Cash Grains, NEC

SIC 0119

Companies in this industry

Industry report:

This industry includes establishments primarily engaged in the production of cash grains, not elsewhere classified. Primary cash grains in this classification include dry field and seed peas and beans, safflowers, sunflowers, and popcorn. The industry also includes farms growing barley, buckwheat, lentils, oats, sorghum, rye, mustard seeds, cowpea, and flaxseed.

Major members of this industry, such as barley, oats, sorghum, and dry beans, combined for more than $3.6 billion in production in 2009, according to the U.S. Department of Agriculture (USDA). This group of cash grains accounted for more than 17 million acres of farmland in the first decade of the twenty-first century. Cash grains, like most U.S. crops, had depended on government price supports since the Great Depression up until 1996, when Congress passed the Federal Agriculture Improvement and Reform Act, or "freedom to farm" legislation. This act gradually decreased subsidies over a seven-year period, with a goal of eliminating them by 2002 and ushering in a new era of market-dependent farming. However, the passage of the 2002 Farm Bill, signed by President Bush in May of that year, extended price subsidies for cash grains and other crops, as did the Food, Conservation, and Energy Act of 2008, which was passed six years later.

About 60 percent of the barley grown in the United States is used for livestock feed, especially dairy and beef cattle. Another third of the crop is used for malt by the food and brewing industries. Barley has been affected by acreage reduction programs through which the U.S. government has paid farmers to suspend the planting of barley on portions of their land. In 2009, barley acres planted reached a record low of 3,567, compared to the nearly 9,000 bushels planted in 1991. Between 1998 and 2009, annual U.S. barley production fell from 352 million bushels to 227 million bushels. Over the same time period, however, yield per acre harvested increased, from 60 bushels to 73 bushels. North Dakota accounted for 35 percent of the nation's production of barley in 2009. Other top-producing states included Idaho, Montana, and Colorado.

Genetic research may enhance barley's future by developing breeds of barley that can yield leavening flour for breads (conventional barley flour alone cannot yield raised loaves of bread) and that are resistant to disease. If biotechnology produces such a barley hybrid, then the demand for barley would likely increase because of its growing efficiency: barley yields about 29 more bushels per acre than wheat.

Valued at $1.2 billion in 2009, sorghum (cereal grasses, also called milo) is used primarily for livestock feed. Applications of sorghum in food, seed, and industrial processing account for only about 2 percent of the U.S. crop. The use of sorghum in liquors has been its most common food application. Sorghum is also processed into starch, oil, and dextrose. In 2009 the United States produced 383 million bushels of sorghum, and the top-producing states were Kansas, Texas, Nebraska, Oklahoma, and Arkansas, according to the U.S. Department of Agriculture. In the late years of the first decade of the 2000s, U.S. sorghum sales increased, partly due to increased exports to Europe. In 2009, about 30 percent of the crop was exported. Overall production, however, suffered a decline beginning in the early 1990s. In 2009 farmers planted only 6.6 million acres of sorghum--which has competed with corn as a primary livestock feed--down from 9.5 million acres in 2002. Yield was down to 69.4 bushels per acre in 2009, as compared to 73.2 bushels two years earlier.

Oats, the smallest agricultural of contracts traded on the Chicago Board of Trade, is used as a cash grain as well as on-farm as straw, pasture, forage, or as a companion crop to help establish an alfalfa crop or other legume crop. Leading states in oat production in the early 2010s included Wisconsin, Minnesota, and North Dakota. Although the value of oat production grew from $212 million in 2002 to $280 million in 2008, oat production continued its decline that had begun in the 1950s, reaching only 93 million bushels in 2009. These trends reflect the view that U.S. oat crops are viewed as inferior to foreign oats. While oat consumption in general gained ground as food due to growing evidence that eating oats helps to reduce cholesterol, an increasing proportion of this consumption was of foreign oats. Researchers continued to search for ways to increase the quality of American-grown oats.

A minor crop in the United States, rye is used primarily as livestock feed and is often mixed with other grains. Rye, especially rye flour, is also used for food. Less than 2 million acres were planted annually during the 1990s and early in the first decade of the twenty-first century, and by 2009 that figure had dropped to 1.2 million. About 20 percent of this acreage was harvested and the rest was grown for grazing, grown for ground cover in the winter, or plowed under to enrich the soil. Almost 7 million bushels of rye were produced in 2009, and the top two rye-producing states were Georgia and Oklahoma. Value of production reached $33.4 million that year. Significantly more rye was imported than exported in the United States in the late years of the first decade of the 2000s and early 2010s, with Canada and Germany supplying all of the rye that came into the country.

Dry Beans
The United States has consistently been a major dry bean exporter, with Mexico, Canada, and the United Kingdom the primary markets. In the late years of the first decade of the 2000s, about 76 percent of all dry beans produced in the United States came from four states: North Dakota, Michigan, Nebraska, and Minnesota. Dry edible beans, including pintos, garbanzos, navy, limas, black, and black eye, have constituted this industry's third largest segment with annual sales of $519 million in 2002. Value of production in 2009 reached $793 million. With mild fluctuations, dry bean production has risen and has been predicted to continue this trend, regularly yielding more than 20 million hundredweight (cwt) annually. In 2009, the average yield of dry beans was 1,667 pounds per acre from approximately 655,000 acres harvested. The largest dry bean crops were pinto, navy, black, and great northern beans. Pinto bean crops totaled more than 40 percent of total dry bean production.

Sunflower and safflower seeds produced more than 3.0 billion pounds from almost 2 million acres of farmland during the first decade of the twenty-first century. The top two sunflower-producing states were North Dakota and South Dakota, with Kansas a distant third. These seeds are primarily used in cooking oil, as the oil content of sunflower seeds is typically 40 percent or higher. Safflower oil had a peripheral industrial application because it resembles linseed oil, and safflower cakes were used as high-protein livestock supplement. As sunflower seeds have become more acceptable in international markets, demand is expected to increase.

Popcorn is native to the Americas and has been cultivated and eaten by Native Americans for centuries. The United States grows nearly all the popcorn used in the world. Nebraska produced about 34 percent of all U.S. popcorn in the late years of the first decade of the 2000s, and Indiana, Illinois, Ohio, and other Corn Belt states have consistently been the leading popcorn producers in the United States. In 2008, 861 million pounds of popcorn were produced in 29 states.

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