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March 4, 2002

Going, going, gone? Indiana wheat acres dip again

WEST LAFAYETTE, Ind. – History is ready to repeat itself – again – this crop season in Indiana. After a record low wheat harvest in 2001, an even smaller wheat crop may be in store this summer.

Farmers planted 350,000 acres of winter wheat this past fall, 8 percent fewer than were harvested in Indiana last summer, said Greg Matli, statistician with the Indiana Agricultural Statistics Service. The IASS is based at Purdue University.

"The 350,000 seeded acres is a historic low for Indiana," Matli said. "Indiana's seeded wheat acres have been between 680,000 and 850,000 acres during most of the 1990s. The big drop started when the seeded acres dropped from 700,000 acres to 550,000 acres in 1999, and dropped another 150,000 acres in 2001."

To put it in perspective, Indiana farmers harvested 5.67 million acres of corn and 5.59 million acres of soybeans in 2001, both up 2 percent from the previous year. Corn production was 884.5 million bushels, with soybean production at 273.9 million bushels.

State wheat production was 25 million bushels.

Hoosier wheat farmers have seen acreage declines for generations. It's happened almost annually since around the time Grover Cleveland was president. Cleveland served two nonconsecutive terms in the late 19th century.

"There's been a very long trend of decreasing wheat acreage in Indiana. That goes back to the 1880s," said Chris Hurt, Purdue Cooperative Extension Service agricultural economist.

Indiana's wheat industry is shriveling up for several reasons, Hurt said. Fewer people grow their own food today, corn and soybeans are more profitable crops for farmers, and demand for hard wheats is greater than soft red winter wheat – the type grown in Indiana.

"If we go back 100 years, we still had a lot of people producing their own food, or at least within their own community," Hurt said. "We had lots of wheat mills. We had the need to produce wheat for bread and cakes and other kinds of products here in Indiana. Today we have regional specialization. We see more of our wheat coming from the Great Plains, and we in Indiana have other crop alternatives."

Economic factors motivate most farmers in Indiana and Eastern Corn Belt states to grow corn and soybeans rather than wheat, Hurt said. Government support for wheat has weakened since 1995, and profits for corn and soybeans above production costs usually are higher.

Current Indiana wheat prices range from $2.50-$2.85 per bushel, with corn from $1.90-$2.15 a bushel and soybeans $4.40-$4.60 a bushel. While wheat commands a higher price than corn, corn yields are much greater than wheat. Yields are better for wheat than soybeans, but not enough to make up the huge difference in price.

"In the budgets we run, you're looking at a $30 to $40 per acre lower return for single-crop wheat," Hurt said.

Soft red winter wheat is used in cookies, cakes and similar products. Hard wheats are chief ingredients in breads, biscuits and some baked goods. Hard wheats are preferred over soft red winter wheat because they are higher in protein.

Despite the strikes against it, wheat isn't likely to disappear entirely from the Hoosier landscape, Hurt said. In the warmer climate of southern Indiana where farmers can grow two crops in the same field the same year, they'll continue to plant wheat. Emerging technology could allow this "double-crop" practice in cooler climes.

"In the southern part of the state where they can effectively double-crop, the economic returns are certainly favorable," Hurt said. "There are some technologies coming along that may favor moving this wheat and double-crop soybean rotation further to the north. Polymer-coated soybean seed is an example of one of the areas being explored."

The polymer coating prevents the seed from germinating until a companion crop in the field is near full growth.

"With that coating there is perhaps the ability to inter-seed the soybeans – maybe in very early February and March – into the wheat before it would be damaged, and then have those soybeans timed to sprout and start to generate while the wheat is maturing," Hurt said.

Wheat prices are showing signs of rebounding, Hurt said.

"Another aspect we are seeing is that wheat prices may be able to advance somewhat above the loan levels," he said. "We may see recovery in wheat prices before we see a recovery in corn prices. That could bring back more wheat production."

Nationally, the United States produces 9 percent of the world's wheat.

Writer: Steve Leer, (765) 494-8415; sleer@aes.purdue.edu

Sources: Chris Hurt, (765) 494-4273; hurtc@agecon.purdue.edu

Greg Matli, (765) 494-8371; gmatli@nass.usda.gov

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/

Purdue News Service: (765) 494-2096; purduenews@purdue.edu


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