Wheat Prices Hit 16 Month Low - NBC Right Now/KNDO/KNDU Tri-Cities, Yakima, WA |

Wheat Prices Hit 16 Month Low

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This year farmers thought they would sell their wheat at record high prices, but now prices have dropped.

For the last four years the price of wheat had been abnormally high. When this happens around the world more farmers chose to grow wheat rather than hay. This caused the market to flood with too much supply. 

Wheat prices plunged from $12 a bushel last March to $5.18. The U.S. Department of Agriculture predicted a record $95 billion in farm income, because of the increase in supply around the world, the net income will be a lot less.    

Local growers say the next few years will be tight.

"I've been in the industry all my life this is the 3rd time I can remember it happening, prices get up that high everybody is going to be coming into it and prices come back down and it's going be a tough couple of years until things settle back down again," said Larry Wilkerson, Kennewick Wheat Grower.

While prices have dropped the cost to produce wheat is still high. Fertilizer, machinery, and labor costs are all at record highs. 

Also in Europe wheat prices are about $2 cheaper making their market more appealing to grain buyers.