Wheat Letter Blog Archive - Page 29 of 104

It is Another High-Quality U.S. Soft Red Winter Wheat Crop for Global Customers

In 2022, U.S. wheat farmers continued a now three-year run producing excellent quality soft red winter (SRW) wheat for the world’s weak gluten wheat buyers and food processors.

U.S. SRW is grown over a wide area mainly east of the Mississippi River. The production region experienced generally good growing conditions in the 2022 crop year. A total of 230 samples from elevators in 18 reporting areas across 11 states accounting for an estimated 68% of total U.S. SRW production, were collected and analyzed by Great Plains Analytical Laboratory, Kansas City, Mo. The results were weighted by the estimated production for each reporting area and combined into “Composite Average,” “East Coast” and “Gulf Port” values.

Hitting Quality Targets

The 2022 SRW crop is very sound with high test weight and falling number values, lower moisture, good milling characteristics, and is relatively free of DON. Processors will find a versatile crop with good qualities for cookies, cakes and crackers. With higher protein and good extensibility, the crop should also be valuable in blending for baking applications.

Buyers are encouraged to review their quality specifications to ensure that purchases meet their expectations.

U.S. Wheat Associates (USW) has posted more information on the Soft Red Winter Wheat 2022 Quality Survey on its website here.

The Season in Review

Planting started at a normal pace in mid-September 2021 and progress was similar to the 5-year average. USDA estimates SRW seeded area for the 2022 harvest at 2.78 million hectares, up from 2.67 million hectares seeded for the 2021 harvest and above the 5-year average.

As the crop developed, there was plentiful moisture through winter and spring with only Maryland seeing lower soil moisture. Overall, timely mild temperatures and rainfall benefited critical kernel development.

Harvest began slowly in late-May but picked up pace in mid-June with hotter temperatures and dry conditions. By July, much of the growing region experienced heat, humidity and above average rainfall with pockets of favorable harvest weather.

2022 SRW production is estimated to be 10.4 million metric tons (MMT), up from 9.8 MMT in 2021 and above the 5-year average of 8.3 MMT.

Close up image of soft red winter wheat ready for harvest on an Ohio farm

Excellent Crop. Soft red winter wheat was ready for harvest in June 2022 on the Bowsher family farm near Waynesville, Ohio. Across the production region, protein, test weight, kernel characteristics and other functional factors were very good in 2022.

2022 Crop Highlights

The overall grade sample average for the 2022 SRW harvest survey is U.S. No. 1 SRW; the Gulf average is U.S. No. 1 SRW, and East Coast is U.S. No. 2.
Test Weight averages trended higher and indicate a sound crop with a Composite average of 60.1 lb/bu (79.1 kg/hl), a Gulf average of 60.3 lb/bu (79.3 kg/hl) and East Coast average at 59.7 lb/bu (78.5 kg/hl).
1000 Kernel Weight, Kernel Diameter and Wheat Protein values reflect a relatively consistent crop.
Single Kernel values also reflect a consistent crop. For the East Coast, kernels are softer, heavier and larger than last year but harder and smaller than the 5-year average. For the Gulf, kernels are slightly softer, lighter and smaller than last year, but harder than the 5-year average.
Wheat Protein content demonstrates a consistent crop. The Composite average of 9.6% (12% mb) and East Coast average of 10.1% are higher than 2021 and 5-year averages. The Gulf average of 9.4% is slightly higher than 2021 but below the 5-year average.
Falling Number trended well above average, indicating this is a sound crop with very little sprout damage. Composite (327 sec), East Coast (336 sec) and Gulf (325 sec) are all above 2021 and 5-year averages.
Vomitoxin (DON) averages are well below the USDA threshold of 2.0 ppm and indicate that the sampled crop is relatively free of DON: Composite (0.7 ppm), Gulf (0.8 ppm) and East Coast (0.4 ppm).
Laboratory Mill Flour Extraction for Composite (66.4%), East Coast (66.6%) and Gulf (66.4%) are all higher than 2021 but below the 5-year averages. The extraction rate from a laboratory mill is not optimized and will always be significantly lower than the rate obtained from a commercial mill.
Amylograph data indicates enhanced starch characteristics that are well suited for batter-based products. The 2022 averages for Composite (666 BU), East Coast (574 BU) and Gulf (687 BU) reinforce the high falling numbers and indicate very low levels of amylase activity.
Solvent Retention Capacity (SRC) values generally indicate excellent quality for cookies and crackers. Sucrose values indicate cookies and crackers will benefit from reduced baking time.
Dough Properties suggest that this crop is weaker than the 5-year average and is typical for SRW.
Alveograph data indicate a crop that is more extensible, less resistant than last year and is suitable for blending bread-type products. P values: Composite (36 mm), East Coast (41 mm) and Gulf (35 mm); L values: Composite (82 mm), East Coast (91 mm) and Gulf (80 mm).
Average Loaf Volumes are higher than last year and indicate this crop is excellent for blending: Composite (624 cc), East Coast (610 cc) and Gulf (627 cc).
The Cookie Spread Ratios for Composite (10.7), East Coast (10.6) and Gulf Ports (10.7) are all similar to last year and higher than the 5-year averages, indicating good spreadability.

The latest 2022 USW Harvest Report on all U.S. wheat classes is posted here. Wheat Letter will share final crop quality reports as they are available, and reports will be posted here.

September 15, 2022/by Steve Mercer

Dry Bulk Freight, Market and Crop Analysis, Michael Anderson

Dry Bulk Freight Rates Riding Rough Seas

This was supposed to be the year dry bulk freight vessel owners turned a profit, Jay O’Neil, a commodities consultant and author of a weekly transportation report recently commented. And U.S. Wheat Associates (USW) shared similar thoughts early in 2021. Instead, S&P Global Market Intelligence noted recently that freight rates for dry bulkers have fallen over the past three months after rates peaked earlier than expected in the second quarter of 2022.

As rates recently climbed, however, O’Neil said the freight market may have finally found its bottom.

Bearish Factors

Since early 2020, shipping has faced uncertainties: labor shortages, various COVID restrictions made worse by each country applying different restrictions, port congestion, and supply chain breakdowns have all competed to make shipping tough. The challenges to shipping logistics have abated. As a result, the number of available vessels floating in the dry bulk freight market has increased.

As China Goes…

China plays such a dominating role in the dry bulk shipping market that analyzing economic activity there can predict the dry bulk fleet’s prospects. China’s economic growth slowed under the government’s zero-COVID policy. The global iron ore trade, one aspect that drives the dry bulk fleet, was down 6% last month compared to a year ago. An analyst with S&P Global Market Intelligence said “slower than expected economic growth” could exist through the second half of 2023. O’Neil covered bearish factors for the dry bulk freight market for USW’s 2021 Crop Quality report.

Russian Coal

Putin’s war in Ukraine has also rerouted some cargo flows and driven up demand for coal, another commodity that absorbs dry bulk shipping capacity. Sanctions on Russian gas supplies have quickly reversed European Union plans to close many coal-fired plants. While the E.U. looks to the United States for coal imports, India and China are taking advantage of cheap Russian coal and changing demand for different bulker size categories.

Another key component that helped bring down dry bulk shipping rates is the easing of port congestion.

“Inefficiencies of last year do not apply to the current market anymore and the supply-demand equation is more straightforward,” said one ship owner. AXS said a primary driver behind the lower rates is the drop in ton-miles.

Overall, Breakwave Advisors, a shipping publication, agreed saying, “Following a period of high uncertainty and significant disruptions across the commodity spectrum, the gradual normalization of trade is shifting the market’s attention back to the traditional demand and supply dynamics that have shaped dry bulk profitability for decades.”

This was all good news for dry bulk freight customers, including the world’s wheat buyers.

Line chart shows the Baltic Dry Index change from April 2022 to September 2022

Stormy Seas for Dry Bulk Freight. After peaking in the second quarter of 2022, the Baltic Exchange Dry Index retreated before bouncing up in September. Some suggest the market found a bottom, yet bearish economic factors continue.

Turning Tides

Yet signs of rate recovery are evident. The Baltic Index on September 9 notched its largest weekly increase in 8 years, according to Reuters data. The index was up 12% to 1,213. On September 12, the Baltic Index marked its fourth consecutive session of gain. AgriCensus, in a story published on August 31, noted that the purchasing managers’ index (PMI) rose to 49.4 in August, up 0.4 compared to July. But still, the index remained below the 50-point mark which separates contraction from growth.

Despite the current strengthening in the shipping index, generally bearish factors affecting dry bulk freight rates such as China’s economic situation remain. Those that follow the market closely say that rebound may simply be a market correction. For now, it seems like vessel owners may have to wait longer before turning that profit that many predicted not long ago.

By Michael Anderson, USW Market Analyst

September 14, 2022/by Steve Mercer

Hard Red Winter, Market and Crop Analysis, Wheat Industry News, Wheat Quality

USW’s Online Baking Program Putting U.S. Wheat ‘Top of Mind’ in South America

An online training series developed by U.S. Wheat Associates (USW) in the early days of the COVID pandemic continues to have success in its effort to educate South American bakers and millers about the value and quality of U.S. wheat.

Specifically, the Online Baking Certification program promotes baking methods and processes that highlight all six U.S. wheat classes. What is significant about the program is that it’s able to reach a large number of bakery and milling staff who otherwise would not be able to take part in educational workshops. The virtual format allows participants to study at their own pace before testing through a handful of modules to earn certification.

Funded by the Agricultural Trade Promotion Program (ATP) – a USDA Foreign Agricultural Service (FAS) program created in 2018 to help U.S. agricultural exporters enhance their work in international markets and mitigate other obstacles to trade – USW’s online trainings have made great strides toward reaching the goal of boosting awareness of U.S. wheat.

Bakers and millers in Colombia, Peru, Chile, Ecuador, Bolivia and Brazil have been getting a thorough introduction to U.S. wheat and are learning how they can utilize it to improve the quality of breads and other baked goods.

The goal for U.S. wheat is ambitious yet simple: Sharing ways to improve baked products made with U.S. wheat could result in increased consumption in South America, which could lead to more customers for South America’s bakeries.

It could also potentially lead to a greater demand for U.S. wheat.

Putting U.S. Wheat ‘Top of Mind’

USW's Online Baking Certification program build's upon an effort to create awareness of U.S. wheat in South America. Pictured here is an in-person workshop conducted in USW's Santiago office in 2019, prior to the COVID pandemic.

USW’s Online Baking Certification program builds upon an ongoing effort to create awareness of U.S. wheat’s value and quality in South America. Pictured here is an in-person workshop conducted in USW’s Santiago office in 2019, prior to the COVID pandemic.

Miguel Galdos, USW’s regional director in South America, says the goal of the Online Baking Certification program is to create better awareness of U.S. wheat.

“We want U.S. wheat to be top of mind for more bakers in the region, as well as for the technical staff at the milling companies,” he said. “We want to place a higher emphasis on reaching bakers

and technical people to perhaps give them a voice when it comes to wheat purchasing decisions.”

The fact that both bakers and milling staff are registering for the online course, too, is a sign that many in the industry want to take advantage of the opportunity to get experience working with U.S. wheat.

USW, the wheat industry’s export market development organization, works with wheat buyers, millers, bakers, food processors and government officials in more than 100 countries to promote the reliability and value of the six U.S. wheat classes. The new emphasis on creating awareness in South America and educate the people who work directly with wheat and wheat flour inside of bakeries is strategic.

Creating awareness – putting U.S. wheat top of mind of bakers – opens all kinds of opportunities.

“The key is that once they learn one aspect of U.S. wheat’s quality, they want to see what else there is to learn,” explained Galdos. “In this program, they must test out of one module to be able to move on to the next. Before earning the certification, they must complete a two-day practical course in person. Soon, after moving through the program, they are an expert on our product. At that point, U.S. wheat has developed a customer.”

Virtual Training has Become Commonplace

The virtual baking training includes six different modules that allow bakers and milling staff to progress at their own pace. Participants must pass a module to move on to the next, assuring they are exposed to all of U.S. wheat's positive attributes.

The Online Baking Certification program includes six different modules that allow bakers and milling staff to progress at their own pace. Participants must pass one module to move on to the next, assuring they are exposed to all of U.S. wheat’s many positive attributes.

Launched in October 2020 as an alternative to in-person training workshops during the height of the COVID pandemic, the Online Baking Certification program has grown rapidly. USW recently added a Portuguese version to the original Spanish version to attract more Brazilian participation. USW also has plans to add a master-level course in the near-future.

The current program has registered nearly 5,500 students in two years. Thanks to a partnership between U.S, Wheat Associates, the Brazilian Wheat Industry Association and the Brazilian Bakery and Confectionery Industry Association, further growth is expected.

The six South American countries targeted by USW are the six that purchase U.S. wheat.

“The biggest wheat buyer in Colombia has had 15 staff members go through the whole program and earn certification,” said Galdos. “Chile has been another active participant, so we are seeing interest from a good portion of the region. Brazil is promising. We have met with the millers and bakers’ associations and U.S. Wheat Associates is going to be recognized by those associations at an upcoming event.”

The birth of the program came by necessity after in-person trainings and workshops were eliminated because of COVID. By March 2020, USW’s staff in Santiago, Chile, were putting together educational materials to complete the online bakery course – courses featuring baking theory, video instruction and assessment platforms were assembled. USW Baking Consultant Didier Rosada played a key role in the production of baking videos for the modules, which were finished in May 2020 and then sent to selected baking staff around the region for testing.

Opportunity for a Competitive Edge

Those who have completed USW’s Online Baking Certification are reporting they gained greater knowledge of traditional baking methods that work well with U.S. wheat.

Miguel Galdos, USW regional director in South America

Galdos emphasized that the online courses provide U.S. wheat with an advantage over competing wheat growing and exporting countries.

One example is the value of U.S. hard red winter wheat compared to Canadian wheat.

“One thing we stress to the bakers in South America is that many of the products they are baking do not require Canadian wheat that is higher in protein but more expensive,” Galdos said. “U.S. hard red winter wheat is a better option, and the content in the online baking courses teach them why. We show them how to bake with it. The problem is that the bakers are not trained. We want more bakers in the region exposed to the value and quality of U.S. wheat and how using it can benefit their products and their businesses.”

Along with putting U.S. wheat top of mind for South American bakers, Galdos pointed out a valuable additional benefit to USW’s online baking program.

“Through this certification process we are working with bakeries, collaborating with millers, collaborating with the people who either are or could be buying and using U.S. wheat,” he said. “We are educating them and creating awareness for U.S. wheat. At the same time, we are building relationships.”

September 8, 2022/by Ralph Loos

Board of Directors, China, Exports, Soft White, Sustainability, Wheat Production and Harvest, Wheat Quality

Past USW Chairman Darren Padget Shares Sustainable Practices on His Farm

In 2021, the U.S. Wheat Associates (USW) team in Beijing asked then-Chairman and Oregon wheat farmer Darren Padget to record a video message to Chinese milling and trading managers participating in a USW-sponsored “Contracting for Wheat Value” seminar.

The USW team wanted to show customers the important things U.S. farmers do every day to produce more and better wheat with less impact on the environment. Chairman Padget took the challenge to heart and spent an entire spring day walking the Chinese team through his operation to tell his farm’s sustainability story.

USW is sharing that story here with a wider audience that is increasing interested in learning more about sustainable food production.

Better Soil

Joined by his son Logan and his father Dale — partners in Padget Ranches — Darren talked in his video presentation about the effort to improve the soil in which they grow high quality soft white wheat.

“From when my father came to farm … things have changed quite drastically,” Darren said. “Taking care of the land and making sure it is sustainable is very important to us as we move forward. We used to till the soil heavily with a moldboard plow … it took a lot of time, a lot of fuel, and a lot of resources. Now, we do ‘direct seeding,’ which means the stubble in the field stays intact, which builds our soil organic matter and is less susceptible to erosion. It has been a big change. We have adopted the technology, and it seems to be the best answer to make sure this farm is here for many generations to come.”

Image shows Darren Padget bending down to drink from a garden hose on his farm

Clean Drinking Water. In the “A Visit to Padget Ranches in Oregon” Darren Padget said his family’s drinking water comes from a well on the farm, a personal reason why they are very cautious about crop protection applications.

Logan Padget is the fifth generation of his family to farm in this dry north-central Oregon region just south of the Columbia River. He has embraced precision agricultural technology. In the video, he talks about the efficiency of the farm’s crop protection product application equipment.

Precision Applications

“This machine is almost as late and great as you can get on technology,” Logan said. “It is GPS-controlled. Once I make the first pass on a field, the GPS can perfectly mimic that line across the field with just one-third of a meter of overlap. That is better than anybody could drive by hand. There’s also section control through the GPS, so if you’re coming across at an angle, each section will shut off to avoid double spraying, which saves us money. It also means fewer chemicals applied to the crop. It’s just a win-win all the way around.”

Better Quality Wheat

Darren also described how farmers are reaching beyond their own fields to help improve the functional quality of the milling wheat they grow for overseas and domestic consumption. He showed a “Preferred Variety List” that ranks public and commercial wheat varieties by desirability of quality characteristics based on three years of data. The list is developed by the state wheat commissions in Oregon, Washington and Idaho, which are directed by farmers who fund commission activities (including membership in USW).

Image shows the front and back of the 2021 Preferred Variety List for PNW wheat

Ranked by Quality. The Pacific Northwest Preferred Variety List encourages functional quality improvement for overseas and domestic millers and food processors. The description of the list states: “When making a decision between varieties with similar agronomic characteristics and grain yield potential, choose the variety with the higher quality ranking. This will help to increase the overall quality and desirability of Pacific Northwest (PNW) wheat.”

We invite you to view the entire video below.

https://vimeo.com/578611568

September 8, 2022/by Steve Mercer

Wheat Industry News

Recent news and highlights from around the U.S. wheat industry.

Speaking of Wheat

“Early wheat leaders … fought through the battle of the “Great Grain Robbery” by the Soviet Union and advocated for more transparency and information from USDA to help farmers and their overseas customers that helped lead to weekly commercial sales reports.” – From “A Legacy of Commitment – Great Plains Wheat Focused on Improving Quality and HRW Markets.” U.S. Wheat Associates (USW) Wheat Letter, March 19, 2020.

Commercial Sales Report Delayed until Sept. 15

On Aug. 31, USDA/FAS Administrator Daniel Whitley announced the following statement: “As a result of unanticipated difficulties with the launch of the new Export Sales Reporting and Maintenance System, USDA’s Foreign Agricultural Service will temporarily revert to the legacy system while we work to fully resolve the issues with the new system. FAS will be unable to publish weekly export sales data on Thursday, Sept. 1 or Thursday, Sept. 8, but we expect to resume regular reporting on Thursday, Sept. 15.” Read more here.

Happy Work Anniversary!

Steve Wirsching, U.S. Wheat Associates (USW) Vice President and Director of the West Coast Office in Portland, Ore., marked 30 years with the organization Aug. 31, 2022. He joined USW in 1992 as Assistant Director, West Coast Office, and in 1997 became Assistant Regional Director for the South American region in Santiago, Chile. In 1998, Wirsching moved to Mexico City, as Assistant Regional Director. He was named Director of the West Coast Office in 2008, where he was promoted to Vice President in 2011. Thank you for your service, Steve!

Colorful New Tool for Flour Analysis

The Idaho Wheat Commission and the University of Idaho together purchased a near infrared spectrometer for the school’s Wheat Quality Laboratory at U of I’s Aberdeen Research and Extension Center. School officials said the modern device will help the lab better measure quality indicators of flour samples, such as protein and moisture content. The technology uses infrared light to analyze the composition of materials, differentiating the unique infrared colors associated with specific components. Read more here.

NGFA: Keep Snake River Dams in Place

The National Grain and Feed Association (NGFA) representing U.S. grain handlers issued a statement following the release of a report commissioned by Washington Gov. Jay Inslee and Sen. Patty Murray that recommends replacing the benefits of the Lower Snake River Dams (LSRD) before breaching them to save endangered salmon runs. Joining U.S. wheat industry stakeholders, NGFA maintains that any action to breach the dams is not a viable option. NGFA said “the benefits of barge transportation to the agricultural value chain and the overall U.S. supply chain cannot be replaced by rail or truck transportation.” 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 more on LinkedIn.

September 1, 2022/by Steve Mercer

Market and Crop Analysis, Supply and Demand

Export Opportunities Await U.S. Wheat, But ‘It’s Complicated’

Before providing a simple and straightforward description of the global wheat and grain markets, Mike Krueger paused to consider a handful of variables facing importers, exporters and producers.

Then he used a word that is opposite of simple and straightforward.

“It’s complicated,” Krueger told those attending the 2022 U.S. Wheat Associates (USW) World Staff Conference August 23, 2022.

The quality and reliability of U.S. wheat has long created demand among importers, Krueger noted. Due to increased competition for acreage, political and economic strife in key regions and the potential for weather events to influence yields, Krueger expects demand will expand.

To put it simply: Export opportunities await U.S. wheat.

“A primary reason is that global wheat supplies are likely to shrink due to a renewed focus on soybeans and corn,” Krueger said. “Another factor favoring U.S. producers involves shipping and logistics limitations that hamper competing wheat-growing countries.”

Add in drought effects from a third consecutive La Niña? The effects would further pressure global supplies.

“These things are pushing more export demand for wheat,” Krueger explained. “Can the U.S. meet the demand? That’s a question that hasn’t been answered. will corn, soybeans or wheat be planted? Business decisions are made every single planting season. Our acres are limited.”

Effects of ‘Rush to Crush’

Krueger, a grain industry consultant with Lida Communications and owner of The Money Farm, has nearly 50 years of grain marketing and trading experience. He’s seen how world events and weather can spin wheat supply

Mike Krueger at U.S. Wheat Associates' World Staff Conference

Mike Krueger explains how a growing demand for renewable diesel in coming years will affect worldwide acreage dedicated to soybean production

and demand at the international level. During his “World Supply and Demand Update” presentation at the USW conference, Krueger reported conditions that are ripe for volatility that could continue for years.

“We have tight global supplies to begin with, and we also have a lot of issues that complicate things – including a war in the Black Sea region,” Krueger said, referring to the Ukraine-Russia battle that has the wheat industry keeping a close eye on the news. “Another thing is what we call the ‘Rush to Crush.’ The demand for renewable diesel and other renewable fuels is erasing vegetable oil supplies and that will dramatically boost demand for soybeans and canola. And a new interest in sustainable aviation fuel (SAF) is just one more item that will put pressure on soybean supplies.”

The Rush to Crush movement includes significant investment in soybean crushing facilities in the U.S., setting up a situation where farmers will be enticed to dedicate more acreage to soybeans. This while corn supplies remain tight everywhere, Krueger noted.

“It’s being estimated that perhaps 20 to 30 million more acres of soybeans would be needed to meet such demand, which certainly would be a huge factor in the competition for acreage that we already see,” Krueger said.

Corn seeded area is expected to ramp up as U.S. ethanol demand increases due to high gas prices and enhanced ethanol allowances. Corn exports by the U.S. could rise, too, as China’s surplus stock is typically overstated, according to Krueger.

All this while drought cut soybean production across South America and Brazil’s safrinha (second crop) corn production is smaller than what had initially been estimated.

Export Opportunities Await U.S. Wheat

Ukraine and Russia export roughly 30% of the world’s wheat – and Russia has a record crop under its belt – but the ongoing war is an intangible, Krueger pointed out.

Krueger emphasized how the quality and reliability of U.S. wheat helps create demand in the global marketplace

“Russia has record production, yet the question is do they have the logistical capacity to export the crop – logistics on the Black Sea are a mess,” he said. “As for Ukraine, the war could really affect their production. Plus, it’s suspected that the amount of wheat that could come out of Ukraine is overstated. It’s really an unknown at this point.”

Where does this leave the U.S. wheat industry? Krueger summed it up with a series of questions, such as: Are there any supply “cushions” outside of Russia and Australia, which is also expecting increased production?

“None,” Krueger replied.

Will world consumption somehow contract? Krueger reminded everyone that “It rarely has.”

Are China’s production numbers real? “Everyone is skeptical,” he warned.

And finally, how will world politics – the war in Ukraine, China’s relationship with Taiwan and ongoing inflation concerns in the U.S. – affect the grain markets and global trade?

Krueger returned to his original assessment.

“Export opportunities await U.S. wheat,” he said. “Again, it’s complicated.”

August 31, 2022/by Steve Mercer

Commercial Sales, Michael Anderson

Commercial Sales Accuracy Benefits Grain Exporters and Buyers

Editor’s Note: On Aug. 31, USDA/FAS Administrator Daniel Whitley announced the following statement:

“As a result of unanticipated difficulties with the launch of the new Export Sales Reporting and Maintenance System, USDA’s Foreign Agricultural Service will temporarily revert to the legacy system while we work to fully resolve the issues with the new system. FAS will be unable to publish weekly export sales data on Thursday, Sept. 1 or Thursday, Sept. 8, but we expect to resume regular reporting on Thursday, Sept. 15.” Read more here.

Each week the USDA publishes weekly commercial export sales for various commodities, including wheat. The Foreign Agricultural Service (FAS) collects data from U.S. exporters on commodity quantity, type, class, the shipment marketing year, and the destination country. Exporters are also expected to report alterations to prior data such as order cancellations and changes in destination.

For the benefit of overseas wheat buyers, U.S. Wheat Associates (USW) posts an updated Commercial Sales Report each week on the USW website, based on this USDA data. Each updated commercial sales report shows the top 20 markets for total U.S. wheat sales and a breakdown by wheat class and destination.

U.S. wheat commercial sales data is generated and reported by the Federal Grain Inspection Service as its teams inspect wheat and other grains before vessel loading. USDA publishes the data on Thursdays on a week delay.

Disruption

Unfortunately, there was a disruption in the report last week. A new technical system was used to report export sales as usual on Thursday, Aug. 25. However, following the publication of the report, traders questioned the contents. The report was taken offline, and the contents were redacted. Reuters reported the redaction occurred after the commodities markets had already closed for the day.

In a statement, the government said it encountered “challenges that affected the physical dissemination of the export sales data as well as data quality.”

The Gold Standard

In explaining the report’s significance, Reuters stated, “the export sales report, which has a week-long delay, is a key indicator for traders, input suppliers and farmers as it highlights recent demand for crops such as corn, soybeans, and wheat at a time of tight global supplies. It calculates the sales of U.S. commodity goods to international customers such as China and Mexico.”

Commercial sales as a percentage of export forecasts can help exporters and buyers understand the supply and outline the general market for a given product. Highlighting the significance of the data reported, Reuters described the weekly commercial sales report as a “gold standard.” In fact, early U.S. wheat leaders fought through the battle of the “Great Grain Robbery” by the Soviet Union and advocated for more transparency and information from USDA to help farmers and their overseas customers that helped lead to weekly commercial sales reports in 1976. The USDA also forecasts annual commodity exports in the World Agricultural Supply and Demand Estimates (WASDE) report.

USDA Commercial Sales data 9above from Aug. 18, 2022) is needed to help understand market movements. USW expands and reports that data each week as it is released from USDA.

The USDA is addressing he technical issues now, and as of Aug. 30, the export reporting system was still down.

USW will continue to report commercial sales but only with data that we know to be accurate.

By Michael Anderson, USW Market Analyst

August 30, 2022/by Steve Mercer

Columbia Snake River System

Wheat Leaders: Protect Lower Snake River Dams

Washington Senator Patti Murray and Washington Governor Jay Inslee recently announced their recommendations concerning a final Lower Snake River Dams (LSRD) Benefit Replacement Report. Basically, they state their belief that while breaching the dams would help salmon populations, breaching should not occur until economic impacts, including substantial negative effects on the U.S. wheat export system, are mitigated.

The National Association of Wheat Growers (NAWG) responded to the recommendations August 26, reflecting the position of U.S. Wheat Associates (USW) and local organizations representing U.S. wheat growers.

“The dams play a vital role in providing a safe, efficient and affordable way for wheat farmers to get their product to market,” said NAWG CEO Chandler Goule. “We are glad the recommendations released by Senator Murray and Governor Inslee recognize the role these dams play in agriculture and acknowledge dam breaching is not feasible at present.

“However, we remain concerned and opposed to breaching as it would be detrimental to wheat growers across the region. Last month, NAWG filed public comments outlining our concerns, whereby other modes of transportation cannot simply replace barging. Wheat farmers move grain most efficiently by using the waterway instead of rail or truck while reducing greenhouse gas emissions. NAWG remains committed to working with our federal partners and stakeholders to meet the challenge of helping facilitate a healthy river ecosystem while supporting wheat growers.”

The Idaho Wheat Commission produced the video story above about the Columbia Snake River System and its irreplaceable role in the Pacific Northwest U.S. wheat production and export system.

USW has also shared the following information about the Lower Snake River dams:

Facts About U.S. Wheat Exports And The Columbia Snake River System

USW Expresses Support For Maintaining Lower Snake River Dams

Report On Replacing The Benefits Of The Lower Snake River Dams Generates Concern

Capital Press Reports On Proposal To Remove Snake River Dams

August 26, 2022/by Steve Mercer

Freight Rail Service

Freight Rail Legislation Would Improve Market Competition for U.S. Wheat

This month, members of Congress, including the Chair of the House Transportation Committee introduced the Freight Rail Shipping Fair Market Act (FRSFMA). If adopted, the legislation will reauthorize the Surface Transportation Board (STB) and “create a fair marketplace” for railroads and shippers. A detailed look at what’s in the bill can be read here, while industry observations can be found here. The bill includes many updates that would provide fairer treatment for agricultural shippers, noted DTN.

Railroad users, wheat farmers, included, have been vocal about performance. Railroad executives and the shippers that depend on their service disagree on the reasons fueling the breakdown in reliability from the Class I railroads. The newly introduced legislation will go some way in creating a more even playing field for shippers, which will benefit farmers down the line.

Supporting Legislation

Most importantly, this bill would reauthorize the STB, a body that U.S. Wheat Associates (USW) supports and has worked with to put forward policies that benefit U.S. wheat farmers and their customers. The Agricultural Transportation Working Group (ATWG), of which USW is part, sent a letter to lawmakers encouraging the passage of FRSFMA. The letter was signed by 88 members of the ATWG, including the National Association of Wheat Growers (NAWG), with USW’s support.

According to the American Farm Bureau Federation, between the second quarter of 2021 and the second quarter of 2022, unfilled orders for grain cars went from 62,000 to 204,000, a 231% increase. During the same period, nearly 70% of grain car orders were 11 days overdue. Based on such challenges, the U.S. House of Representatives held two hearings and the STB held a hearing on poor freight rail performance since the start of the year. FRSFMA goes a long way to remedy the problems uncovered in those hearings.

Critical Components

Progressive Farmer, a news publication, explained some of the critical components of the bill that:

Strengthen the STB’s authority to address freight rail service emergencies. It requires rail contracts to include service delivery standards and remedies while leaving details to be privately negotiated between parties.
Provide the STB with a clear direction to resolve common carrier obligation complaints.
Create financial incentives for both railroads and their customers to move railcars efficiently.
Support freight railroad efforts to identify where freight is located on their systems while in transit.
Adequately fund the STB to allow for quicker dispute resolution when petitioned.

Meaningful Freight Rail Reforms

The American Chemistry Council, a trade group, commended the legislation saying, “This important legislation contains many thoughtful solutions that complement the much-needed reforms being considered by the STB. We urge Congress and the STB to work together on meaningful reforms that will incentivize the railroads to provide reliable and competitive service and hold them accountable when they fail to deliver.”

The CEO of the Association of American Railroads (AAR) pushed back on the legislation saying that it provides “unjustified government mandates” but failed to address the challenges that continued to plague the Class I railroads over the last year.

The Freight Rail Shipping Fair Market Act will significantly improve the issues piling up for the U.S. Class I railroads. FRSFMA also improves the farmers’ standing when dealing with the railroads. USW and the Transportation Working Group (TWG) supports the passage of FRSFMA and will continue to promote the work of the STB. Wheat farmers and customers of U.S. wheat know the importance of reliable freight rail service; it would positively help set U.S. wheat apart from other suppliers. This bill goes further toward improving that service.

By USW Market Analyst Michael Anderson

August 18, 2022/by Steve Mercer

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