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Serving: IA

New oat, wheat markets debut in Iowa

Smithfield program offers oat and wheat contracts to farmers in southern Iowa.

At its peak, Iowa once grew over 6 million acres of oats. You read that right: 6 million acres. That represents about one-quarter of the roughly 23 million acres of crop ground in Iowa. Where were all those oats going? Largely, to feed livestock.

Over time, tractors replaced horses and soybeans replaced alfalfa in crop rotations, so today’s livestock markets consume massive amounts of corn, dried distillers grain and soybeans. Oats, wheat or other cereal grain crops have become marginal components of these rations, especially in Iowa, which produces nearly a fifth of the nation’s corn supply.

A new program launched by Smithfield Foods Inc. aims to change this trend. The new program will offer farmers wheat and oat contracts to deliver grain to Smithfield’s Allerton and Davis City elevators in south-central Iowa, along with a cost-share rate of $25 per acre through Practical Farmers of Iowa to establish a cover crop after oat or wheat harvest.

Benefits of growing small grains

On Jan. 7, farmers and Smithfield representatives gathered in Davis City to discuss the particulars of the program and the potential perks of growing small grains. The trouble with removing oats, wheat and other small grains from crop rotations is that a narrower rotation makes farming riskier. Corn and soybeans are planted and harvested at roughly the same time of the year, while oats and winter wheat are planted and harvested at different times of the year.

Spreading out field operations not only eases farmers’ labor demands, but also increases the chance that at least one of the crops will be planted and harvested in a timely manner. A diversified rotation buffers against unpredictable events, decreasing the risk that a farmer’s income could be slashed by half — or more — in one disastrous weather event or market dip, as we saw with the devastating spring floods of 2019.

Because small grains are planted in the fall or early spring, and harvested in July, this timing within the growing year can also help farmers address management concerns, such as preventing herbicide resistance in tough weeds, generating more forage for cattle with a summer cover crop and having an earlier opportunity to spread manure.

The mix of root structures in an extended crop rotation also has soil health benefits, such as increased aggregate stability, water infiltration and water holding capacity, as shown by long-term cropping system trials at top agricultural universities.

Cover crops and grazing

Tim Palmer raises corn, soybeans, small grains, alfalfa and cattle near Truro, and shared at the Jan. 7 meeting that “if you want to restore the soil, you put oats in.”

Palmer has raised both oats and rye, and is an avid cover-cropper both after small-grain harvest and in between his corn and soybean crops. He grazes his cattle on cover crops to help fill in forage gaps at key times of the year: late fall, early spring and in the heat of summer.

To Palmer, grazing cover crops during these key times is an economic no-brainer to avoid the cost and hassle of hay. It also lets him try out more diverse cover crop mixes. Palmer sticks to cereal rye as a cover crop between his corn and soybeans because of the fall planting date. But an August planting date after his rye harvest opens up the opportunity to try 10- or 12-way mixes that meet more of his soil health goals.

Benefits like the ability to graze cover crops have impressed him so much that he’s planning to expand his rye production for seed and invest in a seed cleaner to aggregate and sell seed from growers around him. At the end of the day, though, his motivation is closer to home. “I work to rebuild the soil by planting an extended rotation because it will really help my grandson when he starts farming my land in a few years,” Palmer said.

Why is Smithfield interested?

But why does Smithfield, a company that produces hogs, care about helping farmers graze cattle or boost their soil health? “The scale of our operations allows us to have a real impact on the grain supply chain, and we want to help farmers be as successful as possible,” said Joe Szaloky, vice president of business development for Smithfield. “If it makes sense for you to grow oats, and if Practical Farmers of Iowa has a program that enables you to grow oats, then we are going to buy those oats, and we are going to get you the very best price we can get for them.”

The Davis City and Allerton elevators will now offer the full range of their contracting options for oats and wheat starting in 2020. Cash bids for wheat and oats are posted on Smithfield Grain’s website.

Jake Geisler, director of ingredient procurement at Smithfield Foods, shared contracting options and current prices at the meeting. On Jan. 7 the cash price for oats was $3.62 per bushel and $3.94 per bushel for wheat. “We believe there’s an opportunity here at Davis City and Allerton to include these grains in your farming operation,” Geisler said. Farmers interested in exploring contracting options with Smithfield should contact Erin Holt at eholt@smithfield.com or 660-748-7270.

Adding a small-grain crop

On-farm data from farmers who have conducted research with Practical Farmers of Iowa show that the most profitable way to add a small-grain crop such as oats or wheat into a corn and soybean rotation doesn’t stop with securing a good market for the grain. Strategically using the long, hot window after small-grain harvest in July to grow a cover crop also contributes to the profitability of the crop rotation as a whole.

One option is to use that window to grow clover, alfalfa or a diverse mix that will be harvested for forage or grazed. The other option is to rely on a legume species like red clover to fix nitrogen biologically and reduce the amount of purchased fertilizer needed for corn in the next year of the rotation.

Farmers interested in trying either of these cover crop systems with their oat or wheat crop that’s destined for sale to Smithfield can make use of the $25-per-acre cost-share program provided by PFI. Fields are eligible if they are not already being cost-shared for cover crops or conservation crop rotation by another program, and if the cover crop contains at least one legume species (such as clover, alfalfa, field peas, vetch, etc.). 

Bower is PFI’s strategic initiatives manager. Email alisha@practicalfarmers.org.

Source: PFI, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

 

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