Farmers are facing a belt-tightening year as wheat prices slip below the break-even mark, signaling the third consecutive year of financial hardship.
“It’s kind of tough right now,” said Gary Bailey, a Whitman County farmer and a member of the Washington Wheat Commission.
Bailey said he hasn’t heard of anybody going out of business because of economic stress on the farm, “but I think everybody’s just watching their pennies as far as getting along and trying to come up with some other avenues of income. People are looking at alternative crops.”
Soft white wheat and club wheat – two varieties commonly grown in this area – were selling for $4.67 to $4.90 a bushel this week, according to the U.S. Department of Agriculture Portland daily grain report. That doesn’t take into account the $1 per bushel it costs farmers to ship their product to the coast, where it is loaded onto barges and sent to customers around the world.
A year ago, wheat prices averaged about $4.50 a bushel, down more than a dollar from 2015, according to the USDA.
Sam White of the Pacific Northwest Farmers Cooperative in Genesee said the depressed prices have to do with supply and demand.
“We trade in a world market, and in the past three years no one has had a crop failure in wheat,” White said. “So we’re a world awash in wheat right now.”
Russia, Ukraine and Argentina harvested good crops in 2016, White said – and Australia is reported to have a record harvest this year.
Until that turns around, he added, low wheat prices can be expected to be the norm.
In response, farmers throughout the country are looking at planting other crops besides wheat.
“But we don’t have that ability here on the Palouse,” White said. “Winter wheat is the thing you can plant in the fall. Some places, they have options.”
Bailey said he has heard some farmers in the Pullman area are putting more acres into garbanzo beans, a crop that currently fetches a higher price than wheat.
Glen Squires, director of the Washington Grain Commission, said weather also has been a factor in wheat problems this year.
“The railroads have had a hard time getting trains through avalanches and tunnels,” Squires said. “At the export point ships are just backing up.”
“There’s a lot of corn, soybeans and wheat being loaded, but they can’t load when it’s raining and there’s snow and ice… They bring a boat in, but the trains can’t get through so the boat sits there. It’s just a nightmare.”
Squires said one bright spot in the picture, however, is that Pacific Northwest grain remains a high-quality product. Some customers, especially from Asia, will buy it no matter what the price is. Hard red wheat also is selling at a premium these days, and Squires predicted some farmers may put in more acres of that variety to satisfy the demand of domestic millers.
According to the National Agricultural Statistics Service, winter wheat in the U.S. for 2017 was expected to total 32.4 million acres, down 10 percent from 2016 and 18 percent less than in 2015. That would be the second-lowest U.S. wheat acreage on record, the service reported.
In Idaho 730,000 acres were planted with winter wheat last fall, down from 760,000 acres the previous year. Washington’s winter wheat plantings stayed the same at 1,700,000 acres in 2016 and 2017.
Spring wheat has not yet been planted, but it also is expected to be down from a year ago.
Jonathan Rosenau, an Idaho County farmer who has been working the family farm for about five years, said wheat at today’s prices, adjusted for inflation and compared to wheat prices in the 1970s, would be selling for about 85 cents a bushel.
“A lot of people right now are trying to budget and trying to figure out something else besides wheat to raise,” Rosenau said. “Everyone’s just trying to find some kind of a niche right now to carry them through.”
The low prices this year follow last year’s disaster of falling numbers, when an early-season frost caused the protein levels in wheat to drop below market measures. Rosenau predicted at the time the falling numbers situation might force some farmers out of business.
While that has not appeared to happen so far, he said, the situation is grim.
“I’m one year away,” he said. “If we have another bad year, I don’t know if I’ll be hard-pressed to keep going.”
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