'Amber waves of grain' recede in America's heartland as wheat farmers struggle
In this Friday, June 15, 2018 photo, a stalk of winter wheat stands ready to by harvested in a field farmed by Dalton and Carson North near McCracken, Kan.(AP Photo/Charlie Riedel)
COLBY, Kansas — On a foggy morning in May, Dennis Schoenhals drove a carload of crop scouts around the wheat fields of northern Oklahoma, part of an annual tour to evaluate the health of the crop. But on some fields, Schoenhals and other farmers had already abandoned plans to harvest the grain for sale because prices had sunk to five-year lows.
Farmers cut their losses early this year across the U.S. wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005.
For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model.
The Great Plains have long been celebrated for the 'amber waves of grain' in the popular hymn 'America the Beautiful.' The region's states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread. But with prices hovering around $5 per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop.
Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest.
In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively.
'They can't sustain that,' said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state's wheat growers association. 'Eventually you either change to other crops if you're able to, or you go out of business,' he said.
Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May.
Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show.
Nationwide, corn and soybeans dominate crop fields, with wheat a distant third in planted acreage.
Hard red winter wheat exports hit historic lows in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity's competitiveness.
In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn's value of production was more than twice as high.
Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices.
'We're below profitable levels for these guys,' said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton.
The way things stand, he said, many farmers have 'eaten a lot of their own money and burned up working capital. These bankers are going to say: 'show me some profits or we're going to have some farm sales.''
Heritage but no profit
Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area's dry soil, harsh winters and extreme temperature swings.
The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown in the U.S.
Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing 'the miles of fresh-plowed soil, heavy and black, full of strength and harshness.'
Now, U.S. wheat growing is on a steady decline, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud.
When Royce Schaneman joined Nebraska's wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state's most productive wheat-growing land, about one in five fields was abandoned this year.
'The feeling out in the country is not good,' he said.
Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields.
Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more.
Profits remain elusive.
'It's heritage, but there's no profit,' said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices.
Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 per cent of his farm's total output.
'There's certainly profit in corn,' he said.
---
Reporting by Emily Schmall; Editing by Simon Webb and David Gregorio
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'Amber waves of grain' recede in America's heartland as wheat farmers struggle
In this Friday, June 15, 2018 photo, a stalk of winter wheat stands ready to by harvested in a field farmed by Dalton and Carson North near McCracken, Kan.(AP Photo/Charlie Riedel) COLBY, Kansas — On a foggy morning in May, Dennis Schoenhals drove a carload of crop scouts around the wheat fields of northern Oklahoma, part of an annual tour to evaluate the health of the crop. But on some fields, Schoenhals and other farmers had already abandoned plans to harvest the grain for sale because prices had sunk to five-year lows. Farmers cut their losses early this year across the U.S. wheat belt, stretching from Texas to Montana. They were choosing to bale the wheat into hay, plow their fields under or turn them over to animals to graze. In Nebraska, wheat acreage is less than half of what it was in 2005. For farmers with crop insurance, damaged or unprofitable wheat fields can still earn revenue. But many agree that chasing insurance payouts is not the best business model. The Great Plains have long been celebrated for the 'amber waves of grain' in the popular hymn 'America the Beautiful.' The region's states produce most of the U.S.-grown crop of hard red winter wheat, favored by bakers for bread. But with prices hovering around $5 per bushel, U.S. wheat farmers have reached an inflection point, with many forced to either lose money, feed wheat to cattle or kill off the crop. Interviews with more than a dozen farmers and analysts across Kansas, Nebraska and Oklahoma, along with a review of U.S. Department of Agriculture data, revealed a vast disparity in profit for wheat compared to other crops. This has led farmers to abandon more fields before harvest. In parts of the region, prolonged drought has lowered yields in recent years. Farm revenue has also suffered in years with healthy rainfall, as abundant global supplies have weighed on prices. Many have pivoted to corn, soy or livestock, often after generations of their family growing wheat exclusively. 'They can't sustain that,' said Schoenhals, 68, who raises crops and cattle near Kremlin, Oklahoma, and is president of the state's wheat growers association. 'Eventually you either change to other crops if you're able to, or you go out of business,' he said. Two years ago, severe drought drove farmers to abandon about a third of the U.S. crop. This year, healthy green stalks shot through the cracked soil, and farmers had expected to harvest the most bushels per acre since 2016. But wheat prices hit a five-year low in May. Every year since 2020, farmers have abandoned between a fifth and a third of the winter wheat crop, U.S. Department of Agriculture data show. Nationwide, corn and soybeans dominate crop fields, with wheat a distant third in planted acreage. Hard red winter wheat exports hit historic lows in 2024 after drought and lower prices in other wheat-producing areas of the world squeezed the U.S. commodity's competitiveness. In Kansas, the leading U.S. producer of hard winter wheat, the disparity between acreage and value is particularly stark. About 1.3 million more farm acres in Kansas were planted with wheat than with corn in 2024, USDA data show, but corn's value of production was more than twice as high. Plentiful global supplies have kept benchmark U.S. prices stuck at lows that discourage farmers from growing wheat, producers and analysts told Reuters. Supplies are so ample that droughts in important grain-growing regions of China and Russia this year have barely budged prices. 'We're below profitable levels for these guys,' said Darin Fessler, an analyst with Lakefront Futures in Lincoln, Nebraska, who grew up on a row crop farm in nearby Sutton. The way things stand, he said, many farmers have 'eaten a lot of their own money and burned up working capital. These bankers are going to say: 'show me some profits or we're going to have some farm sales.'' Heritage but no profit Ties to wheat farming run deep in the Plains. Historically, European settlers in Kansas struggled to find a foothold until Mennonites from Ukraine arrived with seeds of Turkey Red wheat, a variety that proved able to withstand the area's dry soil, harsh winters and extreme temperature swings. The seeds spread to neighboring Oklahoma and Nebraska, where pioneers established homesteads in the sandy, light earth in which wheat thrived but other crops struggled. Hard red winter wheat has remained the main variety of wheat sown in the U.S. Images of golden stalks adorn hotel lobbies and road signs, and towns include the word in their names. Pulitzer Prize-winning author Willa Cather, a daughter of Red Cloud, Nebraska, wrote a celebrated poem describing 'the miles of fresh-plowed soil, heavy and black, full of strength and harshness.' Now, U.S. wheat growing is on a steady decline, with farmers finding surer profits from corn, soybeans or cattle. On the wheat quality tour in May, weeks before Nebraska wheat is usually harvested, no wheat could be seen for miles around Red Cloud. When Royce Schaneman joined Nebraska's wheat board 19 years ago, wheat fields stretched for 2.2 million acres across the state. Since then, acreage has shrunk to less than a million acres, he said. In Cheyenne County in southern Nebraska, the state's most productive wheat-growing land, about one in five fields was abandoned this year. 'The feeling out in the country is not good,' he said. Generations of farmers grew wheat because the crop thrived on rainfall alone. In recent decades, farmers have invested in pricey irrigation systems, experimented with hardier varieties and used fertilizer to improve yields. Agronomists have helped farmers grow more bushels per acre even as climate change has brought more drought and pests. Producers in the southern Plains have experimented with other types of wheat such as durum, the kind used for pasta, and a gluten-free variety, pursuing customers willing to pay more. Profits remain elusive. 'It's heritage, but there's no profit,' said Lon Frahm, the CEO of Frahm Farmland, a 40,000-acre operation in Colby, Kansas. Surrounding Thomas County is now dotted with wind farms. Farmers there once grew wheat exclusively, he said, but they have started to diversify due to more frequent drought and global competition depressing prices. Frahm himself now mainly plants corn. He irrigates, fertilizes and harvests the grain using multimillion-dollar machines, then stores it in gleaming, 80-foot steel grain bins. His 7,000 acres of wheat sometimes produce just 5 per cent of his farm's total output. 'There's certainly profit in corn,' he said. --- Reporting by Emily Schmall; Editing by Simon Webb and David Gregorio
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Even as Oklahoma promises state tax rebates and other incentives, Westwin is lobbying Washington not to eliminate a federal production tax credit heavily opposed by Republicans along with other green energy subsidies enacted by former President Joe Biden, as Reuters reported earlier this month. Westwin is in negotiations with the Pentagon for a nickel supply deal that would keep metal inside the United States to make batteries for military drones and other equipment, according to a source familiar with the deliberations. Sustainable power Roughly 354 km northeast, a lithium refinery under construction from Stardust Power aims to produce 50,000 metric tons of the battery metal per year, about a fifth of what the U.S. is expected to need by 2030. Japan's Sumitomo signed a preliminary agreement in February to buy up to half of the facility's output. Stardust aims for the plant to filter lithium from brines - something that has yet to happen at commercial scale - and will have roughly the same capacity as Tesla's refinery under construction in Texas. It will be powered in part by renewable energy; nearly half of the state's electricity is generated by wind turbines. 'That was a huge draw,' said Roshan Pujari, Stardust's CEO. The company is pushing forward even after rival Albemarle paused plans to build a large U.S. refinery, citing weak lithium prices. 'During these down cycles is the best time to be developing, because why do we want prices to be high when we have nothing to sell?' Pujari said. USA Rare Earth, which went public earlier this year, chose Oklahoma over Texas for its rare earths magnet facility given what it felt was the personalized support from Stitt and other officials, said CEO Josh Ballard. Magnets made from rare earths turn electricity into motion for EVs; the U.S. stopped making them in the 1990s. Ballard says the facility is slated to open early next year and initially produce 1,200 metric tons annually, enough magnets to build more than 400,000 EVs. That supply is already highly sought after in the United States since China placed export restrictions on rare earths in April. Ballard said he has been fielding 'a lot of phone calls' since April from prospective customers. The company on Tuesday signed a preliminary supply agreement with Moog MOGa.N for magnets used in AI data centres. 'We can do this quickly. It's just a matter of how do we do it, and can the government help be a catalyst?' said Ballard. The company could get a boost from legislation introduced earlier this month by three U.S. senators - including Oklahoma's Markwayne Mullin - that would provide a tax credit for roughly 30 per cent of the cost to manufacture a magnet made from rare earths. Elsewhere, two Oklahoma battery processing facilities - from Green Li-ion and Blue Whale Materials - will break down lithium-ion batteries into copper and other building blocks for new batteries. Natural Evolution, in Tulsa, is spearheading a push to expand electronic waste recycling. Green Li-ion, which has a recycling facility in Atoka - Country music star Reba McEntire's hometown - has held talks with Glencore as well as Westwin about buying a recycled version of battery scrap known as MHP, or mixed hydroxide precipitate, that can be used to make nickel products, according to two sources familiar with the negotiations. Glencore declined to comment. Most of the country's recycled batteries are exported now to China in the form of black mass, essentially shredded battery parts. Green Li-ion, which is headquartered in Singapore, moved its U.S. operations to Oklahoma given the state's history with oil and gas extraction, skills it sees as complementary to black mass processing. 'This state has a lot of chemical engineers,' said Kevin Hobbie, the company's senior vice president of operations. 'Swinging for the fences' Oklahoma's foray into the energy transition hasn't been all smooth sailing. Tesla supplier Panasonic in 2022 chose Kansas over Oklahoma for a battery plant after the Sunflower State wooed it with US$1 billion in incentives. In January, EV startup Canoo filed for bankruptcy despite a US$1 million state grant and Stitt's commitment for his administration to buy 1,000 of the company's vehicles. Canoo, which had several production facilities in Oklahoma, blamed uncertain demand for its cargo vans. State officials say they are trying to recoup the funds. Stitt said he is not bothered by the bankruptcy. 'We're going to keep swinging for the fences,' he said. The state's education system has also generated negative headlines, due in part to a battle over low standards that could make it difficult to convince high-tech talent and their families to relocate to Oklahoma. The state's pre-kindergarten through twelfth grade educational system, for instance, is ranked 48th out of the 50 U.S. states by U.S. News and World Report, and many schools have moved to a four-day week to save money. Alphabet's Google, which built an Oklahoma data centre in 2011, donated funds to the local school district in part to attract faculty. Oklahoma's superintendent of schools is an elected position over which Stitt has no control. The governor successfully pushed for a school voucher system that he said should attract more families. 'If I create competition, and now a public school has to compete for a student, it's going to make all boats rise and bring more talent to Oklahoma,' Stitt said. The governor said he is focused on helping the minerals refiners in his state grow and is lobbying Trump to require federal contractors to increase the percentage of minerals they buy that are processed in the country. That's a key desire also for Long, the Westwin founder, who spent her youth herding cattle, an experience she said inspired her interest in refining and a reticence for mining. 'After seeing the beef and meat industry, I learned that the packer is the one that seems to take the least amount of risk and yet makes the most amount of money,' she said. 'When I saw mining, I was like, 'The miner is the rancher and the refiner is the packer.' So I decided I want to be the packer.' --- Reporting by Ernest Scheyder; additional reporting by Nick Oxford; Editing by Veronica Brown and Claudia Parsons
