Source: Texas AgriLife Extension Service
Despite high yields, Texas wheat producers are facing some difficult challenges when marketing their grain this growing season, according to a Texas AgriLife Extension Service specialist.
Buyers have been paying more attention to low protein values than in the past, and that, coupled with the largest carryover stocks since the mid 1980s, has driven prices down, said Robert Duncan, AgriLife Extension small grains specialist.
"High wheat yields in many parts of Texas have contributed to a chain-reaction of issues that Texas wheat farmers are not used to facing," Duncan said. "Unfortunately, this year's high yields, among other environmental factors, have contributed to lower protein levels. These lower protein levels have then lead to a reduced price at the elevator on top of the abnormally high basis. The reasons why low prices are an issue need no explanation, but low protein levels are often not a problem."
The outcome of protein levels in wheat depends on yield and the availability of nitrogen, according to Dr. Brent Bean, AgriLife Extension agronomist at Amarillo.
"High yields will often have lower protein simply because farmers did not fertilize enough for the higher yield," he said. "This year, some of the nitrogen applied in the fall may have leached out of the root zone. This problem was complicated in many wheat fields where roots were too shallow due to the abundance of timely rains in the late winter and spring."
Generally, protein content in wheat is approximately 12 percent, Bean said, and is not part of the normal grain grading-process.
"However, as farmers are finding out, you can be docked if protein is below whatever level that the 'buyers' are looking for," he said. "This is the first time I ever remember farmers getting docked for low protein. I think it simply comes down to a supply and demand issue. Kansas produced a lot of low protein wheat last year (or at least lower than average) and much of this wheat is still around, causing the buyers to not want anymore low protein wheat."
In addition to the protein levels, the price of wheat is the lowest in years, thanks to a historically weak basis, said Dr. Mark Welch, AgriLife Extension economist.
"Several factors have combined to lower cash wheat bids across Texas: a near record crop, limited storage availability, below-normal quality, and a dramatic drop in exports," Welch said. "The wheat basis at the Gulf is negative for only the second time since we have been tracking basis here at Texas AgriLife Extension. The drop in the value of the Euro has made wheat from the European Union cheaper in world markets and (is) backing up wheat at U.S. export terminals. With exports at a standstill, the basis at the port weakens which pressures prices lower in the country."
The low price of wheat is leading farmers to store their wheat with the hope of prices increasing in the near future, said Roy Parker, AgriLife Extension entomologist at Corpus Christi.
"The unexpected storage is occurring in non-optimal storage conditions, without aeration where fumigation potential is limited or will be very difficult," he said. "Under these poor storage conditions during the warm summer months, moisture and insect pests will need to be monitored frequently, and if they are found some way must be found to fumigate the wheat. Although difficult, polyethylene sheeting can be used to provide enough sealing to hopefully protect the wheat."
Another practice could be employed where wheat has just been harvested by applying a labeled insecticide protectant such as Storcide II, Parker said.
"The protectant must be applied to the entire grain stream when it is placed in storage from the field or within the first month; then later will require moving the wheat again so the protectant can be added."
Storage in grain storage bags, which has been successful for corn and sorghum could also be considered, Parker said.
"In this case, respiration of the wheat could potentially use up the oxygen which could result in a drop in insect numbers. In any case, the wheat must be monitored twice a month in the warm months and once a month during cooler weather in the winter. A fumigant could be added to the grain bags with the proper equipment and monitoring procedures in place."
Rob Borchardt with AgriPro in Vernon advises that with the commodity price at these levels and many farmers storing wheat, the temptation to sell grain as seed will be great. However, this practice is in violation the Plant Variety Protection Act for varieties that are protected under the Act. It also has implications for seed handlers as they can only clean enough seed for a farmer to re-plant his or her acres.
According to the federal variety protection law, it is the seed handler's responsibility to make sure they are not cleaning more seed than is needed to plant the individual’s acres.
Borchardt said "variety developers have been seeking protection from persons in violation of the PVP Act. It is the only way they can develop new varieties and recoup their tremendous investment."
He added that a number of cases have been filed or settled in the last several years by private and public organizations like the Kansas Wheat Alliance, Westbred, AGSECO and AgriPro.
Borchardt challenges farmers to "calculate the value of high quality certified seed and don’t risk the farm on illegal seed."
To find out more information on plant variety protection and other wheat related issues, visit http://varietytesting.tamu.edu/wheat.