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

In fact, at Garden City Coop’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.

In the Lawrence area, wheat hit $6.45 Thursday before dropping 60 cents on Friday.

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 though that there is a demand for railcars.

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

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.

Other crops

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 and the wheat basis spread wide 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 basis — the difference between the futures prices and the local price at the elevator — remains a wide spread, he noted, ranging from $1.20 or $1.30 for country elevators and about a $1 for the terminals.

However, he said, “think about where we would be in the wheat market without those crop fires, drought. We would be in a much worse situation, to be polite.”

‘Busy summer’

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.

“Given what we were thinking would happen to Kansas wheat markets in May or June, what we have now is a tremendous blessing,” he said. “We are seeing major wheat production problems again, and hopefully, from the U.S. point of view, that will translate to continued strong U.S. wheat exports and help us whittle down our large stockpiles of wheat.”

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

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

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.”