No Gain in Net Wheat Income

BOSEMAN - Aug 23/05 - SNS -- Adjusting net returns from growing wheat for annual inflation reveals farmers are not making any more money from the crop than they were in 1929, according to Montana State University (MSU) economist Duane Griffith.

Since 1929, there have been only a few years when prices rose considerably higher than costs. However, genetic improvements and better cultivation techniques and rising government subsidies in the United States have passed entirely to consumers, keeping net farm incomes steady.

"The amount of net farm income wheat growers can attribute to government payments varies tremendously," said Griffith. "In years of poor prices and/or yields, it can make up 100% of net farm income. In years with better prices and yields, that amount drops off."

The peak profit years since 1929 were during and immediately after World War II. Otherwise Griffith's data show that wheat growers' expenses and crop values track closely together, leaving net farm income largely unchanged.

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