U.S. Winter Wheat Withers to 1985 Lows as Drought Persists

(Businessweek) – Crop conditions for winter wheat in the U.S. declined for the fourth straight week and were the worst since 1985, the government said, as dry, cold weather slowed seed germination and early plant growth.

An estimated 33 percent of the crop was rated good or excellent as of yesterday, down from 34 percent last week and 52 percent a year earlier, the U.S. Department of Agriculture said today in a report. About 26 percent was in poor or very poor condition, compared with 13 percent a year earlier.

The worst U.S. drought since 1956 helped send wheat futures up 32 percent this year. About 56 percent of the six High Plains states from Kansas to North Dakota was in extreme or exceptional drought as of Nov. 20, up from 6.3 percent a year earlier, government data show. Plant emergence was 88 complete in the 18 top-producing states, compared with 91 percent a year earlier, the USDA said.

“The crop is already dying in some fields from the lack of rain,” Alan Brugler, the president of Brugler Marketing & Management Inc. in Omaha, Nebraska, said in a telephone interview before the report. “Crops survived the dry weather last year because there were surplus soil-moisture reserves. The crop is more susceptible to wind and cold damage this year because of the poor conditions.”

Dry, warm weather is expected over the next 10 days, which will slow root development before plants go dormant for the winter, according to T-Storm Weather LLC in Chicago. About 46 percent of the wheat crop from Texas to Montana received less than half the average rain during the last 90 days, the forecaster said.

Drought Damage

Winter wheat is the most-common variety in the U.S., accounting for about 72 percent of all wheat harvested. The plants go dormant during the coldest months of the year and resume growing in March. The drought conditions already cut output of the nation’s two biggest crops, corn and soybeans, sending prices to record highs earlier this year. On Jan. 11, the USDA is scheduled to release its first estimate of the 2012-2013 acreage seeded with winter wheat.

Wheat is the fourth-biggest U.S. crop, valued last year at $14.4 billion, behind corn, soybeans and hay, government figures show.

To contact the reporter on this story: Jeff Wilson in Chicago at  jwilson29@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at  sstroth@bloomberg.net