A recent survey of Oklahoma’s wheat farmers shows they’re doing whatever they can to save money due to low commodity prices.
The Farmer Speaks study shows nearly 75 percent of farmers surveyed say they’re switching from name-brand herbicides to generics, and more than 30 percent said they won’t buy new equipment anytime soon, The Journal Record’s Brian Brus reports:
“For all practical purposes, especially when it comes to wheat, the current price is below the verifiable cost of production for many producers,” said Kim Anderson, agricultural economist at Oklahoma State University.
The U.S. Department of Agriculture reported this month that the country’s winter crop overall looks better than expected, with 59 percent in good or excellent condition. However, wheat futures for May delivery have dropped to about $4.50 a bushel on the Chicago Board of Trade. That’s wheat’s lowest level in three months. But rain in the Southern Plains is expected to improve prospects for hard red winter wheat, an Oklahoma production staple.
“We have a lot of excess being held back now, so you can expect to see producers holding back on their inputs and going generic to control costs because they cannot control prices,” he said.
Half of the farmers surveyed said they’re also seeking jobs away from agriculture.
Kenneth Failes, the chairman of the Oklahoma Wheat Commission, says that statistic reflects the perception that small family-run farms are disappearing from the economy.
Failes said he also doesn’t plan to buy any equipment of his own for two to three years, the same news he’s heard from peers. According to the Farmakis study, the top topic of conversation among farmers is commodity prices, land rent values and input costs. The presidential elections came in fourth, followed by machinery and EPA regulations.
Anderson counseled patience.
“There’s an old adage from back in grad school: The cure for high prices is high prices; the cure for low prices is low prices,” Anderson said. “The market does react, although it will probably be slow. It usually takes two years to work through it.”
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