Low Prices, Foreign Oversupply Hurt U.S. Wheat Growers

May 31, 2016
Originally published on June 3, 2016 12:38 pm
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One in every five calories people around the world eat comes from just one type of grain - wheat. And for generations, the U.S. led the world in wheat exports. But as Frank Morris of member station KCUR reports, that's changed - and maybe for the good.

FRANK MORRIS, BYLINE: Wheat is not something you want to run out of. Wheat shortages helped spark the bloody French Revolution and the Arab Spring.

MORRIS: But out in western Kansas this year, there is plenty of wheat. Farmer John Thaemert is wading into a rolling field of green, belly-high wheat stretching to the horizon.

JOHN THAEMERT: You get it when it's tall like this, and you get a little breeze. It's a pretty sight. You know, wheat is a pretty crop. It's not all that profitable, but it is a pretty crop.

MORRIS: Across the Great Plains, the wheat crops look terrific, but prices are in the dirt. Wheat is trading at about half what it was this time two years ago - the lowest it's been in a decade. Thaemert and lots of other wheat farmers are turning to alternative crops like milo and alfalfa.

THAEMERT: I'm probably growing 30 percent less wheat than what my dad my dad did, so yeah. That used to be the thing - you planted wheat, and then you planted wheat.

MORRIS: And American farmers used to ship lots of surplus wheat around the globe. For half a century, at least, the U.S. exported more wheat than any other country.

THAEMERT: Well, it's the breadbasket of the world. Kansas was the breadbasket - and still is - of the world. But they're - you know, wheat's growing all over the world now.

MORRIS: And the U.S. is no longer the top wheat exporter - or actually even number two.

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UNIDENTIFIED MAN: Canada exported more than 24 million tons of wheat last year and, for the first time, beat the United States.

STEVE MERCER: Well, you know, we're really looking at a significant shift in world wheat market dynamics.

MORRIS: Steve Mercer is with U.S. Wheat Associates, an export marketing group. He says farmers around the world, especially in China, India, and the EU, are growing much more wheat than they used to. Wheat is a resilient plant. It'll grow just about anywhere. And even one country that used to rely American wheat is now outselling the U.S. in the world market.

MERCER: Russia was a net importer of wheat. And today, they're one of the leading exporters of wheat in the world. So that's a good example of the kind of change in production that's happened.

MORRIS: Skyrocketing production has lately been outpacing mounting world demand. U.S. consumers aren't helping any. Concerns about gluten and carbs have kept domestic consumption pretty much flat. And commodities trader Frank Stone sees wheat piling up now.

FRANK STONE: Wheat supply is huge. I think we're going to have another record world stocks of wheat this year.

MORRIS: The stocks are crushing global wheat prices. The strong dollar is making U.S. wheat pricey compared to foreign competition. And wheat has also been left out of the GMO revolution, so people who grow it haven't seen the remarkable per-acre productivity gains that corn and soybean farmers enjoy. Stone says those who can are giving up wheat.

STONE: The farmer's a smart guy, and he's going to grow what makes him the most money, and it's getting to be where it isn't wheat. And that's really a good thing because it's an efficient allocation of resources.

MORRIS: U.S. farmers pulled some five million acres out of wheat production over the last couple of years, capping a 35-year slide in wheat planting. That doesn't mean that farmers in wheat country are giving up. As John Thaemert observes, people got to eat. And the former breadbasket of the world will keep right on producing food, though likely a lot less wheat. For NPR News, I'm Frank Morris. Transcript provided by NPR, Copyright NPR.