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Wheat Industry News

News and Information from Around the World Wheat Industry

Speaking of Wheat

“If I am worth anything later, I am worth something now. For wheat is wheat, even if people think it is a grass in the beginning.” – Painter Vincent van Gogh. Above, Wheatfield with Crows, 1890, Van Gogh Museum, Amsterdam.

USW Featured on “Wheat’s on Your Mind” Podcast

Vice President of Policy Dalton Henry and Director of Trade Policy Peter Laudeman discussed the implications of the HB4 drought-tolerant GM trait that USDA deregulated on Aug. 29 on the Kansas Wheat podcast “Wheat’s on Your Mind.” Discussion included, does the trait work? What are the implications for international trade? And when will HB4 wheat be grown in the United States? Listen here, or on other podcast sources.

USW's Dalton Henry and Peter Laudeman participated in the "Wheat's On Your Mind" podcast

USW’s Dalton Henry and Peter Laudeman participated in the “Wheat’s On Your Mind” podcast

Texas Wheat Leadership Transition          

The Texas Wheat Producers Board and Association announced the appointment of Steelee Fischbacher as its Executive Director, effective Sept. 5, 2024. With over 15 years of experience with Texas Wheat, Fischbacher is well-positioned to lead the organization. Rodney Mosier, Texas Wheat Executive Vice President since 1998, was named Executive Vice President Emeritus and plans to retire in March 2025. Read more here.

Steelee Fischbacher

Steelee Fischbacher is the new Executive Director of Texas Wheat Producers Board and Association

Innovation in Breeding Will Boost Food Security

More than 90% of seed sector insiders surveyed by the International Seed Foundation expected innovations that breed more resilient and productive varieties of key crops within two decades. Such developments would bolster global food security in the face of the growing impacts of climate change, which was cited as the greatest challenge facing the sector by almost 45% of respondents. The survey was conducted to help inform several upcoming food and agriculture conferences. Read more here.

Wheat Improvement Drives Researcher

Dr. Jessica Rutkoski is the first wheat breeder to hold the Siemer Milling Company Professorship at the University of Illinois Urbana-Champaign. Her career and background on the $1 million gift from Siemer Milling Company, Teutopolis, Ill., are featured in a recent article by Jeannine Otto in AgriNews. Illinois is the leading soft red winter wheat producing state. “I really love interacting with people in the wheat industry,” Rutkoski said. “It is always enjoyable to talk to the stakeholders and anyone who is involved in wheat production.” Read more here.

Dr. Jessica Rutkoski, assistant professor of small grains breeding at the University of Illinois, is the first wheat breeder to hold the Siemer Milling Company Professorship at the school.

Dr. Jessica Rutkoski, assistant professor of small grains breeding at the University of Illinois, is the first wheat breeder to hold the Siemer Milling Company Professorship at the school.

In Montana, This Wheat Field Is Art

An acre of wheat designed by the artist Agnes Denes has cropped up at a new exhibition space in Montana, where agriculture is rapidly giving way to development. This revelation is a testament to a new artwork by Agnes Denes in the burgeoning mountain micropolis of Bozeman, Mont. Titled “Wheatfield — An Inspiration. The seed is in the ground,” the project hinges on an acre of wheat planted at Tinworks Art, a fledgling exhibition space in a demolished beer factory. Read more here.

Felty: Producers Face Real Consequences if Congress Fails to Pass a Farm Bill

In an opinion piece for Agri-Pulse, National Association of Wheat Growers (NAWG) President Keeff Felty urged members of Congress on both sides of the aisle to come together and pass a bipartisan farm bill this year that strengthens the farm safety net. “Over the course of the last farm bill, wheat growers have experienced a wide range of challenges, from drought, market volatility, trade disruptions, and supply chain disruptions. By investing in crop insurance and the commodity title, lawmakers can help make these programs more effective, efficient, and responsive to natural disasters and market challenges that are outside of producers’ control. Read more here.

OSU Wheat Variety Update Includes Advice for Next Year’s Crop

Oklahoma State’s chief wheat geneticist Brett Carver appeared at several producer meetings, including serving as keynote speaker at the Oklahoma Wheat Growers Association annual meeting in Enid, where he gave a recap of research results from the past year and discussed future plans for the breeding program. 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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Price Perspectives: A Bounce from Four-Year Lows

On August 26, 2024, CBOT, KBOT, and MGEX wheat futures prices declined to four-year lows, pressured by the Northern Hemisphere harvest, adequate supplies in aggressive exporters, and generally low prices for feed grains and oilseeds.

Since then, futures prices sustained a multi-week rally, fueled by a weakening dollar, technical short covering from speculative funds, and a recent escalation in the Russia-Ukraine war. However, the question remains: has market sentiment shifted into a bullish market, or will the bearish trend hold? The following describes the current market factors and fundamentals influencing price trends.

Change in world wheat production in 2024 compared to 2023.

Despite a cumulative 20.5 MMT drop in wheat production from the EU, Russia, and Ukraine, the September WASDE reported that the total output for major exporters was just 1% lower than the previous year and 1% below the five-year average. Source: September 2024 WASDE.

Supply and Demand

Despite a cumulative 20.5 MMT drop in wheat production from the EU, Russia, and Ukraine, according to the September World Agricultural Supply and Demand Estimates (WASDE), the total output for major exporters was just 1% lower than last year and 1% below the five-year average. Moreover, total world wheat output sits at a record 796.8 MMT as increased production forecasts from the U.S., Australia, Canada, India, and China balanced the declines.

As the northern harvest wraps up and harvest related price pressure eases, markets will closely monitor the Southern Hemisphere, especially with another possible La Niña weather event. The September WASDE raised Australian production estimates by 2.0 MMT to 32.0 MMT on beneficial weather, while Argentinian estimates sit at 18.0 MMT, a 14% increase from last year.

Meanwhile, world wheat imports are down 12.0 MMT year over year as major importers buy less. Most notably, Turkish imports are down 2.4 MMT from last year, after Türkiye temporarily banned wheat imports to protect their domestic market.

Despite the overall lackluster import forecast, world wheat consumption continues to outpace production by 8.0 MMT. Likewise, ending stocks in major exporting countries sit at 51.6 MMT, 9% below the five-year average and 29% below the recent high in 2016/17.

Bar chart with text

Major exporting countries hold ending stocks of 51.6 MMT, which is 9% below the five-year average and 29% below the recent high in 2016/17, indicating a tight underlying balance sheet. Source: USDA PSD.

Macro-Level Influences

In addition to basic supply and demand factors, broader influences on price such as interest rates, dollar strength, and risk premiums have bolstered wheat markets in recent weeks.

On September 18, the Federal Reserve cut its U.S. dollar interest rate by 50 basis points, the first cut in 4 years and the dollar has weakened in response to this change. While a weaker dollar has long-term benefits, such as making U.S. exports more competitive, it typically supports prices short-term as markets adjust. Lower interest rates also affect storage costs and calendar spreads for wheat futures moving forward.

Line chart with text

The interest rate cut at the September Federal Reserve meeting causes the dollar to weaken. The weaker dollar boosts competitiveness by making U.S. currency cheaper for importers. Source: ProphetX.

Looking at risk premiums, renewed attention on the Russia-Ukraine war also helped support the recent rally. On September 12, Ukraine reported that a Russian missile struck a cargo ship transporting wheat to Egypt. If verified, this strike would mark the first attack on a grain vessel in open water and escalate tensions in the Black Sea. In response to the attack allegations, CBOT, KBOT, and MGEX wheat futures jumped an average of 14 cents. Speculative funds engaging in short covering have also intensified the upward pressure on markets, as investors look to benefit from the current rally.

What’s Next

With the market breaking from the downward trend, supply and demand fundamentals will establish long-term direction. Overall, despite the underlying low stocks in the global balance sheet, adequate wheat supplies and sluggish demand weigh on prices, seeming to reinforce bearish market sentiment.

However, in the short term, Federal Reserve policy decisions will affect interest rates and competitiveness, while the easing of harvest related price pressure and a renewed war risk premium suggest a potential for further gains.

By Tyllor Ledford, USW Market Analyst

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First Look: Another High-Quality Soft Red Winter Wheat Crop

In its first detailed report on U.S. wheat quality in 2024, U.S. Wheat Associates (USW) is pleased to report that farmers growing soft red winter (SRW) wheat weathered some challenging conditions to produce another high-quality crop for domestic and overseas customers.

The 2024 SRW crop benefitted from excellent winter moisture followed by mid-season drought and heat that reduced test weight and yield potential. Yet the crop exhibits good milling characteristics and is relatively free of higher DON. Processors are seeing a versatile crop with good qualities for cookies and crackers. Higher protein and good extensibility should help add value in blending for baking applications.

The full USW Soft Red Winter Quality Survey is available online here. Buyers are encouraged to review their quality specifications to ensure that purchases meet their expectations.

 

Soft red winter wheat kernels against a white background.

Milling and baking industries use soft red winter wheat for specialty products such as cookies (biscuits), crackers, snack foods, and cake flour. SRW is a versatile wheat for blending with U.S. hard red spring (HRS) and hard red winter (HRW) wheat to lower grist cost and improve bread crumb texture, or to improve the quality and appearance of a wide variety of products.

How the Season Progressed

SRW planting started in mid-September 2023 and stayed mostly on a normal pace. USDA estimates seeded area at a total of 6.14 million acres (2.48 million hectares). That is down 24% compared to the 2023 crop but up 4% over the 5-year average.

Warm, wet conditions prevailed across the eastern U.S. through the winter and into the spring. Even with pockets of adverse weather, there was limited disease pressure. After harvest started in mid-May, wet weather followed into early June until heat and dryness set in to speed up harvest. There were some rain delays at harvest in areas feeding into the Gulf export tributaries.

With lower seeded-area buffered by good growing conditions, farmers produced just under 342 million bushels, or 9.3 million metric tons (MMT) of soft red winter wheat, and beat the 9.0 MMT 5-year average.

Image shows a U.S. map suggesting where soft red winter wheat is grown and where samples were collected for the 2024 survey.

2024 Crop Highlights

The overall grade sample average for the 2024 SRW harvest survey is U.S. No. 2 SRW.

Test weight averages trended lower this year and likely reflect mid-season heat and dryness.

Wheat protein (12% mb) averages are higher compared to last year’s crop and the 5-year average. The higher SRW protein content reflects expanding drought during the growing season.

The wheat falling number average for the East Coast is notably higher than last year and 5-year average due to better harvest conditions. The Gulf average is lower than last year but in line with the 5-year average, reflecting isolated wet weather during harvest. This year’s overall average soft red winter wheat falling number of 326 seconds indicates a sound crop.

Vomitoxin (DON) averages are higher than last year, but still below the USDA threshold of 2.0 ppm, indicating the sampled crop is relatively free of DON.

Single kernel values reflect that this year’s crop is lighter and has slightly smaller diameters than last year, but similar to the 5-year average. Compared to last year, the East Coast kernels are softer, and Gulf kernels are similar.

Amylograph viscosity indicates starch characteristics that are suitable for batter-based products. The Overall and Gulf values are lower than average. The East Coast value is significantly higher than average and reinforces the higher falling numbers and lower amylase activity compared to last year.

Solvent Retention Capacity (SRC) values for this crop indicate excellent quality for all typical applications. Sucrose values indicate cookies and crackers will benefit from reduced bake time and should not experience any excess water-holding issues.

Dough properties suggest this crop is in a similar range of values compared to last year and the 5-year average and typical for SRW.

USW photo of technician conducting a cookie spread test for soft wheat.Cookie spread factor values indicate the crop has acceptable spreadability (diameter to height ratio). The Gulf values are lower compared to last year and 5-year average but should be resolvable with minor formulation adjustments. The East Coast values are the same as last year and similar to the 5-year average.

Loaf volume averages are higher than last year and similar to 5-year averages, reflecting the higher protein and greater extensibility of this year’s crop, and also indicates suitability for blending.

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Producing the Story of the Reliable System that Transports Wheat from the U.S. Plains to Customers Around the World

Farmers at Heart of the Story

The wheat was still green and had only recently headed when a film crew showed up on Derek Sawyer’s Kansas farm this spring. Weeks later, in summer, the same crew set cameras up on the edge of a golden Nebraska wheat field to capture harvest by Kent Lorens.

Though their 2024 crops were at very different stages, both farmers shared similar sentiments: “What we do here is only a part of the story.”

That story – how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port and finally on to customers around the world – is being told by U.S. Wheat Associates (USW) in a new video project now in production.

Kent Lorens and one of his sons work together to harvest the 2024 wheat crop in Stratton, Nebraska. Lorens is one of the farmers who helps tell the story of how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port and finally on to customers around the world.

Kent Lorens and his family work together to harvest the 2024 wheat crop in Stratton, Nebraska. Lorens is one of the farmers who helps USW tell the story of how a reliable system of trucks, trains and ships moves U.S. wheat from farm field to grain elevator to shipping port – and finally on to customers around the world.

From Field to Gulf to Customer

Specifically, the story follows wheat grown in the Plains states and exported through the Texas Gulf. It highlights the fact that, no matter where they are located around the globe, customers count on the U.S. as the world’s most reliable supplier of high-quality wheat. In one segment of the project, a top international buyer of U.S. wheat appears in his company’s flour mill to emphasize the importance of sourcing the class of U.S. wheat that is needed – when it is needed. Appearing on their respective farms, Sawyer and Lorens discuss the care they take to sustainably grow high-quality wheat and explain how they value their customers. And how they also value the supply chain that delivers their wheat.

A USW film crew spent a spring day on the farm of Derek Sawyer in McPherson, Kansas to learn how his family works to grow a high-quality wheat crop each year. Sawyer also explained how U.S. farmers value their customers, as well as the supply chain that delivers their wheat.

A USW film crew spent a spring day on the farm of Derek Sawyer in McPherson, Kansas to learn how his family works to grow a high-quality wheat crop each year. Sawyer also explained how U.S. farmers value their customers, as well as the supply chain that delivers their wheat.

Many Factions Working Together

Local grain elevators across the Plains and the rail system that connects them to export facilities is also highlighted.

To capture the final chapter of the story, USW was in Houston in early September to oversee filming at an export elevator. While 110-car unit trains filled with wheat from the Plains unloaded on one end of the facility, two large bulk carrier ships were being loaded in an adjacent shipping canal. When filled with U.S. with hard red winter (HRW) wheat, those ships were headed for Africa and South America.

In early September, USW traveled to Houston to film the unloading of trains filled with wheat from the Plains states and the subsequent loading of bulk carrier ships that deliver high-quality U.S. wheat to customers around the world.

In early September, USW traveled to Houston to film the unloading of trains filled with wheat from the Plains states and the subsequent loading of bulk carrier ships that deliver high-quality U.S. wheat to customers around the world.

USW Plays Important Role

As an important part of its trade service support, USW works directly with overseas buyers to answer questions and resolve issues in purchasing, shipping, or using U.S. wheat. USW does this through regional and country offices, trade delegations to the United States, regular crop and market condition updates, quality surveys and other activities. The organization looks forward to sharing this video story of U.S. wheat reliability and quality that provides such excellent value to the world’s wheat buyers.

 

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Laudeman Discusses Deregulation of Drought-Tolerant Wheat, Next Steps on RFD-TV’s ‘Market Day Report’

USDA’s ruling last month cleared the regulatory pathway for cultivation of HB4® drought-tolerant wheat in the United States, but several steps remain before U.S. farmers are able to grow the trait commercially. USW Director of Trade Policy Peter Laudeman, who has had a close eye on USDA’s deregulation process – as well as the company responsible for the HB4® trait – recently appeared on RFD-TV’s “Market Day Report” to discuss the situation and answer questions. Watch Laudeman’s appearance below . . .

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Innovation to Meet Future Challenges – Ten Years Later

Editor’s Note: This article on wheat breeding innovation was originally published in the September 2014 issue of “Wheat Letter.” In the wake of the first deregulation of a biotechnology trait for wheat by USDA-APHIS, the article remains quite relevant ten years later. The article was written by then USW Vice President of Policy Shannon Schlecht.

If you have ever planted a garden, you know how much effort it takes to help your plants thrive — and how often the results do not match up with your expectations.

Now think about farmers facing similar challenges from insect, weed, and disease pests as well as too much or too little heat and rain. The stakes are much higher when it comes to producing food for 7.3 billion people and more every day*. A destructive virus decimated papaya production in Hawaii a few years ago. In Florida, citrus greening disease that blocks the flow of nutrients to the fruit now infects an estimated 80 percent of its orange trees. Entire industries are at risk.

Wheat farmers, too, battle such challenges. Intensive wheat production in Europe and parts of the United States could not produce yields reaching up to 10 metric tons or more per hectare without preventing disease with frequent fungicide applications each season. Although the UG99 rust strain generated global concerns, thankfully its worldwide impact to date has been much less than feared. Yet new threats will come as they always do. It is one reason why wheat farmers support innovative technology, including biotechnology, to help produce a more sustainable and affordable supply of food for the growing world.

“The wheat farmers who support innovation … greatly respect customer choice as well, but they also believe they will need every available tool to face future challenges and meet growing global needs.”

Conventional Breeding…

Scientists and breeders have been able to overcome many of these threats through conventional breeding. Crossing plants with known resistance to incorporate the desired traits into new varieties. Where genetic markers have been identified, marker-assisted selection (MAS) greatly improves the success rate of achieving those desired traits. Doubled haploid technology, which reduces the number of generations needed to stabilize a new variety, can help bring these traits to market quicker for tools against these challenges.

While these conventional techniques bring the desired traits into new varieties to address specific problems, they may also result in transferring genes that do not benefit the new variety. For example, a breeder may get rust resistance but lose another desired trait such as test weight or protein quality. Through many years and crosses, it is possible to minimize these outcomes, but time may not be a luxury in many cases to address a specific challenge.

…And Innovation

Modern biotechnology, however, is helping restore papaya production in Hawaii and research to resist citrus greening disease is underway (read more here). Concerned growers sparked the increase in research that led to these alternatives. Wheat farmers in the United States, Canada, Australia and other countries have also stood up to say the world needs advances that improve yield, quality, production efficiency and sustainability. Private and public researchers responded and now they are using the full range of technology to find ways to achieve those long-term goals.

As with the citrus greening research, this increased investment in wheat is not limited to so-called GMO technology. Just this week, scientists at Washington State University announced they have identified a gene in wheat that regulates how the plant shares genetic information. The researchers said the discovery “clears the way for breeders to develop wheat varieties with the disease- and pest-resistance traits of other grasses, using a legion of genetic tools that can reduce crop losses and pesticide use.” This discovery likely will not require single gene transfer, but other research does center on the remarkable advancements in biotechnology. All these tools will help wheat breeders address specific challenges without altering other desirable characteristics of wheat and the flour it produces.

The wheat farmers who support innovation firmly believe that the new varieties created through any technology must ultimately meet regulatory requirements of the country that produces them and the countries that import them. They greatly respect customer choice as well, but they also believe they will need every available tool to face future challenges and meet growing global needs.

*Global population today has grown to more than 8.1 billion people.

 

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Bioceres Affirms Commitment to U.S. Biotechnology Commercialization Principles

In its public statement following USDA’s deregulation of the HB4® drought-tolerance trait from Bioceres Crop Science on Aug. 29, U.S. Wheat Associates (USW) noted that it would continue monitoring how the company’s commercialization plans align with the “Wheat Industry Principles for Biotechnology Commercialization” developed jointly with the National Association of Wheat Growers (NAWG).

USW was pleased to see the publicly traded company acknowledge that commitment in its  Sept. 10 earnings call with investors.

Commercialization of wheat with the HB4 trait in the United States will take time, said Bioceres CEO Federico Trucco. In the call, Trucco said the process will follow “the guidance that was provided by the wheat industry associations, the U.S. Wheat Associates, and the National Association of Wheat Growers, that requires approvals in certain key geographies where wheat exports from the U.S. are relevant, as well as an effective way to identify HB4 presence in wheat shipments.”

Image shows U.S. farmers at a conference at Bioceres headquarters in Argentina to demonstrate careful engagement.

U.S. farmer leaders have engaged with Bioceres to emphasize the importance of adhering to wheat industry principles for biotechnology commercialization. This team of farmers and USW staff met with Bioceres in Argentina in January 2024.

Lots of Work to be Done

Also in the call, the company suggested that it will work with wheat industry participants, including public university breeding programs, to develop U.S. wheat varieties with the HB4 trait. Bioceres also indicated they will pursue broad licensing agreements as a commercialization strategy in the United States. Significant development work will be required before any wheat with the HB4 trait will be planted in the United States for commercial sale.

“There is still a lot of ground to cover with this technology and our organization will stay actively engaged in the proc.ess on behalf of our farmers and overseas customers,” said USW Director of Trade Policy Peter Laudeman in USW’s statement. “We appreciate the commitment that Bioceres is making to working with its wheat industry partners to ensure robust stewardship of this technology prior to commercial release.”

In addition to the “Principles” statement, USW and NAWG also developed a “Wheat Industry Biotechnology Position Statement.” It recognizes the promise of biotechnology research in wheat and supports the ability of wheat customers to make purchases based on specific traits, noting that “We commit ourselves to the principle that our customers’ needs are vitally important.”

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Wheat Industry News

News and Information from Around the World Wheat Industry

 

Speaking of Wheat

“The [wheat] market is very much a balance of what’s going on all around the world. You really have to have a higher-level view of what production is like in the Black Sea, Australia or South America. There’s more complication, there’s more moving pieces. … Every three or four months, somebody’s harvesting another crop of wheat. The puzzle’s constantly changing and you have to shift and fit it into the next variable as it comes down the road.” – Brian Liedl (photo above), Director of Merchandising, United Grain Corp, from an article in Capital Press.

Wheat Versus Bread Prices

At U.S. Wheat Associates (USW), we try to present the true effect of wheat and flour prices on end use products. We were pleased to see a recent, accurate assessment of a potential increase in French wheat prices given the weather-limited crop there in 2024. Thierry Pouch, chief economist of the French Chamber of Agriculture was quoted in an article in Politico EU saying, “The price of wheat and flour is only a small part of the total price of a baguette. For the moment, we don’t see large-scale movement in prices for consumers.” Read more here.

Oklahoma State University (OSU) to Create New Home for Wheat Breeding

OSU is creating a new Agronomy Discovery Center through upgrades to the existing Agronomy Research Station, home to one of the world’s top wheat breeding programs. The project received gifts of $5 million from Oklahoma Genetics Inc. and $1 million from USW member Oklahoma Wheat Commission. The two lead donations announced Aug. 9 will help launch a fundraising initiative as part of a multiphase upgrade process. Early priorities include constructing a new headhouse and 12 research greenhouses to be the birthplace of OSU’s new wheat lines. “Investments like this do not merely produce wheat for today; they ensure a better breed of Oklahoma wheat for tomorrow,” said OSU Regents professor and wheat geneticist Dr. Brett Carver. Read more here.

OSU Agronomy Discovery Center Gifts

Representatives from the OSU Foundation, Oklahoma Genetics Inc. and the Oklahoma Wheat Commission join Dr. Kayse Shrum, OSU president (second from left), and Dr. Jayson Lusk, vice president and dean of OSU Agriculture (far right) in launching the OSU Agronomy Discovery Center’s new fundraising initiative. Also participating were USW Director Don Schieber (center), Oklahoma Wheat Commission Executive Director Mike Schulte, and former executive director of Plains Grains Mark Hodges. Credit: ©Mitchell Alcala – OSU Agriculture.

Also at OSU…       

USW offers best wishes to Oklahoma State University’s Kim Anderson who retired July 31 after 42 years providing grain marketing advice in person and through U.S. farm and business media to farmers. In a High Plains Journal article, Anderson said his views of grain marketing have evolved, with the major differences being price seasonality, more data and that farmers are marketing on a more global level than they were 40 years ago. Read more here.

Largest SRW State Seeking Checkoff

Illinois Wheat Association logoIllinois produces more soft red winter (SRW) than any other U.S. state. Members of the Illinois Wheat Association (IWA) are now circulating petitions to institute a wheat checkoff in the state, Brownfield News reports. Checkoffs approved by farmers and operated under state statutes establish wheat commissions that manage funds collected when wheat is first sold. Don Guinnip, with IWA, who farms in Marshall & Clark County, told Brownfield, “We need to be promoting wheat.” The petitions lead to a hearing with the state ag department and, IWA hopes, to a farmer referendum in 2025. Funding from 17 state wheat commission members of USW allows the organization to apply for export market development program funding. Read more here.

 

USDA Looks at Specific Price Increase Effects on Planted Acreage

USDA’s Economic Research Service recently released a study that examined the area planted for major U.S. row crops.  The research went a step beyond previous studies by determining the degree by which a price increase or decrease would result in a change in planted acreage. Researchers determined that for every 1-percent increase in corn prices, corn acreage planted increases by 0.210 percent and soybean acreage planted declines by 0.115 percent. In 2023, a hypothetical 1,000-acre farm planted 373 (37.3 percent of its total area) acres of corn, 329 (32.9 percent) acres of soybeans, 195 (19.5 percent) acres of wheat, 40 (4.0 percent) acres of cotton, and 10 to 30 acres each of sorghum, barley, oats, and rice. If the price of corn for the next growing season increased 10 percent ($0.50 per bushel), the farm will increase corn area planted by 7 acres and decrease soybean area by about 5 acres. The remaining area would go to lower wheat, sorghum, and cotton acreage. Conversely, a 10 percent ($1.30 per bushel) increase in the price of soybeans will result in a 4-acre decrease in corn area and a 6-acre increase in soybeans. Read about the USDA study 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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Competitor Watch: Production is a Mixed Bag in the EU and Black Sea

As the Northern Hemisphere harvest progresses, more output and quality information has become available. Seen during the 2024 Paris Olympics opening ceremonies, persistent rains have continued to hit crop growing areas in France (photo above, iStock) and Germany, influencing harvest quality and yields, while the drought impacts in central and southern Russia have had well documented impacts on yield potential. This analysis will assess the current state of wheat production in the EU and Black Sea regions and examine its effects on global exportable supplies.

Map of EU shows unusually heavy rainfall in 2024

Heavy rainfall has significantly affected EU production, notably in France and Germany. France’s wheat output is at 26.3 MMT, a 24% decrease from the five-year average. Germany production sits at 19.2 MMT, an 11% drop from last year’s 21.3 MMT. Source: USDA FAS

Rains Dampen European Harvest

The August 2024 World Agricultural Supply and Demand Estimates (WASDE) decreased EU production by 2.0 MMT to 128.0 MMT, 5% below last year and the five-year average. According to FranceAgriMer, the French wheat crop sits at 26.3 MMT, down 24% from the five-year average and the lowest output in nearly 40 years. Looking at quality, early testing shows a lower test weight of 74-75 kg/hl while protein sits around 11% (dry matter basis). Stratégie Grains has assessed that just 72% of the harvest meets milling quality standards, a decrease from last year’s 84%.

In Germany, conditions were more favorable, but damp weather still affected planting and crop development. As a result, the Stratégie Grains estimates for German production sit at 19.2 MMT, down from 21.3 MMT last year. Similarly, Stratégie Grains expects a 9.4% decrease in Polish wheat production due to dry conditions in May and June. Of the major EU exporters, only Romanian wheat production holds strong at 10.3 MMT, according to Stratégie Grains. With decreased production in several key producers, USDA estimates put EU exports down 9% to 34.0 MMT.

Map of EU and Black Sea region show agricultural moisture conditions in 2024.

Dry conditions diminished yields throughout the Black Sea. SovEcon lowered their Russian wheat production estimates by 1.8 MMT to 82.9 MMT, in line with USDA estimates. Likewise, USDA put Ukrainian production at 21.6 MMT, a 1.4 MMT decrease from 2023/24. Source: JRC MARS Bulletin

Dryness in the Black Sea

The August WASDE kept the much-anticipated Russian wheat crop at 83.0 MMT, down 8.4 MMT from last year, weighed by the well documented influences of drought on yield potential. Likewise, SovEcon lowered their Russian wheat production estimates by 1.8 MMT to 82.9 MMT, in line with the USDA. Likewise, USDA put Ukrainian production at 21.6 MMT, a 1.4 MMT reduction from 2023/24 due to dry conditions.

Bar graph shows annual changes in exportable wheat supplies in the world from 2015/16 to 2024/25.

Despite a cumulative 16.7 MMT drop in wheat production from the EU, Russia, and Ukraine, the total output for major exporters is just 1% lower than last year (2.9 MMT) due to higher production in the U.S., Australia, and Canada. Source: August 2024 WASDE

Supply and Demand Impacts

Despite a cumulative 16.7 MMT drop in wheat production from the EU, Russia, and Ukraine, the total output for major exporters is just 1% lower than last year (2.9 MMT) and 1% below the five-year average. Increased production forecasts from the U.S., Australia, and Canada have balanced out the declines, contributing to adequate global wheat availability. Nevertheless, the decreased EU and Black Sea production will more heavily impact importers in the MENA region such as Morocco and Egypt, which may prompt them to buy from alternative suppliers.

It is also critical to highlight that total exportable supplies might vary, particularly as the wheat harvest in the Southern Hemisphere becomes more defined in the second half of 2024. In the interim, world prices remain stable, supplies are sufficient, and U.S. Wheat Associates will continue to offer current supply and demand data to aid customers in making informed decisions.

By Tyllor Ledford, USW Market Analyst

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Southeast Asia Team Explores U.S. ‘Wheat Store’ During Workshop Stops in North Dakota, Oregon

Hendrogiarto Tiwow, a representative of the from Wilmar Group in Indonesia, checks out a field of soft white (SW) wheat in Oregon during the recent USW Contracting for Wheat Value Workshop.

Hendrogiarto Tiwow, a representative of the from Wilmar Group in Indonesia, checks out a field of soft white (SW) wheat in Oregon during the Contracting for Wheat Value Workshop.

A group of flour millers from Southeast Asia recently became pioneers of sorts, making up the first international trade team to receive instruction at the new home of the Northern Crops Institute (NCI). They also were the first team to visit U.S. Wheat Associates’(USW) new West Coast Office in Portland.

More importantly, the professionals from Indonesia, Malaysia and the Philippines experienced the hard red spring (HRS) and soft white (SW) wheat crop. It has been described as one of the best crops in years.

After a successful USW Contracting for Wheat Value Workshop, the team is returning home with good news to report.

Opportunities to Meet Wheat Farmers

“Auspicious” is how U.S. Vice President for South and Southeast Asia Joe Sowers describes the participants. He points to the favorable opportunities to meet wheat farmers to discuss the crop. Insightful sessions at the Wheat Marketing Center (WMC) and a tour of grain export facilities are important parts of the workshop.

USW’s often-used catchphrase “the U.S. wheat store is always open” rang especially true.

“This Contracting for Wheat Value program has become a regular and very important workshop. We bring representatives from mills in Southeast Asia to the U.S. to help them see and identify the quality characteristics of U.S. wheat,” said Sowers. “A key part of the workshop is a comparison of how their flours perform versus other mills. We work to show them how they can improve the quality of their end products.”

Partnerships in Action

During visits to North Dakota and Oregon, the team from Malaysia, Indonesia and the Philippines were given a good look at the 2024 wheat crop and the U.S. wheat marketing system.

During visits to North Dakota and Oregon, the team from Malaysia, Indonesia and the Philippines was given a look at the 2024 wheat crop and the U.S. wheat marketing system.

NCI, which recently moved to the new Peltier Center on the campus of North Dakota State University in Fargo, played a vital role in the workshop. As did the WMC in Portland.

“With our partners NCI and the WMC, we were able to showcase this year’s wheat crop, but also explain the marketing system,” Sowers explained. “We give them a look at U.S. wheat from the farm to the export elevator. Importantly, we walk them through farms in North Dakota and in Oregon. Showing them how wheat is shipped via rail or via barge to the port for loading on ships is very important. And then, at the end, the most important interaction they have with the U.S. marketing system is their purchase contract. Specifications in those contracts assure they can receive exactly the wheat that they need.”

Purchase contracts are examined and explained to illustrate specific factors that can help customers of U.S. wheat extract the optimal value from each purchase. This year, large yields of HRS, SW and HRW are expected to result in lower protein content in those classes. Armed with this information, participants are better able to communicate with their suppliers to make sure they receive grain they need.

Important – and Growing – Markets

The Philippines is the largest buyer of both U.S. HRS and SW. Indonesia regularly imports between 9 million and 11 million metric tons of wheat. The source is primarily Australia and Canada. But even with a small share, Indonesia is often a Top 10 buyer of US wheat. Indonesia was the seventh largest market last year. The U.S. market share in Indonesia has risen to about 12% in recent years. It is a market with potential for large growth. Malaysia has a much smaller population and is a smaller market, but it has been a consistent buyer of U.S. wheat. There is tremendous potential, as end-product exports by baking companies in Malaysia are growing quickly.

Some of the sights and lessons offered during the USW Contracting for Wheat Value Workshop:

Mike Moran, Executive Director of the Wheat Marketing Center (WMC) in Portland, explained the role the WMC plays in supporting the U.S. wheat industry.

Mike Moran, Executive Director of the Wheat Marketing Center (WMC) in Portland, gave a tour of the WMC facility and explained the important role it plays in supporting the U.S. wheat industry.

At NCI, the Team:

  • Toured NDSU’s greenhouse and received a presentation about grain exporting by Dr. Bill Wilson.
  • Visited the Maple River Grain and Agronomy elevator in Casselton, N.D. and a farm in Mapleton, N.D.
  • Participated in analytical testing on various U.S. wheat flour and dough, and in testing on protein and moisture, ash, and falling number.
  • Heard from the North Dakota Wheat Commission on the world and U.S. wheat supply and demand.
  • Learned from Shawn Thiele of Kansas State University about flour mill management to optimize profitability. Thiele offered insight into wheat blending, cleaning, tempering, KPI management, and other processes.
  • Explored the differences and similarities between U.S. and competitor wheat for various food products.

At the WMC, the team:

  • Explored the WMC’s facility with Executive Director Mike Moran.
  • Heard from Operations and Project Manager Liman Liu about the WMC’s role in the important crop quality process for all six classes of U.S. wheat.

    Along with learning about the quality of each of the six classes of U.S. wheat, team was presented information and updates about the many end products that can be produced with each class.

    The team learned about the quality of each of the six classes of U.S. wheat. It was also presented information about the many end products that can be produced with each class.

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