Wheat Feeding Thwarted by Prices

The high price of wheat relative to feed grains has kept livestock producer interest in feeding wheat to their animals at bay, said Kansas State University agricultural economist Bill Tierney.

In a July 2002 report, the USDA cut its estimate of wheat feeding by 25 million bushels.
"As of early August, on a pound-per-pound basis, prices for hard red winter wheat in Garden City - the heart of the cattle feeding industry in the High Plains - were 44 percent above the price of corn," said Tierney, who is the crops marketing specialist for K-State Research and Extension. "A year ago the difference was 15 percent."

In key poultry-producer Arkansas, prices for soft red winter wheat were somewhat lower at 23 percent above corn. Based on "national average" prices, however, wheat held a 47-percent premium over corn, he said. Last year the premium was 36 percent.

"These figures are preliminary estimates, based on terminal prices, but it appears that the decision to feed wheat will be based on local price relationships and the availability of grain," he said. "Clearly, in much of the Delta, the southeast, and the southern Plains, wheat is not a competitive feed grain. Furthermore, unlike two years ago in the southern Plains, there is much less wheat available and most of what is there is milling quality."

Two years ago, the hard red winter wheat crop was larger and some of it was of low test weight or had other poor quality characteristics, Tierney said. That encouraged cattle feeders to work wheat into their finishing rations. ©