Lower Protein Expected in 2014/15 Hard Red Spring Crop

With about 75 percent of the 2014/15 U.S. hard red spring (HRS) wheat crop now harvested, the world’s wheat buyers should expect lower-than-average aggregate protein and vitreous kernel counts in this crop. Given the diverse growing region and variable weather conditions, there is higher protein available but it is selling at a premium. However, there should be plentiful supplies of high-performing U.S. wheat for buyers who can use lower protein sources.

“There is no doubt the market is trying to accumulate protein right now,” said Jim Peterson, marketing director of the North Dakota Wheat Commission (NDWC). “The cash bid spread between 13 percent and 15 percent protein spring wheat this week is at a $3 per bushel premium.” U.S. wheat protein is measured with 12 percent moisture as a base. A $3 per bushel cash price premium is equivalent to $110 per metric ton.

Collin Watters, executive vice president of the Montana Wheat & Barley Committee said there was good quality in early-harvested Montana HRS. He noted some optimism after hearing from the Montana State Grain Laboratory that recent HRS samples analyzed there were running slightly above 14 percent protein on average. However, eastern Montana experienced the same lengthy period of rain that affected spring wheat in western Canada and North Dakota and Watters says the $2 per bushel spread between 13 percent and 14.5 percent protein wheat shows the market there is also bidding up higher protein supplies.

Peterson said he also feels a bit better about quality potential with good harvest progress last week and dry weather this week. NDWC reported on Sept. 16 that most areas seem to be holding key quality factors better than expected. Data representing roughly the first 40 percent of the harvest show average protein at 13.6 percent, similar to the 2013 crop and down slightly from previous weeks. Average grade is a No. 1 with a 60.7 lb/bu test weight average. Vitreous kernel counts have slipped below the 75 percent threshold for a dark northern spring (DNS) sub-classification, impacted by the lower average protein levels in parts of the crops and the frequent rains received during harvest across the region. The current average falling number of 385 seconds indicates mostly sound conditions to date. Damaged kernel levels are at 0.7 percent, up slightly from 0.2 percent in the 2013 crop, but well below early harvest expectations due to concerns about disease pressure on parts of the crop.

The HRS situation this year is similar to conditions in the 2009/10 crop. By Sept. 13, 2009, farmers had harvested only about two-thirds of that crop. Yields were very good but protein and vitreous counts were below average. In fact, with about 45 percent of samples tested that year, the protein average stood at 13.7 percent. Final aggregate data showed that about one-third of that crop was 14 percent protein or higher and vitreous kernel content averaged 71 percent, putting much of the 2009/10 crop in a Northern Spring subclass.

Like in 2009/10, traditional customers who demand a 13.5 to 14 percent protein HRS wheat or higher will likely face market premiums through most of the 2014/15 market year as supplies of high-protein wheat on the world market grow smaller. Peterson suggested that buyers might need to adjust purchase specifications depending on the final data on HRS milling and baking characteristics come in.  

Conversely, customers will find the supply of 12 to 13 percent protein HRS and HRW to be more plentiful. With market discounts, there may also be excellent value. Buyers are encouraged to take advantage of this market opportunity to secure their high-protein needs or explore the value offered by lower-protein HRS and higher protein HRW. Please visit http://www.uswheat.org/harvest to review weekly updates on quality data and contact your local USW representative who is ready to help you evaluate your best options.