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Jonathan Knutson, Forum News Service, Published April 02 2013

Wheat losing ground to corn in North Dakota fields

GRAND FORKS – Wheat is a big part of Brian O’Toole’s life.

The Crystal, N.D., farmer grows it, handles it in his family seed business and promotes it as a member of U.S. Wheat Associates, which develops export markets for the crop.

So O’Toole takes a strong interest in a powerful trend that’s reshaping agriculture on the Northern Plains. Wheat, once the region’s dominant crop, keeps losing ground, literally, to corn and soybeans.

“I’m not panicking yet,” O’Toole said. “But there are challenges.”

Wheat – so important in the Upper Midwest that for generations it was referred to as “King Wheat” – is tottering on its throne, if it hasn’t fallen off already.

Area farmers increasingly prefer corn and soybeans to wheat because of greater potential profit. Corn’s popularity, in particular, is increasing because of attractive prices and new varieties that allow the crop to be grown in areas where it once was considered too risky.

In 2012, North Dakota farmers raised 422 million bushels of corn and 339 million bushels of wheat. Fifteen years earlier, farmers in the state raised 269 million bushels of wheat and only 58 million bushels of corn.

In other words, North Dakota in 1997 produced about five bushels of wheat for every one bushel of corn. Last year, the state raised about four bushels of corn for every three of wheat.

Wheat remains a big deal in most of North Dakota, South Dakota, Montana and northwest Minnesota. The crop continues to be a good fit for the region’s soil and climate, and most farmers in the region have a long history of growing it successfully.

North Dakota typically ranks first or second in U.S. wheat production; the state vies annually with Kansas for the top spot. Montana, South Dakota and Minnesota usually are in the Top 10.

Wheat generally is profitable for growers, particularly the past few years, said Jim Peterson, marketing director for the North Dakota Wheat Commission.

But as he and others note, corn and soybeans have been even more profitable, encouraging area farmers to grow those crops instead.

The North Dakota State University Extension Service’s projected crop budgets for 2013 illustrate corn’s appeal relative to wheat.

In northwest North Dakota, traditionally a stronghold for wheat, corn is projected to provide a return to labor and management of $149.09 per acre, compared with a return to labor and management of $33.86 per acre for wheat.

In southeast North Dakota, an area where corn is well established, corn is projected to provide a return to labor and management of $176.20 per acre, compared with a return to labor and management of $85.85 for wheat.

Though raising corn generally involves more work and expense than growing wheat, the huge gap in potential profit could encourage farmers to produce corn.

“People have a bottom line,” O’Toole said.

Corn typically yields two to three times as many bushels per acre as wheat. Traditionally, higher prices for wheat have helped offset that yield disadvantage.

In recent years, however, wheat’s premium over corn has been relatively small. That’s particularly true after massive drought in the Corn Belt hammered yields and pushed up the crop’s prices.

Expectations that U.S. corn production will rally this year likely mean lower prices. Wheat prices are dropping, too, but not nearly as much as corn.

But if wheat’s average price should again fall to within a dollar of corn’s, “then there’s no question that wheat acres will continue to decline,” Peterson said.

“It’s an uphill battle,” says Erik Younggren, a Hallock, Minn., farmer and president of the National Association of Wheat Growers.

Younggren lives in Kittson County in extreme northwest Minnesota, an area where late springs and early falls historically made corn too risky.

“Unless wheat prices are double those of corn, we’re probably not going to go back to those kinds of levels,” he said.

Though wheat’s brightest days may be in the past, its future is encouraging, Younggren said.

“I don’t think we’re going to see mile after mile of waving amber fields (of wheat) anymore,” he said.

“But wheat still has an important place.”

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