‘Desert Durum’

BISMARCK — A steep drop in durum wheat acres in U.S. desert country likely won’t hurt the American pasta industry or boost prices for farmers, industry officials say. The reason: there’s plenty of durum still around.

Acres of “Desert Durum” — a name trademarked by Arizona and California grain groups for irrigated durum grown in the two states — doubled last year to more than 300,000 acres, driven by soaring market prices. But the size of the southern crop is expected to drop as much as 50 percent during the coming growing season.

“2008 was pumped up by the highest prices in history,” said Glenn Quick, owner of the Phoenix-based Quick Grain Corp., which buys and sells grain and distributes seed.

Prices have since fallen, along with those for virtually every other commodity. “The motivation (for growing durum) has diminished,” Quick said. “You basically have acres planted for rotation rather than profit.”

North Dakota produces most of the nation’s durum, which is ground into the semolina flour used by pasta manufacturers. Desert Durum typically accounts for about 20 percent of the U.S. crop.

The southern and northern durum crops have opposite growing seasons, and the irrigated southwestern durum costs much more to produce than northern durum because of the water needed and because farmers use three times as much fertilizer. That boosts yields and makes the crop more economical.

“The cost of production is about $9 a bushel there, and the contracts being offered are only about $10 a bushel,” said Jim Diepolder, a North Dakota durum farmer and past-president of the U.S. Durum Growers Association. “They can make more money on other crops.”

The southern durum farmers typically seed their crops between Thanksgiving and Christmas.

“Between now and the end of December we could stimulate another 10 to 20 percent of our acres with another dollar or two a bushel,” Quick said.

But supply is not a problem right now for pasta makers, said Mark Vermylen, vice president of New Jersey-based A. Zerega’s Sons Inc.

“A year ago we were really concerned about supply,” he said. “The market really worked. The desert growers saw there was a need for their product.

“We’re less concerned (about supply) this year,” Vermylen said. “Basically, we’re getting back to normal. I haven’t heard anyone who’s alarmed by the change in Desert Durum production.”

That means the drop in southwestern acres is not likely to boost prices.

In North Dakota, which typically produces nearly two-thirds of the domestic durum crop, the recently finished harvest produced about 42 million bushels, down just slightly from 2007.

Diepolder said durum reserves around the world are building, which is helping push down market prices. With fertilizer costs going in the opposite direction, northern farmers are worried about making a profit on their durum next year, he said.

“Last spring we had $12 wheat, and next spring we’ll have $6 wheat,” he said. “If you’re going to plant durum, you’re going to need somewhere in the vicinity of $7 to $10 a bushel to make any money.”

Diepolder still expects durum acres to be stable in the north.

“The bins are empty,” he said. “There will be some acres that will be produced and put away ... until we see profitable price levels.”

Tags: durum, grain, pasta, prices, commodities