Overgrown, grass seed farmers switch to wheat

| Print |  Email
Articles - February 2010
Thursday, January 21, 2010

Wheat2Converting to more profitable crops can be a smart move for farmers in rough economic times, and grass seed farmers are doing just that by growing wheat, making the most significant crop switch in the state.

“Growers are playing with other things, but not on such a significant scale” as switching to wheat, says Brent Searle, a policy analyst at the Oregon Department of Agriculture.

The grass seed industry generates $1.35 billion of economic activity each year and takes ups 55% of the cropland in the Willamette Valley; it hovers between being the third- and fifth-largest crop in Oregon.

But prices began dropping precipitously in the fall of 2008 by as much as 50%. Demand remains low because of housing construction’s slump. “There is a surplus in warehouses right now,” says Roger Beyer, the executive secretary of the Oregon Seed Council.

The council is calling for a 30% reduction in grass seed acreage in 2010, while wheat is being grown at levels not seen in Oregon since the 1970s.

Jerry Marguth, the owner of Nixon Farms in Junction City, grows both grass seed and wheat, and says he has cut his grass seed acreage from 1,500 to 1,100 and increased his acreage for wheat from 400 to 700.

“[During] normal times, grass seed is slightly more profitable than wheat,” he says, adding that he’s not sure anybody in the grass seed industry knows when prices will go back up again.

Geoff Horning, executive director of the Agri-Business Council of Oregon, says switching crops is not economically viable for most farmers because of high up-front costs associated with changing equipment, what the farm’s soil is able to sustain, how much water is needed and a farmer’s learning curve when growing something new. “There are few farming operations changing what they do,” he says.

Wheat prices are not doing much better at $4.10 per bushel after transportation costs, which is $2 per bushel below production costs. That’s a far cry from when wheat sold for $16 per bushel in 2007.

But Tammy Dennee, the executive director of the Oregon Wheat Grower’s League, says cash-flow opportunities with wheat are still better.

“[Grass seed farmers] are sitting on inventory,” says Dennee. “There’s no cash flow opportunity.”

Grass seed is typically grown under a contract, which stipulates when it will be bought. The time of sale and harvest time may differ, and farmers can find themselves storing large quantities of seed for up to a year before selling it.

Wheat producers, on the other hand, can sell immediately after harvest. “There’s a lot of advantages to wheat,” Searle says.

“This is one of the best cash crop options available for growers,” says Dennee.

AMANDA WALDROUPE
 

More Articles

Hall of Flame

June 2015
Friday, May 22, 2015
BY JACOB PALMER

A Power Lunch at Oswego Grill.


Read more...

5 things to know about veterans in the workforce

The Latest
Wednesday, July 01, 2015
070215-vetsthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

There are more than 10 million former military members working in the United States.


Read more...

The 5 highest revenue-generating parks in Oregon

The Latest
Thursday, June 11, 2015
parksthumbBY JACOB PALMER | DIGITAL NEWS EDITOR

In 2014, total revenue for camping and day use in Oregon State Parks was a little more than $17 million. That figure may even higher this year "because we've had exceptionally nice weather," Hughes says.


Read more...

The ancient fish that stops bullets

The Latest
Friday, May 08, 2015
hagfishthumbBY CHRIS NOBLE | PHOTOS BY JASON E. KAPLAN

Hagfish may not have evolved much over the last 300 million years, but their protein-heavy slime promises advances in super-materials.


Read more...

Green workplace 2.0

Linda Baker
Thursday, May 28, 2015
IMG 2808BY LINDA BAKER | EDITOR

Reinventing capitalism. Office dumpster divers. Handprints versus carbon footprints.


Read more...

Queen of Resilience

June 2015
Friday, May 22, 2015
BY AMY MILSHTEIN

Astrid Scholz scales up sustainability.


Read more...

The Green Paradox

June 2015
Friday, May 22, 2015
BY EMILY LIEDEL

Inside the topsy-turvy world of corporate sustainability rankings.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS