Agronomy experts say it’s too early to tell whether a three-year trend toward lower protein wheat will continue or whether dry conditions will lead to a reversal this summer.
Recent bumper crops have caused a glut of grain to accumulate at country elevators, compounded by a protein shortage that is occurring at the same time domestic and international buyers are becoming more exacting in their purchasing specifications.
Demand for higher protein wheat is already driving changes in the industry. Last year many country elevators bought $20,000 grain analyzers that allow them to do rapid tests for protein and pay premiums to farmers who can deliver it.
Wheat with 12% or more protein has commanded an extra 60 cents to $1.25 a bushel, depending on location and timing of delivery, according to Mike Schulte, executive director of the Oklahoma Wheat Commission. Farmers have responded to the signals in the marketplace.
Scott Neufeld, who farms with his son Caleb in Western Oklahoma, currently has 20,000 bushels of on-farm grain storage but plans to add another 5,000 bushels this year. “We typically have room for around half of our production,” he said.
“We’re growing wheat for the protein market,” he added. “There are opportunities to take advantage of if you can raise good quality, but you have to have on-farm storage to do it.”
The relative value of higher protein wheat could change in the future depending on what happens with the overall crop this year. Drought and lower yields are often associated with higher protein levels in wheat.
The Oklahoma Wheat Commission’s Schulte was cautious about predicting whether protein levels would improve despite the conditions. “I don’t know that a lot of producers are out there topdressing their wheat right now,” he said.
Sufficient nitrogen fertilization plays a significant role in wheat protein deposition. The common rule-of-thumb, according to Schulte, is that protein percentage is dictated one-third by the environment, one-third by management, and one-third by variety.
With prices low and spring moisture conditions poor in many areas, farmers in general have been reluctant to spend extra money on crop inputs.
And, in areas further north, wheat farmers could see another bumper crop.
“Right here in Burlington we’re in really good shape for moisture,” Colorado State University agronomist Ron Meyer observed recently. “We had a good wheat crop but real low protein last year. If we have another big crop, I would expect us to see low protein again.”
Meyer also noted that fertilizer applications are a contributing factor. “We’re doing some fertility trials right now at Burlington, looking at how much to apply and when, to raise protein,” he said.
According to Mark Hodges, an agronomist who runs Plains Grains Inc., a cooperative testing laboratory based at Stillwater, Okla., the industry would welcome a crop with more normal protein levels. “In general during drought conditions you would expect smaller kernels and smaller yields with higher protein. But that’s not a given,” he said. “You would expect higher protein, but you do have to have nitrogen available in the soil as a building block to get that protein.”
Functional protein in wheat is also a bit more complicated than simple percentages show, he added. “The last two years it has not been an issue of quality. The quality of the protein has been very good. The issue has been the quantity of protein,” he said.
Bigger, fatter kernels produce more starch and that has “a dilution effect” on the protein level overall, he explained.
“The good news is a lot of what’s in storage right now is high quality protein. That means if we can produce protein of average to above average quantity, it will help us to move out the crop,” he noted.
Flour millers are used to dealing with the challenge of blending inventory from one year to the next, he said. However, the difference between last year’s bumper crop and this year’s drought-stressed one could potentially be more extreme than usual.
“The kernels are going to be much different in shape and size, so there’s somewhat of a challenge there,” he said. “What the millers tell me is that they are experts at this, because every year is different and every year they have to deal with different issues in the crop. But this year could be on the extreme side of the variation they’ve had to deal with.”
What millers want — and are willing to pay extra for — typically reflects what is in short supply. With wheat acreage at all-time lows, millers have less inventory to sift through to find what they need, Hodges pointed out.
While protein has been scarce in recent years — and highly valued — that is bound to change over time. Hodges said he could recall drought years in the not-so-distant past when protein was so prevalent that elevators actually discounted it.
Regardless of the potential shifts ahead, Neufeld, the Western Oklahoma farmer, said he believes having more bin space on his farm is a good investment. “Even if higher protein wheat is produced this year, I think there will still be premiums out there for quality,” he said.
“We don’t want to just grow commodity wheat and deliver it to the elevator,” he added. “We want to grow the best quality we can and deliver it directly to a market that wants it.”