SIC 0111 Wheat

 
INDEX
FREE EXCERPT

SIC 0111

This industry consists of establishments primarily engaged in the production of wheat or whose sales of wheat account for more than 50 percent of total value of sales for their agricultural production.

NAICS CODE(S)

111140

Wheat Farming

INDUSTRY SNAPSHOT

Wheat is the third largest field crop in the United States in terms of planted acreage and gross farm receipts, with Kansas, North Dakota, Montana, Washington, and Oklahoma producing the most. In 2005-2006 there were approximately 57.3 million acres of wheat planted, yielding about 46.8 million acres harvested for a total of 38.7 bushels per acre. This represented a slight gain from the previous year in planted acres though the acres harvested decreased, as 57.2 million planted acres yielded 50.1 million acres harvested, for a total of 42 bushels per acre. Season average farm prices (SAFP) for American wheat were projected to be around $4.25 to $4.29 per bushel (an increase from the previous year's $3.42 per bushel) and depended on an enormous range of environmental, political, economic, and technological factors.

The 2002 Census of Agriculture, updated every five years by the U.S. Census, reported an estimated 169,528 wheat farms, down from the 1997 total of 252,922 wheat farms. The number of acres harvested shrunk from about 62 million to 46 million as did the number of bushels (2.3 billion bushels in 1997 to 1.6 billion bushels in 2002). Nearly 52 percent of wheat farms were 99 acres or less while only 16 percent of the total number of wheat farms were 500 acres or more.

Dun & Bradstreet reported in 2006 that the industry's estimated 14,457 establishments posted annual sales of nearly $2.3 billion with about 30,440 employees. Kansas led with nearly $360 million in sales followed by North Dakota with nearly $243 million in sales and Washington with about $195 million in sales.

ORGANIZATION AND STRUCTURE

Although some wheat is used as livestock feed, it is largely used to make flour. The United States is the top exporter of wheat worldwide—when combined with Canada, Australia, the European Union-25 (EU-25), and Argentina, the group comprises 80 percent of total worldwide wheat exports. In the mid 2000s nearly 50 percent of total harvested crops were accounted for in exports. In 2006-2007, 925 million bushels produced food products, 910 million bushels were exported, 170 million bushels were used as feed and residual use, and 81.7 million bushels were used for seeding. Furthermore, the U.S. Department of Agriculture (USDA) projected for 2007-08 that exports will expand to 1,050 million bushels. Due to the importance of U.S. wheat in international trade and the integral role the USDA played in every sector of the agricultural economy, wheat farmers were in many ways more affected by shifts in the political climate than by actual weather conditions.

The U.S. wheat industry also was a world leader in research and development, a point underscored by the unparalleled variety of wheat grown by American farmers. While the Hard Red Winter (HRW) wheat crop is much larger than other wheat crops (accounting for about 40 percent of the total wheat supply and produce 930 million bushels in 2005), there were four other commercial classes of U.S. wheat: Hard Red Spring (HRS), Soft Red Winter (SRW), White Wheat, Durum Wheat.

In 2006 the National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) submitted a generally positive opinion on the acceptance of bioengineered wheat, otherwise known as bio-tech or genetically modified (GM) crops, after previously holding different positions on the subject largely due to consumer fear of the safety of such crops and farmers' concerns about export profits.

Distribution, Production Conditions, and Use

Although wheat is grown in virtually every state, the focal point of the industry is in the central and southern Great Plains region where HRW Wheat is produced. There, in states like Kansas, Oklahoma, Nebraska, Texas, and Colorado, the winters are cold and dry, while the summers are hot. Precipitation, which varies over the region (between 13 and 30 inches annually), can fluctuate drastically, and droughts periodically afflict wide areas for a succession of years. Farms are generally large and employ extensive, as opposed to intensive, methods of crop production. Wheat farmers employ various systems of crop rotation depending on field soil moisture. Most often, farmers alternate a year of wheat with a year of fallow to conserve soil moisture, and HRW wheat is sown in late autumn and harvested in the spring. Wheat production is highly mechanized in the region. A farm worker can typically sow 100 acres or combine-harvest 50 acres in a workday. When milled, HRW wheat produces strong baking and high-quality bread-making flours.

The main region for HRS wheat is the northern Great Plains region, where winters are too harsh for HRW wheat production. The soils are deep, rich, black or brown grassland soils. HRS wheat is usually sown in late April and harvested in August. On average, 80 percent of the annual 15 to 25 inches of rainfall comes during this short growing season. A great variety of crops are used in rotation with wheat, and summer fallowing is becoming rare except in the driest areas. The climatic and soil conditions give HRS wheat a high protein content, strong gluten, and high baking strength. Its flour is excellent for bread-making and can support weaker flours when combined with them in breads.

The Pacific Northwest is the third significant American wheat-producing region. There, on the Columbia Plateau in the valley of the Columbia River, large areas of rolling farmland are protected by mountains and the climate is moderated by the Japanese Current. Most of the wheat grown in this region is white-grained, or "White Wheat." It is produced in semi-arid zones (10-20 inches of rainfall/year), sown in autumn, and harvested in the spring. Because of the varying altitudes, however, almost all other kinds of wheat (including various wheats falling under the "White" designation) are also cultivated. The region's wheat production, crop rotation, and mechanization methods are similar to those used by farmers in the Great Plains. Because of the different topography of the Columbia Plateau, however, combines are often specially designed with self-leveling mechanisms to operate on hillsides. Most White Wheat flour is suited only for pastry and crackers.

The Eastern part of the country produces wheat on a much smaller scale than the rest of the country and also generally produces inferior wheats of a softer texture and lower protein content. The majority of the wheat in this region, including SRW in the central and southeastern states and White in New York and Michigan, is grown as part of a complex crop rotation system on farms that specialize in other agricultural products. However, the farming methods used on these smaller farms have often resulted in higher wheat yields than those recorded in the major wheat regions.

ORGANIZATION AND STRUCTURE

Wheat farmers are part of a large and increasingly complex agribusiness commodity system. The multileveled structure of the wheat industry as a whole includes farm suppliers, storage operators, processors, wholesalers, and...

To continue reading

FREE SIGN UP