Falling Numbers and Farm Bill Strategies

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Posted by Alex McGregor on September 16, 2016

Falling Numbers and Farm Bill Strategies

Falling Numbers

We’ve been going all out to learn all we can about the challenges brought to so many farm families in the aftermath of a very fine wheat crop—with the cover ripped off a flawed and too often erratic discount system. The deductions on an already low wheat price have been a brutal surprise—losses of 50 cents, a dollar, sometimes more. The scope of the problem is widespread but still uncertain—some estimates are in the 35- 40% range for the Inland Northwest wheat crop. The first step is to share information about the problem, the second, to learn from what has happened, address it, and do all we can to reduce future risks.

On September 2nd we hosted a meeting at our main office in Colfax led by Washington Representative Cathy McMorris Rodgers.  Joining us were Washington State Director of Agriculture Derek Sandison, FSA Director Judy Olson, Eastern Washington State Grain Inspection Regional Manager Don Potts, Retired RMA Regional Director Dave Paul and his successor, Ben Thiel, Craig Morris, head of the Western Wheat Quality Lab, state legislators, Washington State University (WSU) cereal grain specialists, and several veteran wheat industry leaders. Representative McMorris Rodgers stated that her goal was “to find an avenue for assistance to growers who have suffered price reductions due to low falling numbers” and to see that progress is made to reduce the likelihood of such brutal surprises in the future. I shared a sense of the challenge to kick off the session and some of my comments follow:

     "Thank you for your concern about a serious situation facing many farm families. Your concern matters, is much appreciated, and is an essential step in moving forward, as we must do for the future of wheat production in this remarkable land. Collapsing wheat prices, big crops offering some measure of hope and now punishing penalties for low falling numbers have made for a difficult and frustrating challenge for many farm families. Major temperature variations in June have brought “Late Maturity Alpha Amalyze” (LMA) to many a field of apparently plump, robust quality kernels. It is a frustrating situation thrown on top of difficult times, made worse by gnawing uncertainty:

  • Inconsistent results and many a report of wide variations in falling numbers from tests on crops adjacent to one another or from the same wheat from week to week.
  • Some indications that holding grain can improve results mixed with cautions that results, in some circumstances, might actually get worse.
  • Warnings about how mixing grain to improve readings is a dangerous endeavor, fraught with risk.
  • A time worn testing process where reading can vary from lab to lab, from technician to technician, and where elevation above sea level and other fudge factors hardly inspire confidence.

The goal of finding ways to help growers who have faced the brunt of the falling numbers debacle is appropriate and much appreciated. There aren’t any silver bullets but we must all pull together to find ways to help. One suggestion worth pursuing is to call upon USDA/CCC to purchase and donate, as humanitarian aid, wheat impacted by falling numbers. A worthy use would be to provide wheat for flatbreads and other nourishing foodstuffs where they are so badly needed. A similar effort in the early nineties provided help for hungry people overseas while helping remedy a huge grain sprout problem in the PNW.

We need to study the potential for emergency assistance, too—we’ve won help through this approach before, often despite long odds.

We also simply must come up with a more reliable way to measure grain quality—all of us who raise wheat, whether or not impacted by the luck of the draw this time, need a better system for the future. In an age of fast advancing digital technology surely an improved measure of testing can be devised better than one that can seem so fickle and erratic developed when I was an eighth grader in a two room country school, half a century ago. Yes, it is an established standard and many an overseas buyer would have to be convinced but we’d be wise to invest more money into a better way of doing things and toward more resistant crops.” I closed with comments about remarkable farm families, the cornerstones to our Northwest economy, and gave a passionate appeal for action.

Federal dollars to help jumpstart work underway would be money well spent—promising work now going on includes starch chemist Amy Lin at University of Idaho studying starch quality and climate with some preliminary information suggesting low FN’s can occur when starch is not degraded; Camille Steber, USDA/ARS wheat geneticist at Pullman working to develop varieties with higher numbers, sponsored by the Washington Grain Commission; and a “milling stream study,” funded by Northwest grain commissions looking at whether end use of product changes because of low FN’s and whether there might be a way to successfully blend more wheat.  Members of our three state grain associations and commissions have been working on these challenges for years and they’re currently working with U.S. Wheat Associates looking for overseas markets for below 300 wheat. The losses by growers faced by the double whammy of falling grain prices compounded by falling numbers must trigger a call for action to expedite the process of developing more reliable measuring sticks.

We’d like to hear from you, our customers, about what can, and should, be done. The last time we faced low crop prices, back when a bushel of grain was worth less than a gallon of fuel a decade ago, the feedback you sent me was a mighty powerful tool we used to help get action from Congress. The odds were long but, together as Inland NW agriculture, we got results. We are ‘all in’ to help do the same in ’16.

The Upcoming Farm Bill and the Wheat Action Plan

The National Association of Wheat Growers (NAWG) is surveying growers across the country asking for our top priorities for the next farm bill. Here is a small sampler of the sorts of questions where your feedback will make a difference.

  • Does crop insurance provide enough protection against extended low prices? Would a $40,000 cap on premium subsidies mean you’d lower your coverage?
  • Are Title 1 programs effective? ARC? PLC? What works? What should be improved?
  • What sort of protection do wheat growers need most?
  • Would additional cross-compliance conservation requirements impact you?
  • Are cover crops important? Practical in our region?
  • Are MAP and other export programs of value?

It is important to help NAWG get a sense of direction on what is needed next time. Threats to weaken crop insurance and Title 1 programs are already rising. With the unpleasant reality of a more challenging agricultural economy this time around, we’ll all need to pitch in with even more determination than before. Your opinion matters so we in the Inland Northwest can have our say. Please go to the NAWG website—www.wheatworld.org—and let your voice be heard.

I was in Denver last month with veteran wheat grower leaders I’ve known over the years and with our fellow executive partners in the National Wheat Action Plan—represented by senior wheat leaders of BASF, Syngenta, Monsanto, and Bayer. We also started working together with the new chief executive officer of NAWG, Chandler Goule. Our goals remain the same as when we invested in the program late last fall—to put more emphasis on wheat profitability and productivity and to reestablish wheat as a major national crop. With the National Wheat Action plan we ‘took the pulse’ of wheat growers across the country this past spring—including many here at home—and if you send me a note I’d be happy to share the 190+ slide deck of what we learned. I am eager to see us moving forward and we have more conferences ahead in the next couple of months to do exactly that.  I’ll be reporting back to you on the long term strategic vision we’ll be working with NAWG to develop and share with the wheat growing world.

I’ve had several wheat growers ask me about the National Wheat Yield Contest. We see it as an important way to transfer information and working knowledge. For corn growers, who have had a similar program for many years, the yields of the champions became the national average within a decade. The contest will be up and running full steam in ’17 and my McGregor  teammates and I will be keeping you posted about it in the days ahead.

Strategies for the ’17 Crop

You’d probably expect to hear this from me and it’s true. While we can’t control world grain prices and we won’t have worldwide acceptance of an improved grading system by next harvest, we can and must strive for what is more in our control—producing high yields in ’17.

Though late spring weather, more than varieties, produced what WSU spring wheat geneticist Mike Pumphrey called “textbook conditions for expressing LMA’s” that they couldn’t have done any better in their labs, there are some variations worth noting. Cat Salois, our Research and Technology Director, has summarized three years of WSU studies at eighteen locations, highlighting varieties that have performed well, and those that have performed poorly, in ‘normal’ years and in low number years. She has done a fine job of boiling down complex data into very usable highlights. A good risk management tool is to grow one sprout (and/or LMA) resistant variety and one good emerging sprout (and/or LMA) susceptible cultivar. Varieties with contrasting traits and maturities are worth considering. Decisions should factor in a ‘normal’ year not just an anomaly in weather—easy to say but hard to do after frustrating, painful experiences for many in ’16. Cat has shared this information with our local Certified Crop Advisers—please check with them or call Bruce Palmer (509) 595-5921 or Cat (509) 595-1646 for further information.

There is good news, too, and it’s a pleasure to share it.  The cost of nitrogen products is down a third since this time last year, led by NH3 down 39%, with the others lower as well. Phosphate costs are lower, too. Fuel prices have fallen nearly ten percent. Our Certified Crop Advisers, researchers, and outstanding service technicians will go all out to help make ’17 a year of profitable harvests for you.

My cousin, Bill McGregor, used to say that pioneers overcame many challenges with dyed-in-the-wool optimism and a tenacity that verged on stubbornness—traits that he went on to say were useful then, are useful now, and will be useful in the future. We will go all out to help with long term issues—less fickle measuring tools for grain quality, an upcoming farm bill, strategies for the future of the wheat industry—while looking for ways to get help for those who have been harmed by deductions piled atop already low grain prices. You have my word on it.

Please share your thoughts about falling numbers, the next farm bill, and ways to improve future prospects for the wheat industry. Stop by my office any time, ask me to come visit you, give me a call at (509) 397-4355 or email me at alex@mcgregor.com. My teammates and I are proud to be able to serve the finest people we know—the farm families of the Inland Northwest. We are determined not just to serve you, but to serve you well, whatever the challenges we face in agriculture today, tomorrow, and for the long haul. 

Alex C. McGregor, President, The McGregor Company 

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