A combination of widespread drought, sharply lower production forecasts and historically high abandonment rates is sending shockwaves through the U.S. wheat industry heading into the 2026-27 marketing year.
The latest outlook from the United States Department of Agriculture projects the smallest U.S. wheat crop in decades, with total production forecast at just 1.56 billion bushels, down more than 20% from the previous crop year and the lowest production estimate since 1972 if realized.
The report triggered an immediate rally in wheat futures on Tuesday, with Kansas City and Chicago wheat contracts both locking limit-up following the release of the numbers. July Kansas City wheat futures surged as high as $7.50 per bushel, levels not seen since 2023.
According to USDA, winter wheat production is expected to fall 25% year-over-year to just over 1 billion bushels, driven largely by drought across the Southern Plains and widespread crop abandonment. Harvested acreage is projected at just 32.9 million acres compared to 37.2 million last year, while abandonment rates jumped to 32%, with particularly severe losses reported in Texas and Oklahoma.
The situation comes as much of U.S. wheat country continues to battle extreme dryness. USDA estimates roughly 70% of the winter wheat crop has been affected by some level of drought stress.
In response to the report, National Association of Wheat Growers CEO Sam Kieffer said the forecast reflects the realities producers have faced for months.
“Across the country, farmers continue to face stubbornly high input costs, ongoing uncertainty in global markets, and the continual challenge of achieving profitability on the farm,” Kieffer said. “As a result, many farmers are making the difficult decision to plant fewer wheat acres. In addition, much of wheat country is experiencing significant drought.”
Kieffer also urged Congress to advance the proposed Farm Bill that recently pass the U.S. House, arguing the legislation would provide greater certainty for producers while supporting research, innovation and market development.
Crop scouts participating in the annual Wheat Quality Council Hard Winter Wheat Tour across Kansas this week confirmed many of USDA’s concerns. After surveying 187 wheat fields across northern Kansas and portions of Nebraska, scouts estimated average yields at just 38.3 bushels per acre — the third-lowest tour estimate in the last decade and well below last year’s 50.5 bpa average.
Tour participants repeatedly pointed to drought as the primary driver of losses, though freeze damage and disease pressure also took a toll.
Agronomists noted the crop initially entered winter in strong condition thanks to favorable fall moisture, but conditions deteriorated rapidly after wild temperature swings in January and multiple spring freeze events.
In western Kansas, continuous wheat acres were hit especially hard compared to wheat following summer fallow rotations, highlighting how management practices became increasingly important under severe drought conditions.
Beyond domestic concerns, USDA also lowered its global wheat outlook. World wheat production is projected at 819.1 million metric tons, down from last year’s record 843.8 million metric tons. Production declines are expected not only in the United States, but also across the European Union, Argentina and Australia.
Global wheat trade is forecast to decline as reduced import demand from North Africa and the Middle East combines with tightening exportable supplies from major producing countries.
Despite the bullish production outlook, analysts note U.S. ending stocks are still projected at 762 million bushels — the lowest in three years but still above some historically tight levels seen earlier this decade. That has left traders balancing concerns over shrinking production against the reality that wheat supplies remain relatively adequate for now.
Still, rising prices are already reshaping market expectations.
USDA increased its projected season-average farm price for wheat to $6.50 per bushel, up $1.50 from last year. Analysts warn that higher prices could further reduce export competitiveness for U.S. wheat, particularly against suppliers in the Black Sea region and Europe.
At the same time, fertilizer costs and ongoing geopolitical tensions, especially surrounding Middle East trade routes critical to fertilizer shipments, continue adding uncertainty ahead of next year’s planting decisions.
For wheat growers across the Plains, however, the biggest concern remains simple: rain.
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Northern Ag Network
