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On June 15, a U.S. Wheat Associates (USW) representative had the opportunity to visit the World Food Prize Foundation’s “Hall of Laureates” in Des Moines, Iowa. As part of an organization working on behalf of wheat farmers, this was a time to reflect on the amazing international food legacy of the late Dr. Norman Borlaug.

In 16 years of work in Sonora, Mexico, to solve a series of wheat production challenges, Dr. Borlaug developed successive generations of wheat varieties with disease resistance, adaptation to many growing regions, and high yield potential. Combined with his later, collaborative efforts in India and Africa, Dr. Borlaug can be said to have “saved more lives than any other person who has ever lived.” For this work, he was awarded the Nobel Peace Prize in 1970.

Great Agricultural Scientists

Dr. Borlaug went on to create the annual World Food Prize in 1986 to “honor the work of great agricultural scientists to end hunger and improve the food supply.” This concept expanded to include the annual Borlaug Dialogue and the Global Youth Institute.

This vital mission to “elevate innovations and inspire action to sustainably increase the quality, quantity and availability of food for all” and the World Food Prize has a permanent home in a beautifully restored Beaux-Arts building in downtown Des Moines that originally served as the city’s public library.

USW Vice President of Communications Steve Mercer toured the Hall of Laureates and shared some photos that illustrate why this remarkable center is a fitting tribute to Dr. Borlaug, World Food Prize recipients – and wheat, with which Dr. Borlaug did so much research and development.

A Moral Right

The photo at the top of this page shows a portion of the Hall’s grand entrance, where guests are greeted by quotes around the Rotunda that establish the meaning and purpose of the World Food Prize. The quote shown upholds Dr. Borlaug’s fundamental value: “Food is the moral right of all who are born into this world.” The stained-glass window above the staircase depicts a family in the Hellenistic Period bringing in the grain harvest.

Image of a sculpture depicting a wheat plant at the World Food Prize Hall of Laureates in Des Moines, Iowa.

The wheat plant represented in this metal sculpture is one of four that, with rice, corn and soy, depict staple food crops. The sculptures are labeled in English and the native language of the region where each crop was first cultivated. Wheat is identified by its ancient Sumerian cuneiform symbol.

 

This image shows a sculpture titled "First Farmer" representing a Sumarian woman seeding or harvesting ancient grain.

“The First Farmer” sculpture represents an early Sumerian female with a digging stick, the first implement used to till the ground, with a basket for seeds or harvest.

 

This image shows a plaque at the World Food Prize Hall of Laureates commemorating a visit to the Hall by Xi Jinping, now President of the People's Republic of China.

In 2012, then Vice President of China Xi Jinping, who had spent time in Iowa in 1985 on an agricultural research mission, addressed a ceremony at the Hall when U.S. Secretary of Agriculture Tom Vilsack and China’s Minister of Agriculture Han Changfu signed a U.S.-China Strategic Cooperation Agreement.

 

This image is a plaque honoring World Food Prize laureate and wheat breeder Dr. Sanjay Rajaram who worked with Dr. Borlaug at CYMMIT in Mexico.

Wheat breeder Dr. Sanjaya Rajaram received the 2014 World Food Prize, the 100th anniversary of Dr. Borlaug’s birth in Iowa.  for developing 480 high-yielding and disease-resistant wheat varieties grown on more than 58 million hectares in 51 countries. As Dr. Borlaug’s successor at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico, the late Dr. Rajaram is the only wheat breeder who has received the World Food Prize.

A visit to this impressive place is highly recommended. To read more about Dr. Borlaug’s life and work, USW recommends this resource from the University of Minnesota: “The Significance of Borlaug.”

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Ron Suppes, left, accepts the ceremonial gavel from outgoing Wheat Foods Council (WFC) Chairman Kent Juliot at the WFC Board Meeting in Denver on June 14.

Ron Suppes, left, accepts the ceremonial gavel from outgoing Wheat Foods Council (WFC) Chairman Kent Juliot at the WFC Board Meeting in Denver on June 14.

Former U.S. Wheat Associates (USW) Chairman Ron Suppes was seated as Chairman of the Wheat Foods Council (WFC) during the organization’s Summer Board Meeting in Denver. The Kansas producer has been a Kansas Wheat Commissioner for two decades. He has also served as chairman of the Wheat Innovation Center Research Foundation.

Decades of international, domestic experience

Suppes, who was USW Chairman in 2007-2008, has traveled to several foreign markets with USW. He’s helped promote U.S. wheat in more than 30 countries. Although his involvement with the WFC is focused on creating demand for wheat in the domestic market, Suppes recognizes the very different – yet vital – roles that USW and WFC play.

“For wheat farmers, the difference each of these groups make is dramatic,” Suppes said. “I’ve been involved with U.S. Wheat Associates for many years and have seen firsthand the value of the work it does in international markets. I have also experienced how the Wheat Foods Council works to promote the wheat we grow.”

Suppes, who also represents wheat growers on advisory committees to USDA and the U.S. Trade Representative’s (USTR) office, said state wheat associations and other wheat industry groups should consider becoming involved in the WFC.

“It’s a great opportunity to collaborate on things that affect all of us in the business,” he said.

Many perspectives make up WFC

Reid Christopherson, Executive Director of the South Dakota Wheat Commission, and U.S. Wheat Associates (USW) Board Member Kent Lorens of Nebraska, chat during the Wheat Foods Council Board Meeting in Denver.

Reid Christopherson, Executive Director of the South Dakota Wheat Commission, and U.S. Wheat Associates (USW) Board Member Kent Lorens of Nebraska, chat during the Wheat Foods Council Board Meeting in Denver.

Suppes will serve a one-year term as WFC Chairman. As a wheat farmer, he brings an important perspective to the WFC leadership spot.

“Ron has already been an integral part of our work and he also provides some continuity to the Chairman position,” said WFC President Tim O’Connor, “The Wheat Foods Council is a unique organization. Our membership includes the entire wheat value chain. We are made up of millers, bakers, ingredient suppliers and equipment companies. But grower organizations and growers like Ron are also important pieces of our membership. We are excited to have a wheat farmer like Ron help push us forward.”

Busy week in Denver

Other members of the WFC officer team for 2023-24 are Vice Chair Mark Hotze, of Corbion; Treasurer-Secretary Britany Hurst Marchant, Executive Director of the Idaho Wheat Commission; and Kent Juliot, of Ardent Mills, as Immediate Past Chair.

Along with seating of a new officer team, WFC’s Summer Board Meeting featured a Communicators Workshop and a review of 2022-23 marketing programs. The organization also took a look ahead at programs scheduled for the coming year. WFC also introduced Sterling-Rice Group (SRG) as its new marketing agency to handle program work.

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News and Information from Around the Wheat Industry

Speaking of Wheat

The market dynamics with the Russian invasion of Ukraine disrupting traditional wheat movements, the disastrous drought in the Kansas resulting in a high amount of wheat fields abandoned and short overall production, and increased rail transportation costs are all market factors leading to the recent announcements of U.S. flour mills purchasing wheat for import by water, which is a very rare occurrence.” — Justin Gilpin, Kansas Wheat CEO.

Congratulations to Dalton Henry

The Agricultural Business Council of Kanas City has selected U.S. Wheat Associates (USW) Vice President of Trade Policy Dalton Henry (photo above) as one of its 2023 Young Leaders in Agribusiness. “We are pleased to recognize these young people who have been nominated by their employers and have shown exemplary passion, leadership, and business acumen,” said Council Chair Dustin Johansen, adding that individuals like Henry “represent the future, the next generation of executives who will lead the agribusiness sector.”  Read more here.

Rain in China Hurts Wheat Harvest

Wheat farmers in China are apparently facing significant crop losses after two weeks of heavy rains that have left their fields sodden. The losses may lead China to rely more heavily on grain imports this year, the impact of which would be felt across the global grain economy. Read more here.

Global Factors Also Push Italian Pasta Prices Higher

Despite seeing a significant drop in inflation, prices are still posing a pinch to shoppers in Italy, particularly when it comes to pasta. Read more and view a video online here.

Women Making Inroads in Milling

At its recent annual conference in Minneapolis, Minnesota, a large contingent of women participated in the event as part of the Women in Milling program that was inaugurated several years ago and continues to grow. Approximately 135 women attended the conference, which was about 13% of the total number of delegates. Many of them were first-time attendees and had met one another virtually on the association’s monthly Women in Milling session. Read more here.

Subscribe to USW Reports

USW publishes various reports and content available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report, and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos, and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo and YouTube, and more on LinkedIn.

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The news that U.S. flour milling companies have imported European wheat has raised concerns and frustrations for U.S. wheat stakeholders. To an organization like U.S. Wheat Associates (USW) that with our state wheat commission members promotes exports on behalf of U.S. wheat farmers, such news is particularly disappointing. After all, U.S. farmers produce enough wheat each year to meet domestic demand and still offer about half the crop to export markets.

The concern is not about imported wheat per se. Flour millers do import varying amounts of Canadian spring wheat every year. And conditions have in the past made it possible for feed-grade wheat to be imported into coastal pork and poultry production markets. It is important to state that there is more than enough high-quality U.S. wheat available to produce all the flour we need in this country, and the 2023 harvest is already underway.

However, imported European wheat to produce domestic flour is a highly unusual situation. USW wanted to share what is behind these imports and perhaps answer the questions from stakeholders.

Dynamic market factors have created a large price spread between similar classes of European and U.S. wheat. In May 2023, according to AgriCensus data, the published FOB export price for Polish wheat was more than $107 per metric ton less than the U.S. hard red winter (HRW) Gulf FOB export price. German wheat export price in May showed a similar discount to Gulf HRW FOB.

In looking at this difference between the bargain purchase price in Europe versus the current U.S. domestic market replacement values, USW President Vince Peterson recently said that “this may be the biggest trade margin that I’ve ever heard of” in all his years in the grain trade.

Supply Shock

This remarkable difference in prices happened mainly because the relative volume of exportable wheat supplies in Eastern Europe has exploded this year. Putin’s invasion of Ukraine drastically curtailed Ukraine’s ability to export by vessel from its Black Sea ports, in turn sending war-distressed Ukrainian wheat and other commodities pouring across their land borders into Eastern European countries. That movement severely depressed local wheat prices, harming EU farmers and causing five EU countries to implement bans on imported Ukrainian grain staying within their countries. Russia’s record 2023 wheat crop and unfettered exports (now projected at 45 million metric tons (MMT), also a record) created more regional price pressure.

Even though the EU-27 is the world’s second largest wheat producer after China and second largest exporter after Russia, EU wheat imports increased by 6 MMT in the 2022/23 marketing year. Combined with the unprecedented disruption of regional grain movement, USDA estimates the EU’s ending wheat stocks will rise from 10.1 MMT in 2020/21 to 16.2 MMT in 2022/23. And USDA expects European wheat production to increase this year over 2022 even though there is dryness in western Europe.

Yet over the same 3 years, U.S. wheat supplies have gone in the opposite direction, especially supplies of HRW wheat. Drought has hurt total U.S. supplies for three years in a row, first reducing hard red spring and soft white crops. Then drought cut HRW production in 2021/22 and intensified in 2022/23, resulting in a high number of abandoned wheat fields and short overall production. U.S. exportable wheat supply concerns, combined with the disruptive news constantly flowing from the Black Sea conflict, are supply shocks that continue to support the surprisingly high gap between U.S. and EU wheat prices.

Ocean v. Rail Rates

Considering imported European wheat, the question must be asked about the difference in cost between bulk ocean freight rates from Europe to the United States and U.S. rail rates to move wheat to its flour mills. Comparing those rates today, U.S. rail tariffs and fuel charges to transport wheat are close to twice the ocean freight cost on a per-metric-ton basis.

Unfortunately, this transportation cost spread indicates that rail rates have been and continue to be a burden on the value of delivered wheat for domestic and export markets.

A 2020 study by USDA found that rail rates increased by 30% for wheat, 32% for corn, and 30% for soybeans from 2000 to 2014, and wheat rail tariff rates have increased by an additional 18% since 2014. Rising and unfair rail rates for wheat erode its competitiveness for domestic as well as overseas buyers.

That is why USW’s Transportation Working Group is focused on addressing uncompetitive wheat rail tariff rates to make sure that when global market conditions readjust – and they will – domestic rail rates for wheat do not diminish U.S. wheat’s value at home and abroad.

Image shows grain rail cars by a country elevator to illustrate USW comments to the Surface Transportation Board.

Rail rates have been and continue to be a burden on the value of delivered wheat for domestic and export markets.

An Unwanted Hit

Without doubt, the import of European wheat and the market factors that encouraged it are most unfortunate. As Kansas Wheat Vice President of Research and Operations Aaron Harries said, this situation is “another hit against our domestic farmers” who are battling drought, increased operating costs and other headwinds to produce high quality wheat that is more than sufficient to supply all U.S. flour mills and export demand.

USW and others in the industry believe the imported European wheat will likely move to coastal U.S. flour mills – in part because of the high rail rates milling companies would have to pay to transport it to interior mills.

The supply challenges in today’s global wheat market are likely to continue at least through the 2023 harvest. USW sincerely believes that absent the illegal and highly disruptive invasion of Ukraine, the price spread incentivizing U.S. imports would be much closer. Sadly, the conflict rages on.

Domestically, higher wheat prices also encourage increased production, seen in the significant increase in U.S. HRW planted area for the 2023 crop. Unfortunately, the devastating drought undercut that positive trend this year, but prices remain an incentive for U.S. farmers.

If there is a grace note to this situation, USW President Peterson points out that the price spread between EU wheat and U.S. HRW wheat has recently narrowed. The potential for recent rainfall in Northern Plains HRW and hard red spring production regions to push 2022/23 production higher than expected would help fill the price gap – and offers hope for a better outcome in 2023/24.

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As the 2023/24 marketing year begins, the market awaits the outlook for the new crop harvest. Despite early concerns anticipating wet conditions and late planting similar to the 2022 crop year, hard red spring (HRS) planting progress has surpassed expectations.

USDA NASS chart showing variable level of spring wheat planting as of June 1 for the years 2016 through 2022.

Though planting progress influences total production and yield, it is not predictive. Years with late planting can yield average crops, while rapid planting does not equate to good production potential. Factors such as soil moisture, weather, and disease pressure can significantly influence yield potential during crop development. Source: USDA NASS Data.

Rapid Planting Progress

Spring wheat farmers have made incredible planting progress after a historically snowy and cold winter delayed spring fieldwork in the Northern Plains. According to the USDA Crop Progress Report, as of June 4, 93% of the spring wheat was planted, up from 85% the week prior and even with the five-year average. In key HRS-producing states North Dakota, Montana, and Minnesota, USDA estimates plantings at 88%, 92%, and 98% complete, respectively. Over the last several weeks, rainfall has benefited soil moisture, and more recently, dry weather paired with above-normal temperatures helped accelerate planting progress. Between May 21 and May 28, 45% of the spring wheat crop was planted.

USDA NASS line graph showing spring wheat planting progress by week from 2018 through current 2023 date.

After a long winter with historic snowfall in the Northern Plains, 2023 planting (red dotted line) started late. As temperatures warmed rapidly, progress accelerated from several weeks behind to even with the five-year average. Source: USDA NASS Data.

A Hopeful Forecast

As spring wheat planting winds down, emergence hovers near the five-year average. As of June 4, spring wheat was 76% emerged, above the five-year average of 74%. The forecast predicts scattered showers for North Dakota, Minnesota, and Montana, a potential benefit to the newly planted HRS crop. Topsoil moisture in the top HRS producers remains good, with 72% boasting adequate to surplus moisture in North Dakota and 66% in Minnesota; meanwhile, drought removal is likely in much of Montana’s growing regions.

Map of precipitation in the United States the last week of May 2023 shows that wheat production regions including the Northern Plains have received sufficient rain to support planting progress and growth of the spring wheat crop.

Scattered showers have greatly benefited much of the U.S. wheat-growing regions, alleviating Montana’s drought and improving conditions in other key producing states. Source: USDA Weekly Weather and Crop Bulletin.

Looking Ahead

The current outlook for HRS remains positive, though continued optimism hinges upon the weather’s cooperation. Recent warm temperatures helped jumpstart planting and emergence, but additional moisture will be necessary to sustain the current confidence levels.

In addition to weather, the underlying impacts of the tight HRS balance sheet and lingering price volatility due to the war in Ukraine will continue to influence the market. As the 2023/24 marketing year continues additional information regarding the production outlook will become available.

To be released on July 12, the July Crop Production Report and the World Agricultural Supply and Demand Estimates will include USDA’s first by-class wheat production estimates. Until then, you can stay updated with the latest crop conditions and harvest progress via the U.S. Wheat Associates weekly Harvest Report.

By USW Market Analyst Tyllor Ledford

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U.S. wheat farmers have long played a major role in the fight against world hunger, which is why the U.S. Wheat Associates’ (USW) Trade Policy Team has been helping push for changes to the international food assistance programs under the 2023 Farm Bill. Among other things, proposed changes would reinstate the Food for Peace program’s original intent to allow U.S. farmers to share their harvest to fight global hunger. Changes would also halt the use of America taxpayer dollars to purchase food from competitors of U.S. agriculture. In the video below, USW Director of Trade Policy Peter Laudeman provides an overview of USW’s efforts . . .

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U.S. Wheat Associates (USW) Director of Trade Policy Peter Laudeman recently returned from Australia, where he joined members of that country’s wheat and grain industries in discussions on plant breeding innovations and other issues ripe for collaboration.

Laudeman attended an international conference in Canberra focused on the research and regulatory landscape of gene-edited crops and implications for international trade.

“As we look to the future potential for gene editing to substantially benefit wheat production, it will be critical that our mutual exporting countries, and customer bases, enable trade in products derived from these technologies,” Laudeman said. “Similar to the U.S., many research efforts for gene editing in wheat are still early in their progress in Australia and will take some time to reach their full potential.”

While in Australia, USW Director of Trade Policy Peter Laudeman (right) pauses for a photo with Dr. Rohit Mago, Team Leader of the Plant Pathogen Interactions group at CSIRO. Among other things, Mago's team works on host resistance involving identification of new sources for rust resistance both for race-specific and adult plant resistance in wheat.

While in Australia, USW Director of Trade Policy Peter Laudeman (right) pauses for a photo with Dr. Rohit Mago, a Principal Research Scientist and Team Leader of the Plant Pathogen Interactions Group at the Commonwealth Scientific and Industrial Research Organization (CSIRO), an Australian government agency responsible for scientific research.

Laudeman pointed out that the U.S. has been one of the early global leaders in advancing updated biotechnology regulations to cover gene editing. From USW’s perspective, the hope is that the U.S. system will be a learning experience for the rest of the world in managing the pros and cons that have come out of our updated regulations.

In addition to gene editing, Laudeman also engaged the Australians on the potential for GMO wheat to come to the global market. Bioceres, the company seeking to champion their HB4 drought tolerant GMO wheat globally, has indicated that both the U.S. and Australia may be among the first global wheat exporters outside of Argentina to potentially work with the technology.

Outside of plant breeding innovations, there are additional collaboration opportunities with Australian industry when it comes to non-tariff barriers to trade. Historically, tariffs were the primary trade policy challenge for wheat exporting countries, but increasingly, non-tariff barriers have been the more substantial area of concern.

“These non-tariff barriers often impact exporters globally in similar ways,” Laudeman explained. “Being able to collaborate with another major global wheat exporter to ensure consistent, science-based trade is a major opportunity for USW to address longstanding barriers, such as China’s implementation of their wheat tariff-rate-quota (TRQ) system or Turkish flour dumping on the global market.”

Similarly, as sustainability continues to dominate conversations around the world, partnering with like-minded countries to ensure science-based access to essential technologies will be critical to pushing back against regulatory overreach that can effectively become a barrier to trade, Laudeman noted.

Laudeman was able to tour farms in Australia and learn about how farmers in the region approach planting and harvest seasons. He was also able to see how they are using new technologies in their fields.

“The USW policy team will continue to explore these collaboration opportunities to leverage global partnerships that drive more opportunities for U.S. wheat exports around the world,” he said.

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News and Information from Around the Wheat Industry

Speaking of Wheat

CBOT wheat futures reached the $14.2525 per bushel all-time high in March 2022 when Russia invaded Ukraine, turning Europe’s breadbasket and critical logistical hub at the Black Sea ports into war zones. While the battle for Ukraine continues to rage, CBOT wheat prices have steadily declined. [A] pattern of lower highs and lower lows that took the most liquid wheat futures to a $5.9550 low in May 2023. Wheat remains in a bearish trend, at just under the $6.10 level on May 22, but the price is higher than the level from August 2015 through September 2020. Wheat’s war premium has declined, but the price remains elevated.” – Barchart Analyst Andrew Hecht, May 22, 2023.

Fiber In; Keto Out?

Key issues impacting the grain-based foods industry are the popularity of fiber, an apparent decline in keto diets and sustainability concerns, according to the International Food Information Council’s 2023 Food and Health Survey released May 23. The IFIC survey involved 1,022 Americans of the ages 18 to 80 who were contacted April 3-10. When asked what dieting patterns they followed in the past year, 4% said ketogenic or high fat, which was down from 7% in last year’s survey. The percentage of consumers following gluten-free diets fell to 6% from 9% last year. Low-carb dieting remained the same at 6%. Read more here.

National Wheat Foundation Partners with My Plate

The National Wheat Foundation is pleased to join the USDA Center for Nutrition Policy and Promotion as a USDA MyPlate National Strategic Partner. The partnership aims to enlighten individuals about the advantages of incorporating wheat into their dietary choices. At its core, MyPlate is a scientifically grounded initiative, crafted to impart knowledge on the merits of wholesome eating and encourage adjustments in our dietary habits that can yield significant long-term benefits. “We are looking forward to working with MyPlate as we help educate the benefits wheat can have in a person’s diet …,” said Bernard Peterson, Chairman of the National Wheat Foundation and a wheat farmer from Kentucky. Read more here.

India: Wheat Export Ban Stays Put

The Indian government has ruled out lifting a ban on wheat exports implemented one year ago as a measure to control rising domestic prices. Asked if wheat exports will be allowed, Consumer Affairs Secretary Rohit Kumar Singh said, ‘No chance at all.’ The government is supplying some quantity of wheat to a few countries like Nepal and Bhutan via a government-to-government trade arrangement. Citing reasons for continuing the export ban, Additional Secretary of the Food Ministry Subodh Kumar said India is not a traditional wheat exporting nation. However, the country exported wheat in the last three years owing to surplus supplies. Read more here.

U.S. Hard Red Spring Crop Planted?

Do not be surprised if the next USDA NASS weekly report shows most of the 2023 spring wheat crop is seeded. As of May 21, U.S. spring wheat planting progress was seen as 60% complete, up from 40% previously, with estimates ranging widely from 51% to 75% complete. However, with a warm, dry forecast over the next several days, farmers will make amazing progress. North Dakota Wheat Commission Policy and Marketing Director Jim Peterson told U.S. Wheat Associates on May 24 that farmers seeded fully half the total expected crop just last week.

A Tale of Two Crops in Colorado

Colorado Wheat Director of Communications and Policy Madison Andersen reported recently that a portion of eastern Colorado is now free of drought. The “excellent,” “good” and “fair” categories all gained points, however, so did the “very poor” category. She said she thinks this continues the tale of two crops reported in Colorado several times this year. There is wheat in the northeast corner that has the potential to make 70 bu/ac, while the abandonment rate in the southeast corner continues to rise, she added. The photo at the top of this page is from a northeast Colorado farm, courtesy of Dr. Phil Westra, Professor of Weed Science at Colorado State University.

Subscribe to USW Reports

USW publishes various reports and content available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report, and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos, and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo and YouTube, and more on LinkedIn.

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On May 12, USDA released its initial estimates for the 2023/24 marketing year (MY) year, providing the first glimpse into how the world wheat situation has shifted in response to political instability, inflation, climate variability, and the volatility seen in the last year. This article will examine key takeaways from the World Agricultural Supply and Demand Estimates (WASDE) and the USDA Crop Production Report, and what it may mean for the 2023/24 crop year.

Global Outlook: A Focus on Weather

Despite recording record wheat production of 789.7 MMT, up 1.5 MMT from 2022/23, world wheat supplies have tightened. Consumption surpasses production by 2.0 MMT for the fourth consecutive year, leading to a decline in global ending stocks. Projections indicate the lowest global ending stocks in eight years at 264.3 MMT. Ending stocks in the five non-Black Sea exporting countries (U.S., Canada, Australia, Argentina, and the EU) have hit their lowest level since 2007/08 at 38.2 MMT.

Production in major exporting countries is also forecast to be down 10.0 MMT to 367.6 MMT from a record 377.5 MMT in 2022/23. Production is predicted to increase in Argentina (+7.0 MMT), Canada (+3.2 MMT), and the EU (+4.7 MMT). However, these increases do not offset flat production in the U.S. (+0.3MMT) and reductions for Ukraine (-4.4 MMT), Russia (-10.5 MMT), and Australia (-10.0 MMT).

Weather poses risks to many production regions, including anticipated dryness in Australia associated with an El Niño weather event and reports of dryness in Canada. USDA predicts improved production in Argentina that hinges on recovery from the 2022/23 drought there. With ending stocks already hovering at 15-year lows, any change in production in major exporting countries could have a direct influence on world wheat prices.

A bar chart from the International Grains Commission (IGC) shows change in wheat production in major exporting countries by year over year and change compared to the 5-year average production.

2023/24 Major Exporter Production Change. With significant production reductions anticipated in Ukraine, Russia, and Australia, any change in the outlook for other major exporters will impact the already tight ending stocks held by exporters. Source: IGC.

U.S. Situation- Bullish Supply Meets Bearish Demand

Much like production in other major exporting countries, the weather has driven the U.S. wheat harvest conversation. As the drought in the U.S. Southern Plains persists, the May 12 USDA crop production figures put Kansas HRW production at 14.0 MMT, the lowest output since 1957/58. Similarly, USDA projections put Kansas (the largest HRW-producing state) wheat production at 181.0 million bushels. The annual Wheat Quality Council (WQC) winter wheat tour confirmed this outlook.

Despite the bullish outlook from the May Crop Production report and the subsequent futures rally, HRW futures prices declined, losing 73 cents in the week ending May 22. Likewise, hard red spring (HRS) and soft red winter (SRW) also softened, down 64 and 55 cents respectively from last week. A key factor contributing to this bearish trend is demand rationing in the face of high prices and seasonal pressures.

Bar chart showing U.S. wheat export sales by class, year-to-date as of May 11, 2023. HRW sales are significantly lower than 2021 at this date.

U.S. HRW commitments as of May 11, 2023, are 32% behind last year’s pace at 5.1 MMT. Meanwhile, HRS sales are up 4% at 5.7 MMT, white wheat is up 39% at 4.7 MMT, SRW is up 1% at 2.9 MMT, and durum has increased 131% to 452,000 MT. Source: USW Commercial Sales Report.

Bright Spots

Despite the complexity of the HRW situation, the outlook for other U.S. wheat classes, especially soft wheat classes, remains optimistic. The Crop Production Report put SRW estimates at 11.0 MMT, a 21% increase from 2022/23, and prices for SW and SRW continue to trend lower to remain competitive with other origins. Likewise, as of the May 21 Crop Progress Report, the winter wheat conditions have begun to see improvement, with a season-high of 31% ranking good to excellent. Spring wheat farmers have also made tremendous planting progress, with a 24% increase in plantings over the week, reaching 64% planted, only 9% behind the five-year average, alleviating concerns about late planting.

A More Detailed Look to Come

In the coming weeks I will recap the 2022/23 U.S. wheat export trends and highlight what to watch as new crop sales increase. In June, USDA will begin revising its initial estimates for the 2023/24 world supply and demand and the July WASDE will provide the first by-class wheat projections for the 2023/24 crop year.

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A professional chef demonstrates methods for using U.S. wheat to make handmade noodles during a Wheat Food workshop for volunteers in Taipei’s adult long-term care community. The October 2022 workshop was part of USW's ongoing effort to develop new wheat food options for Taiwan's aging populations.

A professional chef demonstrates methods for using U.S. wheat to make handmade noodles during a Wheat Foods workshop for volunteers in Taipei’s adult long-term care community. The October 2022 workshop was part of USW’s ongoing effort to develop new wheat food options for Taiwan’s aging populations.

While innovating new products for members of the youthful “Snackification Generation,” U.S. Wheat Associates (USW) has simultaneously been working to develop and promote specialty wheat foods designed for Earth’s more experienced generation.

The world’s older folks if you will.

A catchy nickname has yet to attach to the fast-growing group of consumers over 65, but tags like “Snacking Seniors” and “Aging Appetizers” miss the mark. That’s because instead of crackers, cookies and biscuits, new variances of noodles and breads and pastries are at center of USW’s efforts to grow demand for U.S. wheat in markets with aging populations.

“Super-aged” is the buzzword being used by the media, and a common prediction is that by 2030 there will be at least 30 countries where more than 20% of the population is over 65 – the ratio that has been set to define a super-aged country. Already, “There are more people on the planet over the age of 65 than ever before in human history,” the National Academy of Sciences, Engineering and Medicine recently reported, adding that, “Globally, the population aged 65 and over is growing faster than all other age groups.”

Recognizing opportunities to promote U.S. wheat in super-aged markets – notably its protein, B-vitamins, dietary fiber, and other nutritional benefits – USW has been engaging consumers to learn about preferences and learn what kind of products have a place in their diets and on their menus.

As it turns out, flour made with high-quality U.S. wheat has no age restrictions.

Asia: Super-sized, Super-aged

USW offices in Japan, South Korea and Taiwan have for years been preparing for expansion of aging populations. And for good reason. Nearly 30% of Japan’s population is over 65. and Taiwan (18%) and South Korea (17%) follow, both expecting to see those percentages rise dramatically in coming years.

Expected to become a super-aged society by 2025, Taiwan is a loyal customer of U.S. wheat, with a market share that has ranged from 70% to 80%.USW staff in the country has been aggressive about positioning U.S. wheat in the diet of senior citizens.

“The Taiwan Government noticed the trend and has made great efforts to help develop healthy foods for the elderly in the country, explained USW Taiwan Country Director Bo Yuan Chen.  “However, most efforts had been in rice products. USW’s Taipei Office noticed the lack of wheat products for the elderly in Taiwan, so we launched a program to assist flour and wheat foods industries to develop more wheat products suitable for the elderly.”

Maintaining U.S. market share requires growing the level of wheat food consumption by older consumers, Chen said, adding. “To do this, USW has been working with flour millers, universities and wheat food manufacturer associations to conduct studies, provide technical support and facilitate product development for older consumers, the goal being putting more wheat-based products aimed at the needs of the elderly on food store shelves.”

Pan breads, soft European breads and noodles are the promising foods that U.S. wheat is working to promote to maintain demand by Taiwan’s coming super-aged society.

“U.S. wheat’s strength is in bread products, so that is where we are now focusing,” said Chen.

Workshops conducted by USW in Taiwan have included sharing methods of cooking and baking wheat products that fit desires of the country's aging populations.

Workshops conducted by USW in Taiwan last year included trainings and the sharing of methods of cooking and baking wheat products that fit desires and needs of the country’s fast-aging population. USW is continuing its work in this area in 2023.

Asking Older Consumers What They Want

One major step taken by USW was to survey older Taiwanese consumers to determine preferences in wheat foods and what situations best motivated consumption of wheat foods.

Following the surveys, USW conducted outreach activities to further explore trends.

In October 2022, USW collaborated with Taiwan’s Department of Food and Beverage Management of Shih Chien University (USC) to conduct two Chinese Wheat Food workshops for an audience that included volunteers in Taipei’s adult long-term care community. A professional chef demonstrated methods for using U.S. wheat to make handmade noodles, pan-fried stuffed buns, silk thread rolls, sweet potato pastry, steamed bread, steamed stuffed buns and steamed twisted rolls.

The USW survey had indicated that older Taiwanese consumers favored wheat foods that “cut down on cooking time” or featured “no cooking” – thus, the pan-fried and steamed items.

A previous survey by USC found that more than 60% of Taiwanese over the age of 65 are dissatisfied with the Chinese-style wheat foods sold in the country.

“These workshops showed the participants how to make their own healthy and nutritious Chinese-style wheat products using U.S. wheat whole wheat flour,” USW Technical Specialist Wei-lin Chou noted. “It was a success, and we learned that volunteers from a long-term care community that participated in our workshop made those pan-fried stuffed buns for their elderly residents immediately following our workshop.”

In a separate workshop in October 2022, USW collaborated with the Department of Nutritional Science of Fu Jen Catholic University (FJCU) and Viva Bakery to conduct a healthy and sustainable bread development and promotion program. FJCU and a cooperating bakery applied 100% U.S. wheat flours and Taiwan local ingredients to make bread products.

Previous USW efforts in Taiwan included partnering with the China Grain Products Research and Development Institute (CGPRDI) to conduct research and corresponding workshops on topics such as, Taiwan Commercial Noodles Characteristics, Wheat Flour for Elders’ Noodles, Bakery Products Development for Elders and Steamed Bread Flour and Products.

A group photo at a workshop in Taiwan conducted in October 2022 by USW, the Department of Nutritional Science of Fu Jen Catholic University (FJCU) and Viva Bakery. The purpose of the workshop was to establish a healthy and sustainable bread development and promotion program.

A group photo at a workshop in Taiwan conducted by USW, the Department of Nutritional Science of Fu Jen Catholic University (FJCU) and Viva Bakery. The purpose of the workshop was to establish a healthy and sustainable bread development and promotion program.

A Solid Partner

A reliable customer of U.S. hard red spring (HRS) wheat, hard red winter (HRW) wheat and soft white (SW) wheat, Taiwan is the 6th largest U.S. wheat export market and the 7th largest overseas market for U.S. agricultural products.

A special relationship has been built between U.S. wheat farmers and their Taiwanese customers.

“American farmers place great value on the relationship between U.S. agriculture and Taiwan,” USW Vice Chairman Michael Peters, who grows wheat in Oklahoma, said during a ceremony last fall in Washington D.C. in which the Taiwan Flour Millers Association (TFMA) signed a Letter of Intent to purchase 1.9 million metric tons of U.S. wheat in 2023 and 2024. “We pride ourselves as being dependable partners who grow the highest quality agriculture products in the world. The TFMA and its members have been great trading partners who fully recognize the value of purchasing U.S. wheat.”

Still, there is competition.

U.S. wheat competes against the ample and less-expensive supply of Australian wheat, which helps meet Taiwan’s robust demand for noodle flour. A consistent supply of U.S. hard white (HW) wheat is seen as a potential alternative – and a way for U.S. wheat to maintain and grow its share.

Each Asian Market is Different

Are there things to be learned from USW efforts in Japan and Korea to create demand for foods made with U.S. wheat in Japan or Korea?

“There are certainly common things we can share with flour millers and bakers about the quality of U.S. wheat, and the quality of the foods made with U.S. wheat,” said Chen. “But I think every country has its own different situation. We can learn from each other, but we also need to work hard to develop programs suitable for consumers in our own countries.”