Minnesota wheat growers dismayed over low crop prices, Russia's exit from grain deal

BEJOU, MINN. - Standing in a wheat field in northern Minnesota with his dog licking the hands of a U.S. senator, Mike Gunderson is geographically far from the Black Sea, but can't stop thinking about its ports.

The farmer and board president of the Minnesota Association of Wheat Growers said he keeps a close eye on Russian rocket attacks in Ukrainian port towns, which have intensified since Russia pulled out of an international grain accord earlier this summer.

"We see the attacks and all that, but we still aren't really seeing those bumps [in price]," Gunderson said during a visit by Democratic U.S. Sen. Tina Smith of Minnesota to his farm on Wednesday.

One month ago, U.S. wheat growers stood to benefit financially when Russia pulled out of the Black Sea Grain Initiative, which had safeguarded vessels carrying vital grain shipments out of Europe's breadbasket to the broader world.

But after a brief spike in global wheat prices, contracts on U.S. hardy red spring wheat for September sit at $7.90 a bushel, nearly a $1.50 lower than a month ago. In the Red River Valley, those spot prices were about 50 cents lower this week.

"I keep an eye on those prices, and they keep dropping," Smith said. "Those big, global market fluctuations you just have no control over."

Ed Usset, a grain marketing economist with the University of Minnesota, said the spring wheat prices have seen four separate collapses of 10% or more this year.

Wheat acres nationwide rose 7% in 2023, according to a U.S. Department of Agriculture survey. But wheat exports are at a 50-year-low, said Usset. And there'll be fewer wheat acres in Minnesota this year than last, a longstanding trend as farmers see higher profits in cash crops like corn and soybeans.

Gunderson also asked Smith, who sits on the Senate Agriculture Committee, to look at increasing the reference price on wheat, a trigger-point in the commodity's value at which a farmer may collect insurance on historically low prices.

The Farm Bill, Smith said, will almost certainly need a short-term extension before its September expiration, noting the bill's large tranche of nutrition funding has continued to draw opposition from members in the Republican-controlled U.S. House.

Gunderson noted that he didn't want to even imagine what kind of attack by Russian military would be needed to bolster U.S. prices.