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More Idaho wheat sold for feed, exports to Mexico drop


By SEAN ELLIS



Capital Press






BOISE -- After increasing significantly in 2012, Idaho wheat exports to Mexico dropped considerably during the first quarter of 2013.



The drop was caused by very high corn prices last year that resulted in a lot of Idaho wheat being sent through feed channels, according to industry experts.



"Because of the price of corn, we had millions of bushels of wheat go to feedlots," said Dennis Brower, director of commodities for Idaho Farm Bureau Federation. "We didn't have anything to sell to Mexico, that was our problem."



Idaho wheat sales to Mexico totaled $713,000 during the first quarter of 2013, a huge drop from the $5.97 million total recorded during the same January-March time period in 2012.



Those totals are based on U.S. Census Bureau data that is compiled for Idaho State Department of Agriculture by Global Trade Information Services.



Idaho wheat exports to Mexico grew rapidly during the first half of 2012 but they began decreasing during the latter part of the year as corn prices surged and a significant amount of wheat was sent into feed channels.



While customers in Mexico were still asking for Idaho wheat, there simply wasn't much to spare, Brower said.



"It wasn't because they didn't want it," he said. "We were getting calls for quotes every month (but) we couldn't come up with the wheat."



Total Idaho wheat production dipped 16 percent last year compared with 2011 but more wheat being pushed into feed channels was the biggest reason for the drop in wheat exports to Mexico, said Clark Johnston of J.C. Management, which does contract work for IFBF.



Johnston said about 7 million bushels of wheat more than normal just in southern Idaho alone has gone through feed channels since about September.



"The feedlots were out-bidding the flour mills by 30 to 40 cents a bushel at times," he said.



From a producer's standpoint, it wasn't a bad situation, he said, since feedlots weren't concerned about grades.



"There were no discounts," he said. "It was just, 'Bring it in, guys.' It was a really good market."



While corn priced higher than wheat was the reason for the drop-off in Idaho wheat exports to Mexico, Johnston said the situation has reversed itself and points to December wheat futures that are running $1.95 higher than corn futures.



Brower said he's hopeful Idaho will soon resume shipping wheat to Mexico at levels seen during the first half of 2012.



If the spread between wheat and corn prices holds, he said, "I'm guessing we won't be feeding wheat and well be back down (to Mexico) this fall."



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