Business & Policy
Montana farmers turn to other crops
By Billings Gazette
by Tom Lutey
Apr. 2, 2016 - With falling grain prices, Montana farmers say they'll plant a million fewer acres of wheat this season than they did two years ago, according to the U.S. Department of Agriculture (USDA).
The slide from 5.9 million wheat acres in 2014 to 4.9 million acres in the 2016 prospective plantings report, is the sharpest decline in several years. Since 2014, wheat prices have fallen nearly 30 per cent, enough to strip the profit from some farms.Wheat is still Montana's largest crop. The state would rank fourth nationally for wheat acres in 2016, the report indicated. Nationally, production is expected to be down nine per cent.
"Some people are getting $3.90 a bushel for wheat. That's pretty serious business," said George Haynes, Montana State University economist, noting that the price drop would be too much for some farms.
Those former wheat acres are going into other things, namely lentils, which are at 500,000 acres this spring, a nearly fourfold increase in the past two years. Lentils are a niche crop that is doing well as a result of global demand and challenging weather conditions in 2015 that cut supplies. Lentils averaged almost $28 per hundredweight at the end of 2015, according to the USDA National Agricultural Statistics Service.
The Montana Department of Agriculture has promoted lentil production for several years and the state now is the nation's largest lentil producer.
"The continued growth of pulse crops, including lentils is reflective of the diversification by Montana farmers," said Ron DeYong, Montana Department of Agriculture director. "Prices for lentils have been strong. We expect demand to continue to grow as we develop more trade opportunities and consumers learn about their benefits during the International Year of Pulses."
Other big gains in acreage went to dry beans, which have more than doubled in two years to 80,000 acres. Barley crossed the million-acre mark for the first time in three years, up 80,000 acres from 2014.
Garbanzo beans have more than doubled in acres in the last two years to 68,000 acres.
Sugar beet acres were expected to be at 42,000, a slight decline.
Some of the alternatives to wheat come with contracts guaranteeing the firm price before the seeds are even in the ground. Lola Raska, of the Montana Grain Growers Association, said malt barley is an attractive option to farmers because of an early contract, which protects farmers from market swings during the season.
Malt barley must have low levels of protein, otherwise it makes for cloudy beer. The protein is kept in check by pouring the water on during the growing season. If the protein levels are low, the contract price is honoured.
There's a possibility, Raska said, that farmers will take note of the declining acres in spring wheat and decided to go against the trend. High protein, hard red spring wheat is niche crop primarily in Montana and North Dakota.
North Dakota farmers indicate they will plant a million fewer acres this year than they did last year. Montana farmers expected to cut spring wheat plantings by 450,000 acres. Cuts like that could drive up the Spring wheat price for those who plant, Raska said.
Farming and livestock sales contribute roughly $4 billion to Montana's economy annually.