Wheat Still King East of Cascadesby East Oregonian, Guest editorial
Capital Press, August 3, 2007
There aren't many places these days where $6 wheat would command a front-page headline in the local newspaper.
Such news is usually reserved for an inside page reporting on the markets and that doesn't even happen as much as it used to.
But in eastern Oregon and Washington, the big news about skyrocketing wheat prices has served as an important reminder that the crop that is woven into the historic fabric of the region is still very much an important part of the community, even if it takes a whole lot fewer people to get the job done.
As farms have gotten larger and as mechanization has reduced the work force, wheat farming at best has become less visible, although it's hard to ignore the fact that wheatfields still dominate our landscape.
And even better news is the fact that wheat prices are expected to remain at this level through 2008 and 2009, according to Stan Timmermann, an Eastern Oregon wheat rancher who has been active at both the state and national level.
The higher prices are expected to bring tens of millions of dollars of additional revenue into the region's economy. But that probably won't be manifested in a rush to local car and truck dealerships.
Many farmers will be making their first visit to the bank. Low prices in recent years coupled with burgeoning fuel prices, rising equipment prices, and increases in overall operating costs have left them with an expanded debt load.
If anything, the higher prices permit them to pay down some of that debt and get back on their feet. And in the process, to enjoy a decent return on their investment and the chance to get a little breathing room in a game that is extremely expensive and perilous to play.
Problems elsewhere contribute to good fortune
Like any business built on supply and demand, one man's good fortune is another's misfortune.
As an East Oregonian writer noted on Friday, July 27, one calamity after another has hit the wheat-producing areas of the world in the past year, prompting Northwest prices to peak.
Much has been said about the fact that the increased demand for corn has driven up the price of wheat, but there are other factors at work here as well. Drought has been a villain in many parts of Europe and some of the area around the Black Sea. This same thing happened a year ago in the southern United States.
In China, one part of the country is experiencing drought while the other is being slammed by flooding. Things haven't looked much better in Australia, Argentina, or Brazil.
All of this is bad for them but good for the market in the Pacific Northwest. And as shortages mount, the price is expected to hold steady.
For grain growers in eastern Oregon and Washington, the turnaround in the wheat market has been a long time coming. Now that it's here, we hope that it hangs around for awhile.
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