By W.D. Nottingham
Today’s farmers are facing economic problems far different from those of the past. They have survived, in part, by learning farming techniques suitable for “dry land.” These include new strains of winter wheat, shallow tilling, chem farming, crop rotation or alternate-year cropping (e.g. summer fallowing), and use of herbicides, insecticides, and fertilizer. These techniques have ben coupled with new improvements to farm machinery.
Up to about 1938, winter wheat yields varied from nearly nothing to roughly 20 bushels per acre due to a wide variety of improvements. Yield began to climb after 1938 to reach average values of 40 bushels per acre over the last 30 years. Rain during the growing season has also been important, with success generally occurring when May-July moisture exceeds five inches.
Wheat has historically been known as the “staff of life,” as many nations grow it as a significant food source; however, better farming methods and production have had unintended consequences for the farmer. Farm size has been a factor, starting with success on 160 acres (1862 Homestead Act) and 320 acres (1908 Act); whereas today, success is barely attained on several thousand acres due to economy of scale.
Changing to an almost total cash economy has mostly done away with the self-sustained, diversified small farm. Increasing wheat yield to 40 bushels per acre has affected the economic supply/demand curves, keeping prices to farmers low.
This can be illustrated by considering the price of bread mostly composed of wheat. In the early homesteader days after 1908, a pound of bread cost about six cents, of which wheat cost was about one-half. That same pound of bread today costs about two dollars, of which the wheat ingredient is about eight cents. Note that from about 1940 to date, the dollar has inflated about 30 times! These costs are based on about two dollars per bushel for winter wheat in the early part of the 1900s and under five dollars per bushel currently. As can be seen, primarily better farming methods have kept the farmer in business. It is estimated that today’s cost to raise winter wheat is roughly $200 per acre. With an average yield of 40 bushels per acre, at five dollars per bushel, little is left for profit.
The government does periodically have support programs, but these do little to address the ongoing problem of competition from foreign sources. Rural communities are getting smaller as corporate holdings are getting larger. Economy of scale has become evident as the only way to compete for the wheat farmer. The government, allowing farmers to have higher operating debt, will only postpone the problem. They must find a way to market U.S. wheat at fair prices.
In the meanwhile, small farms are in jeopardy with three main options: 1) sell to larger farms, 2) lease, often at 25% of crop, which allows continued land
ownership with an income stream, or 3) urge the government to lookat the larger long-term picture.
There is no doubt that wheat isthe worldwide “staff of life,” anddemand for this product will only increase as world population grows from the current seven billion to twice as many this century. During this short term, we cannot allow the small farmer to be destroyed, as the world will need all the wheat that can be produced in the long term. Currently, wheat prices are controlled by a few large corporations, utilizing products from many countries on a lowest-cost basis—a recipe for long-term disaster.
Can you imagine that the early 1900s farmer got $2 per bushel of winter wheat, and now the 2019 farmer gets less than $5 per bushel with an inflation factor of 30? It simply does not make sense. For improving production and feeding the world, their reward is being run out of business. Wheat is going to feed the future, and the U.S. government must assure that farming stays healthy and rewards farmers for their important contributions.