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Montana wheat values hit $1 billion for second year

Montana wheat values hit $1 billion for second year

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Kevin Downs harvests winter wheat

Kevin Downs harvests winter wheat near Molt with his father and sons in 2011. Montana and other border states are closely watching negotiations of the U.S.-Mexico-Canada Agreement, often referred to as NAFTA 2.0, which could help open up grain export opportunities.

For the second year in a row, Montana wheat values have surpassed $1 billion, a high watermark achieved only four times.

Analysts have put Montana’s 2011 crop values at $1.3 billion. The numbers released late Thursday by the state bureau of the National Agricultural Statistics Service are buoyed by strong, lasting wheat prices, which kept values afloat despite a weather-plagued crop year.

Wheat and cattle, both weighing in at more than $1 billion in 2011, are the biggest single components of Montana’s economy.

“In 2010, prices were low through the first half of the year before they picked up. In 2011, they started out higher and maintained that,” said Lola Raska, Montana Grain Growers Association executive vice president.

Crop values for 2010 were a record $1.4 billion, but prices for the first half of the year were dismal given that costs associated with growing wheat were rapidly increasing. In July Russia announced that drought had clobbered its crop and it wouldn’t be exporting wheat. That produced premium prices for Montana wheat, which was just then being harvested.

Prices continued climbing into 2011 and then stayed strong for months. That long stretch of favorable prices presented Montana farms with months to lock in a good price.

Crop values for Montana wheat have only surpassed the $1 billion mark four times, all in the last five years. The trend is supported by demand for wheat in rapidly developing countries and weather problems that have plagued the planet’s other wheat-growing areas.

The 2011 crop values were more than double the value of Montana’s wheat crop just seven years ago.

The average 2011 market price for all wheat was $7.75 a bushel, up $1.47 from 2010. Still, crop values were down from 2010’s record $1.4 billion. The difference is partly due to rough 2011 weather.

Record rainfall last spring kept farmers from planting much of anything in May. Crops that farmers usually finish planting by Memorial Day were still 70 percent unplanted heading into June. The delay left many farmers short of growing days for the crop to mature before harvest.

For some, mushy fields too soft to support a tractor never firmed up in time to plant. A million acres of Montana farmland was enrolled in the federal prevented planting program, which offers last-resort insurance help to farmers who fail to plant anything, according to the U.S. Department of Agriculture Risk Management Agency.

Crop insurance indemnity payments to Montana farmers for all crops exceeded $133 million, according to RMA, and nationally set a record $9.1 billion as farmers from Montana to the Gulf of Mexico struggled with flooding and later drought.

Farmers like Tom Jurenka of Hingham, who managed to plant before the May deluge, did very well.

“We finished seeding on May 10 and it turned out great, 13.5 to 15 percent protein and 40 bushels to the acre,” Jurenka said Thursday as he window shopped farm equipment at the Montana Agri-Trade Exposition in Billings.

There was wheat stem rust and fungus to battle, but once wheat was planted, the war was won, Jurenka said.

Jurenka’s neighbor Alex Chvilicek managed to get his wheat planted by May 16. Those who didn’t probably didn’t get another chance to plant until June, said Chvilicek, who cut 45 bushels to the acre.

“We would take these values every year, rather than farm programs,” Raska said.

Other notable state crop values included $162.8 million for barley, up 4 percent from the previous year. The season average price was $5.25 per bushel, up $1.17 from 2010.

Sugar beets values, which are reported a year later, were also significant. In 2010, the production value for sugar beets was up 50 percent from the previous year to $80.3 million. The season average price for sugar beets jumped from $10.60 per ton in 2009 to $64 a ton in 2010.

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