State's smaller wheat crop may pack bigger financial punch
The price of Washington wheat has climbed more than 30 percent within the past six weeks as the drought wilted crops elsewhere in the nation.
Seattle Times staff reporter
While the Midwest bakes under the summer sun, Whitman County farmer Randy Suess is benefiting from well-timed rains that set the stage for a big harvest of his soft white winter wheat.
The value of that wheat has climbed more than 30 percent within the past six weeks as the drought elsewhere in the nation wilted crops and helped create a global bull market for grains.
Suess figures his wheat will be mature in mid-August, and is anxious to have his crop in from the fields.
"Everyone is very optimistic that we're at least going to see the prices that we have right now," Suess said.
Whitman County in southeastern Washington is the state's top-producing wheat county, contributing to a state harvest that last year, for the first time, was worth more than $1 billion.
This year's harvest, already under way in some parts of the state, is forecast to be smaller than last year's. But if current prices hold or head higher, it could rival last year's in value, adding momentum to a historic turnaround in the state's wheat country.
Through much of the 1990s and into the early years of the new century, Washington's wheat farmers most frequently faced glutted world markets and low prices.
But during the past five years, the five-year average price paid for Washington wheat topped $6.30 a bushel, compared with $3.81 for the previous five years, according to statistics compiled by the U.S. Department of Agriculture.
Some of the other crops grown in rotation with wheat also have seen sharply higher prices in recent years, adding to the overall boost in grower income.
"These last three or four years have been a period that most of us have never seen in our lifetime. It's been a wild time," said Ben Barstow, a Washington wheat grower who farms 900 acres near the Idaho border.
Many growers have used the increased revenues to pay off debt or invest in more land or equipment.
But Suess cautions that even as earnings have increased, so have expenses for fuel, fertilizers and machinery, so it takes higher prices to make a profit.
"I am as happy as can be with the price. But I also have record expenses," Suess said.
As the drought in the Midwest has intensified, the price for soft white winter wheat — the dominant Washington wheat crop — delivered in Portland has climbed week by week. On Monday, it jumped 15 to 17 cents higher per bushel, with July deliveries ranging between $8.90 and $9.00 a bushel.
Many wheat farmers had hedged their bets, preselling part of their crop earlier in the year when the price was lower, but plan to sell most of their wheat once the harvest is complete.
The soft white wheat is used to make cookies, crackers, flat breads and other products.
But in recent years, increasing numbers of livestock producers in the U.S., as well as internationally, have turned to wheat to fatten their animals. The shift occurred as rising corn prices have often made wheat a more economical option.
"Last year, the wheat crop was of phenomenal quality," said Barstow. "And it was heart-wrenching to see so much of go into the feed animals."
This year's drought has sent corn prices shooting up even higher, and that may cause more livestock operators to shift to wheat.
There also is concern about the wheat crop in Russia, a major exporter that has been hit by drought conditions in some farm regions, adding to the upward pressure on wheat prices.
But Suess cautions not to get carried away. Farming is a volatile business.
"You can speculate all you want about what may happen, and it doesn't you a lot of good," Suess said.
"We could have a hailstorm come and wipe everything out."
Hal Bernton: 206-464-2581 or firstname.lastname@example.org