Oklahoma wheat and sorghum growers combine meetings
By Jennifer M. Latzke
Weather and market concerns affect all growers, no matter the crops grown. That is why Oklahoma's wheat and sorghum growers met together in the Inaugural Oklahoma Wheat Growers Association and Oklahoma Sorghum Association Joint Conference, Dec. 8, in Oklahoma City.
Mike Schulte, chief executive officer of the Oklahoma Wheat Commission, updated growers on the marketing, research and promotional activities of the past year.
For the most part, he said, Oklahoma wheat growers are holding out and hanging on for better weather for the 2013 crop. Still, the 2012 crop was better than 2011.
"Ending stocks for Oklahoma this year were 154.8 million bushels, or about 36 bushels per acres on 4.3 million harvested acres," he said. Timely rains brought the harvest up from last year's 70.4 million bushels, which was the worst crop for the state in a 50-year period.
"U.S. wheat ending stocks were predicted at 704 million bushels, and estimates are that we might finish out at 712 million bushels," he added. Exports have slowed a bit, and looking at the drought and other concerns in the rest of the world's wheat producing nations it is a trend that may continue into next year. "World wheat ending stocks will be about 2.26 billion bushels of production, with 2.43 billion bushels of consumption," Schulte said. "Hopefully we'll get moisture and things will turn around and we'll have something to market for the U.S."
In looking at export markets, Schulte said the importance of Market Access Program and Foreign Market Development funds are critical to the success of U.S. and Oklahoma wheat growers. However, those funds are in danger of disappearing without a new farm bill or some legislation to extend the current bill.
"Producers, when they think about the support of the commission, often think about what we do for research and development of new varieties, what we can do to help them be more productive on the farm," Schulte said. "But those dollars provide an excellent return on investment from the government and farmer cooperators." MAP and FMD funds develop markets for farmers, and provide jobs for the nation's economy, from the farm to the port.
"For every $1 investment we make, we get an increase of $35 in export markets, which brings back $115 to the U.S. economy and an increased net revenue of $23 to farmers," Schulte said. "If you look at the studies, from 2000 to 2007, had we decreased our export marketing by 50 percent, we would have had 1.4 billion bushels more grain on the U.S. market." Those extra bushels on the domestic market would have reduced the price of grain, he added, and yet input prices would continue to rise, overall decreasing wheat farmers' profits.
One of those market development activities is the Oklahoma-Israeli Exchange Program, and this year Schulte went to Israel to represent Oklahoma wheat interests. Israel accounts for about 15 to 25 million bushels of hard red winter wheat exports from the U.S. each year. However, he said, U.S. growers face competition from Russian farmers with land that is just now being broken out for wheat acres.
"It's a lot of virgin soil that's never been used so it still has a lot of nutrients and wheat is clean coming off of it," he said. "The berry size and plumpness is amazing. But, I reminded the Israeli buyers that when times get tough Russia and the Ukraine will put up export bans and the U.S. has the most reliable wheat source." It goes to prove that if American growers don't leverage their dollars and have a presence in foreign markets someone else will.
Domestic marketing is also an important part of the commission, and with challenges and "dietary advice" posed by authors such as William Davis of the "Wheat Belly Diet" farmers can't afford to fall behind in reaching consumers.
"He basically says modern wheat, that uses semidwarf breeding, he calls them 'frankengrains' and says that it is poison," Schulte said. "(Davis) has said farmers today are raising poison. Where's the sound science in that? We have to question that." The trouble is, Schulte explained, is that the Wheat Foods Council, which is tasked with educating consumers about wheat in healthy diets, only has funding of about $1 million, while Davis and others like him have easy access to mass media.
"The media isn't interested about sound science," he continued. "It's interested in promoting this guy because it's the stylish thing to do. If you can not eat grain and you lose 15 pounds, you might not be healthy, but it's the stylish thing to do."
Likewise, wheat farmers also face a population that is becoming increasingly aware of gluten allergies, gluten sensitivities and the spectrum of celiac disease. Improved testing now shows us that less than one percent of children in the United States will have a wheat allergy, or are supposed to avoid wheat to avoid hives and other reactions, Schulte said. "Six percent of the U.S. population has a gluten sensitivity, where they can tolerate small amounts," he continued. "And, one in 133 people, or less than 1 percent of the U.S. population has celiac disease, which is a strict, wheat-free diet."
Having a family member diagnosed with celiac disease, himself, Schulte said he couldn't imagine going to a wheat-free diet simply to lose 15 pounds. "There's nothing fun about going through that disorder or that situation," he said.
Tim Lust, chief executive officer of the National Sorghum Producers, spoke about sorghum's growth in production acres up and down the High Plains because of recent drought conditions and the recent approval of sorghum as an advanced biofuel feedstock.
The EPA approved grain sorghum as an eligible feedstock under the Renewable Fuels Standard, and this grain sorghum pathway approval is an exciting opportunity for growers, Lust said.
"The RFS approval is significant for sorghum because it, itself, is not an advanced biofuel," he explained. "But, if individual plants make changes to be greener, they can qualify as advanced biofuels. And, in the U.S., those bring significant premiums with them. There are significant opportunities for those plants to utilize sorghum and meet greenhouse gas reduction requirements." There is significant financial incentive for those plants and that will create demand for sorghum, Lust said.
"Corn is ineligible for advance biofuels, so sorghum becomes a viable option," he said. Already, there is one plant under construction in northwest Kansas that will be the first in the U.S. to produce domestic advanced biofuel using 100 percent sorghum.
More sorghum production means there will be more need for federal crop insurance that works for sorghum growers. Lust said there has been and will continue to be adjustments in sorghum crop insurance.
Lust said one thing that helps farmers make the decision to try sorghum on some of their acres is that federal crop insurance was changed in the 2008 farm bill. The language changed the way the RMA calculated the crop insurance price elections for sorghum, which are based on the figures for corn, he said. "They changed from 90.5 percent the price of corn to 97.7 percent," Lust said. "Nationwide, in 2011, that meant an extra $23.5 million to growers. Unfortunately, the only way to get this is if you didn't grow anything."
Despite sorghum's reputation as a tough crop that will grow in tough conditions, some years, he said, sorghum just won't work. In 2011, in Oklahoma, crop insurance payments to sorghum growers were about $2.3 million, and in 2012, losses, as of Dec. 3, were up to about $469,000 with more to turn in.
"As water has declined in the Ogallala Aquifer, there has been a lot of interest in sorghum silage grown for dairies and feedlots," Lust said. "We recently got approval to expand sorghum silage insurance coverage into the Texas and Oklahoma panhandles and eastern New Mexico. There are a lot of you that wanted to grow silage sorghum and couldn't because there was no insurance and you have that option now."
Crop insurance rates for sorghum next year in Oklahoma are likely to rise 5 percent, Lust continued. "That's not what you want to see, but that is what re-rating has done," he said. "That's tied to losses in the last couple of years."
Because of ongoing drought concerns, there's also a push to change planting dates for the 2014 crop. In Oklahoma, the proposal is to make all final sorghum planting dates June 30, still with an additional 25 days if you're double cropping, Lust said. "Still up for discussion is the early period for sorghum planting," he said. "We know that 40 to 50 percent of the crop is planted before the first official planting date, and we're trying to change that.
"Be glad you are in Oklahoma, though," he said. "For most of the United States, they are trying to go the other way. Loss ratios say the last four to five days the crop is planted increase the likelihood of a loss. RMA's answer is to reduce planting dates by four to five days. But, we know, in this drought, you wait for it to rain before you put the seed in the ground." NSP is working to express that logic to the RMA.
Lust said research is ongoing into sweet sorghum and biomass sorghum, which have potential to increase sorghum's footprint into Florida and California acres because of its enormous yield potential. "It's never bad to have Florida and California added to the states you have represented and the grower leaders you have in the organization," Lust said. "There are a lot of votes and a lot of political clout in Florida and California."
Finally, Lust advised growers to get their sorghum seed orders in quickly, especially if they want forage sorghum seed for 2013, which is in tighter supply than grain sorghum seed right now.
"We have seen two brutally dry seed production years back to back, while at the same time we have seen a worldwide increase in demand," he said. "We are expecting a significant increase in sorghum acreage this year, while at the same time they are almost doubling the sorghum acreage in the Ukraine, which uses the same sorghum genetics you do."
Jennifer M. Latzke can be reached at 620-227-1807 or email@example.com.