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Nebraska considers increasing wheat checkoff

Nebraska considers increasing wheat checkoff

Winter wheat

The Nebraska Wheat Board is considering a proposal to increase the amount farmers pay to the checkoff when they sell a bushel of wheat.

The rate is currently four-tenths of 1% of the value of wheat sold. At its April 29 meeting in Lincoln, the board will consider a tenth of a percent hike.

“The board wants to re-visit the issue of whether adding another one-tenth of one percent hike in the checkoff would help,” said Royce Schaneman, executive director of the Nebraska Wheat Board.

He said wheat acres have declined more than 40% since 2012 because the price hasn’t been favorable. In that time, the buying power of the dollar decreased by 20% and expenses have gone up, Schaneman noted.

The proposal is to increase the checkoff to five-tenths of a percent.

The checkoff allocates one-third of its budget to research and another third goes to international marketing. After that, funds go to domestic marketing, promotion and education.

A decade ago, the board changed the way checkoff funds were collected, moving from a flat amount for a bushel sold to a percent of the value of wheat sold. The Legislature put in a clause that they can pursue up to five-tenths of a percent, Schaneman explained.

The Nebraska Wheat Board was required to keep that first rate change in effect for one year. Schaneman says it’s now been 10 years.

Under the proposed funding formula, the increase would generate approximately an additional $150,000 in revenue for the fiscal year, he said. This varies with the number of acres harvested, yield and price at the time of sale.

If the checkoff rate is increased to five-tenths on one bushel of wheat that would be $5.91 times 0.005, or 2.9 cents per bushel, given prices from April 21.

University crop budgets for 2020 dryland wheat cost of production range from $4.16 to $5.58.

“Using that as a benchmark, wheat producers in the state have not seen profitable margins six years,” Schaneman said.

The board plans to re-visit the issue at its April 29 meeting to see how much another one-tenth of 1% would help. If approved, the increase to the checkoff would go through a rules process with a 30-day notice and public hearing. The governor ultimately accepts or denies the change.

Another topic at the April meeting will be considering a proposal to move the Nebraska Wheat Board office from its current location in the Nebraska State Office building a block north of the capital, to the north part of Lincoln.

It’s part of the state’s long-term plan for relocating agencies, Schaneman said. The wheat board would move next to several ag-related state agencies in an area called Fallbrook. He said the wheat board didn’t ask for the move, but noted it is meant to keep the synergies between the agencies.

The board will examine the costs to relocate and make a decision. The relocation topic has also been proposed to other ag-related boards.

Also up for discussion are international and domestic marketing items.

The Nebraska Wheat Board meeting April 29 will be held by video conference, 7-10 p.m. to accommodate farmers’ schedules. To join, contact the wheat board office during regular business hours for a video link. Call 402-471-2358 or email wheat.board@nebraska.gov.

Reporter Amy Hadachek is a two-time Emmy Award winning meteorologist and a storm chaser who earned her NWA and AMS Broadcast Meteorology Seals of Approval. She and her husband live on a diversified farm in Kansas. Reach her at amy.hadachek@midwestmessenger.com.

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Reporter Amy Hadachek is a two-time Emmy Award winning meteorologist and a storm chaser. She and her husband live on a diversified farm in Kansas. Reach her at amy.hadachek@midwestmessenger.com.

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