In the Feb. 25 edition of the High Plains Journal, the price of wheat, at the Dodge City Cooperative Exchange, was $2.63 per bushel; corn, $2.09 per bushel; milo, $3.07 per cwt.; and soybeans, $3.98 per bushel.
Terminal bids for truck delivery, in Kansas City, were a few cents higher for wheat and soybeans and few cents lower for corn.
All of those prices were below the cost of production and not likely to get much better the remainder of this year. According to the Feb. 22 Kiplinger Agriculture Newsletter, stagnant export demand will keep corn prices in the $2 per bushel range. Poor exports will keep downward pressure on wheat prices also. A drop in exports and a large crop from South America will keep soybeans from moving much above $4.30 per bushel. Exports are strong and supplies are tight for grain sorghum, but prices will stay around $1.75 per bushel.
The market does not put much value on what farmers in the heartland of this country produce. What do farmers have that the market does value? What do farmers have that is increasing in value every day?
Knowledge about how to grow crops on their farm, in their area, and under their growing conditions. No one else in the world knows more about how to grow crops on their farms than they do.
As we move away from a strictly commodity based agricultural industry to a more value added industry, that knowledge will be extremely valuable. That knowledge will be a key link in the value set. As the crops we grow become more diversified and more specialized, the companies that buy those crops are going to look for producers who can grow those high quality crops consistently. No college graduate with an MBA knows as much about how to grow crops on a specific farm than the farmer who has made his living on that land for years.
The Japanese are very specific in their purchase orders when buying wheat. They prefer certain varieties, with a certain protein content, grown in certain counties. Their buyers have studied the production areas and know exactly where the wheat is that they want to buy. In some cases, their buyers have been out to visit the farmers, in those areas.
Companies that have spent millions of dollars developing crops with specific qualities are going to be looking for farmers, in specific growing areas, to produce those crops. In addition, these companies will not want to take a chance on co-mingling these specialty crops with commodity crops. No one wants a repeat of StarLink corn.
As the value added agriculture sector expands, farmers need to put a value on the knowledge and information that they process and make sure they are rewarded for that expertise.