Wither wheat?

A mix of media and ag industry folks including myself are chatting around the dinner table on the eve of a Wheat Media Summit earlier this year in San Antonio when Jay O'Neil, an ag commodity consultant from Kansas, tosses out a rhetorical question: "Why should we care about wheat?"

My first response to such a question, having grown up in wheat fields and then covering wheat from every angle in newspapers and magazines for the past 17 years, is to become defensive. But with wheat seemingly stuck at a crossroads — beaten up by disease, seldom selling much beyond $4 a bushel cash price, yield potential that hasn't increased much over the past 20 years, production costs (most notably fertilizer and fuel) that have increased dramatically in that same time span — Mr. O'Neil's rhetorical question bears further contemplation. Toward that end, let's do a little Q&A on wheat:

If wheat acres continue to decline in the northern U.S., why should we care? Yes, wheat is tradition; wheat is the mother crop upon which northern plains agriculture was founded. But times change. Agriculture has changed. If other parts of the world can grow wheat more cheaply than we can, why not let them?

Why should farmers care about wheat? More and more growers are finding they can make better money with less risk growing other crops.

What about crop rotation? Good question — a cereal crop is needed to rotate with the broadleaf crops we grow, such as soybeans, canola, sunflowers, dry beans and field peas. However, the best answer is a four-letter word: corn. Better genetics combined with increasing demand for ethanol means corn acres will continue to creep west and north, with corn increasingly becoming a more viable cereal grain rotation option in traditional wheat areas. And wheat won't disappear from the northern plains completely. Farmers will still be growing it for hay, on sugarbeet ground and in other niche applications and situations, just like barley and oats. So there's less wheat acreage — big deal? That should just mean better market opportunities for the fewer remaining wheat growers who can't or don't care to grow corn.

What about grain elevators and grain handlers? If we're growing other crops instead of wheat, they should still be able to make their margin and volume in handling other crops.

What about the grain transportation industry? Truckers will shift to other crops. And you can be sure the railroad companies will make their money, wheat or not. The Port of Duluth-Superior? Sure, wheat traffic out of Duluth-Superior is always welcome. But the Port is so diversified that less wheat grown in the northern U.S. would barely have an effect. In fact, less wheat grown in the northern U.S. could encourage more wheat acreage in Canada, some of which is shipped out of Duluth-Superior, meaning the Port would still handle its share of wheat if northern U.S. wheat acres continue to decline.

What about agri-business retailers and suppliers? Few of today's agri-business retailers and suppliers are solely dependent upon wheat. They are already diversified to sell and supply inputs and equipment for other crops.

What about the wheat organizations? Well, if wheat acreage would continue to decline, there's no question that the state (and likely national) wheat organizations would need to change, perhaps downsizing or diversifying their operations and programs.

What about wheat end users and consumers? Here's where we come to the point in the wheat chain that would be most affected by a decline in northern U.S. wheat acreage and production, particularly domestic wheat users. It will become more difficult for users to source the type of wheat they want, especially if there are production problems. For high protein wheat, users may need to import over large distances, such as Canada or even Australia, paying much more in freight than if they sourced wheat from Bismarck or Billings. Paying significantly more in freight would squeeze users' profit margin, a squeeze which likely would be passed along to consumers.

So who should care most about the decline in wheat acres and production in the northern plains? In my opinion, it should be end users and consumers, yet too often it seems that they care the least. There are end users and consumers who don't want farmers growing biotech wheat, and they don't want to pay farmers a premium to grow a particular type of wheat either. So what should these farmers do? They'll continue to turn to other crops.

Will biotech wheat and/or attractive premiums for IP (identity-preserved) wheat stabilize wheat acreage and production in the northern plains? Maybe. Maybe there are other ways too. At any rate, it's in the best interest of end users and consumers to become more engaged in the U.S. wheat industry's soul-searching effort.

Tracy Sayler is an ag writer based near Fargo, N.D.