Grain Alliance Expects Hefty Bank Accountby Scott Yates
Capital Press, September 21, 2007
Assessments based on price set creative gears to turning
SPOKANE - If you're a researcher or wheat rancher in Washington, now is the time to start thinking about how you'd like the Washington Grain Alliance to spend the expected spike in grower assessment income.
With a tax on each bushel of Washington wheat paid according to a formula that takes price into consideration, commissioners are bracing for what could be a massive influx of cash in the next two years. How they choose to spend it could influence the direction of the industry for years to come.
In 2000-2001, when the price for a bushel of soft white wheat dipped to $2.45 per bushel to the grower, the wheat commission funded its marketing and research activities on the equivalent of 1.2 cents per bushel. (The assessment was then one-half of 1 percent at the first point of sale.)
At the three-quarter percent rate approved by growers, wheat sold last week for $8.00 per bushel would generate 6 cents a bushel in assessments. Apply that to this year's average crop of 134 million bushels, and you've got a budget bigger than anyone could have anticipated.
The grain alliance, which is a combination of the Washington Association of Wheat Growers, the Washington Barley Commission and the Washington Wheat Commission, is already getting recommendations for using any extra money.
At the commission's September meeting, Jerry Snyder, immediate past president of WAWG, was pushing for a wheat museum to be located outside Ritzville. (Listen to Snyder explain the proposal at www.capitalpress.biz/multimedia/.)
Through the years, the Washington Wheat Commission hasn't been shy about spending money on the pet projects of any particular chairman. This year's chairman is Randy Suess, who farms in Whitman County. He has been pushing for the alliance to own its own building outside downtown Spokane. He was able to put aside $400,000 in a building fund in the 2006-2007 budget. He'd like to see that increased.
For the moment, Tom Mick, chief executive officer of the Washington Grain Alliance, said there's no way of telling how much money will be collected from this year's crop. Farmers have been selling all through the rising market.
"I have no idea how to project income for the coming year," he said at the Sept. 12 meeting, explaining that many farmers sold a lot of wheat as prices broke $4 and then $5 a bushel. He'll have a better idea of income in January.
As prices teeter toward $9 per bushel, Keith Bailey, manager of Odessa Union Warehouse and Reardan Grain Growers, said there wasn't a lot of selling. Intakes at the two companies were standing at 52 percent in mid-September. Elsewhere, however, there are reports farmers have already sold upwards of 80 percent of their harvest.
"We're not seeing real active selling at this moment. Everybody's covered their bills. As long as it's going up, there's no reason to drop it loose," Bailey said, adding, "Some guys wanted $8 on their chart, so they sold a thousand bushels and held the rest."
Suess said there are a lot of ideas about how to spend any extra income.
Increasing to $2 million the amount dedicated to an endowed chair in agricultural economics is being floated. Creating an equipment endowment for Washington State University is another.
Other ideas include taking on foreign market access issues in India and Brazil.
"I don't think there will be a lack of places to spend, but I don't want to spend it willy-nilly," Suess said. "I want to hear from people in the countryside. I want to hear what they want to do with it. We shouldn't have the only say."
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