Wheat Growers Facing Tough Cost-Control Challenges in 2009

The end of the huge profits for wheat producers may come to an end next year as skyrocketing prices of inputs, in the face of flattening prices, will challenge producers to manage their costs more efficiently than ever.

Prices of almost everything have increased significantly, including fuel, fertilizer, machinery, labor, crop insurance and seed. A number of these inputs have surged by almost 20 percent over the last year. If producers want to add land to the mix, prices have also increased by 19 percent over the last 12 months as well.

As of 2004, breakeven for wheat was around $4 a bushel, in 2009 it's projected to reach over $6.85 a bushel.

Who would have thought that the idea of $7.00 wheat would have profitability challenges, but in 2009 that's a distinct possibility and probability.

How and when producers buy and at what discount may be the difference between profits and losses next year.

Go here for costs and revenue of irrigated and dryland winter wheat over the last ten years, included the projections for 2009.