Global grain oversupply affects US farmers, infra costs remain high

WASHINGTON, D.C.: Due to the current state of the U.S. market, winter wheat farmers in the Great Plains will be badly affected, and many could lose money despite potentially high crop yields after the end of three years of drought, which reduced yields and forced farmers to abandon farming wheat.

As cheap supplies from the Black Sea and Europe increased global stocks of the staple grain, U.S. wheat prices have plummeted, while equally high global corn harvests have pressurized the entire commodity grains complex.

Therefore, tough times are predicted for the rural U.S. as winter wheat will be the first crop to be harvested during a year when American farm income is expected to drop.

The International Grains Council, based in London, forecasts a record global grain crop in the 2024-2025 marketing season, intensifying concerns about a worldwide decline.

While U.S. winter wheat crop sizes will become more apparent in the coming weeks, especially during an annual wheat tour in May, this week, the U.S. Department of Agriculture said that 55 percent of the crop is in good-to-excellent condition, the highest for this period of the year since 2020.

Scott Born, a wheat farmer based near Dallas, Texas, said that to break even, he requires a price of at least US$6 per bushel of wheat, which is also more than the current cash price in his region.

Compared with Black Sea and European wheat, the costs to transport and produce U.S. wheat have remained high, causing concerns about the long-term competitiveness of American exports.

After losing market share to top exporter Russia and other producers in recent years, the U.S. is currently the world's fifth leading wheat exporter.