The Biden administration’s drive to increase U.S. wheat plantings after the Ukraine war is faltering as wheat prices hover around four-year lows and exportable supplies continue to flow from the Black Sea region, curbing demand for American grain.
Wheat acreage expanded last year as prices soared to a near record high after Russia’s 2022 invasion of Ukraine. However, U.S. plantings dropped nearly 5% this year, resuming a decades-long trend that has coincided with a more recent slide in the U.S. share of the global wheat export market.
The Biden administration had seen increasing wheat planting as a way to help lower food inflation and avert a wheat supply shortage triggered by the war in Ukraine. To encourage plantings in the central United States, the administration turned to crop insurance for crops such as soybeans that could be planted immediately after wheat and harvested in the same year.
While the expansion in crop insurance initially helped to make wheat more attractive, the initiative was overshadowed by a plunge in wheat prices between September 2022, when winter wheat planting decisions were finalized for 2023, and the following year, when farmers planted the 2024 wheat crop.
Benchmark CBOT wheat futures closed on Tuesday at $5.30-3/4, down significantly from around $9 a bushel in late September 2022. Farmers in the U.S. Corn Belt have been reluctant to alter their crop rotation patterns unless there is a massive profitability signal, according to experts.
The Biden administration’s goal was to expand double cropping, where a second crop is grown later in the season, northward into the heart of prime Midwest corn and soy farmland. However, farmer response has been muted, as double cropping can be highly profitable but also risky, especially in the northern half of the country where autumn frosts might kill the second crop before it is ready for harvest.