Uncertain wheat boom in Palouse

GARFIELD, Whitman County — This Palouse hill town has had two big exports in recent decades: the wheat harvested from some of the most productive grain lands in the world, and young people who — despite this bounty — leave to find opportunity elsewhere.

This year, local wheat growers are receiving an injection of cash and hope as wheat prices — after nearly a decade of slumber — soar to record levels.

To the surprise of many farmers, prices have climbed through the summer, a time when markets typically sag under a glut of newly harvested grain. In Whitman County this week, wheat shot past $7.60 per bushel, more than double the price of two years ago.

"Harvest is the time that the buyers know they can get a fire-sale price," said Bruce Nelson, a Garfield wheat farmer. "This is very unusual. This is about as unusual as you can get."

The higher prices will create tens of millions of dollars of additional income for more than 1,000 Whitman farmers. But plenty of uncertainty remains about whether this will lead to a longer-term reversal of troubling economic trends in Washington wheat county.

The number of farmers has dwindled while their bank debt has expanded. It will take more than one big year to coax sons and daughters back to the farm and small towns such as Garfield, where census statistics indicate the number of young people between the ages of 20 and 34 dropped by nearly half in the decade that ended in 2000.

Still, some are predicting the dawn of more prosperous markets. Wheat, corn and other farm crops already have attracted new Wall Street speculators.

"This thing is not a flash in the pan, and this does have some staying power," said Dennis Solbrack, president of Arrow Machinery in Whitman County, which sells John Deere combines and other farm equipment.

Tempered optimism

Prices of Washington wheat have been bolstered by bad weather elsewhere, including drought that has knocked down crop production in Europe, Australia and Canada. World wheat reserves are at the lowest level since 1982, triggering nervous buying sprees by major grain brokers.

The dramatic expansion of the biofuels industry also is creating a ripple effect.

Some Midwestern farmers this year switched acreage from wheat to corn for ethanol production, and that helped limit U.S. wheat production. Global demand for biofuels, as well as food, is likely to continue to rise.

For farmers, this is a tempting vision.

Even as prices reached a record, many farmers are holding back grain in hopes that the price will go even higher. The price increased more than 50 cents a bushel during the last two weeks of August, prompting talk of $8-per-bushel wheat.

Their optimism, though, is tempered by bitter experience.

Wheat prices shot up dramatically twice previously, in the early 1970s and in 1996. The surges were followed by long periods of low prices while the costs of fertilizers, fuel and farm equipment continued to rise.

Nelson said he fears a repeat, noting that his fertilizer company has notified him of a 15 percent price increase this fall. So he plans to use this year's profits largely to reduce his debt rather than go on a spending spree.

"I am going to be very limited in what I do," Nelson said. "I have to see another few years of these prices to really make a difference."

A bountiful land

Nelson, 56, is a fourth-generation Palouse farmer who grows the soft white winter wheat used to produce pastries, cookies, Asian flatbreads and other products.

Moisture is key, and Nelson's land astride the Idaho border benefits from the extra rainfall created by the weather patterns of the nearby Bitterroot Mountains. The soil yields bumper crops of wheat, peas and lentils.

With harvest in full swing, the hills bear a thick, golden quilt of wheat. Nelson's crew of 12 operates combines that scissor-cut and separate the kernels from the chaff, and trucks that haul sweet-smelling grain to nearby storage bins.

The crews work long days, breaking at early evening for a fading Palouse rite — hot dinner brought into the field. Last week, Nelson's wife, Carol, served sloppy Joes with fresh-cut fruit, a vegetable and home-baked oatmeal cookies.

"This is one of the only outfits that still observes the tradition," said David Satterwhite, a harvest truck driver. "Years ago, the farmers would feed you lunch and dinner. You kind of expected it."

These fields typically yield more than 80 bushels of wheat per acre, roughly double the national average.

But such productivity hasn't ensured prosperity for wheat farmers and the small towns dependent on them.

Years of low crop prices forced some farmers to quit. Others signed up part or all of their lands in a federal conservation reserve program, which in some drier areas offered guaranteed payments substantially higher than landowners could count on earning from farming.

In 1998, a federal survey of wheat farmers found that average incomes in all the major growing regions were not high enough to cover costs, with losses ranging from $36 to more than $100 per acre. Survival has hinged on farmers expanding their acreage — and increasing their bank loans.

Nelson's father farmed 480 acres around the family homestead. Nelson — with about $1.4 million invested in farm equipment — is farming about 4,400 acres of wheat and more than 2,000 acres of other crops this summer.

Four neighbors quit last year, and he is helping farm some of their land.

"This is not what I want to do," Nelson said. "I would rather have a lot more neighbors around here."

With fewer farmers working the land, many farm communities have withered. Some of the hardest hit are in less productive areas, where much of the acreage is locked up in the federal conservation reserve program.

Garfield, with fewer than 700 people and two-bedroom houses selling for less than $100,000, has benefited from a modest influx of newcomers who commute to school or work in nearby Pullman and Moscow.

But the town's business district is in decline. Since the early '60s, Garfield has lost a hardware and drugstore, one of two grocery stores and three fertilizer companies, according to Nelson.

And a survey of 1987-1997 graduates from Garfield-Palouse High School found that 75 percent now live outside Whitman County, said Archie Neal, a former school-board member who assisted in the survey.

"Farming is a very chancy proposition, and a lot of kids are reluctant to farm," said Annabel Kischner, a sociologist at Washington State University. "There has been a decline in the size of the farm families and so there is less likelihood that any of the children want to take over."

Nelson's three children have joined the exodus. His eldest daughter, Andrea Eakin, 28, is a software engineer and homemaker in the Seattle area. His other daughter, April Foster, 25, is studying dentistry in Boston.

His son, Andrew, 23, majored in business and computer sciences at the University of Washington, and lives in Bellevue. He loves high-tech work, but also misses the farm. So he and his wife, Cara, have fashioned a kind of compromise: They plan to work in Western Washington for five years and then return to the family farm.

"I am the only one I know from my high-school class that's going back to farming," Andrew Nelson said. "It does involve a lot more risk. But in terms of a lifestyle, it's much better for both of us."

If boom prices continue for several years, it could ease the pressure to keep expanding farm size and stabilize the dwindling ranks of farmers. There also might be a modest expansion of farm-service companies, and a resumption of farming on some land now fallow in conservation reserves, according to Herb Hinman, a WSU economist.

But Andrew Nelson doesn't expect any wholesale return of his classmates to Garfield. He is skeptical the boom times will last and will hedge his bets. Even when he starts farming, he plans to continue a part-time career as a computer consultant.

Hal Bernton: 206-464-2581 or hbernton@seattletimes.com