(The following story by Erin Emery appeared on The Denver Post website on October 5.)
DENVER, Colo. — Weeks after Gov. Bill Ritter signed an emergency order to help farmers move a bumper crop of wheat to markets out of state, much of the grain remains in Colorado.
After a blockbuster harvest this summer of 94 million bushels – a 136 percent increase over last year – Colorado farmers scrambled to move the wheat to market. A market that now is flooded with grain.
Much of the harvest is stuck in storage or on the ground, partly because of a shortage of rail cars and commercial carriers. Many carriers went out of business after six years of drought because there wasn’t enough crop to haul from the state’s 9,000 wheat farmers.
In August, Gov. Bill Ritter suspended motor-carrier laws until this Saturday so farmers could more easily get their grain to market. Farmers said the move helped, but they still need more rail cars and more room in the market for their product.
“We’ve still got most of our wheat,” said Kelly Spitzer, a grain merchandiser for Tempel Grain in Wiley. At a company storage area in Two Buttes, southeast of Lamar, 350,000 bushels of harvested wheat is still on the ground, though it is covered.
To make matters worse, Colorado farmers are harvesting dryland corn and millet – and storage space for crops is at a premium.
It gets better: Corn’s ready
Grainland Coop has seven locations and storage for 28 million bushels of product. The company said it will have a “mountain” of corn on the ground in the coming weeks.
“The transportation emergency is still not over, and the Colorado Department of Agriculture continues to work with our wheat producers to get their product to market,” said John Stulp, commissioner of agriculture. “…Colorado typically exports 80 percent of our wheat, so this issue could have an impact on the Colorado agriculture economy.”
For Spitzer, lack of room in the market has created an even bigger headache.
“Transportation is still very tight, but right now our biggest problem is finding a market for the wheat. All of our markets are full of wheat, and they don’t want any more.”
Much of the state’s wheat crop is exported and moves by rail to the Gulf of Mexico and the Pacific Northwest. The wheat needs to be moved, because if it gets wet, it spoils.
Darrell Hanavan, executive director of the Colorado Association of Wheat Growers and the Colorado Wheat Administrative Committee, said that when the price per bushel reached a record $6 in July, the state’s farmers marketed half of their crop. Usually, only about 17 percent is marketed in July.
“The market doesn’t need 50 or 75 percent production all at once. They need it over a 12-month period. So, suddenly, the elevators have it, but there is no market for all of it right now. There will be, but the elevators are going to have to hold it until they have a market for it,” Hanavan said. “I don’t think in our history that we’ve seen a situation like this.”
Scott Kirkwood, a grain merchandiser at Grainland Coop in Haxtun, said the company is “waiting for the railroad to show up.”
“The railroad is running 15 to 20 days late,” he said. “We definitely need the room, with the big fall harvest coming on.
“Part of the problem is because of the big export push. There’s so much equipment and so many cars trying to get shoved in down there that it’s like when you’re driving down I-25 and 5 o’clock. You’re not going to go very far. You’re plugged.”
A bottleneck on the coast
Kevin Kaufman, group vice president, agricultural products, for Burlington Northern Santa Fe, said that last week on the Texas Gulf Coast, trains from 11 states were waiting to unload.
He said rule changes recently implemented would make loading and unloading crops more efficient so trains can return to states for more grain.
“In relation to what we’ve had to deal with the last five years, these are good problems to have,” Kirkwood said. “…We have good prices for farmers, good crops.”
Tim Larsen, senior international marketing specialist for the Colorado Department of Agriculture, said Colorado needed more than 5,000 more rail cars this year than last to move the wheat to market.
“Bottom line, the railroads can do the best job they can. They have a total of 30,000 rail cars – hopper cars for grain for the total U.S. system. And suddenly, we went from the need for 3,600 to 8,700. ‘Hi, can we have one-third of all the rail cars that you have in your whole system for Colorado, please? If we ask nicely?”‘