Demand and the dollar help spike wheat prices

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Saturday, March 01, 2008

wheat.jpg

PENDLETON After a rough 12-year slog with more drought than profit, Oregon wheat growers are finally back in the black, thanks to record wheat prices that are not expected to drop any time soon.

After years of selling their harvest at $5 a bushel, less than it cost to produce, growers watched with amazement over the winter as the price soared to $16 a bushel, buoyed by the weak dollar and unprecedented global demand for grain brought on by crop failure in Australia and a relentless ethanol market.

Growers now have the opportunity of pre-selling next year’s harvest at a healthy $9 per bushel, says Tammmy Dennee, with the Oregon Wheat Growers League. It currently costs $6.62 per bushel to produce. “This is going to be a great year for profit in wheat country,” says Dennee.

The whopping price increase should overshadow more modest price increases in diesel fuel and fertilizer, boosting Oregon wheat growers with cash to invest in deferred maintenance and overdue equipment upgrades.

“Those investments are going to create new wealth in our communities,” says Dennee. “We’re seeing smiles that we haven’t seen in a very long time.”                                           

BEN JACKLET


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