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Harvest and Much Improved Conditions Pressure U.S. Soft White Market

Volatility remains the key word when looking at wheat prices, and the soft white (SW) market is no exception.

From their rapid increase following the severe drought in 2020/21 and the Russian invasion of Ukraine in March 2022, U.S. wheat futures have declined recently and were down more than 4% on July 5, hitting a multi-month low. While SW does not trade on a futures exchange, as a soft wheat, it reflects the CBOT soft red winter (SRW) futures price that settled July 5 at $8.07, the lowest level since February 18, before the invasion. On July 6, the July contract SRW contracted slipped further, falling below $8.00/MT.

New Crop Arriving

The U.S. SRW and hard red winter (HRW) wheat harvests are underway, helping push futures and SW prices down as the market takes in news about crop conditions and yield potential. An additional bearish factor is improved crop conditions boosting confidence for this year’s hard red spring (HRS) crop.

Abundant moisture and cooler temperatures this growing season have benefited the SW crop but also slowed crop progress, causing a slight delay in this summer’s harvest.

More SW to Come Slightly Late

One wheat trader shared an anecdote about harvest timing from a Washington-based wheat farmer. Each year the farmer looks to when a specific type of flower blooms to indicate when harvest will start. Usually, the flowers bloom around mid-June, and wheat typically matures about three weeks later. But this year, the flowers did not bloom until the end of June, so the farmer expects to start harvest around July 15.

This look ahead at the new SW crop also helps to explain the quick run-up in SW export prices in May when “old crop” stocks were being drawn down and in June when the price started to turn toward a middle ground.

U.S. soft white wheat futures prices over time

Moderating SW Prices. As the harvest of a much improved and potentially high-yielding U.S. SW wheat crop draws near, new crop prices have come down to a level similar to prices in August 2021. Source: USW.

Buyers of SW around the world are all too familiar with the impact of drought and heat on 2021 SW production and functional characteristics, as well as export prices. This year things are different.

“Much Better” Production

The U.S. Drought Monitor keeps statistics comparing changes in drought status from year to year. A recent comparison map (below) shows significant improvement in the Pacific Northwest SW and white club production region, as well as in much of the U.S. HRS and northern durum production region.

U.S. Drought Monitor map from June 2022 showing changes in drought status from June 2021 to June 2022

Source: U.S. Drought Monitor.

In an interview with the Moscow-Pullman Daily News, Glen Squires, chief executive officer for the Washington Grain Commission, highlighted the volatility and numerous factors that fueled and then decelerated the SW wheat market. Weather, he emphasizes, is a key part of what is behind the market right now.

“Our wheat production in the Pacific Northwest is supposed to be a much better this year,” Squires said. “If the estimates are accurate, we could have 20 million bushels (544,366 metric tons) over our five-year average. So that plays into (the market volatility) a little bit.”

Buyers can monitor U.S. Wheat Associates (USW) Harvest Reports for weekly updates on harvest progress and initial crop quality data and follow more news about the 2022 harvest through state wheat commissions and regional USW office updates.

By USW Market Analyst Michael Anderson

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Good Things that Did and Did Not Happen at the WTO Ministerial

Late spring is a notoriously busy time on U.S. farms. This may partly explain why last month’s World Trade Organization (WTO) Ministerial meetings in Geneva largely came and went without much notice from U.S. farmers or farm media. Or maybe U.S. farmers have tuned out the inner machinations of a 25-year-old organization that has been promising a new agricultural agreement for more than two-thirds of its existence. Whatever the reason, the actions, both those taken and not taken, will impact U.S. wheat farmers.

The actions taken of note at the WTO Ministerial include a new declaration on sanitary and phytosanitary (SPS)* regulations and a commitment by countries to exempt humanitarian purchases by the World Food Programme from export restrictions. The latter is of little consequence to U.S. producers as U.S. laws around export restrictions are pretty tight, part of what has made the United States the most reliable wheat supplier in the world. The SPS front, though, holds more promise.

Fastest Growing Trade Barriers

Non-tariff barriers to trade (which include SPS regs) represent what we on the U.S. Wheat Associates (USW) policy team have called “the fastest-growing segment of trade barrier impacting wheat trade.” We have worked on more non-tariff barriers than traditional tariff barriers in the last calendar year. Non-tariff barriers include rules such as maximum residue limits (MRL) on pesticides and limits on weed seed species or insects. Many SPS regulations are critically important to protecting plant and human health, but, in recent years, many countries have found they are a convenient way to protect domestic producers or otherwise frustrate international trade. That the SPS rules received a major update for the first time in their existence at the WTO Ministerial and that the notoriously protectionist European Union joined in supporting them notes just how important they have become to facilitating trade.

Attempts at Weakening WTO Rules

It may seem odd to celebrate actions not taken, almost as though no progress represents a successful outcome. However, that has increasingly been the case for U.S. agriculture at WTO Ministerial meetings in the last decade.

With all hopes of securing meaningful new market access for agriculture essentially dashed since 2008, several developing countries have tried to weaken existing rules. India has been notorious for this, insisting that its public stockholding programs be exempt from subsidy limits – despite exporting substantial wheat and rice stocks from those so-named food security programs. India secured a limited exception to those subsidy rules during the Bali ministerial in 2013. Developing countries also substantially, though temporarily, weakened rules on export subsidies – widely recognized as the most trade distorting form of domestic support during the Nairobi ministerial in 2015.

With those two events as background, an informal coalition of U.S. agricultural groups – “Aggies for WTO Reform” – attended the WTO Ministerial, received briefings from the U.S. government and WTO representatives, and advocated with other country delegations to hold firm in the original rules of the WTO.

Trade Rules for the Greater Good

Those original rules have been critical to the expansion of U.S. agricultural trade since the WTO was formed in 1996. The chart below, shared with USW’s board of directors in early 2022 by USDA Acting Undersecretary for Trade and Foreign Agriculture Jason Hafemeister, shows the double-sided value to world economies from the WTO. By standardizing the rules of trade and reducing barriers in its initial agreement, the WTO enabled a tremendous rise in exports of U.S. agricultural products while simultaneously lifting millions of people worldwide out of poverty.

Fruits of Globalization chart

So, in looking back at another WTO Ministerial meeting, there may be much to be said about its shortcomings and the need for improvements, but history shows when countries stick to the rules and agreements, trade – and people – win.

*The U.S. Trade Representative defines SPS measures as rules and procedures that governments use to ensure that foods and beverages are safe to consume and to protect animals and plants from pests and diseases.

By USW Vice President of Policy Dalton Henry

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U.S. Wheat Associates Wishes Janice Cooper Farewell

U.S. Wheat Associates (USW) wishes all the best to our friend and colleague Janice Cooper as she retires as Managing Director of the Wheat Marketing Center (WMC) at the end of the month. A long-time friend of the U.S. wheat industry, Cooper has had various roles putting her in direct contact with U.S. wheat farmers and customers.

Janice Cooper

Janice Cooper.

“Six years ago, we negotiated an employment contract, signed it and Janice was on the job within an hour at her first Wheat Marketing Center full board meeting. No drama, just a calculated approach to move ahead as managing director. Her background in lab services, market development and education made her perfectly suited to lead the industry’s Portland operation as the technical crossroads of the world,” said Bill Flory, WMC chairperson and Idaho wheat farmer. “Janice’s calm demeanor and consideration for employees, public and proprietary partners, and the board of directors have served us well. WMC is in a great position to continue enhancing growers’ profitability by better understanding U.S. wheat’s strengths and competitive standing worldwide because of our Janice Cooper.”

Before joining the Wheat Marketing Center in 2015, Cooper spent six years as the Executive Director of the California Wheat Commission and earlier managed the California Association of Wheat Growers. In addition to her experience in the wheat industry, Cooper has a broad background in business development and trade policy in the banking, high tech and renewable energy sectors. Cooper was also a member of the Grain Industry Advisory Committee, the private sector group appointed by the U.S. Secretary of Agriculture to advise the Federal Grain Inspection Service on its programs and priorities.

Located in the historic Albers Mill Building in Portland, Ore., WMC is a research and educational bridge between U.S. wheat farmers and their customers, dedicated to linking quality wheat and quality end products. In April 2022, Mike Moran joined WMC as its new executive director, giving him three months of overlap with Cooper to ensure a smooth transition

“I first had the pleasure to meet Janice when she was with the California Wheat Commission, and our paths were destined to cross again after she took the helm at WMC. In both roles, I have appreciated her counsel and her passion for the wheat industry, and farmers in particular,” said WMC Executive Director Mike Moran. “As I have had the opportunity to walk beside Janice these last few months, I am struck by the depth and breadth of the relationships she has developed throughout the wheat world. I am pleased to be following in her footsteps. The legacy she has built inspires me to honor that commitment to ensuring that U.S. wheat farmers and the fruits of their labor remain the quality choice for customers worldwide. I am proud that I can call her both mentor and friend.”

“Janice has helped guide WMC through an unprecedented time of global uncertainty, and her steady leadership has been an asset to both WMC and the industry at large,” said WMC Technical Director Jayne Bock. “While we are sad to see her go, we’re pleased that she has helmed a transition that sets a new path for Mike Moran and WMC going forward. We wish her all the best as she returns to California to spend more time with her family.”

“Janice Cooper’s friendly, outgoing nature and intellectual curiosity gave her the ability to make foreign guests and wheat producers alike feel welcome and included at the Wheat Marketing Center,” said USW Vice President and West Coast Office Director Steve Wirsching. “She brought superior management skills and calm leadership that allowed everyone around her to reach their full potential. She was able to resolve conflicts equitably and move the organization forward. We are all sad to see her leave.”

Janice, thank you for your service to U.S. wheat farmers.

Wheat Marketing Center staff with USW technical experts.

Technical Training. Dr. Jayne Bock, Wheat Marketing Center Technical Director, discusses baguette qualities with David Oh, USW Seoul; Adrian Redondo, USW Manila; and WMC Managing Director Janice Cooper in March during a core competency training session.

 

In cooperation with the Wheat Marketing Center, Portland, Ore., Oh (fourth from right) helped plan and conduct a Korea Baking Product Development course in 2019. Janice Cooper is pictured third from the left.

 

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Defining U.S. Wheat’s Comparative (Competitive) Advantage: Hard White

In the increasingly competitive global wheat market, it is important to review the advantages that U.S. wheat delivers to millers and bakers. This post examines the advantages that hard white wheat brings to the market.

Hard white (HW) wheat is the smallest class of wheat grown in the United States, with an annual average production over the last five years of 822,413 metric tons (MMT), about 30.2 million bushels. U.S. HW is the newest wheat class and has developed a strong niche for whole wheat flour products in the U.S. domestic market. In addition, HW varieties are bred to yield flour for both bread and Asian noodles.

The strong demand for a specific use and the relatively small production has created a market where most HW is grown under contract with domestic U.S. milling companies to assure quality standards and provide a premium price incentive to farmers. It is also important to mention that HW wheat includes winter and spring varieties, increasing the protein range and functionality within the class.

Milling Advantages

U.S. hard white wheat performs in the mill much like hard red winter (HRW) wheat. The most apparent HW benefit is higher extraction levels of whiter flour due to its lighter bran color. Higher extraction rates generally improve flour water absorption, benefiting the baker. HW is a true hard wheat creating an advantageous granulation in the primary breaks for the production of coarse semolina, increasing the production of low ash flour.

Baking and Processing Advantages

The most significant advantage of hard white wheat is the quality of baked products made from hard white wheat flour. As mentioned, one of the primary uses of hard white flour in the U.S. baking industry is for whole wheat products. By using ultra-fine white whole wheat flour, whole wheat bread can be produced with the color and texture of traditional bread. This has created a large demand for white whole wheat flour in school lunch programs and other products promoting the health benefits of whole wheat flour and its acceptable taste to children.

Another advantage of HW wheat flour is its low polyphenol oxidase (PPO) content. PPO is an enzyme that can cause the browning of dough. Lower PPO content improves the color of wet noodles and Asian steamed bread products. The starch-pasting characteristics of some HW varieties, as measured by amylograph values, are also an essential trait for noodle production. High peak viscosity is associated with desirable texture characteristics in noodles.

Sourcing Challenges

With all the advantages of HW to the milling and baking industry, the market has challenges in determining its value. Most hard white wheat is grown under production contracts by U.S. milling companies. It is also grown predominantly in the Great Plains, adding to the challenge of marketing HW to Asian customers sourcing wheat off the West Coast. The small size of the HW planted acres creates challenges for a volume-based grain handling system. The need to segregate HW from HRW or hard red spring (HRS) wheat adds cost to the elevators due to the time required to clean equipment and bins. It can also be difficult to accumulate enough quantity to fill a ship hold or a complete unit train. These challenges require creativity and flexibility from both the buyer and seller, who must work together to pull HW wheat through the market and encourage the wheat producer to increase HW wheat planted acres.

U.S. Wheat Advantages

As we highlight each specific class in this series, let us not forget the advantages that all U.S. wheat classes bring to the market. First, and perhaps the most important, is consistency in quality and supply. Although each new crop year brings different challenges and opportunities, U.S. wheat is always available to the global market. Second, U.S. wheat delivers variety. Wheat is a raw material manufactured into a bakery ingredient, flour. The flour made from each unique class of U.S. wheat brings value to the market in the unique quality characteristics to make a variety of baked goods and noodles. It is also important to understand the value of blending flour from one or more types of wheat to optimize the flour performance at a minimal cost.

Each region, country, and culture have wheat-based food products that are uniquely their own. With six unique wheat classes, the United States has the right wheat class to deliver the optimal quality and value for every variety of product on the market.

Learn more about the six classes of U.S. wheat here or leave a question in the U.S. Wheat Associates’ “Ask The Expert” section.

By Mark Fowler, USW Vice President of Global Technical Services

Read more about other U.S. wheat classes in this series.

Hard Red Winter
Hard Red Spring
Soft White
Soft Red Winter
Durum

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Wheat Industry News

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

Speaking of Wheat

“We agree that trade, along with domestic production, plays a vital role in improving global food security in all its dimensions and enhancing nutrition. We commit to take concrete steps to facilitate trade and improve the functioning and long-term resilience of global markets for food and agriculture, including cereals, fertilizers, and other agriculture production inputs. Particular consideration will be given to the specific needs and circumstances of developing country Members, especially those of least-developed and net food-importing developing countries. We underscore the need for agri-food trade to flow, and reaffirm the importance of not imposing export prohibitions or restrictions in a manner inconsistent with relevant WTO provisions.”

– From the Draft Ministerial Declaration on the Emergency Response to Food Insecurity adopted by the World Trade Organization at the 12th Ministerial Meeting in Geneva, Switzerland, June 16, 2022.

Prices Weakening

U.S. wheat futures prices were down significantly last week, and the decline has continued this week. Soft red winter (SRW) futures closed down 36 cents at $10.34/bu, and early on June 23, the September price was about $9.75/bu. Hard red winter (HRW) futures closed last week down 57 cents at $11.05/bu, with the September contract at $10.22/bu early on June 23. Hard red spring (HRS) futures ended last week down 52 cents at $11.69/bu, and on June 23, the September price was $10.88/bu.

Focus on Drought

On Tuesday, the Senate Agriculture Subcommittee on Climate, Forestry, and Natural Resources held a hearing to discuss the persistent drought and the western water crisis. On June 1, the administration’s Drought Resilience Interagency Working Group released a report outlining actions taken over the previous year to improve drought resilience. Research could help the industry adapt to drought conditions. Washington State University was awarded a Seeding Solutions grant from the Foundation for Food and Agriculture Research to identify genes in spring wheat that would allow it to be more heat and drought resilient. Brazil has begun field testing Bioceres’ HB4 wheat, a drought-resistant, genetically modified wheat variety.

Focus on Ukraine

During a meeting with U.N. ambassadors and officials at the U.S. Mission to the U.N., U.S. Secretary of Agriculture Tom Vilsack announced the USDA and The Ministry of Agrarian Policy and Food of Ukraine are entering into a Memorandum of Understanding (MOU) to enhance coordination between the U.S. and Ukrainian agriculture and food sectors and build a strategic partnership to address food security. Through the MOU, USDA announced that the United States and Ukraine will “exchange of information and expertise regarding crop production, emerging technologies, climate-smart practices, food security, and supply chain issues to boost productivity and enhance both agricultural sectors.” Read more here.

2022 Hard Spring Wheat and Durum Tour

The annual Wheat Quality Council spring wheat tour is scheduled for July 25 to 28, 2022. The tour will provide the first production estimate for the 2022 U.S. hard red spring and durum crops. Tour information and registration are posted here. Customers can follow the tour in real-time by following #wheattour22 on Twitter and keep up to date on the entire U.S. wheat harvest with the weekly USW Harvest Report.

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.

 

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How to Follow the U.S. Wheat Harvest by Class and State

The 2022 U.S. wheat harvest is well underway across several states. U.S. Wheat Associates (USW) reports on its progress as well as crop conditions and current crop quality for hard red winter (HRW), soft red winter (SRW), hard red spring (HRS), soft white (SW) and durum wheat. These weekly Harvest Reports are published every Friday afternoon, Eastern Daylight Time, from May to October. Anyone interested in receiving this report directly to their email inbox can subscribe here. Updates and photos are also shared on Facebook, Twitter and LinkedIn.

Several of USW’s state wheat commission members also share more detailed reports, pictures and stories from wheat harvest in their state. It is important to note that when the U.S. wheat harvest is expected to begin and end from state to state varies each year based on several factors, including weather and if planting was completed on schedule.

Learn how you can follow the U.S. wheat harvest by state below.

Kansas
Wheat harvest in Kansas typically begins in early to mid-June and is complete by mid-July. It starts in the south-central part of the state and moves north and west. Harvest reports are typically published online Sunday through Thursday during the harvest season. Viewers can also sign up to receive these reports via email here. Photos, crop progress and harvest updates are also shared on Facebook, Twitter and Instagram.

Oklahoma
Wheat harvest in Oklahoma typically begins the last weekend in May, around Memorial Day, and is usually complete by the first week of July. It starts in the southwest and south-central part of the state, moves north and west, and then fans out across the northern tier of the entire state. Harvest reports are published weekly on the Oklahoma Wheat Commission website. Updates are also regularly shared on Facebook and Twitter, including photos and videos from wheat farmers across the state.

Texas
Wheat harvest in Texas typically begins in late April to early May and is complete by the beginning of July. It starts along the coastal bend in the southern part of the state, then moves north and west, concluding in the Panhandle. Photos, crop progress and harvest updates are posted on Facebook and Twitter. As harvest begins, updates are regularly posted to the Texas Wheat website.

Colorado
Generally, wheat harvest starts in Southeast Colorado around the third week of June and gradually moves north, typically nearing completion by July 15. Colorado Wheat publishes a weekly crop outlook report that is posted on Facebook, Twitter and its website homepage. Once harvest begins, a report will be published on the same channels approximately twice a week.

Idaho
Idaho wheat farmers typically begin harvesting in early July and continue through the end of August. Harvest starts in the central part of the state and moves north and south. Idaho wheat harvest updates and photos are posted on Instagram and Twitter. The Idaho Wheat Commission also sends an email newsletter on the first Wednesday of the month that includes a crop production report. Those interested can subscribe here or contact their staff here.

Oregon
Wheat harvest in Oregon typically begins in mid-July and is complete by the end of August. Photos, crop progress and harvest updates are posted on Facebook and Instagram.

Washington
Wheat harvest in Washington typically begins in early July and is complete by September. It starts in the west-central part of the state and moves east toward the Idaho state line. Learn more from the Washington Grain Commission on its website, Facebook, Twitter, Instagram and YouTube.

Montana
Montana’s wheat harvest ranges from the end of July to the first week of September. HRW harvest typically begins first and is closely followed by HRS and durum, which is generally ready two to three weeks after HRW. Harvest starts in the south-central portions of the state and moves to the northwest and east. Photos, crop progress and harvest updates are posted on Facebook, LinkedIn, Instagram and Twitter. The Montana Wheat & Barley Committee also publishes monthly crop reports on YouTube, hosts a Live Crop Cam for viewers to check in on that crop throughout its lifecycle, and posts additional updates on its website.

South Dakota
Wheat production in South Dakota is evenly split between HRW and HRS wheat. HRW harvest typically begins in early July, with HRS harvest following in late July and early August. The South Dakota Wheat Commission shares updates in its South Dakota Wheat Outlook on its website and also shares photos and updates on crop progress and harvest on Facebook and Twitter.

North Dakota
The North Dakota Wheat Commission shares weekly crop progress and harvest updates on its website. Those interested can sign up to receive these updates directly to their inbox via the signup box at the bottom of the homepage here. Pictures and updates are also shared on Facebook.

Minnesota
Wheat harvest in Minnesota typically starts at the end of July in the central part of the state and moves north to finish by the end of August. Minnesota Wheat shares a weekly newsletter and other posts from the University of Minnesota Extension on its website, Facebook and Twitter.

Arizona
Arizona’s Desert Durum® wheat harvest typically begins in early May and is complete by mid-July. The Arizona Grain Research & Promotion Council shares updates on Facebook.

Other Sources

Crop Progress and Condition Reports by state are also published by the USDA State Crop Progress and Condition.

Connect with USW’s other state wheat commission members below.

Nebraska
Website | Facebook | Twitter

Maryland
Website | Facebook | Twitter | Instagram | YouTube

Ohio
Website | Facebook | Twitter | YouTube

Wyoming
Website

California
Website | Facebook | Twitter | Instagram | LinkedIn

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Export Bans Contrast with U.S. Wheat’s Commitment to an Open, Transparent Market

Consumers and suppliers both appreciate uniformity, the ability to purchase a reliable product that is available when needed. Customers of U.S. wheat know that dependable people grow and supply reliable wheat, which marks the difference between the U.S. wheat market and some competing suppliers.

Freedom to Trade

Free trade has been upheld in U.S. commerce since the country’s founding. The Export Clause, in Article I, Section 9, Clause 5 of the U.S. Constitution, states, “No Tax or Duty shall be laid on Articles exported from any State.” The framers of the constitution, eager to throw off the history of colonial rule, made it a policy that goods from the U.S. would be available to markets worldwide, and no elected official would tell them otherwise.

However, farmers have fought for uninhibited trade.

When the Soviet Union invaded Afghanistan in 1980, President Carter cut off U.S. grain exports to the Soviets. In the aftermath of the grain embargo, more stringent laws such as the export sales reporting and contract sanctity law were passed that doubled down on the freedom of commerce.

Protectionism Rising

Despite the sincere efforts by the World Trade Organization (WTO) to keep international markets open, some countries remain quick to block exports when markets become uncertain. Covid-19 and the global shutdowns that followed showed a pattern of export bans from major commodity producers. Russia’s recent invasion of Ukraine has also had a reverberating effect on the grain markets. Many would-be suppliers have instead banned or restricted the sale of their wheat, creating a supply worry and once again proving that not all markets remain reliable.

When countries implement wheat export bans claiming to protect their domestic market it creates uncertainty and higher prices for buyers. Putin’s war with Ukraine pushed already increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated.

Putin’s war with Ukraine pushed increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated. The latest USDA Supply and Demand Report expects Ukrainian wheat exports to fall by nearly half year-over-year from 19.0 million metric tons (MMT) in 2021/22 to 10.0 MMT in 2022/23. This 9.0 MMT reduction is almost the equivalent of all the wheat Turkey is expected to import in 2022/23. Russia’s unprovoked invasion has interrupted Ukrainian commercial sales and added uncertainty to the market.

India abruptly halted commercial wheat exports on May 13, catching the wheat market off guard. The immediate suspension has moderated somewhat since then. Still, the government’s promise to fulfill export shortages caused by Russia’s invasion of Ukraine was an unexpected and costly blow to the market.

Intervention Expands

Other countries have weighed the use of export-curbing measures. Argentina’s president in May urged its legislature to increase export taxes to protect domestic prices from “surging international prices.” Kazakhstan applied a quota on wheat, including durum, soft wheat, and wheat flour, from April 15 to June 1. Belarus imposed an export ban on grains from late 2021 to early 2022.

And Russia, with a very large wheat crop now expected, has not stopped its protectionist wheat export tax that only increases the cost for buyers. Russia also imposed export bans on countries in the Eurasian Economic Union (EEU), which comprises former Soviet countries. The ban is in place from Mid-March to August 31, 2022.

When countries implement wheat export bans, they often claim to be protecting their domestic market. But the actual effect is higher prices for every buyer. Export bans also create uncertainty. India’s sudden export ban is a prime example.

“We bought wheat from traders and moved it to ports,” said a wheat trader caught off guard by India’s export ban. “Our intention is to fulfill export commitments, but we can’t overrule government policy. Therefore, we don’t have any option but to declare force majeure*.”

Buyers expect reliability, and that requires suppliers to have dependable partners. U.S. wheat farmers and their export supply chain partners, with government support, strive to be that dependable partner to world wheat buyers.

By Michael Anderson, USW Market Analyst

*Force Majeure is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing.

Header photo courtesy of Adams Farms LLC in Oklahoma, June 2022

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IGP Institute Capitalizes on Resources and Location to Provide Hands-on Training

Global demand for wheat food grows stronger every year, making exports vital to U.S. wheat farmers. As the export market development organization for the U.S. wheat industry, U.S. Wheat Associates (USW) works to help wheat buyers, millers, bakers, wheat food processors, and government officials understand the quality, value, and reliability of all six U.S. wheat classes. USW relies on its successful working relationships with world-class educational partners that, through courses, workshops, and seminars, enhance the technical and trade service assistance to help distinguish U.S. wheat from its competitors. One of those partners is the International Grains Program Institute (IGP) in Manhattan, Kan.

Located in the Kansas State University (KSU) Grain Science Complex, the IGP Institute offers innovative technical training courses and workshops to enhance market preference, consumption, and utilization of U.S. cereal grains and oilseeds and their value-added products. On-campus, on-location, and virtual education courses are led by KSU faculty and industry professionals in the areas of flour milling and grain processing, grain marketing and risk management, and feed manufacturing and grain quality management.

Adding Value

IGP’s mission is to demonstrate that U.S. grains offer a competitive advantage over other suppliers, especially regarding quality and consistency. IGP is focused on providing technical leadership in milling, baking, and grain storage for the wheat industry.

Shawn Thiele, IGP Associate Director and Flour Milling and Grain Processing Curriculum Manager, says that hands-on training is where participants maximize their experience, which is why IGP prioritizes scheduling a majority of course time for hands-on training or field visits outside of the classroom. IGP partners with the International Association of Operative Millers (IAOM) and Buhler to host many of the grain processing and flour milling courses that focus on everything wheat and milling related, from wheat selection and storage, flour blending and quality control to end-use products and mill optimization and maintenance.

“We have a range of courses from an introduction to flour milling, which is geared towards non-millers working in the milling industry, to basic and advanced milling courses,” said Thiele. “Our goal is to showcase the importance of wheat quality and train participants on how to optimize the milling process to maximize extraction and quality of the U.S. wheat. Through each of these courses, we discuss all six classes of U.S. wheat, how their different characteristics translate into different milling practices, and how to optimize each to extract its full value and quality.”

In its grain marketing curriculum, led by Guy H. Allen, Senior Agricultural Economist and Grain Marketing and Risk Management Curriculum Manager, IGP offers courses beneficial for commodity traders, bankers, and individuals responsible for buying U.S. food and feed grains. The grain procurement and purchasing course focuses on the mechanics of purchasing raw materials and features detailed discussions of cash and futures markets, contracts, and ocean transportation. The risk management course focuses on the principles of risk management and commodity price control through hedging principles and using various hedging strategies. Allen is also working on new educational opportunities featuring grain supply chain field trips throughout the United States and applied agricultural sales training focused on professional sales and marketing for agriculture and related industries.

IGP also provides training on proper grain storage and handling techniques taught by Carlos Campabadal, Feed Manufacturing and Grain Quality Management Curriculum Manager and Spanish Outreach Coordinator. Campabadal has extensive international feed manufacturing experience and travels worldwide, providing assistance and education for grain handling, storage, and feed manufacturing challenges in developing countries.

State-of-the-Art Facilities

The IGP Institute Conference Center offers multiple technology-enabled classrooms, dining facilities, a grain grading lab that meets USDA standards, and a large auditorium featuring simultaneous language translation capabilities. The complex is also home to the commercial-scale Hal Ross Flour Mill, O.H. Kruse Feed Technology and Innovation Center, the Bio-processing and Industrial Value-Added Products (BIAVP) Innovation Center, and laboratories for flour and dough testing and baking. As part of the KSU Department of Grain Science and Industry, the IGP Institute leverages the department’s unique diversity of resources.

“To meet our mission, we have many value-added tools and multi-disciplinary faculty to aid our focus on technical assistance, including millers, bakers, feed scientists, food scientists, grain storage specialists, and economists,” said Thiele. “We also utilize resources from the industry, as needed, to ensure top experts are teaching the respective material.”

Located in the heart of hard red winter (HRW) wheat country, IGP’s proximity to the Kansas Wheat Innovation Center, wheat farmers, grain elevators, commercial flour and feed mills, commercial bakeries, USDA-ARS, and the Federal Grain Inspection Service all allow course participants to experience and learn from the full spectrum of the wheat supply chain.

Thiele adds that IGP’s partnerships help make its programming successful.

“U.S. Wheat Associates, the Kansas Wheat Commission, and other supporting commodity organizations are critical to what we do,” said Thiele. “In addition to financial support, the value of our relationship with industry partners and the donation of their time and materials is difficult to quantify.”

Every year, USW sponsors international customers to attend IGP courses focused on grain purchasing and flour milling. In 2022, IGP hosted USW technical staff for a core competency training session and is planning on hosting a USW advanced flour milling course for South Korean millers utilizing U.S. wheat.

USW Core Technical Training at the IGP Institute 2022

Technical Training. USW technical staff visited the IGP Institute in March 2022 for a core competency training session.

“IGP provides a good learning environment and experienced instructors that help millers lay a solid foundation for milling U.S. wheat,” said Boyuan Chen, USW Country Director for Taiwan.

Past course participants agree.

“The program helped us improve our flour milling operations,” said Vangala Ravindra from Pure Flour Mills in Nigeria. “We understand the different U.S. wheat variety characteristics, their end-uses, and impact on milling extraction and flour quality.”

Nestor Morales, from Gold Mills in Panama, attended an IGP grain purchasing course last month and is already beginning to implement what he learned.

“The staff at IGP was phenomenal. I now have a very good impression of the quality assurance that exists in the entire U.S. wheat value chain,” said Morales. “This course has the potential of improving our buying practices and better understanding the market in greater detail.”

IGP continues to look for ways to better reach U.S. wheat customers by working with industry partners and educational resources to expand on virtual and on-location training options. Recently, IGP has expanded its curriculum by adding new courses focused on the science of baking. These feature hands-on training and are taught by grain science department faculty with years of commercial baking industry experience.

Thiele said that IGP is expanding those opportunities by using innovative and engaging virtual learning platforms to record key topics that are typically only offered on-site. These new training lectures and courses will build on IGP’s virtual and on-demand training options.

“Our goal is that these tools are the first step toward customers saying, ‘wow, this is something that I need to invest more in,'” said Thiele. “At the end of the day, the biggest benefit is being in person at IGP to get the full experience and build long-lasting relationships. Nothing can replace that face-to-face interaction.”

Learn more about the IGP Institute and its programming and services at https://www.grains.k-state.edu/igp/.

By Amanda J. Spoo, USW Director of Communications

Read about other USW educational partners in this series:

Northern Crops Institute Continues Tradition of Adding Value to U.S. Spring Wheat and Durum
Wheat Marketing Center Creates Educational Bridge Between U.S. Wheat Farmers And Customers
Wheat Foods Council Is A Leading Source Of Science-Based Wheat Foods Information

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Report on Replacing the Benefits of the Lower Snake River Dams Generates Concern

A draft report on what would be needed to replace the benefits of the four Lower Snake River dams and locks was released June 9, 2022, for public comment through July 11, 2022. The report, conducted on behalf of Sen. Patty Murray and Gov. Jay Inslee of Washington state, suggests that breaching these dams to prevent the extinction of native salmon and replacing the benefits of barging and hydropower could cost between $10.3 billion and $27.2 billion.

Pacific Northwest (PNW) agricultural and commercial organizations responded to the report with serious concerns. A coalition of Republican members of Congress also introduced legislation that would protect the dams, arguing their benefits are irreplaceable.

No Dams, No Barges

U.S. Wheat Associates (USW) strongly supports the sustainability and reliability of wheat transportation by barge. The Columbia Snake River System is an essential part of a logistical system that moves more than half of all U.S. wheat exports every year to more than 20 Pacific Rim countries. Wheat loaded and barged on the Snake River makes up 10% of all U.S. wheat exports.

The Pacific Northwest Waterways Association (PNWA) questioned a number of baseline assumptions in the new report, including that the future value of the dams will decline and that all losses from dam breaching can be mitigated or compensated.

For example, PNWA Executive Director Heather Stebbings said in a news release that there are significant gaps in the report as it relates to understanding the reality of shifting wheat and other grains from barges to rail and trucks. This would require a massive investment in new infrastructure and likely increase wheat export basis with significant negative impact on regional farmers, the efficient Pacific Northwest export system and, ultimately, overseas wheat buyers.

Barge loading on Snake River

An estimated 10% of total annual U.S. wheat exports passes through the four locks and dams on the Lower Snake River between Lewiston, Idaho, and terminals like this one, to its confluence with the Columbia River and on to export elevators.

Serving Asia, Latin America

The Port of Lewiston on the Snake River, the most inland U.S. port, is uniquely positioned to source wheat from Idaho and other states. River terminals on the Lower Snake serve eastern Washington farmers. That wheat is barged on the Lower Snake River to the six major PNW export elevators serving Asian and Latin American wheat markets. All aspects of the river system are essential for transporting wheat from farm to market. However, barging is the most efficient, affordable, and environmentally friendly way to get that wheat to export locations. For context, one four-barge tow on this river system moves as much cargo as 144 rail cars or 538 semi-trucks.

Economic Value

This Columbia Snake River System transports four classes of U.S. wheat grown by dependable farmers in 11 states. In addition, some of that wheat and other crops for export markets are irrigated with water from the system. And the dams on the Columbia Snake River System generate 90% of the renewable electric power in the PNW.

Sean Ellis, representing the Idaho Farm Bureau, told the Capital Press its members “wholeheartedly” support ongoing efforts to improve salmon runs but continue to “adamantly” oppose dam breaching.

“There is no evidence to support the claim that breaching the dams would save the salmon but it’s quite clear that doing so would have a major negative effect on the region’s economy and put a lot of farmers out of business,” Ellis said.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

“We continue to approach the question of breaching with open minds and without a predetermined decision,” Sen. Murray and Gov. Inslee said about their report. “In the coming weeks, we will carefully review and consider public input, tribal consultation, and other engagement from stakeholders before making any recommendations.”

A Necessary Link

The Columbia Snake River System and other major U.S. river systems truly connect the United States to its trading partners. The river system keeps U.S. wheat competitive by moving higher volumes more efficiently. USW, its state wheat commission members, wheat associations and supply chain stakeholders in the tri-state region of Idaho, Oregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

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OSU on the Forefront of Developing Higher Quality Wheat

Wheat harvest is underway in Oklahoma, and as an appropriate prelude, members of the Oklahoma State University (OSU) Wheat Improvement Team are working on stronger, higher quality wheat varieties.

Oklahoma State University wheat genetics chair Brett Carver shared with wheat producers at the recent Lahoma Field Day that his team of OSU wheat researchers have been breeding wheat varieties with exceptionally high gluten quality, excellent yield and reliable disease resistance.

“With wheat, we can look at a lot of different quality factors, but the one that probably stands out the most is the gluten quality,” Carver said. “The better the gluten quality, the better we can make a loaf of bread. That’s not to discount yield. We’re always going to be thinking about yield, but let’s bring quality into the conversation.”

OSU Wheat Breeder Brett Carver at Lahoma Field Day

Wheat Breeder Brett Carver talks about current and upcoming genetic lines offering higher quality wheat in the OSU Wheat Breeding Program at the North Central Research Station at Lahoma Wheat Field Day.

Quality + Yield

Higher gluten quality could mean more profitability for producers by increasing a wheat crop’s value, and when that trait is combined with high disease resistance, producers could also see an increase in yields.

“These new lines were bred for the purpose of maximizing the strength of the gluten. To do this, we had to use genetics we had never used before with the hard red winter (HRW) wheat class,” Carver said of OSU’s new line of wheat varieties with a Gallagher lineage.

A variety currently called “OK15MASBx7 ARS 8-29” was Carver’s primary focus for the day’s presentation. It was created by cross-breeding Gallagher and a Colorado State University variety called Snowmass.

OSU agronomists have created this new caliber of Gallagher to use a specific naturally occurring gluten protein that does not exist in other OSU wheat varieties.

Super Strong Wheat

“When you put that particular gluten protein with the Gallagher background, now we have a super strong wheat,” Carver said. “It was not easy to do. It took 10 years to get here. It was not an overnight success, but I think we’ve got it in this 8-29 line. And the yield of this would be a little bit higher than Gallagher.”

The 8-29 variety would serve as an ingredient in bread rather than as a stand-alone crop because its gluten is incredibly strong.

The 8-29 variety has a strength equivalent to or better than hard red spring varieties from the northern U.S. and Canada, and it averages 2 bushels more per acre than Gallagher. It is also more resistant to stripe rust than Gallagher.

“Adoption of the 8-29 variety would change what goes on the ingredient label for bread,” Carver said. “Vital wheat gluten is being added to bread to bolster the strength to allow for the modern-day, high-speed processing that occurs. We think we can do that naturally in our wheat varieties themselves.”

Wheat field day at OSU Lahoma Research Station

Higher Quality Wheat Field Day at Oklahoma State University’s North Central Research Station, June 2022.

Are Additives Needed?

Carver said there is nothing wrong with additives in wheat bread, but are they really needed? Getting away from vital wheat gluten to rely on just the wheat itself would be a big boost to the wheat industry because additives are costly.

“We are evaluating with the industry just how much vital wheat gluten can be replaced in bread with this wheat,” Carver said.

Carver said the 8-29 variety could also replace dough conditioners that are added to breads.

“There’s value in that to the baking industry and to the farmer,” Carver said. “Now, the farmer can produce a lot of bushels of wheat, and there is quality in those bushels that cannot be found in any other bushel of winter wheat.”

Carver said OSU researchers have started experimenting with four other derivatives of 8-29 that also have a Gallagher background in hopes of creating an even better yield while maintaining the high quality.

“It just so happened that working with Gallagher not only gave us the agronomic strength, but it gave us the baking strength from certain gluten proteins we were targeting and introducing into that Gallagher background,” Carver said.

More Varieties Ahead

Carver said he expects OSU will release the new Gallagher wheat varieties over the next two years.

“This is kind of a monumental moment for us. I had no idea in 2012 when we started this cross-breeding program that this is where we’d end up — in a uniquely functional class of wheat,” Carver said. “I want to make sure that producers have something they can grow and capture value from, not only just in the baking industry but at the producer level as well. We’re trying to figure it out as quickly as we can.”

Copyright Oklahoma State University. Reprinted with Permission, by Alisa Boswell-Gore, Oklahoma State University Agricultural Communications Services.

OSU Agriculture Field Days are educational events presented by OSU Ag Research and Extension to share research-based information and resources with Oklahomans. Field days showcase current agricultural research and relevant best practices through presentations, tours, hands-on workshops and discussion at little or no cost.

 

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Think Farm Export Programs Don’t Matter? Think Again.

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