Feb/March 1998
FAQ About State Wheat Checkoff Programs
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Prairie Grains is the
official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain
Growers Association,
South Dakota Wheat,
Inc., and the
Minnesota Barley
Growers Association.
If you are doing such a great job, why isn't the price of wheat higher?
We all want to see higher prices but getting higher prices is complex. Some of it has to do with issues beyond the effectiveness of the Commission programs. Issues, such as unfair subsidies of the European Union and practices of monopoly grain boards like Canada, play an important part in wheat prices. We can't control prices other countries pay to their producers, the level of production they establish or the subsidies they offer. Nor can we control the weather.
Can we guarantee a higher price?
No. In fact most wheat producers know it's unrealistic to expect it. When the world has an oversupply of wheat or the government has made a decision not to be competitive in the export markets, or severe weather impacts the wheat crop, the market reacts. The Commission has no claim to credit when prices go up nor share the blame when prices go down.
The Commission programs are designed to promote wheat and help expand markets both domestically and internationally, encouraging the government to be more aggressive in export policy, and improving wheat quality and production through variety development and other research.
Who controls the checkoff funds?
Farmers. The wheat checkoff is administered by a board consisting of wheat producers, elected by fellow wheat producers in some states, appointed in other states. These producers have the same concerns, experiences, and challenges as all wheat producers in the state. They want the money to go toward programs that do them the most long-term good. The checkoff-funded wheat commission or council in each state strives for accountability with as little bureaucracy and government control as possible.
Where is the money being spent?
Research, domestic promotion, and export promotion are the three primary program areas in each wheat state.
Research: The bulk of research dollars are invested on research to improve varieties and production practices custom-made for the individual state's environmental conditions. Most wheat varieties are publicly developed through the university system. It's a long term investment, but continued investment over the long-run results in improved wheat quality and production. Research is also directed at combating disease and insects, which cause severe economic wheat losses throughout the state.
Domestic Promotion: Consumers in the United States average only about four servings of grain products a day. If Americans achieved even the minimum servings recommend by the food guide pyramid, producers would sell an additional 300 million bushels of wheat. Check-off dollars invested through the Wheat Foods Council help accomplish this through the joint efforts of all elements of wheat industry.
Export Promotion: Exports have the biggest influence on the price of wheat. Internationally, we in South Dakota work through U.S. Wheat Associates along with 17 other wheat commissions. Promotion areas are targeted based on potential market demand and consumption. By working together and leveraging checkoff dollars, successful programs that ensure a future for wheat farmers are developed and implemented.
Why invest so much money in U.S. Wheat Associates?
Independently, we could not accomplish the programs and activities of international export promotion. Our checkoff dollars are leveraged to increase funding through other wheat commissions, the federal government and overseas cooperators. Additionally, U.S. Wheat Associates has the staff and technical expertise to accomplish the objectives of worldwide export market development.
If we are spending money on research to increase production, won't that damage the market by increasing the supply over the demand?
Absolutely not. Increased yields mean a better return for farmers. A better yield reduces costs of production, and less cost over fewer acres. The world population is growing rapidly and demand for food is increasing. Those markets will go to the countries that can produce efficiently and competitively.
Why do we bring in trade teams and send people on trips?
We host trade teams because overseas buyers want to know more about the U.S. marketing system, how wheat is produced, how it is handled, stored, and transported to their mills. They like to know with whom they will do business, face-to-face, so they travel to the source of their raw product. Tours emphasize that the U.S. is a consistent and reliable source of wheat.
They also allow our wheat farmers the opportunity to meet with foreign buyers to understand the quality requirements of these customers and how specific attributes relate to their processing technology and the quality of their finished product.
Commissioners and staff do travel to Washington, D.C. as well as other areas of the U.S. and abroad to testify on trade policy issues or to strategize, carry out and evaluate market development and customer service programs.
We capitalize on communications technology by participating in conference calls and interactive video network conferences as much as possible. However, there are many times when this is unworkable. If you've ever belonged to a church council, school board or other local board, most likely the meetings were not conducted over the phone or at a member's home. They were probably held in a suitable meeting place in town. So it goes with wheat checkoff programs. We cannot be isolated in the wheat industry, which is a global business. n