Crisis' Grips Wheat Industry

NAWG leaders worry that wheat may be heading the way of oats and barley. Lon Tonneson 

Published on: Feb 7, 2006

"The wheat industry is in crisis," says National Association of Wheat Grower President Sherman Reese.

The Oregon farmer who has led NAWG for the past year says that wheat is losing so many acres to more profitable crops - particularly corn and soybeans the Great Plains and Midwest - that the future of the industry is at risk.

"We could eventually lose so many acres that the U.S. could lose markets and its standing as a reliable supplier," adds Dale Schuler, NAWG vice-president and a Montana grain grower.

The two men made those statements in interviews at the North American Grain Congress that wraps us today in San Antonio, Texas.

"If something doesn't change, I am afraid that wheat could go the way of oats and barley in this country," Reese says.

A perfect storm seems to have come together to threaten the nation's wheat industry. Faced with apparent consumer and miller opposition to genetic modification of wheat, the industry hasn't supported research of biotech development of new varieties that could have lowered production costs. As a result, wheat yields have fallen behind other crops that compete for farmers' resources.

Energy costs have skyrocketed, too, raising input prices for many $20 per acre. For some growers, particularly in the West, that's all of their profit.

"I have a 4 cent per bushel profit right now," Schuler says. "If I have a production hiccup, I'll lose money."

Wheat growers learned Monday that they now face proposed cuts in farm program payments. The Bush administration announced yesterday a budget that would cut the limit on direct payments in half.

"We have faced challenges in the past," Schuler says. "But this year is different. There is a real sense of urgency."

Increased market prices could help, and but the underlying problem in the U.S. is yield and risk compared to other crop options.

"The answer is biotechnology," Schuler says.

At the North American Grain Conference NAWG, U.S. Wheat Associates (which gets its money from the wheat checkoff) and the Wheat Export Trade and Education Council approved a joint resolution supporting use of using biotechnology to develop new wheat varieties.

"If we can get biotechnology traits, we may be able to turn wheat around," Schuler adds.