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Hurt: Foreign competition reduces U.S. wheat acres
By ANN HINCH
Tennessee Correspondent

WEST LAFAYETTE, Ind. — The idea that the United States could be headed toward crop specialization might disturb some farmers – after all, one has only to look to the Irish Potato Famine as an example of the danger of a single nation producing one crop above most others.

Corn, however, might well be where America’s farmers find their niche, according to Chris Hurt, agricultural economist with Purdue University. South America has already surpassed annual U.S. soybean production, according to the USDA.

And for all its size, the United States grows only 9 percent of the world’s wheat, well behind the European Union at 20 percent (a total of 25 countries), China at 16 percent and the former Soviet Union countries at 15 percent. Hurt said these countries grow wheat because they cannot produce other crops that can be easily produced in the United States.

“That’s not to say we can’t make money raising wheat, it’s just that we can make more raising something else,” he said. “They raise the wheat, and we raise something else.”

In addition, Hurt referred to the role of international politics in wheat production. The EU, he said, subsidizes its wheat farmers to such a degree that U.S. growers would be hard-pressed to compete for big customers in Asia and northern Africa.

This is reflected in Hurt’s export figures – in the early 1980s, the U.S. exported 65 percent of its wheat crop. By 2005, that was down to 46 percent.

“Because of (our governmental) policies, we tend to be the wheat supplier of last choice,” added Don Mennel, president of the 120-year-old Mennel Milling Co. in Mexico, Ind. “We tend to shoot ourselves in the foot.”

Reductions
By this point in the series, it comes as no surprise to hear another expert cite the profitability of corn and soybeans as a prime reason for wheat’s decline.

The fungus that results in damaging head scab, which surges on and off in the Midwest, is another oft-explained factor; so is the 1996 Freedom to Farm bill that removed limits on what farmers could plant. Higher per-acre yields – requiring fewer planted acres overall – is also frequently cited.

Experts have said there is not one reason for wheat’s decline in most of Farm World’s coverage area. But there are some perhaps not often considered, such as Hurt’s explanation that 20 years ago, farmers would plant a 15-20-acre patch to use up their hog manure from the summer. With a 90-percent reduction in small hog operations since the late 1980s, all those abandoned acres of missing wheat add up.

One must also consider the impact of the new carbohydrate-counting American. In the past three years, domestic use dropped thanks to the high-protein/low-carb requirements of diets such as Atkins. Even as the “new” wears off such an idea, Hurt said by and large, people are still moderating their intake of bread, pasta, snacks and other flour-based food, compared to even the turn of this century.

Even so, Shawn Conley, Purdue extension specialist, would like to “keep wheat in the lineup” for Indiana farmers. It breaks up disease in the soil and provides a cash crop during otherwise fallow winter months, sometimes enough to help a farmer plant more profitable spring crops.

“You don’t want to put everything in two stocks,” Conley said. “You want to diversify your portfolio.”

Recovery?
Hurt speculates southern Indiana farmers seeded five to 10 percent more wheat this winter than in 2004 (which still falls short of the 2003 planting). Many of these make use of double-cropping – corn, then wheat, then beans, all within two years.

Fear of a sustained increase in energy and fertilizer costs may bring wheat back into the rotation, Hurt said, to make the most of the land, raise cash and because it uses less nitrogen than corn.

“We’ve almost got a ‘perfect storm’ coming, with costs of energy and everything else coming on,” agreed Mennel.

Another big intermittent problem, scab has been around what seems forever – “I’ve seen Purdue extension bulletins, one of them dated 1889, where they talked about scab,” said Herb Ohm, Purdue wheat breeder and geneticist – but current no-till practices foster it. Plowing breaks up the soil and slows the fungal spread, he explained.

Continuing advances in scab-resistant seeds may also boost wheat’s image as a viable crop. This fall, Purdue, through Ag Alumni Seed, Inc., will release two such varieties, INW-0411 and INW-0412. Ohm named private seed companies also working on resistance, including Pioneer Hi-Bred International.

Pioneer Director of Wheat Research Greg Marshall explained in scab years, a resistant seed turns out to be invaluable even if it does have the drawback of lower yield. In fact, crossing any breeds to obtain one desired trait often eliminates others. He said, however, current resistant varieties yield better than those marketed even a few years ago.

Mennel would like to see genetically modified (GMO) varieties on the market. He said there are such wheat seeds in development that have not been released because of the public’s hesitation about GMO, which he doesn’t believe makes much sense, given other everyday crops already use the technology. (He added the best wheat he mills is planted following Round-Up ready soybeans.)

“If you take the time to manage wheat, it will pay for itself,” Conley asserted. “I think if we can get some of these problems under control, it will help get grower interest back up.”

(This is the seventh in a series of articles about winter wheat production.)

Published in the January 11, 2006 issue of Farm World.

1/11/2006