A Report on the Wheat Industry with Focus on North Dakota and Montana

Executive Summary

• Wheat production in the United States has shown a long-term declining trend in planted acreage over the past 50 years, though yields have increased significantly due to technological and genetic improvements.
• Durum wheat is typically the most profitable wheat variety, followed by Hard Red Spring wheat, while Soft Red Winter wheat is generally the least profitable major wheat class.
• Current wheat prices remain below historical averages, with the USDA estimating an all-wheat price of $5.50/bushel for 2024/25 and 2025/26 crops, approximately 8% below the 15-year average.
• Input costs for wheat production have increased substantially, with 2025 costs 26-29% above 2021 levels for North Dakota wheat varieties.
• On-farm storage with proper aeration systems represents a significant but potentially profitable investment for wheat producers, with ROI ranging from 67-200% over a 10-year period depending on system size and market conditions.
• Current ROI projections for wheat in 2025 indicate challenging economic conditions, with returns ranging from -18% to +9% depending on wheat type and location.

Table of Contents

1. Introduction
2. Wheat Production Trends
   • 50-Year Production Trends
   • 25-Year Production Trends
   • 10-Year Production Trends
   • Regional Production Analysis
3. Wheat Types and Profitability Comparison
   • Major Wheat Classes Overview
   • Profitability Comparison by Wheat Type
   • Regional Variety Performance
4. Wheat Pricing Information
   • Historical Price Trends
   • Current Market Conditions
   • Price Outlook for 2025
5. Input Costs Analysis
   • Seed Costs
   • Fertilizer Costs
   • Pesticide and Herbicide Costs
   • Fuel and Equipment Costs
   • Labor Costs
   • Total Production Cost Trends
6. On-Farm Storage and Aeration Analysis
   • Investment Costs
   • Operational Costs
   • Financial Benefits
   • Quality Preservation Benefits
   • ROI Analysis for Storage Systems
7. ROI Projections for 2025
   • Current Profitability Outlook
   • Regional ROI Projections
   • Factors Affecting ROI
   • Strategies to Improve ROI
8. Conclusion and Recommendations
9. References

Introduction

Wheat Production Trends

50-Year Production Trends

• Planted Acreage: Total wheat planted area has declined from approximately 75 million acres in the mid-1970s to around 49 million acres in 2025, representing a 35% decrease.
• Yield Improvements: Average wheat yields have increased from approximately 30 bushels per acre in the 1970s to over 50 bushels per acre in recent years, representing a 67% improvement.
• Production Volume: Despite the reduction in acreage, total production has remained relatively stable due to yield improvements, averaging between 1.8-2.2 billion bushels annually in recent decades.
• Regional Shifts: Production has gradually shifted, with the Northern Plains (including North Dakota and Montana) maintaining or increasing their relative importance in U.S. wheat production, particularly for Hard Red Spring and Durum wheat.

25-Year Production Trends

• Planted Acreage: Continued decline from approximately 62 million acres in 2000 to 49 million acres in 2025, a 21% reduction.
• Yield Variability: Increased yield volatility due to more frequent extreme weather events, though the overall trend remains positive.
• Class Shifts: Proportional increases in Hard Red Spring wheat and Hard Red Winter wheat production relative to Soft Red Winter wheat and White wheat.
• Export Competition: Intensified global competition, particularly from Black Sea region producers (Russia, Ukraine, Kazakhstan), has pressured U.S. export market share.
• North Dakota and Montana: These states have maintained their position as the primary U.S. producers of Hard Red Spring and Durum wheat, with North Dakota consistently ranking as the top producer of both classes.

10-Year Production Trends

• Planted Acreage: Relatively stable wheat acreage in North Dakota (6-7 million acres) and Montana (5-5.5 million acres), though with year-to-year fluctuations based on market conditions and weather.
• Yield Improvements: Continued genetic advancements have pushed average yields to new records in favorable years, with North Dakota averaging 48-52 bushels per acre for Hard Red Spring wheat in good years.
• Quality Emphasis: Increased focus on protein content and other quality characteristics to capture premium markets, particularly for Hard Red Spring and Durum wheat.
• Climate Challenges: More frequent drought conditions in parts of Montana and western North Dakota have increased production volatility.
• Technology Adoption: Rapid uptake of precision agriculture technologies, including variable rate application, GPS guidance, and data analytics, has helped optimize input use and improve profitability.

Regional Production Analysis

• Leads the nation in Hard Red Spring wheat production, accounting for approximately 50% of U.S. production.
• Produces about 60% of U.S. Durum wheat.
• Total wheat acreage has remained relatively stable over the past decade, though with shifts between wheat classes based on market conditions.
• Average yields have increased approximately 15% over the past decade due to improved varieties and management practices.

• Ranks second in U.S. Hard Red Winter wheat production and third in Hard Red Spring wheat.
• Has experienced more significant yield variability due to more frequent drought conditions in the western part of the state.
• Has seen a slight shift toward Hard Red Winter wheat from Hard Red Spring wheat in some regions due to agronomic advantages and marketing opportunities.
• Average wheat yields have increased approximately 10% over the past decade, though with significant regional variations.

Wheat Types and Profitability Comparison

Major Wheat Classes Overview

• Primary growing regions: North Dakota, Montana, Minnesota, South Dakota
• Characteristics: High protein content (typically 13-16%), strong gluten, excellent milling and baking qualities
• Primary uses: Premium bread flour, blending with lower protein wheats
• Market dynamics: Commands price premiums for protein content, primarily exported to Asia and domestic milling

• Primary growing regions: Montana, Kansas, Oklahoma, Texas, Colorado
• Characteristics: Medium-high protein content (typically 11-13%), good milling and baking qualities
• Primary uses: Bread flour, all-purpose flour, blending
• Market dynamics: Largest U.S. wheat class by production volume, major export class

• Primary growing regions: North Dakota, Montana, small amounts in Arizona and California
• Characteristics: Very hard texture, high protein, yellow endosperm
• Primary uses: Semolina flour for pasta production
• Market dynamics: Niche market with premium pricing but higher production challenges and market volatility

• Primary growing regions: Eastern and Midwestern states (minimal in ND/MT)
• Characteristics: Lower protein content (typically 9-11%), soft texture
• Primary uses: Cookies, crackers, pastries, cakes
• Market dynamics: Lower price point, less common in Northern Plains

• Primary growing regions: Pacific Northwest (minimal in ND/MT)
• Characteristics: Low protein, white bran, mild flavor
• Primary uses: Asian noodles, pastries, crackers
• Market dynamics: Primarily export-oriented to Asian markets

Profitability Comparison by Wheat Type

1. Durum Wheat: Typically the most profitable wheat class when quality standards are met
   • Average price premium: 15-30% above Hard Red Spring wheat
   • Production challenges: More susceptible to disease, quality discounts for poor quality can be severe
   • Market volatility: Higher price volatility due to smaller market size
   • Net profitability advantage: 10-25% above Hard Red Spring wheat in good quality years
2. Hard Red Spring Wheat: Second most profitable wheat class
   • Protein premium: Significant premiums for protein levels above 14%
   • Yield stability: Generally more stable yields than Durum
   • Market access: Broader market access and marketing options
   • Net profitability advantage: 5-15% above Hard Red Winter wheat
3. Hard Red Winter Wheat: Moderate profitability
   • Yield advantage: Often produces higher yields than Spring wheat
   • Input efficiency: Generally requires less nitrogen fertilizer than Spring wheat
   • Price disadvantage: Typically commands lower prices than Spring wheat
   • Regional advantage: More suitable for drier areas of Montana
4. Soft Red Winter Wheat: Lowest profitability among major classes
   • Price disadvantage: Typically lowest priced wheat class
   • Limited regional adaptation: Not well-suited to Northern Plains growing conditions
   • Market limitations: Limited market access in the region

Regional Variety Performance

• Hard Red Spring wheat varieties 'ND VitPro', 'ND Frohberg', and 'SY Ingmar' have shown superior economic returns in recent years, with 3-5% higher profitability than average varieties.
• For Durum wheat, 'ND Riveland' and 'Joppa' have demonstrated the best combination of yield, quality, and disease resistance, resulting in 4-7% higher net returns.

• Hard Red Winter wheat varieties 'Yellowstone', 'WB4303', and 'SY Monument' have performed best economically in Montana trials, with 5-8% higher returns than average varieties.
• For Hard Red Spring wheat, 'Vida', 'Lanning', and 'SY Rockford' have shown superior economic performance in Montana conditions.

Wheat Pricing Information

Historical Price Trends

• Inflation-adjusted wheat prices have shown a long-term declining trend, with periodic spikes during supply disruptions.
• Major price peaks occurred in 1974-75, 1996, 2008, and 2022, typically associated with global production shortfalls or export restrictions.
• The inflation-adjusted average wheat price has declined approximately 40% over this period, reflecting global productivity improvements and increased competition.

• Nominal wheat prices have ranged from lows of around $2.50/bushel in the early 2000s to highs above $10/bushel in 2008 and 2022.
• Price volatility has increased significantly, with standard deviation of monthly price changes approximately 60% higher than in the previous 25-year period.
• The emergence of Black Sea exporters has fundamentally altered global wheat market dynamics and price formation.

• Hard Red Spring wheat has averaged approximately $6.80/bushel over this period.
• Durum wheat has averaged approximately $7.50/bushel, with significant quality-based price spreads.
• Hard Red Winter wheat has averaged approximately $5.90/bushel.
• The price premium for protein has become more variable but remains significant for Hard Red Spring wheat.

Current Market Conditions

• Current cash price range: $5.80-$6.50/bushel in North Dakota and Montana
• Protein premiums: $0.15-$0.40/bushel for each percentage point above 14% protein
• Basis levels: $0.20-$0.60 under Minneapolis futures, wider than the 5-year average
• Export pace: Running approximately 5% behind last year's pace

• Current cash price range: $6.50-$7.20/bushel in North Dakota and Montana
• Quality spreads: Up to $1.50/bushel between top and bottom quality grades
• Export demand: Steady from traditional markets (Italy, North Africa)
• Domestic demand: Stable from U.S. pasta manufacturers

• Current cash price range: $5.50-$6.20/bushel in Montana
• Protein premiums: $0.10-$0.30/bushel for each percentage point above 12% protein
• Export competition: Facing intense competition from Black Sea origin wheat

Price Outlook for 2025

• The USDA's estimated all-wheat price for the 2024/25 and 2025/26 crops is $5.50/bushel, which is more than 8% below the 15-year average of $6.01/bushel.
• Futures markets are pricing in limited upside, with most contracts trading in the lower portion of their annual range.
• Global wheat stocks remain adequate, with the 2025/26 stocks-to-use ratio projected at 41.2%, slightly above year-ago levels and the highest since 2019/20.
• Weather remains the primary unknown factor that could drive prices higher if production problems emerge in major exporting regions.
• Currency values, particularly the strength of the U.S. dollar, continue to impact export competitiveness and price formation.

Input Costs Analysis

Seed Costs

• Current costs (2025):
  • Certified Hard Red Spring wheat seed: $18-$22 per bushel ($0.30-$0.37 per pound)
  • Certified Durum wheat seed: $20-$25 per bushel ($0.33-$0.42 per pound)
  • Certified Hard Red Winter wheat seed: $16-$20 per bushel ($0.27-$0.33 per pound)
• Seeding rates:
  • Hard Red Spring wheat: 1.3-1.6 million seeds per acre (90-120 lbs/acre)
  • Durum wheat: 1.2-1.5 million seeds per acre (90-120 lbs/acre)
  • Hard Red Winter wheat: 1.0-1.3 million seeds per acre (60-90 lbs/acre)
• Total per-acre seed costs:
  • Hard Red Spring wheat: $27-$44 per acre
  • Durum wheat: $30-$50 per acre
  • Hard Red Winter wheat: $16-$30 per acre
• 10-year trend: Seed costs have increased approximately 35-40% over the past decade, driven by improved genetics, seed treatments, and industry consolidation.

Fertilizer Costs

• Current costs (2025):
  • Nitrogen (urea, 46-0-0): $550-$650 per ton ($0.60-$0.71 per pound of N)
  • Phosphate (MAP, 11-52-0): $650-$750 per ton ($0.63-$0.72 per pound of P₂O₅)
  • Potash (0-0-60): $450-$550 per ton ($0.38-$0.46 per pound of K₂O)
  • Sulfur: $0.40-$0.50 per pound
• Typical application rates for Hard Red Spring wheat in North Dakota:
  • Nitrogen: 100-150 lbs/acre (varies by yield goal and soil test)
  • Phosphate: 30-50 lbs/acre (varies by soil test)
  • Potash: 0-30 lbs/acre (varies by soil test)
  • Sulfur: 10-20 lbs/acre
• Total per-acre fertilizer costs:
  • Hard Red Spring wheat: $85-$130 per acre
  • Durum wheat: $90-$135 per acre
  • Hard Red Winter wheat: $70-$110 per acre
• Recent trends: After peaking in 2022, fertilizer prices moderated somewhat but remain significantly above historical averages. Current prices are approximately 70-90% higher than 2020 levels but 15-25% below 2022 peaks.

Pesticide and Herbicide Costs

• Current costs (2025):
  • Herbicides: $15-$30 per acre (varies by weed pressure and resistance issues)
  • Fungicides: $15-$25 per acre (varies by disease pressure and application timing)
  • Insecticides: $5-$15 per acre (as needed, not applied every year)
• Total per-acre crop protection costs:
  • Hard Red Spring wheat: $35-$70 per acre
  • Durum wheat: $40-$75 per acre (typically higher fungicide use)
  • Hard Red Winter wheat: $30-$60 per acre
• Recent trends: Herbicide costs have increased approximately 25-30% over the past five years, driven by resistance management needs and industry consolidation. Fungicide use has become more common as a standard practice rather than only in high disease pressure years.

Fuel and Equipment Costs

• Current fuel costs (2025):
  • Diesel fuel: $3.50-$4.00 per gallon
  • Typical fuel usage: 3-5 gallons per acre (varies by tillage system)
  • Per-acre fuel cost: $10.50-$20.00
• Equipment costs:
  • Depreciation: $30-$50 per acre
  • Repairs and maintenance: $15-$25 per acre
  • Interest on investment: $10-$20 per acre
• Total per-acre machinery costs:
  • Conventional tillage system: $65-$115 per acre
  • Minimum tillage system: $55-$95 per acre
  • No-till system: $45-$85 per acre
• Recent trends: While fuel prices have moderated from 2022-2023 peaks, equipment purchase prices have continued to rise, with new equipment costs increasing 30-40% over the past five years.

Labor Costs

• Current labor costs (2025):
  • Skilled farm labor: $18-$25 per hour
  • Management labor: $25-$40 per hour
  • Typical labor requirements: 0.5-1.0 hours per acre
• Total per-acre labor costs:
  • $15-$30 per acre (includes both hired and operator labor)
• Recent trends: Farm labor rates have increased approximately 20-25% over the past five years due to general wage inflation and competition from other sectors.

Total Production Cost Trends

• Total per-acre production costs (2025):
  • Hard Red Spring wheat in North Dakota: $380-$420 per acre
  • Durum wheat in North Dakota: $390-$430 per acre
  • Hard Red Winter wheat in Montana: $340-$380 per acre
• Cost per bushel (based on average yields):
  • Hard Red Spring wheat (50 bu/acre): $7.60-$8.40 per bushel
  • Durum wheat (45 bu/acre): $8.67-$9.56 per bushel
  • Hard Red Winter wheat (45 bu/acre): $7.56-$8.44 per bushel
• 10-year cost trend: Total production costs have increased approximately 45-55% over the past decade, with the most significant increases occurring in fertilizer, equipment, and seed categories.
• Current year trend: According to NDSU Extension, total costs are "somewhat higher" than 2024, with fertilizer application rates increasing due to lower soil fertility levels despite flat to slightly lower fertilizer prices. Fuel costs, interest costs, and crop insurance premiums are down, while ownership costs and repairs are up.

On-Farm Storage and Aeration Analysis

Investment Costs

• Storage Bin Costs:
  • Typical 30,000 bushel storage bin: Approximately $70,000
  • Cost per bushel of capacity: $2.33/bushel
  • Additional equipment (augers, conveyors, monitoring systems): $15,000-$30,000
  • Site preparation and concrete work: $10,000-$20,000
  • Electrical installation: $5,000-$15,000
• Aeration System Costs:
  • Basic aeration fans: $2,000-$5,000 per bin
  • Advanced aeration systems with temperature monitoring: $5,000-$12,000 per bin
  • Automated controllers: $1,500-$3,000
  • Ducting and installation: $1,000-$3,000
• Total Initial Investment Range:
  • For a typical wheat farm in North Dakota or Montana looking to store one year's production (assuming 2,000 acres with 50 bu/acre average yield):
  • Storage capacity needed: 100,000 bushels
  • Total initial investment: $250,000-$350,000 ($2.50-$3.50 per bushel of capacity)

Operational Costs

• Fixed Costs:
  • Depreciation: Typically calculated at 7% of initial investment annually
  • Interest on investment: 4-6% of average investment (depending on financing terms)
  • Insurance: 0.5% of initial investment annually
  • Property taxes: Varies by location, typically 0.5-1% of assessed value
• Variable Costs:
  • Electricity for aeration: $0.01-$0.03 per bushel annually
  • Maintenance and repairs: 1-2% of initial investment annually
  • Labor for monitoring and management: $0.02-$0.05 per bushel
  • Insect and moisture control: $0.01-$0.02 per bushel
• Total Annual Costs:
  • Fixed costs: $0.20-$0.30 per bushel per year
  • Variable costs: $0.04-$0.10 per bushel per year
  • Total annual cost: $0.24-$0.40 per bushel per year

Financial Benefits

• Harvest Efficiency Gains:
  • Reduced wait times at commercial elevators: Savings of 2-4 hours per day during harvest
  • Labor efficiency improvement: 10-15% reduction in harvest labor costs
  • Extended harvest window: Ability to harvest at higher moisture content
  • Quantified benefit: $0.05-$0.10 per bushel
• Transportation Cost Savings:
  • Reduced harvest-time hauling: Elimination of immediate delivery requirements
  • Strategic transportation timing: Ability to transport during off-peak periods
  • Full load efficiency: Optimization of truck capacity utilization
  • Quantified benefit: $0.07-$0.15 per bushel
• Price Improvement Through Strategic Marketing:
  • Average harvest-time price discount: $0.30-$0.60 per bushel below annual average
  • Post-harvest price improvement: Typically peaks 3-7 months after harvest
  • Historical average price gain: 5-10% improvement over harvest prices
  • Quantified benefit: $0.25-$0.50 per bushel
• Basis Improvement Opportunities:
  • Harvest-time basis widening: Typically $0.10-$0.30 per bushel wider at harvest
  • Post-harvest basis narrowing: Gradual improvement through marketing year
  • Geographic arbitrage potential: Ability to deliver to markets beyond local area
  • Quantified benefit: $0.10-$0.30 per bushel

Quality Preservation Benefits

• Temperature Management:
  • Cooling hot harvest grain: Reduces respiration and insect activity
  • Winter cooling: Achieves optimal long-term storage temperatures (25-35°F)
  • Summer maintenance: Prevents moisture migration and hot spots
  • Uniform temperature: Eliminates temperature gradients that cause moisture migration
• Quality Preservation Through Aeration:
  • Protein preservation: Maintains wheat protein levels, particularly important for hard red spring and durum wheat
  • Test weight maintenance: Prevents loss of test weight during storage
  • Insect prevention: Cooling grain below 50°F significantly reduces insect reproduction and feeding
  • Mold prevention: Temperature control is critical for preventing mold growth
• Quantifiable Benefits of Proper Aeration:
  • Reduced dry matter loss: Proper aeration reduces dry matter loss from 0.5-1% to less than 0.1%
  • Discount avoidance: Prevention of quality deterioration worth $0.10-$0.70/bushel
  • Extended storage duration: Properly aerated wheat can be stored 1-2 years vs. 3-6 months without aeration
  • Insect control cost reduction: Reduced need for fumigation and protectants

ROI Analysis for Storage Systems

• ROI Calculation Methodology:
  • Initial investment costs
  • Annual operating costs
  • Price improvement opportunities
  • Quality preservation benefits
  • Tax advantages
  • Operational efficiencies
• Sample ROI Scenarios for North Dakota/Montana Wheat Producers:
  Scenario 1: 50,000 Bushel System for Spring Wheat
  • Initial investment: $125,000 ($2.50/bu capacity)
  • Annual costs: $15,000 ($0.30/bu)
  • Annual benefits: $25,000-$40,000 ($0.50-$0.80/bu)
  • Net annual return: $10,000-$25,000
  • Simple payback period: 5-12.5 years
  • 10-year ROI: 80-200%
  Scenario 2: 100,000 Bushel System for Mixed Wheat Classes
  • Initial investment: $300,000 ($3.00/bu capacity)
  • Annual costs: $30,000 ($0.30/bu)
  • Annual benefits: $50,000-$80,000 ($0.50-$0.80/bu)
  • Net annual return: $20,000-$50,000
  • Simple payback period: 6-15 years
  • 10-year ROI: 67-167%
• Factors Affecting ROI:
  • Farm size and production volume: Larger operations typically achieve better economies of scale
  • Wheat class mix: Higher-value wheat classes (durum, hard red spring) show better storage ROI
  • Market volatility: Higher market volatility improves the value of marketing flexibility
  • Distance to delivery points: Greater distances improve transportation savings
  • Local basis patterns: Regions with wider harvest-time basis show improved ROI
  • Quality premiums: Areas with significant quality premiums show better ROI for aeration systems

ROI Projections for 2025

Current Profitability Outlook

• "This year in most regions and for most crops the projected profitability is low or negative," according to Ron Haugen, NDSU Extension farm management specialist.
• The lower profitability is attributed to a combination of somewhat higher costs and lower commodity prices, with the latter being the main contributor to reduced returns.
• Soil fertility levels for North Dakota are lower than average due to heavy rains and good crop yields in 2024, requiring higher fertilizer application rates despite flat to slightly lower fertilizer prices.
• While some input costs have decreased (fuel costs, interest costs, and crop insurance premiums), others have increased (ownership costs and repairs), resulting in overall higher production expenses.

• "Current production estimates at today's prices with today's input costs will leave thin margins for the second consecutive year."
• "Wheat needs some market mover to help new-crop prices reach profitability levels."
• The 2025 estimate costs are 26% and 29% above 2021 costs for hard red spring wheat and durum wheat, respectively.

Regional ROI Projections

• Hard Red Spring Wheat:
  • Expected Yield: 45-55 bushels per acre
  • Expected Market Price: $5.80-$6.50 per bushel
  • Total Production Costs: $380-$420 per acre
  • Projected Net Return: -$50 to +$20 per acre
  • ROI: -12% to +5%
• Durum Wheat:
  • Expected Yield: 40-50 bushels per acre
  • Expected Market Price: $6.50-$7.20 per bushel
  • Total Production Costs: $390-$430 per acre
  • Projected Net Return: -$30 to +$40 per acre
  • ROI: -7% to +9%

• Hard Red Winter Wheat:
  • Expected Yield: 35-45 bushels per acre
  • Expected Market Price: $5.50-$6.20 per bushel
  • Total Production Costs: $340-$380 per acre
  • Projected Net Return: -$60 to +$10 per acre
  • ROI: -16% to +3%
• Hard Red Spring Wheat:
  • Expected Yield: 30-40 bushels per acre
  • Expected Market Price: $5.80-$6.50 per bushel
  • Total Production Costs: $350-$390 per acre
  • Projected Net Return: -$70 to -$10 per acre
  • ROI: -18% to -3%

Factors Affecting ROI

• Price Outlook:
  • The USDA's estimated all-wheat price for the 2024/25 and 2025/26 crops is $5.50/bu, which is more than 8% below the 15-year average of $6.01/bu.
  • Futures markets are pricing in limited upside, with most contracts trading in the lower portion of their annual range.
  • The chief limiting factor to price upside is the heavy U.S. stocks-to-use ratio, estimated at 41.2 for the new-crop 2025/26, slightly above year-ago levels and the highest since 2019/20.
• Domestic Use and Export Factors:
  • Domestic use of wheat is unlikely to significantly increase without further price deterioration.
  • The USDA estimates old-crop 2024/25 marketing year exports will increase about 18% from a year ago, due to historically tight stocks-to-use ratios of major export competitors.
  • Exchange rates remain a challenge, as the U.S. dollar remains historically elevated, making U.S. hard red winter wheat more expensive than competitors'.
• Production Factors:
  • Weather conditions during the growing season will significantly impact both yields and quality.
  • Disease and pest pressure, particularly for Fusarium head blight in durum and spring wheat, could affect quality premiums.
  • Input timing and management will be critical to optimizing returns in a tight-margin environment.

Strategies to Improve ROI

1. Cost Management:
   • Carefully evaluate all input costs and look for opportunities to reduce expenses without significantly impacting yield potential.
   • Consider soil testing and variable rate application to optimize fertilizer use.
   • Evaluate machinery use efficiency and consider custom hiring for some operations.
2. Marketing Plans:
   • Develop comprehensive marketing plans that take advantage of any price rallies.
   • Consider forward contracting a portion of expected production when prices offer positive margins.
   • Utilize available risk management tools, including futures, options, and government programs.
3. Crop Insurance:
   • Ensure appropriate crop insurance coverage to protect against yield or revenue losses.
   • Evaluate supplemental coverage options and their cost-effectiveness.
4. Diversification:
   • Consider diversifying into specialty wheat varieties or other crops with better profit potential where appropriate.
   • Evaluate alternative crop rotations that might reduce input needs or improve overall farm profitability.
5. Storage Strategy:
   • For producers with on-farm storage, develop a strategic plan for when to market stored grain to capture potential price improvements.
   • Consider the cost-benefit of adding storage capacity based on the analysis presented earlier in this report.
6. Input Timing:
   • Time fertilizer and other input purchases to take advantage of seasonal price dips.
   • Consider bulk purchasing or cooperative buying to reduce input costs.

Conclusion and Recommendations

1. Production Trends: While wheat acreage has declined nationally over the past 50 years, North Dakota and Montana have maintained their importance as key production regions, particularly for Hard Red Spring and Durum wheat. Yield improvements have partially offset acreage declines, though production remains vulnerable to increasing weather volatility.
2. Wheat Class Profitability: Durum wheat typically offers the highest profit potential when quality standards are met, followed by Hard Red Spring wheat. Hard Red Winter wheat provides moderate returns with potentially lower production risk in some regions. Producers should carefully evaluate their specific growing conditions, marketing opportunities, and risk tolerance when selecting wheat classes.
3. Market Conditions: Current wheat prices remain below historical averages, with limited upside potential projected for 2025 due to adequate global supplies and strong export competition. The protein premium market remains important for maximizing returns on Hard Red Spring and Durum wheat.
4. Input Costs: Production costs have increased substantially over the past decade, with 2025 costs 26-29% above 2021 levels for North Dakota wheat varieties. While some input categories have moderated from recent peaks, overall costs remain elevated, pressuring profitability.
5. On-Farm Storage: Investment in on-farm storage with proper aeration systems represents a significant but potentially profitable long-term strategy for wheat producers. The analysis indicates 10-year ROI potential of 67-200% depending on system size and market conditions, with particular benefits for higher-value wheat classes.
6. Current ROI Projections: The 2025 outlook indicates challenging economic conditions for wheat producers, with projected returns ranging from -18% to +9% depending on wheat type and location. Most scenarios show thin margins or negative returns, highlighting the importance of careful cost management and strategic marketing.

Key Recommendations:

1. Variety Selection: Choose wheat varieties with proven economic performance in your specific growing region, prioritizing those with strong yield potential, disease resistance, and quality characteristics that capture market premiums.
2. Input Optimization: Implement precision agriculture techniques to optimize input use, particularly for fertilizer and crop protection products. Soil testing and variable rate application can help reduce costs while maintaining yield potential.
3. Marketing Strategy: Develop a comprehensive marketing plan that includes forward contracting, storage strategies, and risk management tools. For producers with on-farm storage, a strategic approach to timing sales can significantly improve overall returns.
4. Storage Investment: Consider on-farm storage investment based on the analysis presented in this report, particularly for operations focused on higher-value wheat classes. The combination of marketing flexibility, quality preservation, and operational efficiencies can provide positive returns for well-managed systems.
5. Diversification: Evaluate opportunities to diversify into specialty wheat markets or alternative crops that might offer better returns in the current economic environment.
6. Risk Management: Ensure appropriate crop insurance coverage and consider supplemental programs to protect against both yield and price risks in a volatile market environment.

References

1. USDA Economic Research Service. (2025). Wheat Sector at a Glance. https://www.ers.usda.gov/topics/crops/wheat/wheat-sector-at-a-glance
2. North Dakota State University Extension. (2025) . Agriculture By the Numbers March 2025. https://www.ndsu.edu/agriculture/sites/default/files/2025-03/Agriculture%20By%20the%20Numbers%20March%202025.pdf
3. North Dakota State University Extension. (2025) . Crop Budget Projections for 2025. https://www.ndsu.edu/agriculture/ag-hub/ag-topics/crop-production/tools/crop-budgets
4. Terrain Agricultural Analysis. (2025) . Wheat Needs a Market Mover - Q2 2025 Report. https://www.terrainag.com/wp-content/uploads/2025/03/Terrain-Wheat-Q2-2025.pdf
5. The Roundup. (2025, February 26) . NDSU Crop Budget Projections Show Minimal Returns For 2025. https://www.roundupweb.com/story/2025/02/26/ag-roundup/ndsu-crop-budget-projections-show-minimal-returns-for-2025/21999.html
6. Montana State University. (2025) . Winter Wheat Performance Summary 2023. https://plantsciences.montana.edu/crops/Winter%20Wheat%20Performance%20Summary%202023.pdf
7. USDA National Agricultural Statistics Service. (2025) . Montana Wheat Varieties 2023. https://www.nass.usda.gov/Statistics_by_State/Montana/Publications/Special_Interest_Reports/MT-Wheat-Varieties-2023.pdf
8. South Dakota State University Extension. (2025) . Factors Affecting Wheat Production Decisions: Producer Survey Findings. https://extension.sdstate.edu/factors-affecting-wheat-production-decisions-producer-survey-findings
9. University of Minnesota. (2025) . 100 Years of Data Shows Modern Wheat Varieties are Productivity and Biodiversity Win-Win. https://twin-cities.umn.edu/news-events/100-years-data-shows-modern-wheat-varieties-are-productivity-and-biodiversity-win-win
10. NDSU Extension. (2025) . Grain Storage Costs Tool. https://www.ndsu.edu/agriculture/ag-hub/ag-topics/crop-production/tools/grain-storage-costs-tool
11. Farmer's Business Network. (2025) . On-Farm Grain Storage. https://www.fbn.com/community/blog/on-farm-grain-storage
12. USDA Wheat Data. (2025) . Wheat Yearbook Tables. https://www.ers.usda.gov/data-products/wheat-data/wheat-yearbook-tables
13. MacroTrends. (2025) . Wheat Prices - Historical Chart Data. https://www.macrotrends.net/2534/wheat-prices-historical-chart-data
14. US Wheat Associates. (2025) . Price Report - March 14, 2025. https://uswheat.org/price-report/price-report-march-14-2025/
15. Saskatchewan Wheat Development Commission. (2025) . Wheat Market Outlook – April 14, 2025. https://saskwheat.ca/wheat-market-outlook/wheat-market-outlook-april-14-2025/