Global markets affect California wheat plantings


Issue Date: November 22, 2017
By Ching Lee
Kings County farmer Michael Miya looks over a wheat field he planted this fall that has sprouted. The crop will be harvested for silage and marketed to the region’s dairies.
Photo/Cecilia Parsons
Kings County farmer Michael Miya, left, stands in a field that is being planted to wheat. Because of his proximity to dairies, he grows a forage wheat that will be cut for silage.
Photo/Cecilia Parsons

Though its water-saving qualities make it attractive, California farmers likely won't grow much wheat this fall, as depressed prices encourage them to evaluate other crop options.

This will be the third consecutive year that California wheat acreage is expected to fall below 500,000. Last year, California farmers grew 372,000 acres of winter wheat and 41,000 acres of durum wheat—the lowest in 50 years and a far cry from the million-plus acres farmers grew in the early 1980s.

"Production has been heavily declining," said Claudia Carter, executive director of the California Wheat Commission. "One of the biggest reasons is price, which has been really low, and competitive crops we have out there seem to be more profitable for (farmers)."

Even though California farmers grow wheat largely as a rotational crop, their decision for planting it "is primarily driven by price, because California growers have a lot of alternatives," said Roy Motter, an Imperial County grower.

"With the current price, we're planting the very minimum amount of wheat that we need to, because we can't make money growing wheat at these prices," he added.

This is true, he said, even for those growing Desert Durum wheat, which is grown under irrigation and typically receives a higher price. But that premium has eroded in recent years, he noted.

For this reason, Motter said he's planting more lettuce and onions this year, and leasing some of his wheat ground to a cantaloupe grower. Other farmers are switching to garbanzo beans and triticale, which is grown for feed, Carter said.

Nationally, farmers planted 45.7 million acres of wheat this year, the lowest on record, according to the U.S. Department of Agriculture. Despite smaller plantings, abundant global supplies have kept prices "in the toilet," Carter said, with Russia emerging as "big-time producers" and a competitor of U.S. wheat.

"What they're producing is good, so the world is buying a lot of it," she said, noting that Russia has also benefited from the weaker ruble against the firm dollar.

With the falling grain market, California farmers are growing more forage-variety wheat, which can be higher yielding and now accounts for 25 to 30 percent of the state's crop, Carter said. Most of that forage wheat comes from the San Joaquin Valley, which produces 70 percent of the state's wheat.

Being in Kings County, farmer Michael Miya grows wheat for silage, which he said always finds a home in the region's many dairies. He said he knows wheat prices are down and that there are other forage crops he could grow during the winter, but he's "more comfortable" growing wheat because it doesn't require a lot of water and fertilizer, and it's easy to grow. He said he won't grow safflower, for example, because the crop tends to attract pests to his walnuts.

Miya is planting more wheat this year than in the past because he removed a walnut orchard and is using wheat as a rotation crop to recover the ground. He said he also prefers growing forage wheat because he doesn't want the hassle of having to test his crop and trying to meet milling standards. Dairies, he noted, do their own testing and will pay him a set price by the ton.

"It pays some of the bills—not a lot these days," he said. "The wheat price hasn't been very good, but we're always looking for something that saves water."

Having a shortage of water is a major reason Yolo County grower Bill Cruickshank is continuing to grow wheat. Because the winter crop is mostly rain-fed, he could save his irrigation water for row crops during the summer months.

He said he's heard of farmers growing more garbanzo beans, and there's also more barley being grown, he said—not for feed but edible barley for specialty markets, as well as malting barley for craft breweries, though he noted that this segment is still in its infancy.

A new export market that has opened for California wheat is Ecuador, which bought its first load of Desert Durum this past summer, with plans to buy more California wheat, Carter said. The South American nation has a new milling facility that it needs to supply and is "very quality-conscious," she said.

Currently, most of the state's Desert Durum goes to Italy to make semolina, which is used to make pasta.

One advantage California has, Carter said, is that its wheat production is small compared to states such as Kansas and North Dakota, so it has the ability to keep varieties separate. This allows the state to target niche markets such as Ecuador, she said.

Riverside County farmer Grant Chaffin, who plans to grow about the same amount of Desert Durum as he grew the last two years, welcomed the news about Ecuador.

"In general, anytime you can get another buyer, it's always a good thing," he said.

With just one mill in Ecuador, Motter said current wheat volumes being shipped there are small. Cruickshank said though this new market has potential, he would like to see a long-term commitment from Ecuador as a buyer, pointing out that California already does not produce enough wheat to take care of the state's 12 mills, which must import most of the wheat they need.

(Ching Lee is an assistant editor of Ag Alert. She may be contacted at clee@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.