Wheat harvest brings in bumper crop, but market prices leave farmers struggling
The little bumper crop that could
This year’s wheat harvest almost didn’t look as good.
When Jerry Cooksey and other farmers around Roggen planted wheat last fall, hot, dry weather left the soil in poor planting condition. The beginning of the growing season stayed tough, he said. The first good rain didn’t come until mid-October.
What saved the wheat was timely and frequent rain in the spring to help the crop bounce back.
For most of the farmers on the Plains, the other wheat villain this year was stripe rust. Farmers like New Raymer’s Jim Mertens spent thousands on fungicide treatments for stripe rust, despite knowing there was little he could do to recover that cost. He knew that wasn’t an expense he could spare.
“The thing about stripe rust is you’ve got literally a day or two (once it’s there),” he said. After that, it can spread through a whole field and cut yields by half or more. The only solution for wheat rust is to treat it with a fungicide.
Keenesburg farmer Marc Arnusch said 90 percent of his fields were affected by stripe rust, but by treating it early, he saw little to no damage.
Keenesburg farmer Marc Arnusch had barely started harvesting the wheat on his farm when he knew it was one of the best crops he’d see in his farming career.
While that’s a relief for any farmer, it was bittersweet for Arnusch.
“We’re going to need it,” he said. “We need to produce about twice as many bushels as we did a year ago to have similar revenue.”
Farmers all over the state — and country — are seeing massive yields and high quality so far out of the winter wheat harvest, which started earlier this month. Marc Arnusch, who farms wheat and certified wheat seed near Keenesburg, said his yields so far are nearly 50 percent higher than average for dryland wheat and 10-15 percent above average for irrigated wheat.
But national wheat prices are at their lowest since mid-2010, currently at mid-$4 per bushel and projected to drop even lower by the end of harvest season. According to Weld County farmers like Jim Mertens and Jerry Cooksey, some Colorado grain elevators are giving less than $3 per bushel for wheat.
Cooksey, who farms about 4,000 acres in the Roggen area, said the market is the worst he’s seen in about 25 years. If he doesn’t bring in high yields, he won’t make a profit on one of his primary crops.
This year’s bumper crop is the only thing allowing farmers to break even.
LOOKING FOR THE ANSWER
Arnusch said during economic downturns, farmers have to do two things well — plan and be lucky.
Most of the farmers he knows sell their wheat in advance on projected numbers, called futures. This can come back to bite them if the prices go up, but lately, that hasn’t been the case. Arnusch said more than two-thirds of his crop was sold in advance.
“Albeit, (I didn’t sell) at a very profitable level, but at least it is black ink,” he said. “I would really hate to sell the bulk of my crop in today’s market.”
It’s just as important for farmers to find niche markets as trying to add yield and play the market, he said. For example, Arnusch sells certified wheat seed and a white wheat, which carries a premium in the market.
High wheat protein numbers impact a farmers’ profitability, too, but it’s hard to maintain a high protein count and a high yield, Cooksey said. He expects protein levels will be a little low across the state this year.
WAITING FOR THE FALL
It’s not just Colorado that’s seen a strong wheat harvest so far this year. According to Kansas Wheat, the nation’s leading wheat-producing state is expecting a record-breaking harvest for 2016.
The only place to go for excess U.S. wheat is international, but the global market is already inundated with wheat from other countries.
Cooksey and Arnusch, who both work with ag organizations like the Colorado Association of Wheat Growers and the Colorado Farm Bureau, are concerned about the longevity of a Colorado wheat industry where growers’ strategy is to overproduce just to break even.
Arnusch said the way the wheat industry produces is outpacing the capacity of the market. In a capitalist society, that won’t sustain itself. He thinks there might be changes on the horizon — will farmers start planting fewer wheat acres? Will they try a different crop rotation? Is there another alternative? He’s not sure.
“The market always decides, and the market will always encourage production or discourage production,” Arnusch said. “With the low prices we have, it’s certainly discouraging production moving into the 2017 year.” ❖