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Wheat Grower Organizations Alarmed About Possible NAFTA Withdrawal

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are alarmed over media reports today that the Trump Administration is considering a withdrawal from the North American Free Trade Agreement (NAFTA). Mexico is our largest U.S. wheat buyer, importing more than 10 percent of all U.S. wheat exports this year. NAFTA truly opened the door to the strong and growing market opportunity in Mexico. Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers.

USW and NAWG understand that there are several elements of the trade agreement that could be re-examined and modernized. However, we believe withdrawing from NAFTA would be a serious mistake. It could lead to new tariffs on U.S. wheat and threaten to undermine the long-standing, loyal relationship U.S. wheat farmers have built with Mexico’s wheat buyers and food industry. That would be devastating to U.S. wheat farmers already facing unprofitable prices and increasingly aggressive wheat exporting competitors.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability. For more information, visit our website at www.wheatworld.org.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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U.S. and Canadian Wheat Farmer Leaders Call for Open Wheat Trade in Op-Ed

ARLINGTON, Virginia — In an op-ed published in Canada’s “News Hub Nation” Feb. 8, 2017, U.S. Wheat Associates Chairman and wheat farmer Jason Scott and Western Canadian Wheat Growers Association President and wheat farmer Levi Wood called on the Canadian government to take the steps needed to allow “a free flow of grain in both directions across the border to improve the efficiency of the grain handling systems in both countries and eliminate artificial price distortions that frustrate farmers.”

In the op-ed, Scott and Wood said: “Since the end of the Canadian Wheat Board’s government monopoly control over the marketing of western Canadian wheat … one of the most significant changes to come from marketing freedom for wheat farmers has been the growth in sales of Canadian wheat into the U.S. market.”

“Currently, Canadian farmers delivering wheat into the U.S. receive equitable treatment with grain grown south of the border; however, because of legislation and regulation that existed for years before the marketing freedom changes came to western Canada, U.S. producers who currently deliver wheat into Canada automatically receive the lowest grade, regardless of the quality or variety of grain, even if the variety is registered in Canada … This inequity has created significant concerns in the Canadian and U.S. wheat industries, especially given the potential of re-opening the North American Free Trade Agreement (NAFTA).”

To read the complete op-ed, please click here.

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Wheat Grower Organizations Disappointed in TPP Withdrawal; Call for New Agreements in Crucial Asian, Latin American Markets

WASHINGTON, DC — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) recognize that President Trump’s executive order to withdraw the United States from the Trans-Pacific Partnership (TPP) was inevitable. It is disappointing, however, that until an alternative trade policy is established, export opportunities in the promising Pacific Rim markets that could help U.S. wheat farmers at a time when they need it most are very much at risk.

“U.S. wheat farmers depend heavily on export demand to determine their per-bushel income,” said Jason Scott, USW Chairman and a wheat farmer from Easton, Md. “We can compete very effectively in Asian and Latin American markets where the demand for high quality wheat is rapidly increasing and our organizations took a long-view of the benefits TPP held out — a trade agreement that promoted economic growth abroad as a way to grow export sales and prosperity for farmers at home.”

Without TPP or alternative agreements, U.S. farmers will be forced to the sidelines of trade while losing market share in the region to our competitors including Australia, Canada, Russia and the European Union, which have current agreements or are negotiating new ones with countries outside the network of existing U.S. trade agreements,” said Gordon Stoner, NAWG President and a wheat farmer from Outlook, Mont.

USW and NAWG agree that trade agreements must provide the most benefit possible to our own farmers and industries. We continue to support new agreements that expand free, rules-based trade, as TPP would have done, and encourage that agricultural interests be able to continue to provide input into those negotiations.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA/Foreign Agricultural Service. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Wheat Grower Organizations Welcome New Trade Enforcement Actions Challenging China Policies

WASHINGTON, DC — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcome two trade dispute actions by the U.S. Trade Representative (USTR) challenging Chinese government policies that distort the wheat market and harm wheat growers throughout the rest of the world. USW and NAWG are encouraged to see the U.S. government take such a strong position on trade enforcement, which is crucial for building confidence in existing and new trade agreements.

The USTR filed a request on Dec. 15, 2016, for consultations with the World Trade Organization (WTO), alleging that China is not fairly administering its annual tariff rate quotas (TRQ) for corn, rice and 9.64 million metric tons (MMT) of imported wheat. This request states that China’s TRQ administration unfairly impedes wheat export opportunities. The USTR announced the TRQ action simultaneously with a request that the WTO form a dispute panel in the case it filed in September against China’s excessive market price support for domestic wheat, corn and rice production.

“As with its price support case, the USTR is shining a light on other policies that pre-empt market driven wheat trade, stifle our export opportunities and force private sector buyers and Chinese consumers to pay far more for milling wheat and wheat-based foods,” said USW President Alan Tracy.

“The facts in these two cases go hand-in-hand, demonstrating how Chinese government policies create an unfair advantage for domestic wheat production,” said Gordon Stoner, president of NAWG and a wheat farmer from Outlook, Montana. “Both actions call attention to the fact that when all countries follow the rules, a pro-trade agenda and trade agreements work for U.S. wheat farmers and their customers.”

China’s wheat TRQ was established in its WTO membership agreement in 2001. Under that agreement, China is allowed to initially allocate 90 percent of the TRQ to be imported through government buyers, or state trading enterprises (STEs), with only 10 percent reserved for private sector importers. The private sector portion of the TRQ is functioning well enough to be filled in recent years, in part because Chinese millers are trying to meet growing demand for products that require flour from different wheat classes with better milling and baking characteristics than domestically produced wheat provides. However, China’s notifications to the WTO on TRQ usage show an average fill rate of only 23 percent.

The WTO does not require that TRQs fill every year, but it has established rules regarding transparency and administration that are intended to facilitate the use of TRQs.

“When you consider that China’s domestic wheat prices are more than 40 percent higher than the landed cost of U.S. wheat imported from the Pacific Northwest, it would be logical to assume the TRQ would be fully used if the system were operating fairly, transparently and predictably as the rules intend. It is clearly not operating that way,” said Tracy. “This troublesome administration of China’s wheat TRQ is restraining export opportunities for U.S. wheat farmers and farmers from Canada, Australia and other wheat exporting countries to the detriment of Chinese consumers.”

The facts also argue against potential claims that enforcing the TRQ agreement would threaten China’s food security. China produces more wheat each year than any other single country and currently holds an estimated 45 percent of the world’s abundant wheat supplies. If China met its 9.64 MMT wheat TRQ, it would move up from number 14 to number 2 on the list of the world’s largest wheat importers, and its farmers would still produce 90 percent of domestically consumed wheat. Opening the wheat TRQ would also allow private sector millers and food producers to import the types of wheat they say they need, but cannot now obtain, and the benefits would be passed on to China’s consumers.

USW and NAWG also applaud the USTR’s request for a dispute panel in its WTO challenge to China’s trade-distorting market price support programs for wheat, corn and rice. It is a crucial step toward reining in a policy that costs U.S. wheat farmers between $650 and $700 million annually in lost income by pre-empting export opportunities and suppressing global prices, according to a 2016 Iowa State University study sponsored by USW.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA/Foreign Agricultural Service. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Wheat Growers Urge Congressional Leadership to Allow a Vote on TPP

WASHINGTON D.C. — Nine months ago, following the signing of the 12-nation Trans- Pacific Partnership (TPP), the National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) called on Congress to rapidly consider and ratify the agreement. After a long and disappointing wait, a real window of opportunity for a vote on TPP will soon open when the legislative session resumes next week. We call on Congress again, to urge its leadership to allow an implementing bill to be considered as soon as possible.

Wheat is the most export-dependent grain commodity grown by U.S. farmers. Since February, many national and state wheat grower association members visited congressional offices to stress their support for the agreement. Since February, however, those same growers have seen their average cash prices drop from an already unprofitable $4.90 per bushel to a devastating $3.50 per bushel.

“Wheat growers depend on export markets like those in South Asia and Latin America that are growing, but highly competitive,” said NAWG President Gordon Stoner, a wheat farmer from Outlook, Mont. “When implemented, TPP will help ease the pain of low prices by expanding demand for our wheat in those markets. Now more than ever, we cannot afford to lose even more momentum in these markets from Congress letting this opportunity to ratify TPP slip by.”

Asia is a growing region and TPP has the potential to increase economic opportunity and wheat demand even in countries where we already have duty free access. That is critically important because competitors like Australia are moving ahead with bilateral agreements that eliminate tariffs on wheat imports with countries like Vietnam. And U.S. wheat exports face similar tariff disadvantages in several other countries that want to join TPP but cannot apply for membership until after Congress and governments of the other countries ratify the agreement.

“The high standards in the TPP agreement should help us be more competitive and hopefully lead to even more opportunity for our wheat as new countries join TPP in the future,” said USW Chairman Jason Scott, a wheat farmer from Easton, Md. “The Obama Administration has taken strong actions that show trade agreements, when enforced, work for agriculture. At such a critical time, America’s farmers and ranchers need this agreement as a platform for expanding global markets for years to come.”

USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service (FAS).

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Wheat Growers Welcome Trade Enforcement Action on Chinese Market Support Programs

ARLINGTON, Virginia — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcome the Obama Administration’s new trade enforcement action against China at the World Trade Organization (WTO). The significant investigative effort by the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture (USDA) followed five years of work by USW, NAWG and other industry partners to demonstrate how China’s domestic support policies hurt U.S. farmers.

This enforcement action challenges the level of China’s trade-distorting market price support programs for wheat as well as for corn and rice. In describing its action, USTR said “the level of support provided through these programs in excess of China’s commitment was nearly $100 billion.”

These programs cost U.S. wheat farmers between $650 and $700 million annually in lost income by pre-empting export opportunity and suppressing global prices, according to a 2016 Iowa State University study sponsored by USW. That loss estimate is actually 19 percent more than the losses estimated by a similar 2015 study due to the effect of increasing global stocks and resulting market price decline.

“Wheat production subsidies in China and other advanced developing countries are the single biggest policy issue affecting our farm gate prices and global trade flows,” said USW President Alan Tracy. “In taking this step, USTR and USDA are demonstrating that trade enforcement can ensure that our many trade agreements and a pro-trade agenda really work for American farmers.”

“This enforcement action shows a welcome willingness to defend farmers against governments that blatantly disregard the rules of the road under their trade agreements,” said NAWG President Gordon Stoner, a wheat grower from Outlook, MT. “It comes at a critical time for farmers who have seen market prices collapse to unsustainable levels in recent years.”

A 2014 study by DTB Associates, also sponsored by USW, showed that China’s minimum procurement price of about $10 per bushel for wheat, in addition to other subsidies, violates China’s WTO commitments. That market price support is so high that the Chinese government has to purchase and store enormous stocks of domestic wheat. As a result, USDA estimates that by June 2017, China will hold 44 percent of the world’s wheat stocks, which will be at record levels and further depress market prices. This also hurts Chinese flour millers who are forced to purchase overpriced domestic wheat from these stocks and hurts their customers who pay more for the flour.

Noted Iowa State University agricultural economist Dr. Dermot Hayes conducted the 2015 and 2016 studies of domestic support effects. In reviewing the 2016 study results, which compared a base case including China’s current support to a new scenario in which the factors represented by China’s policies were removed, Dr. Hayes said farmers there would grow less wheat because domestic prices would fall and input costs would increase.

“In our comparison, that would benefit farmers in the United States and other wheat exporting countries as China would need to increase its imports to more than 9 million metric tons,” Dr. Hayes said. “The corresponding lift in wheat exports would increase U.S. farm income from wheat by 19 cents per bushel.”

“China may try to cloak its market price support as necessary to achieve self-sufficiency in wheat production, but this does not justify ignoring its trade commitments,” said Tracy. “Trade plays a vital role in food security, as no country can truly be self-sufficient in food production. The studies we have sponsored clearly show that eliminating its expensive market price support programs and letting the market work to meet their wheat needs would reduce the cost of food for Chinese consumers.”

“Trade agreements cannot meet their promise if other countries ignore the rules, no matter if the agreements are multilateral, bilateral or regional like the Trans-Pacific Partnership,” said Stoner. “That TPP has improved enforcement mechanisms is one more reason we strongly support its passage. Our grower organizations fully support this new trade enforcement action with China, and we will continue to work with our government and industry partners to address other trade distorting issues.”
USW and NAWG have posted the Iowa State studies online at https://bit.ly/1XPLrLo and https://www.wheatworld.org/issues/trade/. For results of two DTB Associates studies measuring domestic support in advanced developing countries, visit www.dtbassociates.com/docs/DomesticSupportStudy11-2014.pdf and www.dtbassociates.com/docs/domesticsupportstudy.pdf. For a third party analysis of individual policy measures by country, visit https://www.oecd.org/tad/agricultural-policies/producerandconsumersupportestimatesdatabase.htm#country.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA/Foreign Agricultural Service. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Wheat Industry Welcomes End to Japan’s Temporary Suspension of White Wheat Imports

ARLINGTON, Virginia — U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are pleased that Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) resumed tenders this week for new purchases of U.S. Western White (WW) wheat, a blend of soft white and club wheat. On Sept. 1, 2016, MAFF announced it had purchased 58,000 metric tons, or more than 2.13 million bushels, of WW for delivery in October.

MAFF had temporarily suspended new WW purchases following the announcement on July 29, 2016, by USDA’s Animal and Plant Health Inspection Service (APHIS) that a small number of wheat plants containing an unapproved, genetically engineered (GE) event to resist the herbicide glyphosate were found in a fallow field in eastern Washington State.

USW and NAWG believe that this unexpected situation caused only a minor disruption in trade because every stakeholder approached it in a reasonable way. APHIS promptly identified the regulated wheat event, validated a detection method developed by Monsanto and made that test available to officials in Korea and Japan. Effective communications between government officials, including USDA’s Foreign Agricultural Service, the grain trade companies and customers kept the process moving in a positive way.

As a result, APHIS, MAFF and the Korean government have now tested thousands of samples of U.S. wheat and found no evidence of any GE material in commercial supplies, which reaffirms the conclusion that this was a limited, isolated situation.

The productive relationships wheat farmers and their representatives at USW, NAWG and state wheat organizations have built with customers at home and around the world also played an important part in resolving this incident.

On behalf of those wheat farmers, USW and NAWG express our appreciation to APHIS for its help. To all our customers, we thank them for their response to this situation and their continued confidence in the quality, safety and value of U.S. wheat.

USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service (FAS).

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the United States – +1-605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Detecting No GM Event, Korea Ends U.S. Wheat Import Suspension

ARLINGTON, Virginia — (Updated 8/5/16) Korea’s Ministry of Food and Drug Safety (MFDS) has ended a temporary suspension of U.S. wheat imports after testing detected no genetically modified wheat in U.S. supplies. MFDS quickly deployed the test to assure U.S. wheat remains safe and reliable, adding confidence that nothing has changed the U.S. wheat supply chain’s ability to deliver wheat that matches every customer’s specifications. This action follows the discovery of a very small number of wheat plants that were genetically engineered (GE) to resist the herbicide glyphosate in an unplanted, fallow field in eastern Washington State in June.

Out of an abundance of caution, Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF)is temporarily suspending only new purchases of western white wheat (soft white and 20 percent club wheat) from the PNW until it can validate and start using a customized version of the new detection assay test provided quickly by Monsanto and USDA. U.S. Wheat Associates (USW) expects that to happen by mid- to later-August. As we expect the testing will detect no GE wheat, the results will likely end the suspension very soon after Japan starts testing. In 2013, WW suspension was in place for 2 months. U.S. hard red winter and hard red spring tenders/purchases so open purchases (already contracted) with vessels loading in the PNW and discharge operation in Japan continue normally.

The Animal and Plant Health Inspection Service (APHIS) took prompt and thorough action to identify the regulated wheat event in the plants that were discovered and has confirmed to us that:
the situation was isolated to only 22 plants in a fallow field;

  • there is no health risk associated with this wheat event based on Food and Drug Administration evaluation;
  • there is no evidence suggesting that this wheat event, or any other GE wheat event, has entered U.S. commercial supplies;
  • a validated test to detect this event in wheat was quickly produced and made available to trading partners if so desired to help ensure that any market disruption will be limited and temporary; and
  • a statement with more facts about this situation is posted at https://www.aphis.usda.gov/aphis/ourfocus/biotechnology/brs-news-and-information/ct_news.

The agency has kept our organizations, as well as government officials in several key overseas markets, informed as it worked to find the facts. In turn, our organizations have shared information about the situation with the domestic grain trade and downstream customer organizations, as well as overseas grain trade and buyers in several countries that import U.S. wheat.

USW, the National Association of Wheat Growers (NAWG) and state wheat organizations believe that APHIS has successfully managed this situation and provided sufficient evidence that this has not affected commercial wheat supplies. Based on that and other facts, we are very confident that nothing has changed the U.S. wheat supply chain’s ability to deliver wheat that matches every customer’s specifications. In fact, the Korean Ministry of Agriculture, Farms and Rural Affairs has issued a public statement saying that there is no concern from Korean experts, including officials from the Quarantine Inspection Agency (QIA), that GM wheat has been or will be introduced to Korea.

It is also important to note that grain import officials in Japan and Korea have tested for the GE event identified in 2013 in virtually every load of U.S. wheat delivered to those countries since August 2013. The event has never been identified in more than 500 million bushels of wheat exported to Japan alone. In addition, researchers at Washington State University have been conducting routine phenotype screening for glyphosate tolerance in wheat since 2013. In each of the last three growing seasons, this field screening process has involved more than 80 varieties, 2,000 advanced breeding lines and more than 35,000 individual plots. Varieties included in these trials represent more than 95 percent of the wheat acreage planted in the state of Washington and much of the acreage planted in Oregon and Idaho. Screening to date has revealed no glyphosate tolerant wheat plants in these trials.

The federal systems in place ensure that unauthorized biotech products are tightly regulated and do not enter commercial channels. In fact, APHIS recently changed its rules to require developers to apply for a permit for field trials involving GE wheat. APHIS said this more stringent process will add protection that GE wheat will remain confined during the trials.

Nothing is more important to the U.S. wheat industry than the trust we have earned with customers at home and around the world by providing a reliable supply of high-quality wheat. We thank our customers for their reasonable approach to this situation and we are confident that public and private breeders and federal regulators are taking all appropriate actions to ensure that U.S. wheat, wheat flour and wheat foods remain safe, wholesome and nutritious for people, and in animal feed, around the world.

USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service (FAS).

For additional information, please contact:

Ed Curlett
Director of Public Affairs
APHIS
301-851-4052

Steve Mercer
U.S. Wheat Associates
703-650-0251

Ainslie Campbell
National Association of Wheat Growers
202-547-7800

Glen Squires
Washington Grain Commission
509-456-2481

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the United States – +1-605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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An Alternative Take on ITC’s Mixed Score for Wheat under TPP

Following is a Joint Statement from U.S. Wheat Associates and the National Association of Wheat Growers

WASHINGTON, DC – On Wednesday, the International Trade Commission (ITC) released its highly anticipated report on the economic impacts expected to accrue from the adoption of the Trans-Pacific Partnership (TPP). For the entire agriculture and food sector, the report forecasts a $7.2 billion increase in exports or a growth of about 2.6 percent by 2032 compared to the same timeframe without TPP.

The report recognized that the U.S. wheat industry would see substantial gains in market access and subsequent exports to Vietnam where the United States currently competes at a tariff disadvantage to Australian suppliers. Specifically, the ITC notes that U.S. wheat and other grain exports to Vietnam would increase by a healthy 25.3 percent by 2032 under TPP. However, ITC also concludes that U.S. wheat exports to Japan would decline by 17 percent under TPP. Given our industry’s 60 years of experience in the unique Japanese market, we respectfully believe that ITC got this one wrong.

There are two distinct markets for wheat in Japan: one for high quality food grade wheat and one for lower quality, lower priced livestock feed wheat. Japan has consistently imported about 60 percent of its annual milling wheat needs from the United States, with Canada and Australia making up the balance. Because access to Japan’s milling wheat market would remain equal among the three suppliers under TPP and because Japan requires different types of wheat for distinct uses, we see no reason why U.S. sales would decline.

Regarding the feed wheat market, ITC notes that Canada would see higher feed wheat sales under TPP because it is a “low-cost producer.” If Canada has such an advantage over U.S. wheat producers, then why has U.S. wheat made up 45 percent of Japan’s feed wheat imports on average since 2013 while only 20 percent has been imported from Canada? The relative cost of feed wheat compared to alternative feed grain has far more to do with Japan’s feed import decisions than cost of production. As long as corn and other feed grain alternatives remain inexpensive Japan does not buy much feed wheat from any origin.

ITC’s statement that Canada is positioned to out compete the U.S. in either milling or feed wheat sales to Japan is out of touch with the reality of Japan’s preferences for U.S. wheat. It also fails to recognize that Canada’s competitive position with respect to the United States would be unchanged under TPP.

Modeling policy impacts to individual countries 16 years in the future is inherently difficult theoretical work. The reality is that TPP reduces barriers facing U.S. wheat farmers and keeps us on a level playing field with two of our largest competitors. That is particularly important because Canada and Australia continue to seek tariff advantages by negotiating and signing free trade agreements in competitive markets at a much more rapid pace than the United States.

“The assumptions made in the ITC report are disappointing and misleading,” said NAWG President Gordon Stoner. “U.S. wheat farmers stand to benefit from a lower MAFF (Ministry of Agriculture, Forestry, and Fisheries) markup and new market access in Japan and from being able to compete on a level playing field in Vietnam. Congress should act quickly to enable farmers to take full advantage of the potential economic opportunities at stake under TPP.”

What really sets TPP apart from past agreements is it creates a platform for future growth. Not only does it target one of the fastest growing regions in the world, but once enacted it becomes a forum for other countries to join. Countries in line to join TPP include Indonesia, the world’s second largest wheat importer, the Philippines and Thailand, also significant importers. Each country already signed FTA’s with Australia.

That is why U.S. wheat farmers remain convinced that we need swift consideration and approval of TPP.

“Every day that TPP implementation is delayed, our ability to compete on a level playing field in established and new markets erodes that much more. Wheat farmers need TPP, but so do our customers around the world,” said USW Chairman Brian O’Toole, a wheat farmer from Crystal, ND.

Read the full ITC report online at https://www.usitc.gov/publications/332/pub4607.pdf. Additional information about how TPP will benefit wheat farmers is also online at https://www.uswheat.org/newsRelease/doc/9B4AC6CC055E03CC85257F4F0056A111?Open and at https://www.uswheat.org/factsheets/doc/026BAE500967A7FE85257F2A006F0FDE/$File/TPP%20Fact%20Sheet%20Handout%20PDF.pdf?OpenElement#.

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China’s Excessive Wheat Subsidies and Other Policies Increase U.S. Farm Losses

ARLINGTON, Virginia — Over the past few years, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) have demonstrated how the policies of a few advanced developing countries are distorting world wheat trade and hurting farmers in the United States and other wheat exporting countries. In 2015, an Iowa State University study sponsored by USW showed that China’s excessive wheat subsidies alone were costing U.S. farmers almost $550 million per year. Now, just one year later, a January 2016 update of the study demonstrated that the decline in world prices has increased the projected annual loss in U.S. wheat farm revenue from China’s policies by 16 percent to $653 million.

A 2014 study by DTB Associates showed that China effectively pays its farmers a minimum procurement price of more than $10 per bushel for wheat and subsidizes input costs. In wheat alone, China provides an aggregate measure of support (AMS) of at least $15.4 billion or 36 percent of the value of production, which far exceed the 8.5 percent de minimis limit set when it joined the World Trade Organization (WTO). China also agreed to allow wheat imports at a 1 percent tariff rate, up to a quota of 9.64 million metric tons. The out-of-quota tariff rate is 65 percent. China rarely administers this tariff rate quota (TRQ) as agreed and imports invariably fall far below the quota, even when its domestic prices are far above world market prices.

The evidence strongly supports the conclusion that China’s noncompliant domestic subsidies and TRQ administration create artificial incentives for its farmers to grow even more wheat at a time when China already controls almost 40 percent of world wheat stocks. In turn, the policies suppress wheat import demand in China and put additional downward pressure on world wheat prices.

“Considering all the trade distorting policies U.S. farmers face in the world, the wheat subsidies in China and in other developing countries have the most serious effect on farm gate prices and trade flows,” said USW President Alan Tracy. “The studies we have sponsored clearly show the problem is growing more serious at the worst time for farmers who are already facing unprofitable prices.”

“We have seen prices collapse to unsustainable levels in just a few seasons, partially as a result of some of our trading partners not playing by the rules” said NAWG President Gordon Stoner, a wheat grower from Outlook, MT. “The decline in income of every wheat farmer in the United States will accelerate if China’s policies are not brought back into compliance with the commitments China’s government made to its trading partners.”

Noted Iowa State University agricultural economist Dr. Dermot Hayes conducted the 2015 study and the latest update. He said the results confirm that removing China’s domestic wheat support would have significant benefits for farmers in wheat exporting countries. The study used a proven econometric method to determine a world wheat “base case” including China’s current wheat input subsidies and price support. Researchers then removed the factors represented by China’s policies, ran the model again and compared the resulting scenario to the base case. Dr. Hayes said the results showed Chinese farmers over time would grow less wheat because domestic prices would fall and input costs would increase.

“In our comparison, China would need to increase its imports to more than 9.6 million metric tons per year, a volume that is about equal to the Chinese wheat tariff rate quota” said Dr. Hayes. “That would increase wheat exports and farm revenue in the United States, as well as in Europe, Canada and Australia (see Table 1). In the United States specifically, farm income from wheat would increase by $0.19 per bushel compared to the base scenario (see Table 2).”

“NAWG supports free trade and supports Congressional ratification of TPP,” said Stoner. “But trade agreements cannot meet their promise if other countries ignore the rules. It is time for the Administration to seek enforcement through the WTO.”

“Since these harmful policies are the acts of sovereign governments, our farmer organizations cannot battle them alone,” said Tracy. “At the direction of the USW and NAWG boards, we are working with the Office of the U.S. Trade Representative and USDA to develop a possible WTO challenge.”

USW and NAWG have posted the current update of the 2015 Iowa State study and the original study online at https://bit.ly/1XPLrLo and https://www.wheatworld.org/issues/trade/. For results of two DTB Associates studies measuring domestic support in advanced developing countries, visit www.dtbassociates.com/docs/DomesticSupportStudy11-2014.pdf and www.dtbassociates.com/docs/domesticsupportstudy.pdf. For a third party analysis of individual policy measures by country, visit https://www.oecd.org/tad/agricultural-policies/producerandconsumersupportestimatesdatabase.htm#country.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA/Foreign Agricultural Service. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, DC, NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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