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Wheat Industry News

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

Speaking of Wheat

“Disruptions like Russia’s invasion of Ukraine can have a long tail in global trade. I think that is one reason why the [USDA] Secretary is very interested in getting my successor [as USDA Under Secretary for Trade and Foreign Agricultural Affairs] named. And…Gregg Doud’s successor at USTR [as Chief Agricultural Negotiator] named, because more than half the battle is just showing up. And now that we are getting out from under COVID, showing up can make such a difference. If you are not showing up…somebody else is.” – Ted McKinney, CEO National Association of State Departments of Agriculture on Agri-Pulse Newsmakers.

NAWG Elects New Officers

National Association of Wheat Growers (NAWG) recently elected Nicole Berg as its next President. Berg is a fourth-generation farmer from Paterson, Wash., where she farms alongside her dad and two brothers. They grow dry-land and irrigated wheat, Blue Grass Seed, Field Corn, Sweet Corn, Sweet peas, green beans, and alfalfa. During her tenure, Berg will lead conversations about the next Farm Bill and act as the voice of the nation’s wheat growers. Other NAWG officers include Dave Milligan, Cass City, Mich., Past President; Brent Cheyne, Klamath Falls, Ore., Vice President; Keeff Felty, Altus, Okla., Treasurer; and Pat Clements, Springfield, Ky., Secretary. Read more here.

Celebrating National Ag Day on the National Mall

U.S. Wheat Associates (USW) will join the North American Millers Association and National Association of Wheat Growers to host a booth at the inaugural Celebration of Modern Agriculture on the National Mall in Washington D.C., March 21 to 22 for National Ag Day. The public event will showcase U.S. equipment manufacturers, farmers, ranchers, and agriculture innovators on the cutting-edge of science and technology. Learn more about the event here.

USDA Report Shows Conservation Practices Increasing

A new USDA report shows the use of no-till, crop rotations, more efficient irrigation methods, and advanced technologies by U.S. farmers have climbed in recent years. USDA’s Natural Resources Conservation Service (NRCS) report demonstrates progress through voluntary conservation over ten years. Findings from the report will inform future conservation strategies, including USDA’s efforts to tackle the climate crisis. Read the full article here.

Largest Drought Area Since 2021

The U.S. Drought Monitor released March 8 indicated more than 61% of the contiguous U.S. is in some classification of drought, the largest percentage since 2012. The report emphasized, “the southern Plains and South continue to dry out. As spring approaches and [winter wheat] dormancy is broken, impacts are already showing in these areas….”

March 8, 2022 Drought Monitor

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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Reciprocal Switching Policy Would Benefit U.S. Wheat Importers

U.S. Wheat Associates (USW) joined other major shipping groups this week in calling on the U.S. Surface Transportation Board (STB) to adopt policies that have the potential to lower costs and improve service for wheat rail shippers and their customers. The policy proposal, commonly referred to as “reciprocal switching,” has been under the STB’s consideration for some time.

Reciprocal switching seeks to provide rail shippers such as grain elevators who are commonly only served by one railroad access to ship on other railroads, provided they are located within a reasonable switching distance. The desired effect is the creation of competition between railroads, where previously there was none. That competition has the potential to lower costs for USW customers around the world.

What is Reciprocal Switching?

The STB defines reciprocal switching (sometimes referred to as competitive access) as follows: Under reciprocal switching, an incumbent carrier transports a shipper’s traffic to an interchange point, where it switches the rail cars over to the competing carrier. The competing carrier pays the incumbent carrier a switching fee for bringing or taking the cars from the shipper’s facility to the interchange point, or vice versa. The competing carrier’s total rate to the shipper incorporates the switching fee. Reciprocal switching thus enables a competing carrier to offer its own single-line rate to compete with the incumbent carrier’s single-line rate, even if the competing carrier’s lines do not physically reach a shipper’s facility.

Freight Waves, an online publication, defines this concept in simpler terms: reciprocal switching occurs when a shipper has access to one freight railroad but wants access to a nearby competing freight railroad to cultivate a competitive pricing environment. A shipper can get that access at an interchange between the two railroads.

An executive order by President Biden encouraged the STB  to “promote competition and economic opportunity,” and specifically to encourage reciprocal switching.

Seal of the Surface Transportation Board

The Surface Transportation Board is an independent federal agency charged with the economic regulation of various modes of surface transportation, primarily freight rail. STB held a hearing on proposed reciprocal switching regulations March 15 to 16, 2022, 

What USW Advocates

Except for the Pacific Northwest, U.S. wheat production is not close to river transportation, and export facilities are too far away to rely on trucking. As a result, railroads play a key role in the export supply system. Over the last decade, rail rates have increased exponentially, and rates to ship wheat are higher than for other commodities with similar handling characteristics.

USW’s comments filed with the STB noted those higher rates between 22% and 39% for wheat movements compared to corn in four major regions. A June 2017 USDA Agricultural Marketing Service study corroborated these results, finding no underlying cause driving the increases in wheat rates. These premiums relative to other commodities demonstrate the current market power of U.S. railroads and the lack of competition afforded to wheat shippers.

USW also encouraged the STB to consider other relevant factors as it considers a new policy, such as: (1) whether the arrangement would further the rail transportation policies in 49 U.S.C. § 10101; (2) the efficiency of the proposed route; (3) whether the arrangement would allow access to new markets; (4) the impacts, if any, of the arrangement on capital investment, quality of service, and employees; (5) the amount of traffic that would be moved under the arrangement; and (6) the impact, if any, of the arrangement on the rail transportation network.

U.S. Wheat Competitiveness

Reciprocal switching has existed in Canada for many years, called “interswitching.” The situation there makes a compelling comparison to the United States because the spring wheat and durum growing regions are similarly positioned in the country’s interior. And the shipping distances to export facilities are nearly identical. However, despite the similarities, work collected by one of USW’s member state wheat commissions showed comparable origin-to-export point rail moves in Canada were 30% less than similar U.S. moves at the time.

Differing government rail policies (including more favorable terms for reciprocal switching) are one of the few significant differences in market position between the two countries. USW also realizes that the competitive access benefits Canadian farmers enjoy will make the proposed merger of Canada’s CP railroad with the KCS more advantageous for Canadian growers – if the STB does not apply its standard to enhance competition.

More Efficient Competition

USW believes that implementing reciprocal switching will make the rail system more efficient. We hope it will compel the railroads to provide better service and be more prepared by introducing more competition into the rail industry.

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Facts About U.S. Wheat Exports and the Columbia Snake River System

The Columbia Snake River System is the network of federal dams and locks on the Columbia River and connected water bodies, including the Snake River. This system enables grain barges to carry wheat 360 miles from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

In marketing years 2019/20 and 2020/21, more than 55% of all U.S. wheat exports* moved through the system by barge or rail. Of the more than 15.0 million metric tons (MMT) of U.S. wheat exported from Pacific Northwest (PNW) export elevators each of those years, an estimated 4.6 MMT arrived by barge.

In addition, an estimated 10% of total annual U.S. wheat exports each year passes through the four locks and dams on the Snake River between Lewiston, the most inland port in the nation, and its confluence with the Columbia River.

Chart shows the amount of U.S. wheat by class that is exported through the Columbia Snake River System

Four Classes of Wheat are exported from PNW export elevators after arriving through the Columbia Snake River System by barge and rail. Source: Federal Grain Inspection Service. 

Grain Superhighway

In October 2019, U.S. Wheat Associates (USW) Market Analyst Michael Anderson shared his experience aboard a four-tow barge moving wheat from Lewiston to western export elevators on the deep-water Columbia River. Eight locks on the system allow barges to safely navigate the nearly 222-meter drop in elevation over that distance.

“The Columbia Snake River System is a superhighway of sorts for moving wheat and other agricultural products from farm to market,” Anderson said. “The ability to move such a large volume of grain efficiently makes the river system a very cost-effective and “green” logistical option. The Army Corps of Engineers maintains the lock system. And its history goes back to the 1930s when President Franklin Roosevelt personally inaugurated Bonneville, the first of the eight dams and locks east of Portland.”

Barge loading on Snake River

From Way Up River. Wheat is loaded onto a barge tow on the Snake River, the eastern segment of the Columbia Snake River System, near the start of its journey to export.

Earlier in 2019, Anderson noted why barging represents an essential part of the Pacific Northwest (PNW) wheat export supply system, including rail and trucking.

Barge Efficiency

“The rivers can move more volume at once, with greater fuel efficiency,” he wrote. “One barge can carry the same amount of wheat as 35 rail cars or 134 trucks. A barge tow can carry more than one 100-unit train or 538 trucks. And one barge can move a ton of wheat 647 miles per gallon while a truck can only move a ton of wheat 145 miles per gallon.”

The Pacific Northwest Waterways Association (PNWA) also reports that barging is a very safe way to move cargo, with fewer injuries, fatalities and accidental spills than other transportation options.

Economic Value

This system transports four classes of U.S. wheat grown by dependable farmers in 10 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.

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.

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.

* Source: Federal Grain Inspection Service

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Cooperation Drives Continuous Wheat Quality Improvement

Wheat quality improvement is at the heart of the U.S. Wheat Associates (USW) mission to enhance the value of U.S. wheat for overseas customers and profitability for U.S. wheat producers. Improved quality makes U.S. wheat more competitive in global markets and, in turn, increased demand benefits producers at home.

USW cooperates with stakeholders across the domestic and international industries to encourage U.S. wheat quality improvement.

Active Participation

Activities include past Wheat Quality Improvement Teams connecting U.S. wheat breeders with overseas customers to better understand the most important quality characteristics they need. Also, USW is helping fund milling and baking quality testing for entries in the 2022 National Wheat Yield Contest sponsored by the National Wheat Foundation (winning entries must meet specific quality standards). USW also puts wheat quality improvement in the spotlight at producer meetings.

Image shows HRW wheat breeders meeting with customers in Lima, Peru, to discuss U.S. wheat quality improvement.

Breeders with Customers. The most recent USW-sponsored Wheat Quality Improvement Team in December 2018 took U.S. hard red winter wheat breeders to Peru (above) and other Latin American countries to better understand what wheat quality customers need. USW photo.

Most recently, USW Vice President and Director, West Coast Office, Steve Wirsching, and Assistant Director Tyllor Ledford participated in a Wheat Quality Council meeting in Kansas City, Mo. This is an annual forum where wheat breeders from the Great Plains states gather to review the latest results of ongoing wheat quality studies.

Honest Evaluation

“It is a challenging task for wheat breeders to develop varieties that deliver higher yields for the producer and better functional quality for end-users,” Wirsching said. “But the data shows they are doing just that. And one reason is breeders hear the honest evaluation of about how the varieties they developed performed in the field at meetings like this.”

At the meeting, Wirsching reviewed how U.S. hard red spring (HRS) wheat quality has trended over ten years using data from the USW Crop Quality Reports that Ledford had prepared. He showed breeders that HRS yields are increasing about one-half bushel per year while also meeting high breeding quality targets for kernel soundness and flour performance.

Moreover, he showed HRS genetic advancements were achieved even across variable growing conditions in the Northern Plains production region of Montana, North Dakota, and Minnesota.

Pushing for Improvement

USW also pushes to improve wheat quality and value by acknowledging areas where breeders can improve quality, such as water absorption. Absorption is an important quality characteristic valued in the export market to help bakers optimize their profits. Wirsching noted that the HRS ten-year crop average water absorption was 63%, which did not meet the HRS breeding target of 64% as measured by the farinograph.

Producers Can Also Help

Producing high-quality, high-performing wheat also takes best management practices on the farm. At the Wheat Quality Council meeting, Wirsching encouraged public wheat industries to develop producer outreach programs like Kansas’s “Wheat Rx” effort. Wheat Rx is a partnership between Kansas Wheat and Kansas State University Research and Extension to share the latest research recommendations for high-yielding, high-quality wheat to Kansas wheat farmers.

Image shows Steve Wirsching, USW, discussing wheat quality improvement at the Wheat Quality Council meeting.

Best Management Practices. At the Wheat Quality Council meeting, Wirsching encouraged public wheat industries to develop producer outreach programs to promote continuous wheat quality improvement. Photo by Romulo Lollato.

Other efforts will include preferred variety lists (PVL), which rank wheat varieties by quality and help wheat producers make informed decisions based on quality outcomes and yield potential.

“Published PVLs are helping improve soft white wheat quality in Washington, Oregon and Idaho,” Wirsching said. “Also, Grain Craft, a private milling company, is now publishing a PVL for hard red winter wheat, which is influencing variety selection in the Central Plains states.”

After attending the meeting, Assistant Director Tyllor Ledford said the Wheat Quality Council is a uniquely collaborative organization.

Building Dependable Value

“Stakeholders like breeders, farmers, millers, bakers, state wheat commissions, and export organizations all come together to pursue a common goal,” she said. “And the product of this cooperation is making quality improvement a priority so that U.S. wheat can remain a dependable value to our customers around the world.”

Future Wheat Quality Council meetings are scheduled to focus on U.S. soft red winter and soft white wheat quality. Look for more information about these and other events focused on wheat quality in future Wheat Letter posts.

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Wheat Industry News

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

Speaking of Wheat

“During yet another market disruption related to Russian government intervention, the U.S. wheat store remains open and operating predictably and transparently on a sound commercial basis. The disruption has fueled challenging market volatility. But during this crisis, all customers have an equal opportunity to access to U.S. wheat supplies in order to run mills and maintain our shared responsibilities to feed the world’s people.” – U.S. Wheat Associates (USW) President Vince Peterson.

Ag on the National Mall

A “Celebration of Modern Agriculture” will be held on March 21 and March 22 (National Ag Day) on the National Mall in Washington, D.C. Exhibits at the event will feature hands-on displays of modern technology and equipment that is driving agriculture’s tradition of innovation. The event, including a wheat industry exhibit, will be open near the Smithsonian Metro station from 9:00 am to 5:00 pm each day.

Congratulations to USW’s Tyllor Ledford!

Tyllor Ledford, 2022

Tyllor Ledford.

Tyllor Ledford, assistant director in the USW West Coast Office, was recently awarded the 2022 Outstanding Master’s Thesis Award by the Southern Agricultural Economics Association. Ledford completed her master’s degree in August 2021 at Texas Tech University’s Department of Agricultural & Applied Economics. Her thesis examined the impacts of food insecurity on terrorism and conflict in Sub-Saharan Africa. Read the full announcement here.

2022 National Wheat Yield Contest Opens

The National Wheat Foundation (NWF) is now accepting grower enrollment for the 2022 National Wheat Yield Contest. The contest includes winter wheat and spring wheat categories and two subcategories: dryland and irrigated. NWF emphasizes that the contest “will help increase U.S. wheat growers’ productivity to ensure an ample supply of quality U.S. wheat to reliably meet the needs of the domestic wheat market and our overseas customers.” Learn more about the contest and how to enter here.

Subscribe to USW Reports

USW publishes various reports and content that are 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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Fred Schneiter Was a Pioneering Advocate for U.S. Wheat

The passing of former U.S. Wheat Associates (USW) colleague Fred Schneiter at the age of 94 in January 2022 prompted USW to look back on a remarkable and pioneering career.

From his start with Western Wheat Associates (WWA) in the early 1960s through his retirement from USW in 1991, Schneiter’s work helped establish a now thriving demand for wheat foods that has benefitted three generations of wheat farmers and their Asian customers.

From the Sub-Continent to China

As a WWA Director in Manila, Philippines, Fred Schneiter hired Ms. Fleur Noeth as an administrative assistant in 1967. She remembers that Schneiter started with WWA in Pakistan before moving to the Manila office. Noeth said he directed U.S. wheat export market development across Southeast and parts of North Asia before becoming a Director in WWA’s Taipei office in 1970. After WWA and Great Plains Wheat merged to form USW, Schneiter accepted a director for China based in Hong Kong in 1981.

Photos shows Fred Schneiter and children in Hong Kong in the early 1960s

A Walk in Hong Kong. In this photo found on Instagram, Fred Schneiter and his children are seen walking near Nathan Road and Carnarvon Road in 1964 Hong Kong.

Opening a New Wheat Market

Steven M. Graham served as Administrator of the Kansas Wheat Commission from 1981 to 1995. He shared the following story about Schneiter’s work with USW colleagues building a market for U.S. wheat in the Peoples Republic of China.

“USW Director Fred Schneiter handled China operations from Hong Kong as, at that time, the organizational realities – logistics, communications, transportation, support functions and such – in China were about where they were in the United States in the 1930s,” Graham wrote. “USW’s Rick Callies provided daily firsthand assistance in Beijing.”

Graham added that Schneiter’s USW colleagues helped create the Sino-American Baking School in Guangzhou and a flour milling school in Beijing.

“Schneiter and Callies … worked hard to open this relatively new and potentially huge wheat market,” Graham said.

Changing Perceptions

In addition to Callies, Schneiter’s retired colleagues who helped build this important but challenging market included Ms. Pansy Lam and Matt Weimar. Schneider himself shared this observation about wheat market development in his post-retirement writings.

“In 1991, I journeyed by train just across the border from Hong Kong to Shenzhen to participate in the opening of the first McDonald’s outlet in the People’s Republic of China. Marketing experts were awed to find the entire week’s inventory sold out in less than three hours. Within weeks that McDonald’s had become one of Shenzhen’s top tourist attractions. The acceptance of properly prepared and correctly marketed hamburgers illustrates how – by identifying a … consumer attitude [that can be changed] and working aggressively toward improved quality – wheat foods have become a staple in Asia’s more developed countries.”

Fostering Instant Noodle Industry

Another one of this team’s significant achievements was helping establish a market for instant noodles in China. That effort included working closely with Chinese government agencies to create a pilot instant noodle plant in Shanghai that served as a training center for Chinese companies and workers.

Photo shows former USW staff Fred Schneiter and Winston Wilson with a U.S. government and Chinese officials at the opening of an instant noodle pilot plant in Shanghai, China, in the 1980s.

Joining Hands. The caption for this USW archival photo from the 1980s at an instant noodle pilot plant in Shanghai, China, identifies, from left: Winston Wilson, USW President; Seeley Lodwick, U.S. Under Secretary of Agriculture for International Affairs and Commodity Programs; Fred Schneiter, USW Vice President for China; and Zhang Yu Wen, Deputy Director, Shanghai Municipal Feed Bureau.

Following his long and successful USW career, Schneiter applied for an early reporting job with the East Oregonian newspaper and a journalism degree from the University of Oregon to write a book about how Westerners can successfully work with the Chinese and a cookbook titled “A Taste of Old Hong Kong.” A 2014 East Oregonian article about that cookbook said Schneiter was descended from a “pioneer wheat family” in Umatilla County, Oregon.

Legacy of Commitment

In many ways, Fred Schneiter represented the legacy of commitment from generations of U.S. farm families, the U.S. government, and the people who have represented them to build overseas markets. That legacy continues worldwide through USW’s 13 overseas and two domestic offices.

Photo shows USW staff Rick Callies, Pansy Lam and Fred Schneiter at a dinner in China in 1985

USW Colleagues. Now retired colleagues who worked together to help build demand for U.S. wheat in China are Rick Callies (left), Pansy Lam, and Fred Schneiter in  1985.

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USW to Surface Transportation Board: “Uphold the Values of Competition.”

In 2021, the Canadian Pacific Railroad (CP) announced plans to purchase the Kansas City Southern Railroad (KCS). After a few sidetracks, the proposed transaction is now under final review by the U.S. Surface Transportation Board (STB) to determine whether the two Class I railroads can merge. If successful, the new system will become the first tri-national railroad in North America.

On Feb. 22, U.S. Wheat Associates (USW) filed comments with the STB, stating opposition to the rail merger as “inconsistent with the public interest.” USW also suggested that, should the merger proceed, the STB should impose certain conditions “to eliminate the adverse impacts this transaction will have on wheat shippers that are large rail shippers in the United States.”

Wheat Depends on Rail

Farmers export approximately 50% of their wheat crop each year. As such, U.S. farmers depend on the railroads to provide reliable and affordable access to export markets. Wheat farmers rely on the railroads in large part because of location. A significant volume of exportable wheat is grown in the Plains stretching from Montana to Texas and the Pacific Northwest (PNW). Rail transportation in the PNW is supported by regional river access to ports. Shippers in the Plains states are captive to rail freight through their distance from any genuine alternative.

In its comments to the Surface Transportation Board, USW noted that the market power held by the Class I railroads* has serious implications for U.S. wheat’s competitiveness compared to other major exporters. Rail rates over the last decade have increased exponentially, and rates for wheat are higher than rates for other commodities despite similar handling characteristics.

“Where combination is possible, competition is impossible.” – George Stephenson, English Civil and Mechanical Engineer, known as “The Father of Railroads.”

Canadian Rail Advantages

The proposed transaction is especially relevant to U.S. wheat farmers as their Canadian competitors enjoy government protections that shippers in the United States do not. For example, the Canadian government enforces a Maximum Revenue Entitlement (MRE) on grain transportation to port facilities. This allows Canadian exporters to undercut U.S. exporters through rates set by statute instead of the market. During times of rail congestion, Canadian grain shippers have successfully lobbied their government to prioritize grain shipments over other sectors and have access to policies such as final offer rate arbitration and competitive switching. USW told the Surface Transportation Board if the merger would extend such treatment to the expanded CP line, Canadian shippers would enjoy an advantage that U.S. shippers under current conditions cannot.

The current KCS rail system also provides a direct link to the largest U.S. wheat importing customer, Mexico. Combining the two proposed rail lines will likely increase traffic and congestion on the combined network. In addition, nearly all Class I railroads have adopted a practice known as Precision Scheduled Railroading (PSR). USW suggested that practice actually created poorer service and higher rates for rail shippers over the last five years.

Map of the U.S. showing the rail system created by the Canadian Pacific Railroad purchase of Kansas City Southern Railroad

If approved by the U.S. Surface Transportation Board, the purchase of Kansas City Southern by Canadian Pacific Railroad would create the first tri-national railroad in North America.

Long History of Seeking Fairness

Arguments about rail competition today would not be unfamiliar across past generations of wheat farmers. Railroads have had a strong hand for a long time. During the industrial age, business interests sparred with the government over how to manage the expanding railroads.

The Interstate Commerce Act of 1887 was the first time Congress stepped in to regulate the railroads with “just and reasonable rate structures.” The railroad industry looks very different today. In 1980, the Staggers Rail Act made big changes to rail regulations. Infrastructure in the U.S. changed significantly in the decades between the two acts, necessitating changes to railroad oversight. Regulatory bodies meant to provide supervision have also changed. The Interstate Commerce Commission was abolished in 1996 and replaced with the Surface Transportation Board.

Enhancing Service

The STB must now answer a question it posed to railroads at the start of the 21st Century: “how to improve profitability through enhancing the service provided to their (railroads) customers.” Last summer, the Biden Administration directed the Surface Transportation Board to “promote competition and economic opportunity and to resist monopolization.”

In its comments filed this week, USW encouraged the STB to uphold the values of competition both for the wider railroad industry and in its oversight of “an economically sound and competitive rail transportation system.”

*There are currently seven Class 1 freight railroads in the U.S., a distinction defined by the railroads’ market capitalization.

By Michael Anderson, USW Market Analyst

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U.S. Wheat Highlights from USDA’s First Look at 2022/23

An increase in planted area, production and lower prices are among the U.S. wheat highlights USDA shared Feb. 24, at its 2022 Agricultural Outlook Forum.

These U.S. wheat highlights and USDA’s outlook for all U.S. agricultural products represent the first predictions for marketing year 2022/23. The new year for U.S. wheat starts June 1, 2022, and changes are to be expected. In addition, it is important to note that USDA’s outlook does not account for unknown potential effects of the conflict in Ukraine.

In the “Grains and Oilseeds Outlook for 2022,” USDA cited high current wheat prices and tight stocks to predict U.S. farmers will plant 48.0 million acres (19.43 hectares) to wheat for harvest in 2022. That is about 3% more than was planted for 2021. Using an assumption of normal spring planting and summer crop development conditions, USDA expects U.S. wheat prices will come down in 2022 with higher U.S. wheat production and ending stocks.

Winter Wheat Up; Competition for Spring Area

U.S. wheat highlights included the National Agricultural Statistics Service (NASS) estimate of 34.4 million acres of winter wheat planted for harvest in 2022. That is the largest area since 2016/17. The report noted that “combined spring and durum wheat plantings for 2022/23 are also projected higher,” but could be constrained by higher potential return from other crops that farmers in the Northern Plains can grow.

Image shows a large farm planter and tractor to illustrate planted area among U.S. wheat highlights for 2022

USDA’s initial outlook for U.S. wheat highlights in 2022 includes a significant increase in planted wheat area as farmers try to take advantage of higher farm gate prices.

Again, assuming normal conditions through harvest and the long-term trend, USDA initially expects average yield (production per acre) for all U.S. wheat in 2022 to increase 11% from the drought-affected 2021 yield. If farmers achieve this increase, USDA expects the larger crop will help increase total U.S. 2022/23 supplies by 5% to 2.708 billion bushels or 73.71 million metric tons (MMT).

Total U.S. Wheat Use Up a Bit

Annual use for food, seed and feed is one U.S. wheat highlight that stays relatively flat. And USDA expects 2022 to be no exception. Total domestic wheat use in 2022 is predicted at 30.68 MMT.

USDA does expect U.S. wheat exports to rebound slightly from 2021/22 to 23.14 MMT. “U.S. wheat export prices have continued to rise amid tight supplies, making the United States less competitive globally,” USDA reported.

Illustrates export demand among U.S. wheat highlights in USDA's 2022 outlook.

One U.S. wheat highlight from USDA’s Global Grains and Oilseeds Outlook for 2022 is for increased exports.

Given these predicted market factors, USDA expects the United States will end the marketing year with 19.9 MMT of wheat stocks. That is up 13% from USDA’s current prediction for 2021/22, but still less than the 5-year average.

Follow USW’s Supply and Demand Report

As USDA adjusts its U.S. wheat highlights and global estimates each month, U.S. Wheat Associates (USW) updates its comprehensive Supply and Demand Report. It is available online at the USW website. For additional U.S. wheat highlights, free subscriptions to USW Price Report, Harvest Report, and the Wheat Letter blog are available here.

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U.S. Wheat: Still the World’s Most Reliable Choice

The world’s wheat buyers have heard the claim that dependable U.S. farmers produce “the world’s most reliable choice.” U.S. Wheat Associates (USW) and the farmers we represent believe in that claim because so many customers rely on several classes of U.S. wheat to meet their specific end-use and quality needs and because importing U.S. wheat carries less risk.

The situation the world’s wheat buyers see today is uncertain. The invasion of Ukraine has disrupted already stressed exportable supplies. Market volatility is the result.

Fortunately, overseas customers know they can depend on the integrity of the U.S. supply chain, the quality of U.S. wheat and our unmatched reliability as a supplier. Here is why U.S. wheat remains the world’s most reliable choice.

The U.S. “Wheat Store” is Always Open

U.S. farmers overcome significant risk every year to meet domestic wheat demand and still provide half their crop for export markets. Farmers and commercial warehouses can store and efficiently transport wheat in top condition to meet overseas demand when needed and throughout the marketing year.

Prices are Transparent and Honored

U.S. wheat export prices are discovered openly through futures exchanges and basis costs and are always available to customers. Private exporters use risk management tools to honor sales contract prices often made months in advance of vessel loading.

Quality is Assured

USW publishes weekly reports during harvest that summarize initial wheat quality findings. USW works with several organizations and laboratories to analyze hundreds of harvest and export wheat samples for all six U.S. wheat classes and publishes all results in the annual Crop Quality Report. Our staff, farmers and industry experts then travel the world to present the results to our customers and end-users. Those customers know U.S. wheat will meet their specifications because the supply chain follows uniform grain segregation and inspection procedures.

Photo shows an FGIS inspector and wheat kernels demonstrating another reason why U.S. wheat is the world's most reliable choice.

The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality loaded matches the quality stated in the customer’s contract. Those inspections yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that customers can use, with assistance from USW, to get the most value from their tenders.

The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality loaded matches the quality stated in the customer’s contract. Those inspections yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that customers can use, with assistance from USW, to get the most value from their tenders.

Direct Government Export Intervention is Banned

The world’s most reliable choice is protected by several U.S. federal laws that assure the sanctity of all export contracts. The only exception is a declared national emergency. Export tariffs are forbidden in the U.S. Constitution, fully adhering to World Trade Organization disciplines, and U.S. policy prevents using food as a weapon.

Buyers Receive Unmatched Trade Service and Technical Support

With funding from dependable U.S. wheat farm families and USDA’s Foreign Agricultural Service, experienced USW staff and consultants add exceptional value to all U.S. wheat class imports.

Photo from a flour mill showing technical service that support U.S. wheat as the world's most reliable choice.

Technical Support and trade service from U.S. Wheat Associates adds value to imported U.S. milling wheat, helping make it the world’s most reliable choice.

Fostering Trade

USW invests substantial funding from farmers and federal programs to help overcome trade or technical barriers that would otherwise keep end-users from realizing the highest value and most revenue from using U.S. wheat.

The U.S. wheat industry is proud of its position as the world’s most reliable choice. All of us who participate in the industry believe that it contributes to world food security and economic stability, and work to maintain a transparent and open market to sustain that valued reputation.

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Wheat Industry News

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

Speaking of Wheat

“The key going forward is how the market allocates remaining very tight [durum] stocks in Canada, the U.S. and … Europe. The next…harvest will take place in June. Obviously, that takes a while to get in market position after harvest, so we could have a couple pretty tight months…depending on what happens with demand.” — Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission, in a webinar on U.S. and world durum supply and demand sponsored by Northern Crops Institute.

The Passing of Fred Schneiter

Portrait of the late Fred Schneiter.

Fred Schneiter

U.S. Wheat Associates (USW) recently learned that retired colleague Fred Schneiter passed away on Jan. 31, 2022, at 94. Fred started working with Western Wheat Associates in the early 1960s representing U.S. wheat farmers in the Philippines and Taiwan. After USW was formed in 1980, Fred accepted a position in Hong Kong and helped build strong demand for U.S. wheat in the Peoples Republic of China until his retirement in 1991. USW will share more about Fred and his career in an upcoming Wheat Letter post.

Learning More About Wheat

Scott Huso and his wife Elizabeth manage Ridgeline Farm near Aneta, N.D. As a country representative on the North Dakota Wheat Commission, Huso recently participated in the IGP Institute Flour Milling Short Course on the Kansas State University campus in Manhattan, Kan. USW Assistant Director, West Coast Office, Tyllor Ledford also participated in the course. In a Ridgeline Farm blog post, Huso said the course made him aware that the milling process is much more intricate than he imagined and an appreciation for the wheat quality demanded by domestic and overseas millers.

Adapting Wheat to Climate Variability

The University of California, Davis, will lead a five-year, $15 million research project to accelerate public wheat breeding to meet new climate realities and train a new generation of plant breeders. The USDA National Institute of Food and Agriculture grant will create a coordinated consortium of 41 wheat breeders and researchers from 22 institutions in 20 states. Researchers from Mexico and the United Kingdom are also participating. Read more here.

U.S. Agricultural Export Value

USDA recently announced the U.S. agricultural industry posted its highest annual export levels ever recorded in calendar 2021. The final 2021 trade data published by the Department of Commerce showed U.S. farm and food product exports totaled $177 billion, topping the 2020 total by 18% and eclipsing the previous record, set in 2014, by 14.6%. Read the full news release here.

Subscribe to USW Reports

USW publishes various reports and content that are 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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