Wheat Letter Blog Archive - Page 34 of 101

Dry Conditions Continue Affecting Global Wheat Production

In a market-moving report in February, USDA cut its 2021/22 global wheat production estimate by more than 2 million metric tons (MMT) from its January estimate. USDA also increased its world wheat consumption estimate.

What is behind this change so late in the marketing year?

This year, high wheat prices remain a fixture as drought in major exporting countries cut trade supplies. However, coming into better focus is the hard-hitting drought in Middle Eastern countries that usually grow more wheat for domestic use.

Supply Restrained

Iran, Syria, Iraq, Turkey, and Egypt have all seen crop reductions during the 2021/22 growing season, contributing to lower global wheat production. That suggests higher wheat import volumes will be needed to meet domestic demand. This is significant because, taken as a whole, the region is expected to import 35.5 MMT of wheat in 2021/22. That is 17% of USDA’s global import forecast of 204.8 MMT. In 2020/21, these five countries imported 25.9 MMT or 13% of the global wheat trade.

USDA’s Foreign Agricultural Service (FAS) report on Iran estimates wheat production to be down 3 MMT to 12 MMT total. Syrian wheat production is estimated at 2 MMT, and in Iraq, production is estimated at 3.5 MMT. Much of the production shortfall is being made up by imports from Russia, which enjoys a transportation advantage, FAS reported.

A look into the situation in these countries is helpful.

Iran

In October 2021, Reuters reported that Iran, which has imported around 1.0 MMT of wheat annually over the last five years, would need to import 8 MMT in 2021/22 to ensure a steady bread supply. The Foreign Agricultural Service forecast wheat imports at 7 MMT this year, up nearly 5 MMT compared to other years. Iran suffered its worst drought in half a century during the 2021 growing season, cutting the wheat crop by 30%, said industry sources.

Syria

In Syria, the “Year of Wheat” campaign has been challenged by low rainfall, leaving an import gap of 1.5 MMT. The United Nations (UN) Food and Agriculture Organization (FAO) said that Syria would need to import at least 1.5 MMT of wheat. The organization said the government’s target of 1.2 MMT of local wheat, purchased through forced sales of wheat from Syrian farmers to the government, “looked unrealistic.”

Iraq

Iraq’s state-grain buyer said it procured around 3.36 MMT of local wheat in 2021, down from 5.02 MMT in 2020. The Grain Board said in December it plans to import 2 MMT of wheat in 2022. Unlike the other countries discussed here, Iraq is less price-sensitive and buys high-quality wheat from U.S., Australian and Canadian origins. When Iraq’s Ministry of trade was actively tendering for wheat between 2017 and 2019, more than half its imports came from the United States. Before this year, two exceptionally large Iraqi wheat crops have met domestic demand.

Smaller Crops. Drought has hit several Middle Eastern countries, contributing to lower global wheat production and increased trade. Source: USDA/Foreign Agricultural Service Global Market Analysis.

Turkey

This month, the USDA/FAS agricultural attaché in Turkey reduced the estimate for wheat imports in 2021/22 by 5 MMT to 10.8 MMT. Even so, the revised estimate is 33% higher than imports from previous marketing years. The FAS office also said wheat production in 2021/22 had fallen 2 MMT to 16.25 MMT. The Attaché’s report is lower than the recent WASDE report, which put Turkey’s wheat imports at 11 MMT. The Turkish Statistic Institute showed that wheat imports during the first six months of the 2021/22 trade year (June-November 2021) grew by 20% year-on-year.

Egypt

Egypt is the largest importer of wheat in the world. It produces less than half the wheat it consumes annually. According to the Egyptian Supply Minister, the government is working hard to diversify its suppliers. The recent tension between Russia and Ukraine could disrupt 80% of Egypt’s grain flow. Despite an increased harvest forecast of 9 MMT for domestic wheat, 100,000 MT more than 2020/21, domestic consumption is expected to increase 400,000 MT. Egypt’s imports are expected to increase 7% compared to the 5-year average.

The chart shows a big increase in wheat imports by Middle East countries and effect on global wheat production

More Wheat Needed. With lower production, import demand for wheat is expected to be up this year in Iran, Iraq, Syria and other wheat-producing countries. Source: USDA/Foreign Agricultural Service Global Market Analysis.

Drought, Supply and Prices

Global wheat production challenges fueled by drought have certainly driven this market in the past. And this month, USDA summarized its report this way: “the global wheat outlook for 2021/22 is for lower supplies, higher consumption, increased trade, and reduced ending stocks.”

The price incentive for farmers to produce more wheat for 2022/23 is real. The world will be watching to see if Mother Nature supports that effort.

By Michael Anderson, USW Market Analyst

February 17, 2022/by Steve Mercer

Mexico, Wheat Foods

U.S. Wheat Associates and Latin American Cereals Institute to Promote Wheat Food Benefits

U.S. Wheat Associates (USW) has made a formal agreement to support the long-term mission of the Latin American Cereals Institute (IL Cereales) to promote the benefits of cereals and wheat foods in a healthy human diet.

IL Cereales, Mexico City, currently reaches Mexican consumers but plans to expand its mission to Central America. Its members represent Mexico’s largest wheat foods associations. USW will share scientifically sound nutritional information, expert consultants and other resources as part of the agreement with IL Cereales. With average annual imports of more than 110 million bushels, Mexico purchases more U.S. wheat every year than any other country.

Shared Goals

“We know the U.S. wheat foods industry shares our goal to help consumers understand that cereals and wheat foods should always be part of a healthy, nutritious diet,” said José Antonio Monroy, Chairman, Latin American Cereals Institute (IL Cereales).

Image from Wheat Foods Council to show the U.S. industry shares goals with IL Cereales

Universal Truth. Through their state wheat commission organizations, U.S. wheat farmers support the Wheat Foods Council with a shared mission with IL Cereales. Image Source.

Chairman Monroy added, “We intend to make the most of this agreement, and we thank U.S. Wheat Associates for their support.”

This agreement was concluded following a recent meeting with IL Cereales and USW in Cabo San Lucas, Mexico. The USW delegation included Chairman Darren Padget, Secretary-Treasurer Michael Peters, President Vince Peterson, Vice President of Overseas Operations Mike Spier, and Regional Vice President, Mexico, Central America, Caribbean and Venezuela Mitch Skalicky. Representing IL Cereales were Chairman Monroy, Director General Dr. Luis Hernando Cervera, and José Luis Fuente, Executive Director of the Mexican Millers Association (CANIMOLT).

“In August 2022, U.S. Wheat Associates will celebrate 25 years with an office in Mexico,” said Skalicky. “This is the perfect time to work together with IL Cereales to help Latin American families better understand the health and well-being of wheat and cereal foods in their daily diet.”

Shared Responsibility

Noting the successful partnership with the Mexican wheat foods industry, USW President Vince Peterson said it is important to see that partnership from a broader perspective.

“Together, we are responsible for providing a very large proportion of the primary food and nutrition to our citizens and, more broadly, the world’s citizens,” Peterson said. “We share common goals, and we commend Mexico’s wheat food industry leaders for creating IL Cereales. It is a pleasure to be a partner and productive resource in this much-needed work.”

More on IL Cereales

IL Cereales (Instituto Latinoamericano de Cereales) (Latin American Cereals Institute) is the only Institute in Latin America that seeks to promote, generate and disseminate rigorous scientific knowledge on the nutritional value of cereals and their derivatives. Its members represent the Mexican Millers Association (CANIMOLT), the Mexican Bakers Association (CANAINPA), the Mexican Association for Food Ingredients Suppliers for the Baking Industry (ANPROPAN), Grupo Bimbo, and the Mexican Cookie, Cracker and Pasta Manufacturers’ Association (AMEXIGAPA).

February 15, 2022/by Steve Mercer

Market and Crop Analysis, Northern Durum

Northern Crops Institute Webinar: A Look at the World and U.S. Durum Market

The U.S. durum market remains supported by tight supplies, leading to a reduction in consumption that may, or may not, hold until the 2022 harvest. That is an observation by North Dakota Wheat Commission Policy and Marketing Director Jim Peterson in a Feb. 2, 2022, webinar sponsored by the Northern Crops Institute (NCI).

Following a run up fueled by supply issues, durum prices have “softened in values since mid-January,” Peterson said. That is reflected in what the International Grains Council estimates as a 20-year low in total durum use.

For example, USDA currently expects U.S. durum exports in 2021/22 at 410,000 metric tons (MT). U.S. Wheat Associates (USW) reports commercial U.S. durum sales at about 168,000 MT to date in marketing year 2021/22. That is down from about 658,000 MT at the same time last year. Canadian durum exports from August through December 2021 are also about half their total sales compared to the year before.

This bar chart of U.S. durum market supply and demand for the past six years shows lower production and demand in 2021/22.

U.S. Durum Market Supply and Demand. Drought cut U.S. durum production in 2021, and in Canada. Higher prices have rationed demand, reflected in USDA’s lower export estimate as of February 2022.

Buying Hand-to-Mouth

Peterson said durum buyers are only purchasing when the market gives them a chance to save some money. In addition, end-users are, when possible, increasing the amount of non-durum wheat flour for pasta production.

“We will see how long that rationing can continue,” Peterson said. He said buyers will have to replenish supplies before the 2022 harvest starts in June.

European durum prices are lower than Canadian and U.S. durum market prices. However, we sense more tightness in the European market and hopefully, that will translate into some export sales over the next few months,” Peterson said.

What is Ahead?

Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission.

North American farmers are now making spring planting plans. In the U.S durum market, farmers will consider the difference in federal crop insurance prices for hard red spring (HRS) and durum crops, Peterson explained.

“There is no question that the durum crop insurance price will be at a premium to spring wheat,” he said. Farmers will know what the difference is after February. In addition, Peterson said U.S. farmers will compare the potential income from durum and spring wheat before making their planting decisions.

Still, the Canadian and U.S. durum markets could see a 10% increase in durum planted area in 2022.

Tight Supplies

Of course, until the 2022 durum crop gets in market position, Peterson noted, “we could have some very tight months coming up depending on what happens with demand.”

Readers can watch a recording of NCI’s one-hour webinar on the world and U.S. durum market online here.

February 14, 2022/by Steve Mercer

Sustainability, Wheat Production and Harvest

Where Can I Learn More About Sustainable Wheat Production?

Here in the United States, the topic of sustainable agriculture is getting a lot of attention. Almost as much as what will happen between Russia and Ukraine. U.S. Wheat Associates (USW) believes people everywhere want to know where their food comes from and how it is produced. The following facts and resources will help the world’s wheat buyers learn more about sustainable wheat production in the United States.

Field to Market

Field to Market is an alliance of diverse member organizations formed to help “unite the supply chain to deliver sustainable outcomes for agriculture.” In December 2021, the National Association of Wheat Growers (NAWG) shared about sustainable wheat production from Field to Market’s latest “National Indicators Report.” That report provides an assessment of “where U.S. agriculture has made progress in driving improved environmental outcomes.”

NAWG noted the report shows wheat production saw improvement in its sustainability efforts in almost every category of land use, soil conservation, water and energy use. Review the Wheat section of the Field to Market report online here and the entire report here.

Farm Bureau

The American Farm Bureau Federation (AFBF) is a nationwide advocacy organization for U.S. farmers, including many wheat farmers and livestock producers. The organization has an interesting resource on “Sustainability in Agriculture.” AFBF co-founded the Food and Agriculture Climate Alliance and, to showcase the progress U.S. producers have made in achieving sustainability goals, also co-founded Farmers for a Sustainable Future.

This week, AFBF’s President Zippy Duvall wrote an important column pointing out some key facts about U.S. agriculture that may not be well-known. For example, he noted that “American agriculture makes up just 10% of greenhouse gas emissions, much lower than transportation, electricity generation and industry.” In addition, he said more than half the U.S. wheat corn, cotton and soybeans were planted using no-till or low-till methods (see chart below).

U.S. Sustainability Alliance

To help tell the story of sustainable wheat production to the world, USW is a member of the U.S. Sustainability Alliance. That is a group of American farmers, fishery managers and foresters who want to tell the world “how we grow.” The group offers many resources for learning more about responsible food production, including a Sustainability Podcast that will feature sustainable wheat production in a future episode.

A beneficial fact sheet titled “U.S. Wheat – A Global Leader in Sustainability” is also available from U.S. Sustainability Alliance and on the USW website.

USDA

The U.S. Department of Agriculture has important programs that benefit U.S. farmers and the environment. One example is the Conservation Reserve Program, which has a direct, positive impact on carbon sequestration. There are 140 million acres (56.7 million hectares) of privately owned land reserved from cultivation. In other words, that amount of land is more than the states of New York and California combined.

On Feb. 7, USDA Secretary Tom Vilsack announced “Partnerships for Climate-Smart Commodities” to support America’s climate-smart farmers, ranchers, and forest landowners. The $1 billion investment will create market opportunities for U.S. agricultural and forestry products that use climate-smart practices. Some of these practices include cost-effective ways to measure and verify greenhouse gas benefits. Read more about this initiative here.

In Their Own Words

There are no more trusted sources about sustainable wheat production than from farmers themselves. As part of its “Wholesome: The Journey of U.S. Wheat” film, USW included this segment titled “Sustaining the Legacy.”

USW also shares the stories of how six farmers adapt to the challenges unique to their production region to make choices that are best for the environment and their operation. Learn more about their sustainable wheat production practices and how they work every day to contribute to a sustainable future in agriculture here.

February 11, 2022/by Steve Mercer

China, Trade Negotiations and Barriers, Wheat Industry News

Wheat Industry News

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

Speaking of Wheat

“The retaliatory tariffs led to a significant reduction in U.S. agricultural exports to retaliating partners. Nationally, direct U.S. agricultural export losses due to retaliatory tariffs totaled more than $27 billion during 2018 through the end of 2019. Across retaliatory partners, China accounted for approximately 95 percent of the losses ($25.7 billion) …” — From “The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture,” a study by the USDA Economic Research Service.

Market Outlook Webinar

The Northern Crops Institute (NCI) Market Update webinar series will feature Jeffrey McPike with WASEDA Commodities Inc. for its next webinar, Feb. 16, 2022. McPike will review the 2022 market outlook for wheat, corn and soybeans. Register for the webinar here. Previous NCI Market Update webinars are posted online, including a look at durum markets on Feb. 2 by Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission.

Wheat in the Spotlight

Wheat is back in the national and international news these days. Reporters have asked U.S. Wheat Associates (USW) to comment on how a Russian invasion of Ukraine would affect wheat prices (about which we do not speculate). The Wall Street Journal and Forbes reported on that topic. Fortune.com wrote about higher costs for Lunar New Year treats like sponge cakes and pineapple tarts based on smaller U.S. soft white wheat supplies. Bloomberg published a similar article.

Sufficient Moisture

Kansas wheat farmers reported last week during a board meeting of the Kansas Association of Wheat Growers that wheat fields across Kansas were generally planted into sufficient moisture conditions and went into winter with decent stands. But more moisture will be needed over the winter and into the spring to kickstart a crop emerging from dormancy and maintain growth. Read more here.

2022 Northern Crops Institute Courses

The Northern Crops Institute (NCI) in Fargo, N.D., has available courses in 2022 for online and in-person instruction. Available courses include a Pasta Production and Technology course in April. Learn more about NCI courses and how to register here.

2022 IGP Institute Flour Milling Course Schedule

The IGP Institute in Manhattan, Kan., has several upcoming flour milling and grain processing courses available in 2022. Courses in this curriculum area cover aspects of managing the flour milling process, from grain selection to finished products. Learn more about IGP Institute courses and how to register 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.

February 3, 2022/by Steve Mercer

Exports, Wheat Export Supply System

Wheat Export Supply System Map a Practical Tool for Importers

The first of its kind interactive wheat export supply system map that U.S. Wheat Associates (USW) introduced in 2020 is a helpful planning tool for U.S. wheat customers, our staff, and others. USW produced the map with Heartland GIS using USDA Foreign Agricultural Service Agricultural Trade Promotion program funds. The “USW Wheat Export Supply System” map is posted here on the USW website.

“There are six distinct wheat classes grown across many states and delivered by many different routes. So the U.S. wheat supply chain truly is driven by geography,” said USW Vice President of Overseas Operations Mike Spier. “The wheat export supply system map provides a geographical information system. That helps USW representatives show the world’s wheat buyers where the wheat they want is grown and transported to the export elevator.”

“Assisting overseas customers is a critical service that helps add value to U.S. wheat,” said USW Vice President of Communications Steve Mercer. “This wheat export supply system map is unique, and a practical addition to the trade service our representatives conduct around the world.”

Interactive export supply system map to help when buying U.S. wheat

Click on the map to use this tool.

The map includes a selection tool that allows the viewer to identify, in any combination, U.S. wheat production by class, wheat shuttle loading terminals, Class 1 U.S. rail lines and spurs, wheat terminals on major rivers, and export elevator locations.

“Working with U.S. Wheat Associates and its state wheat commissions, we used data from a lot of sources, including satellite imagery, to identify wheat planted area data,” said Todd Tucky, Owner and Senior Consultant of Heartland GIS. “I believe this is the most accurate representation ever developed of where individual U.S. wheat classes are produced along with the parts of the export system.”

February 3, 2022/by actualize

Market and Crop Analysis, Michael Anderson, Rail Transportation

What is Driving Wheat Market Volatility?

Since late December, U.S. wheat futures prices moved down through mid-January and have bounced up and down since then. For example, prices surged early the week of January 24 but lost steam by the end of the week. And the March ’22 hard red winter future price lost 4% as of Wednesday’s close. Such wheat market volatility is a challenge for importers. And there are many elements adding volatility that deserve a closer look.

Chart shows weekly wheat futures closing prices from November 2021 through late January 2022 demonstrating wheat market volatility

There is Wheat Market Volatility in the weekly closing futures prices for soft red winter (CBOT), hard red winter (KCBT) and hard red spring (MGEX) between November 2021 and late January 2022. Source: USW Price Charting Tool.

Russia and Ukraine

The ongoing tension between Russia and Ukraine has certainly added wheat market volatility. Both countries are major grain exporters, and the market seems to accept that any disruption there could have an immediate effect on supply. One grain trader quoted in AgriCensus said, “you cannot ignore [the topic], and [it] makes any trade decision very difficult to make … until things get clearer.”

But not everybody is so skittish. SoveEcon, a Russian agriculture consultancy, raised its forecast for 2021/22 Russian wheat exports by 200,000 metric tons to 34.4 million metric tons. The consultancy pointed out that the last time Russia invaded Ukraine, it did not disrupt grain exports. However, it did spark wheat market volatility as Black Sea wheat prices rose 25% in just two months.

Persistent Drought

Commercial futures trading also plays a role in wheat market volatility. The managed money takes quick profits that pressure the markets. But speculators also appear to be bullish in their wheat outlook primarily because of ongoing weather challenges to the old and new Northern Hemisphere wheat crops.

And yet a forecast for rain and snow in those areas this week prompted that significant drop in HRW futures prices. It is too early to say what the rest of 2022 has in store, but moisture is needed to put new crop winter wheat on a good footing. So, wheat importers can expect the market to continue moving with weather news.

The illustration of the 02022022 NOAA US Drought Monitor map shows persistent drought in key US wheat production areas contributing to wheat market volatility

Drought Persists in much of the U.S. Plains and Pacific Northwest wheat production regions. To help prepare for ongoing wheat market volatility, importers should monitor how this evaluation changes. Source: NOAA.

Logistic Challenges

Grain traders have had a lot to say recently about rail performance and its impact on export basis the last few months. Since December, a slowdown in rail logistics has supported wheat export basis. Fortunately, traders say those issues improved in January, but rail service for the trade is still behind where it was the year before.

According to the Association of American Railroads, U.S. weekly rail traffic for the week ending January 15 was down 7% compared to the same week last year. All grain shipments, including wheat, were down 11% the same week. In the USDA’s weekly Transportation Report, bids for shuttle service in the secondary railcar market have been high, although down significantly from where they were at the beginning of January.

New Pandemic Normal?

Lastly, we look at the persistent presence of COVID-19. This is the third winter of pandemic-induced challenges. Though lockdowns are increasingly rare, pandemic disruptions continue to rattle parts of the marketplace. It continues to be a significant challenge for logistics. That includes worker shortages and increased absences. Supply chain bottle necks will likely continue to be part of the wheat market volatility equation in 2022.

Help is Available

As these forces continue to affect wheat market volatility, importers can be assured that the U.S. wheat store will remain open for efficient delivery of high-quality milling wheat. Our local U.S. Wheat Associates (USW) representatives are available to help buyers navigate the market’s challenges – and opportunities – no matter how much volatility it throws at them.

By Michael Anderson, USW Market Analyst

February 2, 2022/by Steve Mercer

Columbia Snake River System, Exports, Wheat Export Supply System

Moving Wheat Efficiently Through the Columbia Snake River System

In the Pacific Northwest (PNW), wheat can move by barge to export elevators from as far away as Idaho. That is because of the series of eight locks and dams that make safe, efficient navigation possible on one of the leading trade gateways in the United States — the Columbia Snake River System.

The Pacific Northwest Waterways Association (PNWA) notes that over 8.6 million tons of cargo are moved by barge on the inland portion of the system, feeding the deep draft lower Columbia River. The Columbia Snake River System is the top wheat export gateway in the nation.

Serving Asia, Latin America

Idaho exports more than half of its wheat crop each year. The Port of Lewiston on the Snake River, the most inland U.S. port, is uniquely positioned to source that wheat for 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 through the lower Snake River is the most efficient, affordable, and environmentally friendly way to get that wheat to export locations. For context, one 4-barge tow on this river system moves as much cargo as 144 rail cars or 538 semi-trucks.

An estimated 10% of all U.S. wheat exported every year moves through the four locks and dams on the lower Snake River. The Idaho Wheat Commission and its partners recently shared the short video below that tells the story of how the Columbia Snake River System works for the world’s wheat importers, for the U.S. farmers who grow that wheat, and for the people of the Pacific Northwest.

U.S. Wheat Associates (USW) will share more information about the crucial role of the Columbia Snake River System in future Wheat Letter posts.

February 1, 2022/by Amanda Spoo

China, Trade Negotiations and Barriers, Trade Policy, World Trade Organization (WTO)

China Exceeded Annual Wheat TRQ Volume in 2021

China’s latest customs numbers are in, and the news is significant. After clearing 933,500 metric tons of wheat through customs in December, China in calendar year 2021 exceeded its 9.636 million metric ton (MMT) annual wheat TRQ (tariff rate quota) established in its World Trade Organization (WTO) membership. The official tally was 9.718 MMT of imported wheat.

According to customs, Australian wheat and U.S. wheat at more than 2.7 MMT each were China’s largest suppliers in 2021. The difference between them is a mere 9,000 metric tons. That is about the volume that fits into one hold on a bulk freight vessel.

Customs data showed China exceeded its annual wheat TRQ in part by importing 2.544 MMT of Canadian wheat and 1.412 MMT of French wheat in 2021. The volume China imported from those four wheat suppliers indicates to U.S. Wheat Associates (USW) that buying from deep and transparent markets with good ocean shipping infrastructure is still attractive to China’s buyers. The remaining 3% of its total 2021 imports arrived from Kazakhstan and Russia.

Image of U.S. HRW wheat and list of functional benefits included to show how China exceeded its annual wheat TRQ with help from USW.

Introducing HRW Wheat. China imported a significant amount of U.S. hard red winter (HRW) wheat in 2021. So in September, USW used presentations (above) and technical demonstrations to help Chinese millers and grain buyers understand the functional benefits of HRW.

U.S. Wheat Demand

In December, a private buyer purchased a small container-load of U.S. wheat. That helped lift China’s total U.S. imports in the second half of calendar year 2021 t0 848,000 metric tons. The obvious, recent slow-down in U.S.-origin wheat arrivals is disappointing. But it is not surprising. In fact, U.S. export wheat prices are now above domestic Chinese prices on a Cost and Freight basis.

China’s private milling and wheat food manufacturers serve an increasingly sophisticated consumer market. Their demand for four classes of high-quality U.S. wheat remains strong. That is why our experienced, professional USW China team members continue to educate industry customers about U.S. wheat value and functionality. We are pleased that COFCO, China’s state trading company, welcomes our activities that, we believe, helped China exceed its annual wheat TRQ.

Practical Guidance

A good example from 2021 was a three-day “Contracting for Wheat Value” seminar in July for 32 participants representing 11 non-state and state Chinese trading companies and mills. The goal of the seminar was to help the participants become better-prepared buyers. USW provided practical guidance on writing contract specifications that take advantage of U.S. wheat crop and market situations and much more. According to input from the meeting participants, our goal was achieved.

Chinese wheat buyers participated in a USW Contracting for Wheat Value seminar in 2021, part of effort to help China exceed its annual wheat TRQ in 2021.

Contracting for Wheat Value. USW combined an in-person meeting in Guangzhou, China (above), with video and virtual presentations in July 2021 to help Chinese wheat buyers better understand the U.S. wheat export system.

Policy Plays Its Role

We also respectfully look for help from policymakers on both sides. Since the Phase One agreement, U.S. wheat sales to China are far above USW’s pre-trade war average. As USW Vice President of Policy Dalton Henry noted one year ago, policymakers “would do well … to pick up where Phase One left off and continue to build on the tremendous export potential for China.”

It is true that some uncertainty will remain in U.S.-China trade relations. It is also true that opportunities will emerge to do business in China. USW has support from our farmers and USDA Foreign Agricultural Service export market development programs. And USW will stay engaged in keeping our Chinese customers informed about the quality, variety and value of U.S. wheat. So hopefully, next January, we will see that China has once more exceeded its annual wheat TRQ.

Finally, we wish all our customers and friends peace and good health in the Year of the Tiger!

By Jeff Coey, USW Regional Vice President, China, Hong Kong and Taiwan

January 27, 2022/by Steve Mercer

Wheat Industry News

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

Speaking of Wheat.

“Our study also showed that fermentation was very effective in reducing FODMAPs and ATI levels in wheat in the form of sourdough. These results tell us that sourdough production can be effectively used to reduce the levels of FODMAPs and ATIs in wheat.” — Dr. George Annor, Assistant Professor of Cereal Chemistry and Technology at the University of Minnesota, in an article about wheat digestibility research in Prairie Grains Magazine and reprinted in Wheat Letter.

Long-Serving World Ag Outlook Board Chairman Passes

Gerald Bange, who worked for 43 years at the USDA, including 20 years as chair of the World Ag Outlook Board, died Thursday, Jan. 13, 2022. He oversaw USDA’s monthly World Agricultural Supply and Demand Estimates report in that role. In addition, Bange also served as program chairperson for USDA’s Agricultural Outlook Forum. During his tenure as chair, which ended upon his retirement in 2014, Bange was a two-time recipient of the Presidential Rank Award for Meritorious Executive. Read more about Bange’s career.

2021/22 Global Wheat Flour Trade Forecast

Global wheat flour trade is forecast to reach its highest peak in three years and reverse a five-year downward trend. The International Grains Council (IGC) predicts the world will trade 14.8 million metric tons (wheat equivalent) of flour this year, 9% higher than last year’s total but well below the 2016/17 record of 17.6 MMT. “The projected first rebound in five years is largely linked to expectations for increased imports by Iraq…,” the IGC said. “However … the forecast may be revised lower in the coming updates, should the pace fail to accelerate going forward.”

2022 National Wheat Yield Contest Adds Quality Component

The National Wheat Foundation (NWF) announced that grower enrollment for the 2022 National Wheat Yield Contest is open. NWF divides the contest into two primary competition categories: winter wheat and spring wheat, and two subcategories: dryland and irrigated. The 2022 contest adds a new quality component in which contest partners will evaluate the 24 yield winners’ wheat for baking and milling qualities. If it meets all the criteria for “industry-desired” quality, the farmer will receive an additional $500 cash award in addition to the trip to Commodity Classic. Learn more about the contest, due dates, and how to enter here.

Wheat Marketing Center Searches for Executive Director

The Wheat Marketing Center (WMC) is looking for an Executive Director. WMC is a dynamic and multifaceted non-profit research and technical training entity. It promotes multiple classes of U.S. wheat by demonstrating their quality and functionality in end products. The application deadline is Friday, Jan. 21, 2022. Learn about the position and how to apply here.