Manhattan, KS - For the past few years, acres planted to wheat throughout the U.S. have fallen, acres sown to corn and soybeans are on the increase. Wheat is falling out of favor with many farmers, causing a conundrum among those involved in the industry.
"The Wheat Conundrum" was addressed by wheat leaders at a forum sponsored by the Kansas City Agribusiness Council October 15.
Daren Coppock, chief executive officer of the National Association of Wheat Growers and Justin Gilpin, chief executive officer of Kansas Wheat, set the stage by describing the challenges faced by the wheat industry, including lack of research and development into wheat, and declining profitability for wheat farmers compared to other crops.
Wheat farmers, on average, are projected to return about $100 per acre over variable expenses in 2009-10, while soybean producers net about $250 per acreand corn producers, nearly $300 per acre, based on figures from the Food and Agriculture Research Policy Institute from the University of Missouri.
The ratio of income has been largely the same for the last decade, FAPRI reports. Should the trend continue, Coppock says wheat acres will continue to be sacrificed as farmers turn to more profitable crops.
"While that's an immediate term problem for the wheat growers and wheat industry, it's also a problem for our customers," he explains. "As they look down the road and see a potential supply problem, they need to be able to get access to quality wheat at competitive prices at acceptable quantities. "This is an issue that the whole wheat chain cares about."
The U.S. exports about half its wheat to other countries and is regarded as the world leader in supplying high-quality, consistent wheat. If acreage continues to decline, the U.S. seems unlikely to retain that distinction.
What is the solution?
Biotechnology investments - the same kind of technology that has brought farmers Roundup Ready soybeans, or Bt corn - have the potential to pay dividends to farmers and consumers alike.
The problem with biotechnology in wheat, however, is that not all consumers are ready.
Coppock says U.S. consumers, including food companies, millers and bakers, show little resistance to biotechnology.
Many overseas markets are willing to accept biotech wheat, too. "Other markets have expressed pretty strong concern on behalf of their customers," he says. "Those are the markets in which we need to have conversations the next several years. "We need to explain that this trend of declining wheat acreage and production, slower yield growth, lower returns per acre compared to other crops, wheat being pushed on marginal land as other crops take better land; they all are bad trends for people that buy, use and eat wheat.
"We need to be able to get technology in the hands of producers that helps alleviate that problem."
Gilpin points out that biotechnology could bring about improved quality characteristics and other traits that prove beneficial to end-users, not just farmers.
"[Biotechnology] means more than just looking at agronomic factors. We can seek biotechnology investments that improve end-use functionality and quality of wheat.
"It's not just an issue of trying to create a better variety, but a more desired variety, one that gets pulled through the marketplace, not just pushed through it," Gilpin explains.
"The U.S. is regarded as a quality provider throughout the world. We can expand on that and capitalize on that with new traits we bring to the marketplace."
Source: Grainnet
