MARIANNA -- Esten Mason has some welcome news for Arkansas farmers who are struggling to make money off their wheat crop because of low commodity prices.
Mason, who runs the wheat breeding program at the University of Arkansas Division of Agriculture, recently released the UA's first new wheat variety in several years. The new soft red winter wheat is high-yielding, well-suited to the mid-South and resistant to common diseases, he said.
"There's such a fine line on profit versus not, that we need varieties that are resistant to the diseases we have here in Arkansas," Mason said.
Wheat varieties that are naturally resistant to pathogens like stripe rust require fewer applications of fungicides so are less costly to grow. And that, combined with higher yields, means producers have a fighting chance to at least break even on their wheat crop despite the current slump in commodity prices, Mason said.
He showed off a test plot of the new variety during a recent visit to the UA's Lon Mann Cotton Research Station in Marianna, where the small green plants rippled in a stiff wind. The wheat, planted last fall, will be ready for harvest in early June.
Scott Young, who grows corn, soybeans and wheat in Ashley County, said he works closely with the UA Extension Service every year to pick the best available wheat variety for his farm. Wheat diseases vary from farm to farm and change over time, he said, so picking varieties with the right kind of resistance is key.
"There's always constant changes in farming, and you have to keep up to stay profitable," Young said.
The UA last fall solicited bids for the exclusive right to produce and market the new variety, originally called AR11LE24. AgSouth Genetics, a Georgia-based company, and Stratton Seed Co. in Stuttgart worked together to produce the winning bid. Mason declined to disclose the amount of their bid but said the new variety, to be marketed as AGS 2055, will be available to farmers in the fall.
Since 2006, the UA has released 65 varieties of plants, including rice, soybeans, and various fruits, among others, said Don Dombek, director of the UA Division of Agriculture crop variety improvement program. Thirty-four of those releases were public or unlicensed, Dombek said, meaning the UA will sell foundation-grade seed to any qualified seed grower or dealer that wants to market a particular variety to farmers.
The remaining 31 were issued to winning bidders who acquired exclusive or semi-exclusive rights to the varieties, he said. Those sales have generated about $4.37 million, which was funneled back into the UA's research and breeding programs, Dombek said.
UA officials choose the method of release that they believe will most efficiently make each variety available to farmers in the areas where it will perform best, he said. In the case of Mason's new wheat variety, it not only did well throughout Arkansas but also flourished in Texas, a roughly 1 million-acre market, Dombek said.
Mason said the new variety was initiated by the University of Georgia, which, along with the UA, is part of a six-state co-operative breeding program. It didn't do as well in Georgia trials as it did in Arkansas, so the University of Georgia wasn't interested in releasing it, Mason said.
In the UA's variety trials, AR11LE24 had a two-year average yield of 78 bushels per acre, ranking it seventh out of 46 cultivars with two years of test results, Mason said.
By comparison, Mason said, "Our average yield [in Arkansas] is around 50, and if you look at the U.S., the average yield is closer to 40 or 45."
The new variety also won the Texas yield trials each of the past two years, he said.
Higher yields and lower input costs are always important to farmers but never more so than when commodity prices are low, as they have been the past two years. Prices fell because of a global oversupply of all agricultural commodities. Wheat -- which accounts for 20 percent of the calories consumed worldwide, according to the UN Food and Agriculture Organization -- is particularly sensitive to supply pressures because it is grown widely across the planet.
According to the U.S. Department of Agriculture's most recent estimates, the U.S. stockpile of wheat is equal to 49 percent of the nation's annual consumption. From 2006 to 2014, when prices began to fall, the average was 30 percent. Globally, the USDA said, the stockpile is 26 percent of annual consumption, up from an average over the same period of 22 percent.
In Arkansas, winter wheat is a secondary crop, said Archie Flanders, an agricultural economist with UA Extension Service. That means it's not a primary source of income for most farmers, unlike rice, soybeans and corn, he said.
As a result, some farmers plant wheat to create cash flows even when low prices would seem to argue against it, he said. Seed is relatively cheap and farmers may be able to plant winter wheat using fuel and other production inputs they have on hand as well as equipment that would otherwise be idle in the fall, Flanders said.
Recently, he said, the price of wheat has averaged between $4.50 and $4.60 per bushel, down from a reported $5.40 to $5.50 in February 2015.
Farmers who can produce about 65 bushels an acre on land that they own will have out-of-pocket operating expenses of about $4 per bushel, Flanders said. Farmers who rent their land, and typically give 25 percent of their crop to the landowner, could have out-of-pocket operating expenses as high as $5.50 per bushel, he said.
"It's really hard even in good times to cover your costs in wheat," Flanders said.
If farmers have to pay for multiple applications of fungicides, their already slim chances of making money are further reduced, he said.
That's where Mason's breeding program and AR11LE24's resistance to stripe rust come in.
"You have to continually develop new varieties because the environment changes," Mason said. "In particular, races of diseases change on a yearly basis or a biannual basis. Breeding is a continuous effort because if you don't have that continuous effort, a variety that's good this year will break down to disease next year."
SundayMonday Business on 02/21/2016