Uncertain Harvest Farmers Ride Bull Market Best Harvest In Years Could Boost Farm-Related Businesses

For much of the 1990s, Mike and Lucy Ebert have had little reason to celebrate the end of wheat harvest at their southeastern Adams County farm.

Prices were lousy and emotions were as drained as the parched soil surrounding their town of Washtucna, Wash.

But this year it’s time to celebrate. Thanks to a booming wheat market, good yields and generous neighbors, the Eberts will throw a harvest party today for the first time in years.

“We’re not serving hamburger and hot dogs,” Lucy Ebert said as she planned the barbecue for friends who helped the Ebert’s rush their harvest between August rain storms. “We’re having steak and good stuff.”

This could be a good year for businesses selling everything from T-bones to tractors, as farmers across the Inland Northwest have emerged with a profitable harvest and cash to spend.

Not that farmers haven’t been buying goods all along. But for many who till the millions of acres surrounding Spokane, this is the first time in years that they feel comfortable making up lost ground by replacing worn out equipment, fixing up the house or acquiring more land.

That could give the rural economy a shot in the arm, and boost sales for Spokane retailers and suppliers through the winter.

“I’d love to be in the machinery business this year,” says Leroy Blakeslee, professor of agricultural economics at Washington State University. “There’s going to be a lot more buying.”

WSU researchers say Inland Northwest wheat farmers annually inject $668 million into the local economy. But how much is spent this year may depend on when farmers market their crops and their attitudes about the future.

Cash prices for wheat in Portland have for weeks hovered near $5 a bushel, the highest point in 20 years, and some believe they will go higher. (Farmers receive 35 cents to 50 cents per bushel less than the Portland price after shipping and handling fees are deducted.)

At the same time, yields in many dryland wheat fields were above average, raising the spirits of those who have suffered through a string of drought-plagued years in the 1990s.

“I’m optimistic,” said Grant Miller, an Adams County wheat and canola grower who has added 2,600 acres of ground to his operation in the past two years. “You’d better be optimistic, or you’d better get out.”

There’s reason to believe wheat may be this year’s winning commodity. World grain stocks are near a 20-year low and China raises its import demand almost monthly. Europe also has slowed its aggressive pricing strategy, giving U.S. farmers a chance to sell their crop without taxpayer-supported export subsidies.

Grain traders clearly believe this is a long-term bull market. On the floor of commodity exchanges in Chicago, Minneapolis and Kansas City last week, bids exceeding $4 a bushel were made for wheat delivered in July 1996. That means farmers could lock in a price that’s higher than what many need to break even at next year’s harvest.

Dennis Solbrack, co-owner of Arrow Machinery in Colfax, said the spirit of spending is evident at dealerships and stores. In a rare year when both wheat yields and prices are up, merchants are hopeful that farmers will help fill some bare cash registers.

“Don’t put it away for a rainy day,” Solbrack joked. “Come spend it at our place.”

Others wonder, however, if the good times will last. The uncertainties of the wheat market, coupled with the threat of federal farm subsidies shrinking dramatically during the next seven years, has some farmers exercising caution.

“It doesn’t take long to use up your extra money,” said Pullman farmer Bob Boyd, who recently spent $45,000 to replace a set of 25-year-old seed drills. “That’s a lot of money. That’s all I’m going to buy.”

Bill Copenhaver, a popular Wilbur, Wash., farmer who writes a philosophical column for the local newspaper, said he’s not taking any chances. He’s leased four of his irrigated circles to a Columbia Basin group willing to pay more than $300 an acre to grow potatoes on the traditional wheat ground next year.

Wheat farmers’ success in 1995 already has caused reverberations on Capitol Hill, where Congress is overhauling the nation’s farm program. After months of pushing a seven-year plan to cut the farm program by $13.4 billion, Republican congressmen from Southern cotton states defected two weeks ago to vote with Democrats against the plan. One complaint was that the GOP plan would benefit wheat farmers at a time when they had harvested a small gold mine.

Wheat farmers are split on whether the Republican plan, now in limbo, would help them. Many prefer a traditional program that would save taxpayers money by reducing the number of acres for which they can be paid. Others believe market prices will remain strong, making government subsidies unneeded.

“I believe agriculture is on a golden road to prosperity,” says Andrew Thostenson, agronomist with Spectrum Crop Development Corp., a Ritzville-based consulting firm and promoter of canola and other alternative crops. “They (Southern congressmen) are protecting their own Dixie pork. It makes me sick.”

The U.S. Department of Agriculture estimates that Washington wheat farmers this year reaped 144.3 bushels; Idaho, 97.65 million bushels. At $4.50 a bushel, the crop would fetch farmers in the two states nearly $1.1 billion, up from $900 million a year ago.

Ironically, as subsidies come under attack, prices are so high that there might not be any price-support payments for this year’s crop.

If the price of wheat continues to exceed the government’s $4-per-bushel target price, some farmers at the end of this year may be forced to pay back subsidies advanced earlier by the USDA. And producers who are used to receiving a green subsidy check in January, won’t get a dime.

Because they likely won’t receive subsidy checks, farmers’ net gain from this year’s crop won’t be as great as it first seems, said WSU’s Blakeslee.

Payments still would be made to farmers participating in the Conservation Reserve Program. The program pays farmers to idle land as a way to save soil, protect wildlife and reduce surplus wheat stocks.

But a sustained strong market could persuade farmers next year to begin seeding millions of acres of CRP land with wheat.

“The bad times are not behind us,” Blakeslee says.

That’s probably true, but Ebert, the Washtucna farmer, says he’s satisfied for now that the 1995 crop will make it easier to survive the future.

“We’re an ambitious bunch and we’ll make it one way or another,” he said. “Right now, it feels great to have a good crop, good price, and good friends.”

, DataTimes ILLUSTRATION: Color Photo Graphic: Golden harvest