Wheat Farmers Reap Triple Reward A Record Crop, Federal Subsidies, High Prices Have Growers Smiling

For the first time in decades - and possibly the last time ever - Inland Northwest wheat farmers are reaping the triple reward of a bumper crop, strong market prices and government subsidies all at the same time.

Agriculture officials say the harvest now in full swing across dryland wheat country is the largest ever, a bin-buster that could fill a train of grain hoppers stretching from Spokane to San Francisco.

Sales from the crop and checks from the government will line the pockets of farmers who have suffered nearly a decade of drought and paltry prices which failed to keep up with inflation. Economists say the income is needed by farmers to retire bank loans, upgrade 20-year-old equipment and cushion themselves against hard times.

The good times down on the farm also could pay off for Spokane merchants who attract the people who work millions of acres of farmland from Bonners Ferry, Idaho, to Clarkston, Wash.

“This is the payoff year,” said Gretchen Borck, an executive with the Washington Association of Wheat Growers in Ritzville.

“The economic ripple will provide jobs, whether it be at the Bon Marche or Adams Tractor. Wives will go to Spokane and buy that new winter coat they’ve been putting off. Farmers may buy a new pickup truck. And it’s a lot easier to send their children to college in Spokane.”

Barring extended damage from the recent heat wave, the federal government forecasts a record 181.5-million-bushel wheat crop in Washington. That’s enough for the state to become the second-largest wheat producer in the nation behind only Kansas. In Idaho, farmers are expected to harvest a record 120.5 million bushels of wheat.

Those figures would beat the records set in 1993 of 177.6 million bushels of Washington wheat and 110.4 million bushels in Idaho.

A cool, wet spring boosted yields this year. But farmers also took advantage of a new farm program to plant thousands of additional acres of wheat to capitalize on expected higher prices.

“It’s a real good year. Any time we got a rain, we got a pretty good yield,” said an enthused Chris Herron, a Connell, Wash., farmer who cut his crop last week before beginning custom harvesting for other farmers. “My average yield is 32 bushels per acre. This year, I cut over 50 bushels.”

What makes this year especially sweet is that prices also are high, hovering above $4.50 a bushel in recent weeks. At $4 a bushel, the Washington and Idaho crop could be worth an astounding $1.2 billion. And many farmers signed contracts earlier in the year to lock in prices of $5 a bushel or more.

The Northwest crop is vastly better than the yields in other major wheat-growing areas such as drought-plagued Kansas, where farmers have reduced their planted acres and yields are off by 10 bushels per acre or more.

Yet, whether in Kansas or the Palouse, farmers are receiving subsidy payments from the U.S. Department of Agriculture. This year, the government is pouring an estimated $120 million into Washington farmers’ bank accounts, $72 million in Idaho.

Those payments were approved by Congress under a new seven-year transition program to wean farmers off subsidies. The program calls for the highest payments to be made this year, cutting them to half by 2002. After that, farmers will be on their own.

Under the old farm programs, subsidy checks were reduced when market prices were high. Last year, for instance, farmers had to repay advance subsidy payments after prices soared.

The change to a flat payment regardless of market prices may raise the suspicion of critics of the farm program who wonder why taxpayers must pay farmers a subsidy in their best year ever.

“The two (subsidies and a big crop) together don’t make for good public relations for the farm sector,” said Leroy Blakeslee, agricultural economist at Washington State University. “Under the previous farm bill, there would be zero payments this year.”

But Blakeslee argues that past government programs have inflated the value of farmers’ land, so the government has a responsibility to compensate farmers for the value of their assets that they stand to lose when subsidies are eliminated in 2003.

WSU researchers estimated last year that farm ground in Whitman County might lose 28 percent of its value after the federal farm program is eliminated.

“Transition payments are compensation for what’s going to happen,” Blakeslee said. “Looked at in this way, this year’s subsidies can make some sense.”

, DataTimes ILLUSTRATION: Graphic: Amber waves of grain