The owners of a Kansas seed business explained on Wednesday why they are in "no man's land" as it pertains to selling wheat, as price hikes have been deterring buyers.
Ehmke Seed owners Vance and Louise Ehmke noted on "Cavuto: Coast to Coast" that according to local banks "a lot" of the older wheat crop "has already sold, so you can’t sell any old crop to capitalize on these higher prices."
"And then on new crop a lot of the buyers have just gotten out of the market, either because they were being crucified by high margin calls or they were just kind of afraid of the market," Vance went on to note.
He stressed that "you can’t sell old crop because you don’t have any [and] you can’t sell new crop because local markets don’t have a bid on that yet."
He added that "we are looking at a very explosive wheat market" amid the war between Russia and Ukraine, both major wheat producers and suppliers of the commodity.
Louise told host Neil Cavuto that the weather is also contributing to higher prices, which is making her crops harder to sell.
"We are in a dry area," she told Cavuto, noting that "75% of Kansas wheat right now is in good, poor to very poor condition and that’s because we are lacking moisture."
"So you have the Russian wheat out of the market and dry weather threatening the crop, that spells, guess what? Higher prices," she continued.
Russia’s invasion of Ukraine threatens a significant portion of the world’s wheat supply and has sent prices on a wild ride to new highs and sharp drops.
Vance said that "in the past several years our standard wheat price was about $5 a bushel."
"Right now it’s $10 and had been flirting with $12 a bushel before we had a big market retracement by buyers," he continued.
Vance argued that the wheat situation is a "long-term problem" as "it’s going to take years to rebuild that agriculture and all that infrastructure" in Ukraine following the war.