Drought drives big drop in wheat and oat forecast amid long-term shift to corn and soybeans

The federal government is projecting big declines in South Dakota’s production of wheat and oats, due in part to drought conditions but also because of a decades-long transition to corn and soybeans.

The U.S. Department of Agriculture is forecasting that South Dakota farmers this year will produce 17% less winter wheat, 29% less spring wheat and 23% less oats. 

Compared to last year, the area planted to each crop is relatively unchanged, but each crop’s yield-per-acre forecast is down significantly, indicating that drought is a factor.

Jim Clendenin, of rural Watertown, is a soil health technician with the South Dakota Soil Health Coalition. He said drought conditions in parts of eastern South Dakota are affecting this year’s crops.

“It’s just been so dry,” Clendenin said. “We need some rain, desperately.”

While this year’s declining harvest projections may be attributable to drought, Clendenin said oat and spring wheat production have been trending downward for over half a century. He said the explanation is simple.

“Cash is king,” Clendenin said. “And corn and soybeans are where the cash is.”

Wheat production had been growing until a decline in the early 2000s. 

“And that’s partly because corn and soybean subsidy programs are so robust,” Clendenin said. “It’s just easier only to grow corn and soybeans now.”

Corn acres planted in the U.S. increased from 60 million in 1983 to 89 million last year. The USDA attributes much of that growth to expanding ethanol production, which now accounts for nearly 45% of total corn use.  Additionally, corn now accounts for more than 95% of feed grain – which has grown in demand as confined animal feeding operations have proliferated. 

The popularization of soybeans is largely attributed to greater global demand (from China in particular), favorable planting conditions in the Midwest, and attributes that make it beneficial to rotate with corn. 

What has happened as a result is troubling to some farmers. Bryan Jorgensen incorporates cereal grains such as wheat and oats into the crop rotations at his farm and ranch near Ideal.

“I am very adamant about keeping cereal grains in our crop rotations for the soil health benefits,” Jorgensen said. 

Working cereal grains into a crop rotation keeps living roots in the ground for more of the year, and that minimizes topsoil loss and rainfall runoff, Jorgensen said. Additionally, keeping diverse root systems in the soil pulls a more varied range of nutrients into that soil.

Jorgensen isn’t alone in thinking the long-term decline in cereal grain production is “a problematic trend.” It’s a sentiment shared by Gettysburg farmer Tregg Cronin, who added that “your best crop yields will follow wheat,” because of the large amount of crop residue. He said crop residue catches more snow, which results in more moisture and cooler soil temperatures.

Jorgensen said farmers have turned away from cereal grains and toward corn and soybeans because “all the right government incentives are there to ensure a return on investment,” and because there are fewer places to sell cereal grains. 

“There are very few oat buyers in the game anymore,” Jorgensen said. “There has been a lot of consolidation in the grain buying industries, and now there are a lot of places that only take corn or soybeans.” 

Cronin attributes the downward trend to a few other factors as well. 

“The investments that multinational seed and chemical companies make isn’t going to cereal grains. It is going into corn and soybeans,” Cronin said. He said that makes those crops “a lot easier to grow.”

Cronin said a crop like wheat has a number of grading and testing requirements it must meet before a buyer will take it, largely because wheat is made into flour and must meet quality standards, while a significant share of corn ends up as ethanol or livestock feed.