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Story Archives: Wheat futures leaves farmers guessing


Wheat futures leaves farmers guessing
by Michael DeVault - posted Tuesday, October 7th, 2008 @ 4:06 pmE-mail Story E-mail Story | Print Story Print Story 
A sudden drop in the commodities market has left a number of area wheat producers pondering a potential fall wheat crop.

Franklin Parish agriculture consultant Chad Nelson said the uncertainty of the commodities market and a low wheat price — wheat was booking at $4.80 a bushel at press time — might keep some producers out of the fields.

"There will be some people who plant it, but it will not be a big deal," said Nelson. "The economics just aren't there."

LSU AgCenter's Carol Pinnell-Alison echoed that sentiment.

Pinnell-Alison said the decline in price seems to be tied to the overall economic forecast.

"Commodity prices are falling but the input costs are not yet," Pinnell-Alison said. "That's the predicament right now."

Both Nelson and Pinnell-Alison said the economics of fall crops aren't right for a number of producers considering planting.

"Nothing is really cash flowing with commodity prices and input costs," Pinnell-Alison said.

Nelson also blamed high input costs for the decline in fall crops interest.

"With the price of nitrogen as high as it is right now, wheat just does not look that profitable," Nelson said.

State. Rep. Noble Ellington, also a farmer, said the next few days will be critical in determining a course for fall crops, as producers watch markets to see if input costs follow commodity prices.

"Whether or not input costs are getting cheaper, I don't know," Ellington said. "But we're looking at some very expensive input costs on wheat, corn and cotton."

"It's got the farmer in a very tough situation," Ellington said.

The downturn in the commodities market couldn't have come at a worse time for producers hit hard by flooding and storm damage.

Ellington said he was optimistic farmers would weather the crisis, but said a large part of the recovery hinges on what Congress does in Washington.

"I think in the long run, we'll get something out of Washington for the farmers," Ellington said. "It just looks like, while we were giving away all that other money, we should have given something to farmers."

Nelson said a number of his clients are relying on emergency loans, or EM money, to overcome the storms. But, Nelson remained hopeful for some other form of crop assistance as well.

"As far as any direct payments coming, it's not happening right now," Nelson said.

Late last week, the U.S. Dept. of Agriculture issued an agricultural declaration of disaster in 52 Louisiana parishes, including Franklin.

That means aid from existing programs such as the EM loan program could begin flowing. Also, Congress has signaled it will allow Louisiana to use portions of the Community Development Block Grant monies to pay for farm recovery.

Ellington said that would be a last resort because businesses and communities throughout the state depend on the CDBG program for economic development.

"We met yesterday with the governor and he recognized that farming is one of the major issues that has not been tended to," Ellington said.

"We're looking at, if we don't get assistance from Washington, — and they're still trying — but if we don't, maybe some of the CDBG money we get will have to be used for farms."
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