Rob:  Well, while we’ve talked quite a bit about the impact Oklahoma’s energy sector has had on our economy, we have yet to touch on what is in store for the state’s second largest industry, agriculture.  Joining me now to do just that is OSU agricultural economist, Kim Anderson.  Well 2009 certainly was an interesting year when it comes to the commodity markets.
Kim Anderson:  Yes, it was like Jekyll and Hyde if you look at 2008 and 2009.  You know, 2008 was a banner year especially for the crop producers, livestock not quite as well as say two 07, but two 09 was a very trying year, both with the harvest, whether you’re looking at wheat, or whether you’re looking at the corn and beans, and with the prices.
Rob:  Now we went from some record high prices to, not record lows, but significantly lower.
Kim:  Yes, you bet.  Well you go back to April of 08, we had record prices for our wheat at that point in time, and probably went from, thirteen, twelve, thirteen dollar wheat back in the spring of 08 to below four dollars as we got into the fall of 09.
Rob:  Now if we’ve seen that drop in commodity prices, have we also seen a drop in the inputs that farmers are so dependent upon?
Kim:  Yeah, that would be the good news, and if you go back to that 08 crop with the relatively high prices, we planted the 09 crop with relatively high fuel prices, relatively high fertilizer prices, the inputs probably, oh four dollars and eighty to five dollars a bushel break even, some higher, some a little bit lower.  Now as we planted the 10 crop, the prices were significantly lower with the input costs with the, for the wheat break-even per bushel probably in the three seventy five to four and a quarter range depending on where you’re located and what your yields are.
Rob:  Now in concern of wheat, we did see some record low stocks.  Where are they now?
Kim:  They’re not record high, but they might as well be.  You know, we went from three hundred and fifty million bushels to nine hundred projected right now for May the 31st of this next year; nine hundred million bushels.  Some analysts say that it could be as high as a billion bushels.  Now you’ve got to compare that to a five year average of around five hundred million bushels, so we’ve got about twice as much stocks as we need.
Rob:  So in the short term, laws of supply and demand come in to play?
Kim:  I think they will.  You know, we’ve seen prices drop off.  They’ve been kind of edging down recently.  We are, our export demand has been weak to say the least.  Right now U S prices are above world prices about fifty cents, that tells you what they’ll have to do for us to move a lot of this wheat out of storage; and if you’re looking at storage, we went from excess storage two years ago to there’s some question of whether we’ll have enough room to store the 2010 wheat crop.
Rob:  Now it certainly is a global market.
Kim:  It’s definitely a global market.  Our prices have to be in line with the, with the world prices.
Rob:  Now, as you look into 2010, is there any one thing that you tell farmers to watch for?
Kim:  You bet.  The way, the thing you watch is input costs, is, what’s the cost of production in getting a good quality product produced to sell?
Rob:  At the end of the day, does it come down to weather?
Kim:  You know, back in the 1980’s Luther Tweeden told me, policy comes, policy goes, but weather’s going to determine the price.
Rob:  Alright Kim, as always, appreciate you coming by.  Kim Anderson an agricultural economist at Oklahoma State University.