Wheat

Wheat updates

Challenges persist in 2025.

In 2025, wheat growers' profitability will largely depend on effectively managing production costs and implementing risk management and diligent grain marketing strategies. With wheat prices projected at $5.80 per bushel for the 2025-26 crop, most producers are expected to operate below or near break-even levels. USDA forecasts minimal relief for production costs, with 2025 wheat costs estimated at $386.14 per acre, just $2.02 per acre less than in 2024. This reduction is insufficient to counterbalance the significant drop in wheat prices in 2024 when winter and spring wheat prices dropped an average of $1.20 per bushel. Producers are forecasted to plant 46 million acres, 3.6 million fewer than the previous year.

Despite an overall pessimistic outlook, shifts in the global wheat supply could support higher prices. Both the European Union and Russia are expected to have lower production in 2025. Russia is also reducing their export quota by two-thirds, effective from mid-February through June, to balance their domestic needs with production. Despite a strong dollar, U.S. wheat exports for the 2024-25 crop are expected to increase by 20% year-over-year from the 50-year low reached in 2023-24, primarily due to lower exports from competitors. If the U.S. dollar weakens, U.S. wheat exports could see an even greater increase.

In late December, Congress passed the American Relief Act of 2025, which will provide $9.8 billion in relief payments to 20 crops. This one-time payment to producers is based on 100% of planted acres and 50% of prevented planting acres for the 2024 crop year, aiming to mitigate some of the losses incurred. It is estimated that producers will receive the following assistance payments per acre: $31.80 for wheat, $21.76 for barley, $26.76 for canola, $19.32 for lentils, $16.16 for dry peas, $17.48 for flaxseed, $21.77 for small chickpeas, $24.16 for large chickpeas, and $11.42 for mustard seed. Payments are expected to be distributed to growers sometime in the spring of 2025, with a cap of $250,000 for producers who derive more than 75% of their income from farming.

Profitability

December 11, 2024

Wheat: Breakeven profitability - Bearish 12-month outlook

Global export competition and a strengthening U.S. dollar will create headwinds for wheat growers. While bearish price signals add to these headwinds, winter wheat conditions are improving as drought eases.

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