From the Editor- Oklahoma Farm Report’s Ron Hays has been asked to speak on Wednesday at the annual meeting of the Oklahoma Wheat Growers Association in Stillwater. Ron is speaking on “A Half Century of Wheat Policy, Production, and Personalities!” Ron has turned to OSU Extension Grain Market Economist Dr. Kim Anderson to reminisce about some of the events that have shaped the ability of Oklahoma wheat growers to survive and thrive. This interview captures some of those important mile markers impacting Oklahoma wheat producers.
When Anderson got his start working with OSU Extension in 1982, he said he knew very little about the Oklahoma wheat industry. Today, one might argue that Anderson is the “go-to” when it comes to Oklahoma wheat information.
“If you go back to ’92, we had a very tight, rigorous government program where wheat went into storage, and we had, at one time, 2.8 billion bushels in the government program- in other words, a year’s crop because U.S. production was around that much,” Anderson said.
Looking back, Anderson said he has seen some major changes come to the wheat industry, for the good, from a government program standpoint, a national wheat industry standpoint, and the world.
Based on the historic farm programs before 1996, Anderson said producers had base acres that they had to plant wheat on to be eligible for government programs.
“If they didn’t plant wheat, they were not eligible for the programs and the protection that the programs gave them,” Anderson said. “The programs limited producers’ ability to react to changes in the market situation.”
Now, farmers have the ability to plant based on market conditions rather than having to plant continuous wheat. Freedom to Farm, Anderson said, made major changes to the Oklahoma wheat marketing system and the farmers’ ability to react to changes in prices.
Anderson said while Oklahoma and the U.S., in general, produce a large amount of winter wheat, the planted acres and production have declined over the years.
“I think the next big change in the marketing system was when we went to ethanol,” Anderson said. “When we went to ethanol production, we had to have significantly more acres of corn and soybeans to a certain degree with biodiesel. You go back to 2006 and 2007, I remember traveling around the states telling Oklahoma wheat producers, ‘You have got a $1.25 to $1.50 free increase in your price simply because of the corn industry and bean industry.’ The corn industry has to increase their acreage dramatically, and soybeans have got to come in there and protect their acres.”
The increase in prices of soybeans and corn, Anderson said, brought up the price of wheat. Looking at the 2006-2007 time period, Anderson said wheat acres were reduced, but this resulted in higher prices.
Another note, Andeson added, is that due to increased production in the Black Sea area, the U.S. does not play as big of a role in the world market as it used to.
“I think the relatively high beef prices and the increased world demand for beef have resulted in the poor crop acres going into pasture and hay for the livestock industry,” Anderson said. “That is something that has been kind of hidden between the lines and is difficult to fair out. If you look hard, that is another market factor that has resulted in some of these changes.”
Anderson said the Oklahoma farmer and rancher has adjusted well to changes in the market over the years to maintain profitability.
“It has been an incredible experience over the 40-plus years that I have been here and, in this job, to watch and learn from Oklahoma farmers and ranchers,” Anderson said. “I tell producers that what I teach and what I share is what I have learned from them.”