divergence between box and live beef prices, beginning with the Holcomb Fire in KS last summer and now with COVID-19,” Perdue said on Twitter.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago.

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