Seeking a return to comity in intra-industry dialogue

by Morton Sosland
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In a year when election politics in the United States (U.S.) and other countries are characterized by hyperbole and vicious attacks, it is regrettable that some of the same confrontation has entered the grain industry. The election this November in the U.S., it may be hoped, will bring close to the political din. In the case of grain and grainbased foods, where wheat price volatility has prompted accusations of different sorts, a return to comity, to mutual respect and regard, has no fixed end point. Thus, this plea is made for recognizing the value of peaceful conversation in pursuit of common goals like strengthening consumer appreciation.

Little is to be gained by repeating the diatribes that have prompted this concern. Suffice it to say, some of the language used by spokesmen for wheat growers attacking the pleas by bakers has been of a sort that is not frequently heard. While the discussions within the Wheat Summit, convened several years ago in America by the principal elements of the industry — wheat farmers, flour millers and bakers — are secret, it is hoped that this effort, designed to unify positions on important matters, is not the cause of the unpleasantness. At the time the Wheat Summit players first met, no one even dreamed of a wheat market advance like that witnessed in the past crop season, but that hardly justifies these attacks.

It was the "March on Washington" by a group of American bakers in March that attracted the most vitriol in the way wheat farmers responded to urgent demands of bakers that the federal government terminate programs that bakers say accelerated the wheat price climb. Whereas bakers wanted less governmental interference, some of the producer response asserted that bakers sought draconian steps like an embargo on exports. This was an extreme example of converting a case for modest change into a cause célèbre. It is very much like bakers asserting that wheat farmers were in the forefront of pressing for ethanol expansion, of seeking expanded food aid at a time of grain shortage, and of wanting to preserve conservation payments.

As painful as explosive prices have been, bakers are aware that wheat farmers, after years of barely adequate returns, should defend anything that may account for these amazing levels. Indeed, that the market has offered sharply higher returns, not just to wheat, but to growers of other grains and a broad array of competing crops, does little more than exacerbate the severe problem the wheat-based food industry faced before the price climb. That is the diminished attraction of wheat for farmers in competition with crops like maize and soybeans. Thus, the case is made that while ethanol demand has heightened maize’s appeal as an alternative to wheat, this trend was under way in response to improved yields compared with wheat.

In pleading for mutual understanding and respect, for a return to civility within the entire grain and grain processing industry, attention needs to focus on the way that the business has changed and is changing around the world. One change that is particularly telling here is the way that the number of wheat farmers, meaning farmers who have no alternative but to grow wheat, is declining. From a time when the vast share of producers on the central Plains in America and in similar areas in other lands grew only wheat, a great transformation has occurred. This is a truth not always understood within grain. In the same way that the industry seeks to do everything possible to attract consumers, it is perhaps time to recognize that its core suppliers, the growers of wheat, need an equal dose of cultivation. This is best done by improved communication, by developing varieties that offer superior returns, through prices that are not as volatile as witnessed recently, and also by markets that assure a level of demand offering an adequate return.