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Sidney , Montana
June 29, 2016     Sidney Herald
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June 29, 2016

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SIDNEY HERALD Agriculture WEDNESDAY, JUNE 29, 2016 3A RENI~E JEAN/PLAINS REPORTER Golden Tioga durum turns into the header of a combine near Grenora on the farm of Wade Fischer. He was one of the state's Joppa grow- ers, a new NDSU variety, and found it out-yielded his old favorite by an average of two bushels an acre. BYJESSICAHOLDMAN edtolockinaprofitableprice er risk because there's less Dakota growing season. BISMARCK TRIBUNE level given the alternative transparency in the market, The outcome of a record- low returns on wheat. Flaten said. They can't hedge planted pulse crop will GARRISON, N.D. -- JM Flaten said, because of the or haul into the closest eleva- determine whether the high Grain started buying con- shortage, buyers were astor and dump their crop.prices will stick around. tracts for the 2016 pulse crop anxious to purchase as sell- "Commodities are right on "I know a lot of peas went in November. Normally, the ers were to sell. paper in front of them; peas in the ground this year," company doesn't start until "I think we're in transi- are marketed," he said. Flaten said. "Canada put early spring, tion for the better in terms of Other factors come into in phenomenal amount of "Despite the global slow- contracting and, hopefully, play because most pulse acres." down, we're still seeing very terms of value," he saidofthe crops are consumed in their Estimates in Canada for strong demand," said Justin shift he's seen in the pulse natural state, rather than lentils are between 5 mil- Flaten, who operates the market, ground into flour or oil, and lion and 6 million acres, Garrison-based company's Kevin Haas, chairman their appearance matters, compared to a 3.8 million- Montana office. "Yellow (pea of the North Dakota Dry For example, the shade of acre average, Flaten said: prices) are crazy high." Pea and Lentil Council, peas at harvest determines "That's just crazy." Whilepricesformostcrops agrees the industry did see whether they'll go to China Lentil acreage in North have sunk to break-even the aggressive contracting to be sold as a snack food or Dakota is estimated at levels or less, the price for trend early in the year, as Kansas City to be added to 240,000 acres, according to pulse crops has remained well as increased interest pet food. U.S. Department of Agricul- high with droughts shorten- in growing higher-pricedSome of that is changing, ture National Agricultural ing supply. And as farmers pulse crops, but trade has Flaten said. The industry Statistics Service numbers try to remain solvent, it has since slowed as buyers and has stepped up its market- and Montana's is up 50 per- shifted how those crops are sellers wait to see what hap- ing of pea flour as a source cent from 260,000 acres in bought and sold. pens with the recordnumber of protein that is gluten free 2015to 500,000 acres expected "This year, we contracted of acres planted, andfreeofGMOs, genetically this year. a lot of acres," Flaten said. "As harvest approaches, modified organisms whoseDespite possible records, "Normally, it's spot basis." we'll know a lot more," said genes have been altered there is still a lot that needs The2015season'scropsold Haas, which should be bythrough breeding to cause to fail into place, according at high prices and demand mid-July, traits in the plants that don't to Flaten. Too much rain at on the new season's crop, in With no futures for peasnaturally occur. An example harvest could wreck crops, the ground now, has stayed and lentils, farmers have Would be corn bred to with- while an oversupply could strong. Many farmers decid- typicallyseenthemasahigh- stand the shorter North drive prices down. In challenging times, get back to basics Q &A with Joseph Janzen, on these individuals and businesses. It's a bottom-up MSU Dept. of Agricultural approach to understanding Economics and Economics markets and economies. For example, some of my BYKIRSTENSTROMSODT ongoing research attempts FORUM NEWS SERVICE to measure the impact of U.S. government purchases Q. What's your personal of pulse crops for food aid on background in ag? prices received by farmers. I A. I was raised on a farm was intrigued by claims that near St. Francois Xavier, U.S. government buying can Manitoba. My dad, Jim, and cause shocks in pulse crop younger brother, Bill, cur- markets, soIcollecteddetailed rently farm there, growing data on the timing and quan- spring wheat, canola and tity of U.S. government ten- soybeans. During and after dersforpulsecropssince2002. college, I worked on thefarm. Using this data and statisti- At some point, I got the itch to cal methods, I try to identify develop a deeper understand- what would have happenedto ing of agricultural markets prices in the absence of U.S. and policies, which led me government purchases. The to pursue graduate studies at difference between the prices the University of California we have observed and this Davis. counterfactual scenario rep- I am fortunate enough to be resents the impact of govern- abletoreturnoftentoourfam- ment purchasing behavior. fly farm. I try to make it back So far, my analysis suggests during harvest each year. the average tender has a fairly It's great to be able to drive limitedimpactonprices--on the combine, turn a wrench, the order of a 1 to 2 percent clean bin bottoms and gener- increase. ally have my little brother tell me what to do for a week or Q. What is the main dif- two every year. ference between the U.S. In addition, being part of and Canadian ag economy? a farming family gives me a A. In many respects, farm- chance to ground truth some ing is farming, no matter of my economic analysis where in the world you are. against the know-how and My dad farms in Manitoba, common sense that can only and my father-in-law farms be found on the farm. in western Nebraska. Their operations are very differ- Q. You're an applied ent, but they have plenty of microeconomist. In lay- things to discuss when they man's terms, what does get together. There are far that mean? more similarities than differ- A. Takethe"micro" compo- ences. nent first. Microeconomists That said, two major dis- focus on the interactions similarities I see are exchange between individuals and rates and farm policy. businesses in the market for Exchange rate volatility is a a specific good. major factor affecting farm In agricultural markets, profitability in Canada. Sud- these individuals and busi- den changes in exchange rates nesses might be farmers, can give and take. Canadian merchants, processors and farmers are keenly aware of end-users of agricultural how inputs like machinery, commodities. My goal as an priced in U.S. dollars, have economist is to understand become considerably more the impact of changing mar- expensive in the past two ket conditions and policies years.