September 15, 2008
Montana Wheat Crop May Bring Record Revenue
By Lutey, Tom
A grain harvest larger than expected and historically high grain prices could produce the first-ever billion dollar wheat crop for Montana farmers.
"We could have a billion-dollar wheat crop," said Peggy Stringer, lead Montana statistician for the National Agriculture Statistics Service. "I think prices are the big question mark, but prices should hold. I don't think we'll ever see $3.50 per bushel wheat again."
The NASS pegged the June price for winter wheat at $8.13 a bushel, more than $3 above the price for the same month last year. Elevator prices have since fallen into the $7 range, still considerably higher than a year ago, and commodities futures markets suggest grain prices won't be falling soon.
Ag insiders Tuesday were crediting cool early summer weather as much as high prices for the industry's good fortune. Drought threatened to clobber agriculture in Montana in early spring, and many farmers were on the ropes until May rains saturated fields with 5 inches of rain or more. Rainfall thereafter wasn't extraordinary but cool temperatures kept evaporation at bay for the remainder of the summer.
That cool weather has delayed crop progress considerably. Through Aug. 10, farmers had cut 45 percent of the winter wheat crop, compared with 89 percent for the same time period a year ago. In the past five years more than three-fourths of the crop was cut by now.
The barley harvest is also coming in later than usual, said Dave Dougherty, MillerCoors agronomist in Huntley. Federal officials are predicting Montana will produce 4 million more bushels of barley than it did last year.
"We're usually wrapping up at this time," Dougherty said. "Right now, we're over the hump, but we've still got a long ways to go. The quality has been excellent."
Most farmers are holding their breath, hoping to complete harvesting before damaging hail arrives, said Nancy Schlepp, national affairs director for Montana Farm Bureau Federation. Despite two consecutive years of record prices for grain, there's also still nervousness about commodity prices tumbling, she said.
Farm Bureau members are talking now about how they might approach Congress about reopening the farm bill should grain prices fall to the $5 a bushel range. That price would have been well-received two years ago, but with rising prices for fuel and fertilizer, farmers have real worries about paying their bills with a $5 a bushel wheat price at the elevator.
There are a lot of people wagering that wheat prices aren't done rising, said Dave Buschena, agricultural economist at Montana State University. Investors playing the Minneapolis commodities futures market are forecasting a 13.5 percent increase in wheat prices between the end of 2008 and December 2009.
Factors that could weigh heavily on the future price of grain include the strength of the U.S. dollar, global crop conditions and the cost of fertilizer and fuel. The country's weak dollar is making wheat attractive, as are farming conditions globally. Fuel prices, though high, appear to be flattening out. Those are good signs for Montana wheat growers, Buschena said.
Rising fertilizer prices are a concern, said Buschena, who tracked a 49 percent increase in fertilizer prices between May 2007 and May 2008. Fuel price rose 27 percent during the same time period, he said.
Wheat's appeal also impacted other crops, which didn't receive the same upbeat forecast. Montana's sugar beet farmers planted 16,700 fewer acres this year. The projected harvest of 745,000 tons of beets is down 36 percent from last year. Many farmers opting to plant fewer beets this year went with wheat instead.
Beet farmers in the Sidney area opted to plant other crops earlier this year after contract negotiations with American Crystal Sugar Co. were prolonged. Farmers who collectively planted 35,000 acres of beets for the company in 2007 planted close to 20,000 acres this season.
Growth in the state oat harvest was forecast to be relatively flat.
Montana hay farmers expected to harvest 33 million tons, a 13 percent decrease from 2007, despite planting the same 1.65 million acres.
Copyright Billings Gazette Aug 13, 2008
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