Wheat prices have reached their highest point in three years, yet American farmers in the Kansas heartland are far from celebrating. A toxic mix of record fuel costs, punishing drought and the fallout from war in Eastern Europe is leaving growers unable to capitalise on strong markets — and threatening to push global food bills even higher.
A Perfect Storm on the Farm
For Merrill Nielsen, who works 2,500 acres near Beloit in the US state of Kansas, the mathematics of farming have never looked more fraught. Forward prices for bread-type wheat have surged by 39%, which on paper should have meant a bumper year. But diesel fuel — essential for running tractors and combines — has hit unprecedented levels, while erratic spring weather wiped out his entire wheat crop outright.
Now, drought has settled over the southern Great Plains, compounding an already dire situation.
“We’re not looking to plant any more wheat than we probably normally would, or maybe we won’t even plant that much. I don’t know. Really, we’ll have to see what the weather does for us,” Nielsen said.
His hesitation reflects a broader mood among US grain producers. Despite attractive prices, the rising cost of inputs and unpredictable growing conditions are deterring farmers from expanding acreage. Many have quietly shifted away from wheat toward corn and soybeans over the past decade, finding the latter more reliably profitable.
Weather: Curse and Potential Saviour
Across the Atlantic, Europe is also grappling with shriveled harvests, while forecasts for a “super” El Niño event this year have raised serious concerns about agricultural stability in the southern hemisphere. The phenomenon, intensified by the climate crisis, drives warm surface waters across the equatorial Pacific and has historically wreaked havoc on crops in regions from Australia to southern South America.
Experts say wheat supplies in major exporting nations are sitting at their second-lowest levels on record. Australia alone has seen its wheat plantings fall by 12%, driven by expectations of dry conditions and soaring fertiliser costs.
There is a silver lining, however. El Niño can also deliver wetter-than-average conditions to the southern Great Plains during autumn and spring. During the last significant El Niño in 2015 and 2016, the United States achieved an all-time record-high winter wheat yield, said Mark Welch, an economist specialising in grain marketing at Texas A&M University.
Still, optimism is tempered by reality on the ground. Vance Ehmke, a wheat-seed seller based in south-west Kansas, said demand for seeds has surged this year — but the soil is simply too parched for germination.
“If you get your wheat up, you’ve got 90% to 95% odds that you’ll harvest something. But if you can’t even get it up, I mean, you’re just screwed,” he said.
Ehmke also pointed to the pressure of ongoing trade disputes, which have inflated input prices across the board. “We are the ones that get hurt by those policies,” he said.
Geopolitics and the Black Sea Bottleneck
Even if weather patterns cooperate, the global wheat supply chain faces a separate and deeply alarming threat. Russia’s attacks on port infrastructure in the Black Sea — through which roughly one-third of the world’s wheat trade passes — have severely disrupted grain shipments at a critical moment.
Black Sea producers were among the few global wheat exporters to enjoy a bumper harvest, having only just finished gathering their crops when the strikes began. With supply effectively cut off, prices have been pushed higher still.
“Because of the fighting, supply is largely inaccessible, which has pushed prices up,” Welch said. He added that if Black Sea farmers and shippers could identify alternative export routes, prices would ease somewhat — though the challenge would be considerable.
At best, roughly 35% to 50% of that wheat could eventually find its way to market, but it would take considerably longer and cost far more to do so, said Joao Lampreia, a market strategist at the Lisbon-based Freedom24.
The Risk of Even Higher Food Bills
Analysts are warning that the convergence of damaged harvests and geopolitical disruption could drive worldwide food prices beyond current levels. Dan Basse, president of agricultural market research firm AgResource, pointed to the United Nations’ Food and Agriculture Organization food price index, which had risen 2.5% in August compared with a year earlier.
The spike in wheat prices “has tentacles that go far beyond the war between the Ukrainians and Russians,” Basse said. “The world needs more harvested acreage of every grain. All of this resonates in higher grain and food prices for the world looking forward.”
Basse expects US farmers to respond by expanding winter wheat planted acreage by roughly 10% compared with last year, as producers rush to take advantage of elevated prices. But the structural picture works against them: harvested wheat acreage in the United States is at its lowest point since 1877, reflecting a long-running shift toward other crops. A single year of strong prices is unlikely to reverse that trend.
Farmers will need both higher output and sustained value to break even. “If it’s not an average yield or better, the breakeven cost really gets high very quickly,” Welch said.
Why it Matters
What happens in the wheat fields of Kansas and the Black Sea ports of Ukraine and Russia does not stay local. Global food systems are deeply interconnected, and a shortfall in wheat supply ripples outward to millers, bakers, restaurants and supermarket shoppers everywhere. With prices already at three-year highs and multiple pressures — climate, conflict and cost — converging simultaneously, the risk is that ordinary households around the world face yet another increase in the cost of everyday staples. For farmers hoping to recover, and for consumers hoping to cope, the coming months will be decisive.
