Wheat on the defensive in the Northern Plains
CRYSTAL, N.D. (AP) – Wheat is a big part of Brian O’Toole’s life.
The Crystal, N.D., farmer grows it, handles it in his family seed business and promotes it as a member of U.S. Wheat Associates, which develops export markets for the crop.
So O’Toole takes a strong interest in a powerful trend that’s reshaping agriculture on the Northern Plains. Wheat, once the region’s dominant crop, keeps losing ground, literally, to corn and soybeans.
“I’m not panicking yet,” O’Toole tells Agweek. “But there are challenges.”
Wheat – so important in the Upper Midwest that for generations it was referred to as “King Wheat” – is tottering on its throne, if it hasn’t fallen off already.
Area farmers on balance increasingly prefer corn and soybeans to wheat because of greater potential profit from the former. Corn’s popularity, in particular, is rising because of attractive prices and new varieties that allow the crop to be grown in areas where it once was considered too risky.
In 2012, North Dakota farmers raised 422 million bushels of corn and 339 million bushels of wheat. Fifteen years earlier, farmers in the state raised 269 million bushels of wheat and only 58 million bushels of corn.
In other words, North Dakota in 1997 produced roughly five bushels of wheat for every one bushel of corn. Last year, the state raised roughly four bushels of corn for every three of wheat.
Don’t underestimate wheat’s importance. It remains a big deal in most of North Dakota, South Dakota, Montana and northwest Minnesota. The crop continues to be a good fit for the region’s soil and climate, and most farmers in the region have a long history of growing it successfully.
North Dakota typically ranks first or second in U.S. wheat production; the state vies annually with Kansas for the top spot. Montana, South Dakota and Minnesota normally are in the top 10.
What’s more, wheat generally remains profitable for farmers who grow it, particularly in the past few years, says Jim Peterson, marketing director for the North Dakota Wheat Commission.
“Farmers have had good returns on wheat,” he says. “They’ve made a good profit on wheat the past couple of years.”
But as he and others note, corn and soybeans have been even more profitable, encouraging area farmers to grow those crops instead of wheat.
Arguably the most popular topic of conversation at area farm show meetings and conferences this winter was the extent to which corn acres will increase again this spring.
The North Dakota State University Extension Service’s projected crop budgets for 2013 illustrate corn’s appeal relative to wheat. Keep in mind that the numbers are only estimates, and producers’ profits ultimately will depend on actual yields and prices.
In northwest North Dakota, traditionally a stronghold for wheat, corn is projected to provide a return to labor and management of $149.09 per acre, compared with a return to labor and management of $33.86 per acre for wheat.
In southeast North Dakota, an area where corn is well established, corn is projected to provide a return to labor and management of $176.20 per acre, compared with a return to labor and management of $85.85 for wheat.
Though raising corn generally involves more work and expense than growing wheat, the huge gap in potential profit inevitably will encourage farmers to produce corn, wheat supporters say.
“People have a bottom line (financially),” O’Toole says.
Corn likely will continue to become more widespread on the Northern Plains, says Randy Englund, executive director of the South Dakota Wheat Commission.
But ultimately, if too much corn is produced, its price will decline, making wheat more attractive, Englund says.
“I think wheat will rebound some as the economics take over, on the supply and demand side,” he says.
A ‘battle,’ but pluses, too
Wheat’s staunchest backers acknowledge that their crop faces tough competition from corn and soybeans.
“It’s an uphill battle,” says Erik Younggren, a Hallock, Minn., farmer and president of the National Association of Wheat Growers.
He lives in Kittson County, in extreme northwest Minnesota, an area where late springs and early falls historically made corn too risky. But corn’s popularity is growing in Kittson County, similar to what happened there with soybeans in the mid-1990s.
Even in Montana, where wheat remains dominant, dryland corn acreage is expected to rise sharply this year, says Ryan McCormick, a Kremlin, Mont., farmer and president of the state Grain Growers Association.
“There’s competitive pressure” on wheat, he says.
But wheat retains a number of advantages, including:
· Promoting soil health and improving pest and weed control as part of an annual crop
Wheat remains a vital player in northern areas because of the short growing season, O’Toole says.
Though wheat’s brightest days may be in the past, its future is encouraging, advocates say.
“I don’t think we’re going to see mile after mile of waving amber fields (of wheat) anymore,” Younggren says.
“But wheat still has an important place.”