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Buying wheat becomes new game with high prices

    Because of high wheat prices and market volatility, elevators are changing their strategies in the way they buy and sell wheat.
    When wheat doubles and triples the old average of four-dollar wheat, that also doubles and triples the amount of credit an elevator must have to purchase wheat. Even if an elevator sells wheat immediately after buying it, it may not receive payment for up to 30 days.
    Because of increased price volatility, many elevators have decided to buy wheat only when Kansas City Board of Trade (KCBT) wheat contracts are trading - 9:30 a.m. to 1:15 p.m. Large changes between close and open prices make establishing a wheat price, when the exchanges are not trading, nearly impossible.
    One such operation is the Frenchman Valley Co-op of Nebraska, whose website home page reads: “Due to market volatility, FVC will only be purchasing grain during market hours (until further notice). We will not be purchasing any grain beyond the 2008 crop year.”
    According to Kim Anderson of Oklahoma State University, during March 2008 the average absolute (plus or minus) change between the close and the open for the KCBT July wheat contract price was 23 cents. During March 2007, the average change was 2.7 cents. The maximum change in March 2008 was a minus 84.5 cents. During March 2007 the average daily price range was 13 cents. During March 2008 the average daily price range was 33.8 cents.
    “With the prices and volatility in the market, there’s a lot higher capital requirement to keep up with the markets as they move because the limits are being expanded with the high prices,” says Wyoming Wheat Marketing Commission Executive Director Keith Kennedy. “There have been moves of 60 cents a day in the wheat market, and sometimes even higher.”
Kennedy says limits went down as volatility decreased slightly last spring, but one contract of 5,000 bushels still contains close to $3,000 dollars in a margin call on a single contract.     “That’s the biggest problem,” he says.
    Anderson says another change elevator managers are discussing is how to handle forward-contracted wheat in a harvest failure. Elevators that “rolled” forward contracts from 2007 to 2008 have had to make up to $35,000 margin calls per contract. Some elevators had to liquidate assets to generate cash to cover some of the margin calls. Most elevators indicate they’ll not “roll” contracts from 2008 to 2009.
    “Early last fall there was some reluctance among domestic buyers who felt they could go hand-to-mouth on wheat and that prices would drop a lot more than they actually did,” says Kennedy. “A lot of that’s affected by the world supply – we’ve just gotten to the place where stocks are low and people can’t float any more to live on by relying on what’s in storage or a cheaper alternative.”
    Kennedy says 2008 has brought substitution from other types of wheat, which has raised prices across all classes. “People are now using some higher-protein winter wheats when normally they buy dark northern spring wheat,” he says.
    Although Australia expects to harvest a normal crop this year, Kennedy says last year the world used more wheat than was produced. “It looks like the rest of the world is out to maintain that status quo,” he says.
    While some areas of the country are experiencing problems with their wheat from too much moisture, Kennedy says too much moisture in Wyoming is just enough.
    Kennedy says the price of wheat is tied to the price of corn and soybeans. “Wheat has got to be competitive with corn and soybeans, and if those prices drop from where they are people will switch to those crops. We’ll see wheat prices hang in there, provided corn and soybeans stay high,” he explains.
     “Higher prices come with higher volatility and greater risk,” says Anderson. “Greater risk normally provides the opportunity for higher profits.
    Christy Hemken is assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .
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Land Institute researches perennial grains

Wes Jackson founded the Land Institute in 1976 with a focus on building agricultural systems with ecological stability.

Their research efforts toward such goals have included the breeding of perennial crops, as well as domestication of wild plants for human use. Their work has been successful and is ongoing.

Stan Cox, the Coordinator of Science for the Land Institute recently reported in the Fiscal Year 2011 update that 30,000 plants were transplanted to fields at the Land Institute. An updated greenhouse and additional research building facilitated an increase from last year.

“Although the bulk of growing occurs in the fields, the first generation of many of our new hybrids starts in the greenhouse, with a capacity of about 4,500 plants,” said Cox in the annual report. “Cross pollination of wheat is more successful under the protection of the greenhouse.”

The research teams at the Land Institute study perennial wheat and sorghum, as well as domestication of intermediate wheatgrass, perennial oilseeds and Illinois bundleflower. There have also been hybrid crosses involving corn and sunflowers made at the institute.

“We have done some work with sorghum bicolor and Johnson grass,” said Jackson on Oct. 4 in a presentation for the Northwest College Writers Series in Powell. “We are working to tame the Johnson grass. In China and Indonesia, we have support to breed perennial varieties of upland rice. In sunflowers, we are working to get the heads more centralized.”

“The seed weight is going up in our collection,” said Jackson. “In only three selection cycles we have been able to increase the size of the seed to more than double.”

Additional developments have enabled the plants an increased rate of survival.

“Out of almost 2,000 plants, 43 percent survived the summer of 2010,” explained Jackson. “Those are the parents for the future generations of plans, and from there, a bigger percentage will survive.”

There has also been some evidence showing good drought resistance in plants across the globe.

The variety of perennial wheat that the Land Institute has helped to create is called Kernza. The Land Institute describes Kernza as their domesticated intermediate wheatgrass. They are currently working to increase seed size and yield.

Kernza shows an intermediate between common annual wheat varieties and perennial grains from the dawn of civilization, exhibiting increased root systems and larger plants.

According to the Land Institute FY 2011 Annual Report, “In the 2010-11 field nursery, 819 (wheat) plants survived both the summer after harvest and the winter, a much larger number than in any previous case.”

Additionally, more than 50 new DNA markers were developed to identify each chromosome in the hybrid population. The population of wheat/wheatgrass plants is constantly being improved to expand genetic diversity, as well.

Other research in sorghum has developed a selection of “winter-hardy” perennials that are seen as superior plants. Continued research with sorghum in Hawaii has allowed development of plants that are growing faster in the second generations.

Along with research at the Land Institute, collaborating institutions, including the University of Minnesota, Prescott College, Dordt College and Michigan and Minnesota universities, as well as Applied Ecological Services in Wisconsin, have helped to further research.

Jackson has also begun approaching various foundations with a plan to increase research that is feasible.

“We need to have a 30-year program devoted to developing agriculture based on the way natural ecosystems work,” said Jackson. “We can do it now because we have perennials on the horizon, and we are able to take what we have learned from the broad discipline of ecology and apply it to our fields.”

Jackson’s plan involves using scientists and 11 candidate locations around the globe to continue research, as well as five virtual research sites at academic institutions across the United States.

“If we were to train 110 PhDs in various disciplines, we would have them work in clusters around the planet,” added Jackson. “The cost to educate and train those 110 fellows is only $24 million.”

Research efforts at the Land Institute utilize natural processes and molecular genetics, but not gene splicing, to reach the end goals.

Molecular genetics is a tool, according to Jackson, to help identify the markers in plants that code for the traits they desire. He emphasizes they are not genetically splicing or modifying plants, but rather using the approach to reduce the workload and time required to develop successful perennial plants.

Jackson describes that. by merging molecular biology techniques and knowledge of ecology, a new revolution in science will begin.

“Every time there has been a synthesis, there has always been a flowering of knowledge and energy develops, something great,” emphasized Jackson, who used examples of Darwin’s merge of natural history and biology and Watson and Crick’s development of genetic code as being prominent starting points in the development of scientific knowledge. “Now we have the chance for the fourth synthesis with perennials on the horizon – ecology and agriculture coming together for crop and for grain agriculture.”

Jackson hopes that perennial plants will combine agriculture and ecology to ultimately create more sustainable systems.

“There is a reservoir of knowledge that has been paid for and put on the shelf. We know how these systems work,” said Jackson.

Saige Albert is assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .

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New distillery seeks Wyoming grain

Kirby – Wyoming Whiskey, Inc. is seeking 12,000 bushels of grain including corn, wheat, rye and malting barley to make its first batch of bourbon in its new Hot Springs County distillery. With construction to be completed this spring, the company plans to make about a thousand 52-gallon barrels of whiskey in the months to come.
    The idea for Wyoming Whiskey developed when Brad and Kate Mead, Jackson area ranchers and attorneys, purchased a ranch near Kirby, north of Thermopolis.
    “Kate and I were concerned about our cattle contracting brucellosis,” says Brad. “The most dangerous time is when the elk are calving, so we bought the ranch at Kirby to run our cattle during that time. Kate also thought it would be interesting to diversify our agriculture operation by starting a vineyard, but the climate in the Big Horn Basin doesn’t necessarily lend itself to a vineyard. All the right ingredients are there, however, to make bourbon,” says Brad noting the climate, grains and water.
    Bourbon is a type of whiskey that meets six criteria. It must be American-made and packaged in white oak barrels charred on the inside and used only once. Corn has to make up at least 51 percent of the ingredients and it can be distilled at no more than 160 proof. When it enters the barrels it can’t surpass 125 proof and flavorings of any kind are prohibited. According to co-owner and Jackson attorney David DeFazio, it’s called whiskey when it enters the barrels and bourbon after aging and bottling.
    David and Brad are both bourbon connoisseurs. “We’ve exchanged bourbons over the last 10 years and were always trying something different,” David explains. In June 2006, the Meads approached DeFazio about going into business making bourbon on the Kirby ranch and he jumped at the chance. DeFazio did a lot of research and the business partners attended the Kentucky Bourbon Festival to discover what distilling whiskey is all about.
    “We’ve hired two master distillers, both members of the Bourbon Hall of Fame,” says Brad. “Lincoln Henderson, who invented a bourbon for Woodford Reserve, is advising us on the recipe and on marketing issues. Steve Nally was a master distiller for Makers Mark and he’s now in charge of our day-to-day operations. He’s the chef.”
    Construction on the new facility including a 5,500 square foot distillery, a barrel house, a bottle house and tasting room, is underway. They designed the distillery building to look like an old grain elevator to accommodate the still, which David says is 35 feet tall. The copper still is custom-made for Wyoming Whiskey and for this region of the country.
    “Kentucky distilleries brag on their limestone water, and it’s true, the water makes all the difference,” David comments. “Worland has a deep, limestone artesian well, with a pipeline that ends about six miles north of Kirby. We’re working with the Big Horn Regional Joint Powers Board to obtain grant funds from the Wyoming Business Council to complete the pipeline and bring that water to Kirby.” The company will truck its water to Kirby until the pipeline is complete.
    During the first couple of years in business, Wyoming Whiskey will employ about six people, possibly adding more when the bottling process begins.
    “Our goal is to have a value-added product where our ag producers can say, ‘My grain is in that bottle,’” says David. “From seed to spirit, Wyoming Whiskey will be 100 percent Wyoming.”
    By this June, the company should be ready to make and barrel whiskey that will age two to four years before it’s available to the public. “We’ll do it slowly enough to make it right,” explains Mead. “It won’t be the most expensive bourbon, but it will be top-shelf.”
    Grain producers interested in marketing their corn, wheat, rye or malting barley to the new distillery should contact Steve Nally at 307-921-2180 for more information. Echo D. Renner of Meeteetse is a correspondent for the Wyoming Livestock Roundup. Send comments on this article to This email address is being protected from spambots. You need JavaScript enabled to view it. .
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Like livestock, soils requires balanced diet fueled by diversity

Cody – According to NRCS District Conservationist Jay Fuhrer of Bismark, N.D., cover crops have enabled wheat farmers in his area to increase crop diversity, rebuild soil health and increase productivity in commercial systems.
    Fuhrer was present at the early November joint meeting of the Society for Range Management Wyoming Section, the Soil and Water Conservation Society Wyoming Chapter and The Wildlife Society Wyoming Chapter in Cody.
    Fuhrer was referring to a region-wide effort to rebuild soils depleted from intensive commercial wheat production.
    “We had started into tillage systems with high amounts of summer fallow and season-long grazing on the rangeland,” he explained. “One day we sat down together and asked ourselves how long we could continue to mine the Great Plains. We needed to restore and reclaim, but how do you do that in a production ag system?”
    “I started looking at the foundation blocks of soil health and how they relate to cropping/grazing systems using cover crops,” said Fuhrer, bringing up what he called the “three sisters” – corn, beans and squash. “A lot of the Native American systems were based on those three because they all brought something to the table and it was sustainable.”
    “We went from low crop diversity – we were wheat people – to high crop diversity with no-till systems, eventually bringing in cover crops,” said Fuhrer. “We went from season-long grazing to pasture grazed less than a week each year. What we’re harvesting now in the Great Plains is sunshine, and there’s a lot more sunlight we can harvest in early-seeded crops.”
    The shift began in 2006 when Fuhrer planted cover crops as monocultures and two- to eight-way mixtures. One thing he found was, with a little over one inch of precipitation in the 2006 growing season, an extreme difference between the poly- and monocultures.
    “The soil temperatures were extremely different between the poly- and monocultures, and as the summer evolved the monocultures completely dried up, but the eight-way flourished and produced a little over 4,000 pounds of production on a little over one inch of precipitation,” he explained.
    Fuhrer said ground cover is key to a healthy system. “When I’m talking ground cover, I’m talking significant,” he said. “It was one of our missing elements. The soil is alive, and like livestock you have to take care of its home and provide a food source.”
    He said there’s no such thing as too much ground cover. “There’s no amount of cover you can’t no-till through,” he said. “And you get extremely uniform emergence, which comes from having a uniform cover crop.”
    As an example he told of a field mechanically tilled for over 100 years, with the crop residue baled and taken off. The first year a field pea cover crop was planted and rolled down to cover the soil. “No rational person would do that, but he provided a cover the field had never had and you could hear the soil go into shock,” said Fuhrer. “Then we could start to reclaim.”
    Following the field peas a mixture of cover crops was brought in. “Where a monoculture struggled we brought in an eight-way cover crop and they’re not competing – they’re helping each other,” he explained.
    Fuhrer said his template for managing cropland is native rangeland, which has hundreds of plant species. “Diversity is what drives our systems. We brought those same crop types into cropland – cool season and warm season grasses and both seasons broadleaf plants.”
    Following the initial experiments with mixtures in 2006 Fuhrer said 70 to 80 percent of the county moved to no-till systems, with 10 percent direct seeding and 10 percent that he said never will change.
    “We went from primarily wheat to all four crop types, and through that a lot of our disease and insect pressures diminished,” he said.
    Increasing crop diversity also increases water holding capacity in the soil. “A no-tiller builds soil aggregates, which builds pore space back in, which is what’s degraded with tillage,” said Fuhrer. “That little space is where the extra water is held, and where air can occur and where it all happens.”
    Increasing diversity also increases cycling, or the amount of time required to incorporate crop residue into the soil system. Cover crops also help with weed suppression, which reduces inputs.
    Regarding livestock, Fuhrer said a cropping system can be brought to a higher level if livestock are brought in. “A lot of good things happen with integration,” he said, in soil nutrients and especially in the way the cover crop’s harvested. “It’s chopping versus grazing, and the cattle have legs. What we’re moving to in North Dakota is bringing the cattle to the land.”
    “Crop diversity provides a balanced diet for the soil,” said Fuhrer. “Wheat does not provide a balanced diet – it’s only one food source for the soil biology. Soil organisms are like livestock – they require a balanced diet to attain high performance.”
    Christy Hemken is managing editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .
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Summer moisture results in excellent dryland wheat yields

Southeast Wyoming – According to those involved with wheat production in the southeast corner of Wyoming, this year’s crop was exceptional, if not the best yields ever.
    “The 2009 harvest is much above average, as far as we know in Laramie County,” says Keith Kennedy of the Wyoming Wheat Commission. “It’s above the state average by a fair amount, with some exceptional yields.”
    Scott Zimmerman of the Rocky Mountain Farmers Union, who lives in Pine Bluffs, says, “This may be the best dryland wheat harvest ever in regard to yield. Most producers that didn’t have hail damage had a phenomenal crop.”
    “Some of the area producers had the best crop they’ve ever had, while some were about average to a little above,” says Matt Hahn of Pine Bluffs Feed and Grain in Pine Bluffs. “Of course, we’ve been so long without even an average crop that anything seemed really good. It’s been 15 years since we’ve had a good crop.”
    Hahn says the really good yields ranged from 65 to 90 bushels per acre on dryland, down to 35 to 45 bushels per acre on the low end.
    All yield ranges were affected by hail damage, which is typical for the area. Irrigated wheat produced a normal crop.
    “Some really good moisture,” says Kennedy. “All it takes is good, timely moisture to grow a good crop. Some of the yields in Laramie County could be once-in-a-lifetime, depending on how things shape out.”
    “The moisture came at the perfect times, and many areas of southeast Wyoming have had more than their annual average precipitation during the months of June and July alone, and that’s what really helped the wheat yields,” says Zimmerman.
    Although moisture can cause problems if it comes at the wrong times, he says it came before the grain was ripe, avoiding disease and most harvest problems.
    Despite the high yields, Zimmerman comments that won’t necessarily translate into a good income year because of the way wheat prices have fallen over the last two months.
    Kennedy agrees, saying the market is down quite a bit from where it’s been over the past year, but he notes it’s pretty good compared to the last four or five, although fertilizer and fuel are up significantly from five years ago.
    “The price has gone down considerably from what it was last year,” says Hahn. “Even though the yields were down last year, they received the same amount of money as they are this year.”
    Concerning the market’s future, he says a lot of people speculate it will find the bottom, but Hahn thinks it will gradually drift lower because of the world market. He says some producers are upset by the low prices, and have refused to sell. “That will only create problems as we carry more wheat into next year. We have to get cleaned out of it,” he says.
    Concerning the 2010 crop, Zimmerman says the extra moisture in the soil profile will help immensely in the production of another good crop. “In most cases the soil profile is close to full, and the 2010 crop, which is being planted right now, will have an excellent start for hopefully a good crop next year.”
    Hahn agrees, saying, “The next crop should have a pretty good moisture profile to plant into.”
    Christy Hemken is assistant editor of the Wyoming Livestock Roundup and can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. .
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