High wheat prices are good for you

In recent months, newspapers, as well as shoppers, have noted that prices have increased substantially for flour, bread, rolls, doughnuts, boxed cereal, pizza and other items containing wheat.

It's understandable that many consumers and bakers are unhappy about this. But what everyone might not realize is that the record-high wheat prices are a long-overdue boon for an industry that has endured more than its share of suffering over the years.

I should know. I've been a wheat farmer since 1981. My ancestors began wheat farming in Eastern Washington soon after settling there in the 1880s. It is in my blood.

Even so, it has been a struggle for me and my fellow wheat growers to make a solid living. Until last year, Washington wheat farmers had to cope with low prices (nobody except farmers complained when wheat sold for $3.26 a bushel in 2006) for our crops while also enduring higher operating costs. While wheat prices remained fairly stagnant over the past two decades, fuel and fertilizer prices rose dramatically, as did labor and equipment costs.

These challenges drove thousands of family farmers out of business nationally, while food processors and agribusinesses saw their profits go through the roof. In addition, there are many urban families who hold on to farmland. They haven't been on a gravy train by keeping the family farm.

But now, farmers are enjoying the highest wheat prices ever seen in Washington. They recently topped out in the teens per bushel and, as of mid-April, white wheat sold for about $9 a bushel in Portland. Why are wheat prices so incredibly high? Like oil, they are being driven by global demand, greater exports, a smaller supply and a weak dollar.

Last year, some of the other prime wheat producers in the world — Australia, Russia and Ukraine — had small crops due to drought or other weather-related factors. It has been reported that world wheat supplies have declined 11 percent to their lowest level since 1980 or earlier. Federal projections indicate that U.S. wheat supplies are at their lowest mark since the late 1940s.

While these other wheat-growing regions are suffering, Eastern Washington has enjoyed a fairly normal crop this past year. This trend is likely to continue through the year as the most recent harvests in other countries were again subpar.

The benefits of a strong wheat market are not limited to wheat-farm owners and operators. Every legislative district in our state receives money generated from wheat sales. It has eliminated several types of subsidy payments for farmers because the market is working. Farmers aren't the only ones benefiting from this increase in wheat prices. It also has brought smiles to the state treasury by helping the state's revenue situation, as well as retailers and other merchants.

The public should realize that while farmers are earning more, they are now paying more for fuel, fertilizer and other things needed to grow wheat. This recent run-up has enabled me and many other wheat farmers to update farm equipment — expensive purchases that we simply couldn't do when wheat prices were low.

Amid the mild hysteria over wheat prices, people should know that more than wheat prices affect the cost of baked goods. Packaging, energy and labor costs also are factors. Wheat prices are a tiny factor in the cost of a bread loaf, as every dollar per bushel equals one penny per loaf.

While the recent increase in prices for wheat-related grocery items might raise eyebrows, it's just part of a general price hike for many food items in grocery stores.

The head of the American Bakers Association has called for the reduction in the federal Conservation Reserve Program, which pays farmers to plant ground cover instead of wheat or other crops. This program is designed to improve water quality, control soil erosion and create habitat for waterfowl and other wildlife. While a program reduction might benefit consumers, initiating one might be premature and harmful to wildlife that sportsmen and environmental groups appreciate.

While $13-a-bushel wheat might be unacceptable to bakers and millers, the majority of the crop was sold at half of that, or less.

Today's high price of wheat is a major shot in the arm for Washington wheat farmers and their off-farm relatives who long have suffered when it was down at $4 a bushel.