Wheat growers explore national checkoff, other funding sources
By Sara Wyant
Calling it “a bold step forward for the U.S. wheat industry’s future,” National Wheat Foundation (NWF) President Dusty Tallman alerted fellow wheat growers and staff recently that the NWF plans to fund studies that could lead to the creation of new revenue streams and potentially, some form of national wheat checkoff.
The NWF unanimously approved funding for two studies designed to look into what the return on investment could be to U.S. wheat growers “if all U.S. wheat states participated in investing consistent time, leadership, and resources into an increased national wheat effort,” according to a letter obtained by Agri-Pulse. Currently, there are 44 wheat producing states, but only 23 associations have some form of checkoff program.
With U.S. wheat acres on the decline and each state making different levels of contribution, wheat growers have often struggled to generate enough funds to invest in research, promotion, market development and other new opportunities. USDA estimates that wheat planted area for 2014 will reach almost 56 million acres, down from 62.5 million acres in 2000.
Last year, wheat industry checkoffs in the U.S. generated about $44 million—a substantial sum—Âbut one that pales in comparison to some of the other national checkoff programs. For example, the U.S. soybean checkoff collected $104.3 million in 2013.
“Wheat has been on the back burner of making investments, compared to corn, soybeans and sorghum,” explained Tallman. “This subject was first broached two years ago and now we’ve decided it see what types of return might be generated if we invested more funds.”
“The idea is to evaluate what we feel our potential can be and identify what obstacles we are facing,” says Jim Palmer, CEO of the National Association of Wheat Growers. “Part of what’s needed is for the other (non-checkoff) states to come on board. A national checkoff is an option, but the states want to be in control of a national checkoffÂ—not the other way around.”
Palmer says there is currently no national wheat research funding other than $11 million that is provided by Congress to USDA and some land-grant universities. State wheat checkoffs provide the lion’s share of their own in-state land grants for wheat research. When you consider the private and public funding that is going into corn research versus wheat, the differences are sharp. “For every $10 of corn research there is only 70 cents invested in wheat research,” Palmer estimates.
North of the border, the Canadian government launched a wheat and barley checkoff in 2012. A recent return-on-investment study conducted by the University of Saskatchewan indicated that every checkoff dollar invested in wheat variety research delivered $20.40 in value to producers. Barley research returned $7.56 for every dollar invested.
The two different NWF studies are to be conducted by Gary Williams, a professor of agricultural economics at Texas A&M University, and Gary Blumenthal at World Perspectives. The reports will compare wheat to the other major U.S. crops including corn, soybeans, peanuts, cotton and sorghum in a variety of areas, including research and promotion, while also looking at Canada’s national programs. Both reports are expected to be presented to the NWF by October.
If the ROI studies are both encouraging, NWF proposes creation of two national “Wheat Vision” committees. One would comprise leadership from NWF, the National Association of Wheat Growers, U.S. Wheat Associates and state wheat commissions and associations. A similar committee will include executives from the states and national organizations.
Tallman says each committee will work toward “whatever structure is the most acceptable, agreeable and practical for all parties involved.” And in a nod to the states already providing most of the funds, he acknowledged that NWF “will not consider any national effort that in any way might infringe upon the authority, funding, flexibility and priorities of our current state wheat commissions.”
Editor’s note: Agri-Pulse Editor Sara Wyant can be reached at www.agri-pulse.com.