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Fears of a global shortage for grains like wheat are a boon for Kansas farmers, who could reap the benefits of a nearly $3 jump in prices since the middle of harvest.

In fact, at Garden City Co-op’s elevator branches across southwest Kansas, farmers already have sold 75 percent of their wheat crop — an unusually high amount, said Ken Jameson, vice president of the cooperative’s grain division.

“Normally, we wouldn’t be at this percentage bought up,” he said. “It would be March before we’d have this percentage of the wheat crop sold.”

Wheat prices at Garden City were $6.35 at the close of market Thursday. Prices at many of the state’s elevators in June reached a low of nearly $3.50. In Hutchinson, prices at local elevators were hovering around $6.70.

Prices soared to the highest in two years after Russia announced it would ban grain exports for the rest of the year after drought and wildfires destroyed 20 percent of its wheat crop. Top that with dry weather in Europe, as well as an influx of money coming in from speculators, said Jerald Kemmerer, general manager of Dodge City Coop.

He noted customers of his cooperative chain have sold 75 to 80 percent of their crop, as well, in the past 40 days.

“The tip in the market has brought the sellers out, which has been a good deal for co-ops if we can get transportation to move out (wheat) for fall harvest,” he said, adding that there is a demand for railcars.

His elevator took in about 9 million bushels of wheat in June.

Hey, we’ll plant more

The steep spikes in the wheat market are changing farmer attitudes, said Dave Studebaker, general manager of the Delphos Co-op Association.

“Three weeks ago, we had farmers telling us they’re going to cut back on wheat,” he said. “Today, we’ve got farmers telling us they’re going to plant more.”

Thursday’s market closed up 54 cents a bushel for wheat, which pushed Delphos Co-op’s cash price to $6.32 a bushel. At harvest in June and early July, the low price dipped to $3.44 a bushel.

At the Cargill Ag Horizons grain terminal just west of Salina, the price jumped Thursday to $6.50 Thursday, up 431/2 cents a bushel.

While the soaring price has created “a lot of interest” among farmers in the Delphos area, Studebaker said not many can take advantage.

“Most of the wheat is sold. That’s the sad news,” he said. Many sold their wheat from $3.90 to $4.10 a bushel.

“A lot of wheat got bought at harvest time at lower prices,” Studebaker said.

Looking to cash in

What’s good about these market changes is an expectation that a better export market will develop this fall, he said, and a number of grain speculators are looking to cash in.

“They’re taking money out of Wall Street … and putting it into better investments,” Studebaker said.

Looking ahead for farmers, he said there are forward-contracting opportunities.

“They can lock in some higher prices next year, on a least a portion of what they’re gonna raise,” Studebaker said.

He predicts the market could influence another 10 to 15 percent increase in wheat acres planted this fall, especially on fields currently planted to soybeans. If they’re harvested in time, they could be double-cropped to wheat.

“We didn’t see that happen a year ago because the beans all got caught to late,” Studebaker said. “This year, we’re having more normal (hot) temperatures.”

They’re nervous in Russia

Among the world’s largest exporters of grain, Russia said the ban would run from Aug. 15 through Dec. 31 and could even be extended into next year if necessary.

Prime Minister Vladimir Putin announced the ban, which in addition to wheat and wheat flour covers barley, rye and corn, at a Cabinet meeting Thursday, saying it was necessary even though Russia has sufficient reserves.

“We need to prevent a rise in domestic food prices, we need to preserve the number of cattle and build up reserves for next year,” he said during the televised meeting. “As the saying goes, reserves don’t make your pocket heavy.”

Most of the damage to Russia’s wheat crop has been caused by the drought, one of the worst in decades as much of the country suffers through the hottest summer since record keeping began 130 years ago. But wildfires raging through western Russia have spread into farmland and there are fears that more fields will be lost.

Other grains rally, too

The rally in wheat Thursday is also helping drive up prices for corn, oats and soybeans. All in all, that’s good news for Kansas farmers, who, coming off the heals of a bountiful wheat harvest, will help make up some of the shortfall in exports from Russia and other countries with damaged crops such as Ukraine, Kazakhstan and Canada.

Experts, including Kansas State University Agriculture Economist Dan O’Brien, say the United States, Argentina and Australia will gain the most from the spike in wheat prices because Canada and the European Union are not expected to have abundant harvests this year.

In June, prices were lower amid swelling world stocks at an all-time high, due in part to a bountiful production by key wheat-producing countries and new production by countries that historically have not grown wheat.

In June, O’Brien reported wheat carryover in the nation’s elevators went from 13 percent in 2007 to about 47 percent this year.

The last time wheat prices were above $6 a bushel was in June 2009. Wheat hit record highs in early 2008, with prices in Hutchinson recorded at $12 to $13 a bushel that March. Prices stayed above $8 and $9 a bushel for much of the June 2008 wheat harvest, thanks to short world supplies.

Prices, however, continued to fall through much of 2010, until recently.

Not all were able to reap higher prices, however, Kemmerer said.

“Some of they guys, they’re frustrated,” he said. “They sold earlier.”

The heat’s hurting here

While Russia is hurting, so is some of Kansas’ fall crops, said Jameson, noting that even irrigated corn, amid the searing heat, isn’t keeping up with water requirements.

Meanwhile, Jameson said, Windriver Grain of Garden City, a company the cooperative is a part owner, is busy shipping train cars full of wheat to the Gulf.

“This does have us scratching our heads,” Jameson said of the whirlwind of activity in July and early August. “It’s been a very busy summer.”

n Journal reporter Tim Unruh and The Associated Press contributed to this story.