As markets change, farmers look to pulse, other rotation crops

Apr 23, 2009      Billings Gazette

Tom Lutey

Apr. 21, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- Wheat's prairie gold rush appears to be over.

Montana farmers expect to plant 300,000 fewer acres of the commodity this spring than they did in 2008 when the state's wheat harvest cracked $1 billion for the first time ever.

The reasons behind the decline are thought to be the more lucrative prices for other crops, a cooling wheat market and stressed grain land in need of rest after being seeded in back-to-back crop cycles during a hot market.

"When wheat prices were high, people double-cropped," said Carl Mattson, who farms near Chester and works for the Montana Grain Growers Association. Mattson said he suspects the number of acres planted in spring wheat will go up because fertilizer prices have dropped considerably from last year, which should improve profit margins.

Wheat payouts are down from a year ago when $8 a bushel wasn't unheard of for dark northern spring wheat. Prices are still relatively high with quality wheat trading in the $7 range locally, much higher than the $3 to $4 per bushel wheat sold for just a few years ago. But growers last year learned how quickly volatile prices for fertilizer, pesticides and fuel can chew through grain dollars.

Interest is now surging in pulse crops that naturally put nitrogen back into the soil and demand no fertilizer. Montana Farmers responding to the U.S. Department of Agriculture prospective plantings survey in March said they planned to plant 42,000 more acres of lentils this year than last when they planted 83,000. The state was poised to become the nation's second-largest lentil supplier in 2008, but drought and cutworm infestation devastated the crop in far northeast Montana.

The state also plants a quarter of a million acres of peas annually. That crop was expected to expand by 15,000 acres as well. Grant Zerbe, who raises chickpeas near Frazer, said pulse crops are a good change for soil depleted by wheat plantings.

"Pulse crops, of course they take less inputs. You don't have to buy nitrogen fertilizer, and they're good in rotation, especially in the northeast our guys are finding they make a great rotation crop with winter wheat," Zerbe said. "Our acres have been growing every year."

Both Zerbe and Mattson said spring wheat hasn't done well in recent summers when sweltering, dry weather in July and August sapped spring wheat's potential.

Winter wheat down Winter wheat, planted in the fall, has fared better with the hot summer temperatures, though its planted acres were thought to be down, also roughly 100,000.

Input costs weighed heavily on farmers opting to plant less winter wheat last fall. Advance contracts for winter wheat had fallen several dollars to the $5-a-bushel range at the same time tractor fuel and nitrogen prices were skyrocketing. Some feared they'd end up growing wheat for free as production costs devoured profits. Prices have only fallen further, as low as $3.90 a bushel for ordinary winter wheat and $4.28 for winter wheat with a value-adding 12 percent protein. The same grain a year ago might have sold for double the current price, according to data collected by the USDA's National Agriculture Statistics Service.

Despite the decline in acres planted, wheat remains Montana's most planted crop. All wheat varieties combined should account for nearly 5.3 million crop acres in 2009, down 450,000 acres from last year. Wheat pushed a lot of crops out in 2008 as it surged to a record crop.

Hay acreage was converted to wheat by some farmers attracted by prices that reached $20 a bushel in January 2008. Few farmers cashed in on that $20-a-bushel wheat price, which occurred when Montana farmers have little wheat to sell. The price did stir excitement.

Farmers also tapped land previously committed by contract to the federal Conservation Reserve Program. CRP land is usually highly erodible and deteriorates quickly when farmed or grazed. Farmers agreeing to conserve the land receive government payment.

Hay acreage this year is 108 percent of the 2008 planted area. The number had been on the decline as wheat prices soared.

Dan Downs of Montana Seed in Billings said his spring wheat seed sales are not what they were a year ago and that hay is playing a role.

"We had $20 wheat last year, now it's less than half that and a lot of guys are putting in hay forages," Downs said. "Chemicals are still up. Guys know in order to sell what they have, they have to fertilize the hell out of it."

But spring wheat should still produce good earnings, said Dave Buschena, an agriculture economist at Montana State University. The banking system is calming down again, easing concerns about credit for farmers and buyers.

Wholesale fertilizer prices are half what they were previously, though probably higher than at the local level because curbside suppliers paid premium prices for inventory earlier, Buschena said.

"Spring wheat prices do look good, but those prices for lentils and peas are pretty strong and barley prices have been pretty good. Sugar prices are up, too," Buschena said.

Newstex ID: KRTB-0032-34358032

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