Economics of grain production discussed

5/29/01

By MARK POWELL

Under current economic conditions, Maryland farmers can expect make more money from the wheat straw than the grain.
According to Maryland Ag Statistics Service, wheat straw is selling for about $130 a ton at auctions in New Holland, Pa. At same time, wheat was selling for $2.29 a bushel for July contracts at Upper Eastern Shore grain elevators.
Ted Haas, Eastern Shore agronomist with the University of Maryland, told some 50 farmers and crop consultants last week that the breakeven point for no-tilled wheat was 83 bushels per acre, 91 bushels for conventionally tilled wheat.
Many farmers average between 50 and 65 bushels per acre of wheat on the Eastern Shore.
In breaks between lines of thunderstorms, Haas detailed his analysis of wheat economics at the annual small grains twilight tour at the University of Maryland’s Wye Research and Education Center outside of Queenstown.
His analysis does not account for the Farm Service Agency’s LDP program in which many farmers participate. But, it does provide a good benchmark to show the tough economics of wheat production.
Haas’s research used average custom work rates for the state, including combining costs of $25 an acre; disking at $10 per acre (conventional), fertilizer at $24 per acre; pesticides at $13 an acre (no-till) and hauling at 12 cents a bushel.
“The message is maximize marketing,” Haas said.
Lynn Morris, grain marketer at the Wye Mills Grain Co., said in a telephone interview that despite wheat acreage dropping in recent years, supply is still large.
“We’re still storing wheat from last year’s harvest,” Morris said. “The flour mills just stay full. We’ve got all our wheat sold, there’s just no place to ship it.”
The soft red winter wheat grown in the Mid-Atlantic region is used in making pretzels and pastries.