Good yields, high test weights and excellent futures prices made last fall’s decision to plant a little wheat a good one for wheat producer Terry McGraw.

MCGRAW

McGraw says this will certainly help his bottom line during a time when farmers’ profits are hurting from high fuel prices and high interest rates and with the future of the farm bill uncertain.

But if he and other U.S. farmers can hold on for a few more years, stronger demand could start to offset some of those problems, he says.

McGraw farms 2,800 acres with his son, Clint, father, Eugene, and three full-time hands, around Palestine, Ark. He produces 1,860 acres of soybeans, 940 acres of rice and 330 acres of wheat.

McGraw stresses that crop mix decisions at planting time “are kind of like rolling the dice. We used to plant 500-600 acres of wheat every year in our rotation. Then in 2004, prices were so low that we didn’t plant any in 2005. This past year, I just had a hunch that we were going to see better wheat prices because not many people were planting it. We got lucky, and it paid off.”

McGraw’s wheat yields averaged around 70 bushels per acre this season, “which was a little better than what I was expecting.” Yields on individual fields ranged from 60 bushels to 80 bushels-plus.

McGraw also capitalized on wheat prices with the help of a marketer, Carl Frein, in Brinkley, Ark., locking in $3.70 per bushel on a hedge-to-arrive contract. “We waited and when the basis got around where we wanted it, we locked it in.”

He also took advantage of excellent wheat prices in the 2007 and 2008 futures markets, locking in some of his future production. “I’ve already priced out a large portion of my 2007 crop at $4.70 and my 2008 crop at $4.40.”

Wheat follows full-season soybeans in McGraw’s rotation program. On bedded ground, he’ll put out fertilizer, run a DMI field cultivator, then drill the wheat with a John Deere 455 drill on 7.5-inch spacings. “We usually put out enough fertilizer for the wheat crop and the soybean crop the following year.”

On non-bedded ground, he will run a land plane and field cultivator, fertilize, run the field cultivator again, then drill the wheat.

McGraw will normally wait until Oct. 15 to begin planting, but in 2005 about half the crop started going in around Oct. 4. The earlier planting date and a warm fall allowed the wheat to put on too much growth and there was some freeze damage.

“You also run the risk of problems with Hessian fly and aphids vectoring barley yellow dwarf when you plant that early. The half planted on Oct. 15 did a little better.”

McGraw planted all his wheat acreage for 2006 in Delta King 7830. As a seed producer for Delta King, “we watch it closely for vetch, garlic and ryegrass. We sprayed a lot of it with Harmony and 2,4-D and Harmony alone where we only had garlic in the field. Some fields we didn’t need to spray at all.”

His first fertilizer application of 100 pounds of urea and 50 pounds of ammonium sulfate went out March 3-4. That was followed two weeks later by 100 pounds of urea.

Fungicides are seldom needed in McGraw’s wheat production program. “We scout fields on a weekly basis to determine if we need it. We didn’t this past year.”

McGraw has had to spray for armyworms in April, but this year, the pest was not a big problem.

Harvest with a John Deere 9760 STS combine usually begins in mid-June, but this year it started 10 days earlier with the help of extremely warm temperatures in April.

To be profitable, McGraw needs to average around 60 bushels of wheat per acre, while double-crop beans need to come in around 40-45 bushels.

“We’ve made a lot of 50-bushel, double-crop beans the past few years. I don’t think we’re going to do it this year because we don’t have the plant population.”

McGraw will choose a double-crop soybean variety that has traditionally done well on the farm. This year the majority was planted to Dyna-Gro 33B-52, also for seed production. “The seed company wanted them planted as late as possible to increase germination.”

As of June 20, McGraw’s double-crop soybeans were in good shape, thanks in part to a steady, soaking rain the weekend before which provided a much-needed shot of moisture.

McGraw plans to increase wheat acreage to 500-600 acres this fall. “But I’m not going to plant anymore than what I need to cover my bookings. I don’t think we’ll see this kind of price this time next year.”

To offset the variability of prices and high input costs, McGraw must make top yields in every crop, every year. He irrigates all his soybeans, including double-crop beans.

“I study soybean varieties and try to pick the best varieties in this area. We’re trying to bed as many beans as we can and water down the row. But we still have a lot of acreage that we have to levee up and flood irrigate.”

Farming marginal land is no longer an option under a high-yield program, says McGraw. “In this area, we have farmers turning land down, and I’ve turned down marginal land.”

High prices for diesel, natural gas and electricity, along with rising interest rates are big concerns for McGraw.

And so is the apparent willingness of the current administration “to turn its back on the American farmer.”

“I know there are risks involved in any business, but low prices are killing farmers. The U.S. government helped create low prices so we can compete in the world market with the help of a farm program that would subsidize us when we had low prices. If they take away the subsidies and leave us with the low prices, it’s like they’ve left us out to dry.

“A lot of people in Washington just don’t feel like it’s that important to keep the American farmer in business. They feel like America can import its food, just like we import VCRs and TVs. But they don’t know that we’re not going to have the same level of food safety. Other countries aren’t regulated like we are.”

McGraw does see a bright side to U.S. agriculture. Increasing prosperity around the globe and the development of a middle class in many countries will significantly increase demand for U.S. agricultural products in the future.

The increasing emphasis on biofuels to lessen reliance on foreign oil will also increase demand for U.S. products. “It will give us another market for soybeans and corn, with biodiesel and ethanol. There is no doubt that we have to find alternative sources to crude oil. That’s got to help, if we can just hang on until then.”

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