Montana Wheat Is In The Bin, But Bank Accounts Aren’t Full

Aug 10, 2016
bins
 
Montana’s winter wheat harvest is rapidly coming to a close, but nobody’s making any bread — at least not the money kind.
 
With winter wheat values as low as $2.16 a bushel this year, many farmers will lose money on grain. The state winter wheat crop was more than 80 percent cut Sunday. A record amount of wheat grown worldwide, combined with a strong dollar, is suppressing prices. The U.S. Department of Agriculture estimates that there will 257.8 million metric tons of wheat in the world this year. At some Montana elevators, wheat is being piled on the ground.
 
The 2016 Montana crop could be just the third one in a decade valued at less than $1 billion, not only because of low prices, but also because many farmers who could plant something other than wheat did.
 
“It’s tough for Montana farmers to fix the situation because we don’t have a lot of options,” said Lola Raska, of the Montana Grain Growers Association.
 
There are 600,000 fewer acres of Montana wheat this year, according the U.S. Department of Agriculture. Farmers who had the option of planting other things opted for lentils and other alternative crops that still pay well. Malt barley, Montana’s beer crop, saw a 40,000 acre increase, though not as much growth as there might have been if the beer world was more stable.
 
AB InBev, the largest beer company in the world, is merging with the fellow beer giant SABMiller. The deal, which involves a third of the world’s beer production, has influenced the availability of contracts for growing malt barley. Montana ranks first or second nationally every year for malt barley production.
 
“I think you would see a lot more Montana farmers growing barley if there were contracts available,” Raska said. Farmers who have traditionally raised malt barley have had to get on the waiting list for a contract because beer companies under new ownership are contracting less often.
 
There are still pockets of profit in the wheat industry, Montana’s largest agriculture sector. Organic wheat remains profitable. As farmer Randy Hinebach finished cutting the last of his organic hard, red winter wheat near Chinook, he said the organic grain farmers in his area were faring better than their conventional counterparts. Prices for organic wheat were four times better.
 
The real benefit for famers on Hinebach’s stretch of the Hi-Line was timely rain. The year started extremely dry, but things changed in April. The region received more than 12 inches of rain since then. Waiting for skies to clear long enough for fields to dry for planting, Hinebach’s seeding went from a few-days job to a couple months.
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