Food grains show steadiness amid COVID-19 commodity troubles

Food grains show steadiness amid COVID-19 commodity troubles

Texas wheat producers could see an opportunity as food grains show steadiness amid calamity for other commodities, said a Texas A&M AgriLife Extension Service economist.

Mark Welch, Ph.D, AgriLife Extension economist, College Station, said food grains have avoided much of the “complete wreck” market disruptions have made of commodities like corn, cotton, beef and crude oil. As dairy operators dump milk and oil markets report negative-sum prices, prices for wheat and rice remain relatively steady and have experienced brief gains during the COVID-19 crisis.

Cattle, corn and crude oil prices were all down at least 20% compared to wheat and rice, which were down around 3%-4%, Welch said.

“So many commodities are cloudy amid this crisis, but wheat and other food grains have held up,” he said. “I think it’s because COVID-19 has created underlying demand for these food grains as countries around the globe take an extended view of their food supplies.”

Welch said nations like Russia and Ukraine have already announced the possibility of limiting exports to make sure their people are fed. The pandemic timeline and overall growing conditions in those countries and other major wheat-growing nations going forward will weigh heavily on those decisions.

Weather in the U.S. this spring could also affect domestic decisions, Welch said. Freezes in Texas and Oklahoma damaged wheat destined for grain production, but it remains unclear if it will hurt overall yields.

AgriLife Extension agronomists estimated Texas grain-wheat acres could see up to a 10% yield loss based on reports in the state’s wheat growing regions. It’s also unclear how many Texas wheat acres were going to grain.

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