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

Speaking of Wheat.

“We need moisture.” – Glen Squires, Chief Executive Officer, Washington Grain Commission, in an article by the Associated Press on how drought in eastern Washington state has cut soft white wheat production and created concerns about the next crop.

Borlaug Global Rust Initiative Announces 2021 Global Wheat Conference. The Borlaug Global Rust Initiative (BGRI), formed in 2005, will host a virtual conference Oct. 6 to 8, with the theme “Global Resilience: Science, Pandemics, and the Future of Wheat.” The 2021 BGRI Virtual Technical Workshop will explore how nearly two decades of monitoring and responding to wheat rust epidemics can teach other global disease outbreaks such as COVID-19. The online-only event is open to all and free for registrants. Learn more about the conference and register here.

Friend and Colleague Receives Boy Scouts of America’s Silver Buffalo Award. Reid Christopherson, executive director of the South Dakota Wheat Commission, one of USW’s state wheat commission members, will receive the Silver Buffalo Award from the Boy Scouts of America. This is the highest award presented for volunteer service. Christopherson will be among 826 recipients since 1926. Christopherson has been involved with the Boy Scouts of America for 53 years. Congratulations to our friend and colleague on this prestigious award! Read more here about this honor.

Oregon Wheat Hiring. The Oregon Wheat Growers League and Oregon Wheat Commission are hiring a new Director of Communications. This position supports the Chief Executive Officer to provide the development and growth of Oregon Wheat communications, outreach, advocacy, education and public relations programs. Read more about the position and how to apply here. The position will stay open until it is filled but apply for first-round consideration by September 7, 2021.

U.S. Wheat Associates Publishes Commercial Sales every Thursday, documenting wheat export sales-to-date by country and class for the current marketing year compared to the previous marketing year on the same date. The report includes a 10-year commercial sales history by class and country. Data is sourced from the USDA Foreign Agricultural Service Weekly Export Sales Report. Read the latest report on the USW website.

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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USDA’s August 2021 World Supply & Demand Estimates (WASDE) report trimmed expected global wheat production, reduced the global wheat stocks-to-use ratio and created a supply shock market rally. USDA dropped total production to 777 million metric tons (MMT), 15.4 MMT less than its July forecast, citing major weather problems in Russia, Canada and the United States. Global wheat use forecast for 2021/22 is 787 MMT.

Wheat supply is of course a major variable in global price discovery and is related to the “stocks-to-use” ratio, representing the level of carryover stocks as a percentage of the total demand or use. These new USDA estimates reduced the global stocks-to-use forecast to 35%, which, if realized will be its lowest since 2016/17. If China’s massive wheat stocks are removed from the calculation (China exports very little wheat), the stocks-to-use estimate is 21.6%.

A chart showing global wheat stocks-to-use ratios for last 10 years.

Global wheat stocks-to-use percentage has declined after an eight-year run-up. Source: USDA August 2021 WASDE and USW Supply and Demand Report.

Guy Allen, Senior Economist at IGP Institute at Kansas State University, points out that an important consideration when looking at the wheat stocks-to-use ratio is to compare the ratio to corn as well. While wheat is primarily a food grain, it can compete with feed grains given relative prices or regional shortages. The current global stocks-to-use ratio forecast for corn is 24%, also lower than its ratio the past few years.

Supply Shock Source

How did the world get to this point? Global use continues to set records each year and ending stocks declined in 2020/21 and again this marketing year. It is major exporting countries taking the supply hit this year. In fact, Stratégie Grains, a French grains analyst, said that the stocks-to-use ratio for major exporting countries could fall to its second-lowest level on record after 2012/13.

USDA slashed Russia’s production forecast 12.5 MMT to 72.5 MMT. The Russian statistical agency, Rosstat, reduced the number of winter wheat acres harvested while the Ministry of Agriculture reported lower yields. In Canada, the Prairie Provinces saw production decline after persistent drought slashed yields by 24% compared to the 5-year average. USDA reduced its Canadian production forecast by 32% compared to 2020/21 to 24.0 MMT. If realized, it will be the smallest Canadian wheat crop since 2010/11.

U.S. Wheat Balance Sheet

USDA also lowered U.S. production 7% compared to last year as drought has affected several wheat-growing areas including the Northern Plains states and the Pacific Northwest (PNW). The total stocks-to-use ratio in the U.S. is forecast at 30% for 2021/22, down 10% from 2020/21’s total stocks-to-use ratio of 40%. This is not surprising considering that all wheat classes started with lower beginning stocks in 2021/22 and of the five wheat classes tracked by the USDA in its monthly report all wheat classes except for hard red winter (HRW) and soft red winter (SRW) are expected to have lower ending stocks. Even with the higher production in HRW and SRW, the stocks-to-use ratio is forecast lower for all wheat classes in 2021/22. U.S. white wheat, primarily soft white grown in the Pacific Northwest (PNW) is the most affected with 16% stocks-to-use compared to 21% last year.

U.S. wheat stocks-to-use data for August 2021

USDA now expects the 2021/22 stocks-to-use ratio for each major U.S. wheat class to decline. Source: USDA August 2021 WASDE and USW Supply and Demand Report.

With harvest well underway for many classes (HRS, S.W.) and complete for HRW and SRW the market is getting a better indication of how accurate the USDA’s production number is. The September WASDE report will account for more known production in the United States and other major exporting countries. USDA will also publish its quarterly Grain Stocks report at the end of September that will also add to our understanding of how much wheat is available.

By USW Market Analyst Michael Anderson

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U.S. Wheat Associates (USW) will sadly say goodbye to our long-time colleague and friend Matt Weimar who is leaving his Singapore-based position as Regional Vice President for South Asia and Senior Advisor for Asia on Sept. 1, 2021, to pursue new interests.

USW President Vince Peterson notes that U.S. wheat producers have been well served by the export market development organization that they envisioned and created decades ago.

“But the bottom line of that success has come from many decades of effort by people like Matt Weimar who have dedicated their entire careers to the service of our industry,” he said.

Several of Matt’s colleagues wanted to share the following thoughts and best wishes.

Vince Peterson, USW President

“Matt’s dedicated career has been an exemplary example of the ‘boots on the ground’ philosophy U.S. wheat producers embedded into their organization. That involves living in our customers’ regions, getting to know them and their business interests personally, and building a long-term, lasting level of confidence and trust. It allows USW to effectively promote wheat exports to these markets and constructively address any problem that may occur.”

Demonstrating Matt Weimar relationship with customers.

Matt Weimar, right, with Ms. Sisi Xu, Director, Sino-American Baking School, Guangzhou, China.

“Matt’s success for USW in Asia is well known, recognized and respected by our customers and state-side organizations and farmers he has worked with over these many years. He will be highly missed by all of us on both sides of the Pacific, but his legacy and friendship will endure. Matt leaves USW not only with our thanks, but also our very best wishes as he begins this next chapter in his life.”

Shirley Lu, USW Country Director, China

“Matt has been a mentor to me before and after I joined USW, and I am always grateful for his support and guidance. He led the team, taught, shared, and encouraged us. He has done so much for so long that it is impossible to single out individual things he achieved. His dedication to the Chinese market has laid the groundwork for the successes we have enjoyed recently. Our friends in China as wheat buyers, millers and food processors enjoyed the good relationship he built between the industry and USW, and they have been missing him a lot. Although sad to see him retiring, we are so happy that he will return to Hong Kong, where we can remain in touch!”

Several people at a baking school in Bangkok, Thailand.

USW Director and Washington farmer Gary Bailey, Matt Weimar, USW VP, Global Technical Services Mark Fowler and USW Bakery Consultant Roy Chung visiting the United Flour Mills (UFM) Baking and Cooking School in Bangkok, Thailand.

Jeff Coey, USW Regional Vice President, China and Taiwan

“In USW’s world, every overseas posting presents unique challenges, and there is no book that outlines what new colleagues need to know about any particular market. So, I was very lucky to have Matt as a predecessor in the greater China markets. When I had a question, and I had many, behind every answer was a background story, and you did not get the lesson without the story behind it. Fortunately for me, Matt was unstinting with his time and was always ready with the stories and lessons.”

Matt Weimar with colleagues at a China food trade show.

Janice Mattson, Past USW Chairperson and Montana wheat farmer, Pansy Lam, Retired Associate Regional Director, China/Hong Kong, Matt Weimar, Peng Fei Zhong, Deputy General Manager, Guangdong Baiyan Grain & Oil Industrial Co., Ltd. retired USW President Alan Tracy, and Philip Zhou, President, Sino-American Baking School, attended the China International Baking Industry Expo in Shanghai in 2011.

“Besides his embodiment of ‘institutional knowledge,’ Matt had built many strong relationships as he conducted trade service and technical support for customers year by year over decades. Whether it be with growers, mills, traders or staff, Matt set a great example for me and for the others who worked with him. I will always be grateful for his support and wish him well in whatever adventures come next.”

Joe Sowers, USW Regional Vice President, South Asia (effective Sept. 1, 2021)

“After a long and productive career with USW, I’d like to congratulate Matt on his immense and lasting impact, guiding offices and personnel and managing operations across much of the Asia Pacific region. During his tenure in South and Southeast Asia, Matt quickly built strong and meaningful relationships with key players, gaining their trust, and helping businesses thrive and grow. His success is evidenced by U.S. wheat sales increasing at a rate and scale unparalleled anywhere in the world during his time in the region. Matt led successful marketing efforts with his unique and energetic enthusiasm for initiating innovative programs. All of us in the Singapore and Manila offices wish him the best in his future endeavors.”

A group of men in a wheat field.

Matt Weimar (left) travelled often back to the United States with regional trade teams. Here, he is with a Thailand milling team at Bailey Farms in Whitman County, Washington. Glen Squires, CEO, Washington Grain Commission (right) joined the team in 2019.

Glen Squires, Executive Director, Washington Grain Commission

“Congratulations Matt on your exemplary years of enthusiastic service to the U.S. wheat farmer. Matt was the first USW overseas employee I met as we touched down in Hong Kong on board team travel with Rick Callies (retired). Since that time Matt has always been a go-to person for insight, expertise and guidance about various markets. His relationships and efforts with millers/buyers and foreign government officials, along with knowledge of all things China and subsequently South Asia have provided detailed value to us all. No one can hold a candle to Matt’s unbelievable memory, attention to detail and knowledge of individual people and companies. Matt, on behalf of the Washington Grain Commission, thank you for all you have done to help expand and solidify the use of U.S. wheat in oversea markets.”

Matt, from all of us at USW, 再见, 祝你好运, 亲爱的朋友.

Photo of Matt Weimar

In the photo at the top of this page, USW colleagues joined Matt Weimar at a 2014 event celebrating the 30th anniversary of long-time educational partner the Sino-American Baking School in Guangzhou, China. Left to right: Shirley Lu, Country Director, China; Kaiwen Wu, Marketing Specialist, China; the late Ronald R.L. Lu, who served as Country Director, Taiwan; Pansy Lam, Retired Associate Regional Director, China/Hong Kong; Steve Mercer, Vice President of Communications; Sophia Yang, Past Asian Products/Nutrition Technologist, Taiwan; Mike Miller, Past USW Chairman and Washington wheat farmer; Matt Weimar; Peter Sutter, baking consultant; and Andy Zhao, retired Country Director, China.

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U.S. Wheat Associates (USW) recently joined a coalition of several U.S. agricultural organizations calling on the Biden Administration to work toward reforms to the World Trade Organization (WTO) “that lead to a market opening agenda for agriculture and a better functioning institution.”

USW signed the July 23, 2021, letter to U.S. Trade Representative Katherine Tai and Secretary of Agriculture Tom Vilsack because it believes the WTO’s mission to liberalize global trade has benefitted the wheat farm families the organization represents and the world’s wheat importers. As the coalition stated on liberalized trade, “It helps connect American farming communities to peoples around the globe.”

Since it was formed in 1995, global wheat trade has doubled. The WTO provides a trade dispute mechanism that has identified the need to amend trade-distorting practices such as China’s domestic wheat support and unfilled wheat import tariff rate quota.

However, the letter also pointed out that “When the WTO functions poorly, and other governments get away with treating U.S. agriculture exports unfairly, trust erodes in our government and international institutions. To restore trust, WTO reform is needed.”

Leading issues of discussion at the WTO include challenges on tariff implementation, domestic support, transparency, sustainability, and climate. Following are some of the areas the coalition would like the U.S. officials to address at the WTO Ministerial Conference (MC12) in late November 2021:

  • Public stockholding (PSH) disciplines – PSH programs may serve a laudable food security goal but often lead to excessive domestic stockpiles, as we have seen in India and China. Those stocks lead to lower global prices and may force U.S. farmers to compete with subsidized exports.
  • Special safeguard mechanism (SSM) rules – SSM’s allow developing countries to temporarily impose import tariffs to protect domestic producers from competition, and at times may unfairly tax U.S. exports.
  • Domestic support limits – Domestic support, a subsidy that encourages production, is one of the most discussed topics in Geneva. Some countries want the U.S. and EU (both of whom are within the limits they agreed to) to slash their farm program spending, while the U.S. argues that many advanced developing countries are dramatically exceeding their own limits. The coalition supports negotiating new limits on domestic support if market access is also considered.
  • Export restrictions are policies that may limit the amount of a product being exported from a country in the form of a tax or set quantity. Some countries will impose export restrictions on commodities to control domestic prices. During the COVID pandemic, Russia imposed export restrictions on wheat exports to control domestic wheat prices. Countries are expected to consider a proposal to exempt purchases by humanitarian organizations like the World Food Program from these limits.

Addressing transparency is a leading concern because it has a significant effect on market access and export competition. For example, global wheat production and trade are negatively impacted by India’s domestic support policies for wheat. Resolving such issues would help the market operate more freely and allow more fair and equal trade for all wheat producers.

The world continues to change, and the demand on the agricultural industry to feed more people in more environmentally and socially sustainable ways is increasing. The coalition supports using science-based approaches to embrace innovations and technologies to address these challenges of sustainability and climate. Also, with this, the coalition supports a declaration on sanitary and phytosanitary (SPS) measures, which would establish a committee on SPS measures to focus on harmonized regulation, risk analysis, sustainability, and innovation at the WTO.

USW remains committed to the WTO’s mission and believes that, with positive reforms, the organization can once again become a functioning, trusted institution for equal and fair trade for the people of the world.

By Shelbi Knisley, USW Director of Trade Policy

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

Speaking of Wheat.

“The overall sentiment is not great, but they are farmers, so they are thinking next year is going to be better.” – Casey Chumrau, Executive Director, Idaho Wheat Commission, describing the farming community’s outlook. Read more.

U.S. Millers Weigh in on Drought Effects. Reuters reports that millers and bakers are draining wheat reserves and paying more for spring wheat used in baking, as drought shrivels crops across the Canadian Prairies and northern U.S. Plains that produce more than half of the world’s world’s supply. While overall global wheat stocks are large, the drought affects mainly the high-protein spring wheat crop that millers such as Archer Daniels Midland Co (ADM.N) and bakers, including Grupo Bimbo (BIMBOA.MX), rely on to produce the texture and moistness in baked goods that consumers expect. Read more.

Oregon Wheat Hiring. The Oregon Wheat Growers League and Oregon Wheat Commission are hiring a new Director of Communications. This position supports the Chief Executive Officer to provide the development and growth of Oregon Wheat communications, outreach, advocacy, education and public relations programs. Read more about the position and how to apply here. The position will stay open until it is filled but apply for first-round consideration by September 7, 2021.

U.S. Wheat Associates Publishes Commercial Sales every Thursday, documenting wheat export sales-to-date by country and class for the current marketing year compared to the previous marketing year on the same date. The report includes a 10-year commercial sales history by class and country. Data is sourced from the USDA Foreign Agricultural Service Weekly Export Sales Report. Read the latest report on the USW website.

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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The effects of weather on the 2021/22 global wheat crop have sparked a run-up in prices even as harvest progresses in the Northern Hemisphere. Given the market’s supply concerns, U.S. Wheat Associates (USW) gathered information from major wheat exporting countries to see what may affect USDA’s next estimates of world supply and demand due on Aug. 12.

Both USDA and the International Grain Council (IGC) still expect 2021/22 global wheat crop production to reach a record level. USDA’s July estimate of 792.4 million metric tons (MMT) was down 2.0 MMT from June. IGC trimmed its latest forecasts by about 1.0 MMT to 788 MMT.

Hot, dry weather in the northern and Pacific Northwest (PNW) regions of the United States and, recently, in Canada, has attracted much of the market’s attention.

United States

The Wheat Quality Council Hard Spring and Durum Tour estimated this year’s hard red spring (HRS/DNS) yield average at 29.1 bushels per acre, compared to 43.1 bushels per acre in 2019. Even so, the tour’s consensus is HRW/DNS protein and kernel size will be very good. U.S. northern durum and soft white (SW) wheat yields are also expected to be down significantly. On the other hand, hard red winter (HRW) and soft red winter (SRW) average yields and production are expected to be higher for 2021/22. In addition, Kansas-based HRW grower Brian Linin, noted, “We put a lot into this crop. Protein [levels] have been awesome.” Follow USW’s weekly Harvest Report for more information.

HRS wheat rows showing effect of drought in North Dakota

Drought in the Northern U.S. Plains could cut the 2021/22 HRS/DNS yield average by one-third, but industry experts expect protein and kernel quality will be good.

Canada

Canada, the largest spring wheat producer, has experienced record temperature and drought in portions of its Prairie Provinces. Agriculture and Agri-Food Canada (AAFC) cut its most recent forecast of spring wheat production by 11% to 25.6 MMT, down sharply from previous estimates. That agency also reduced spring wheat export forecasts to 17.7 MMT, down 16% from last year.

South America

In Argentina, dry weather is also a concern, depleting soil moisture for the winter wheat crop and creating a logistics headache. The Buenos Aires Grains Exchange (BAGE) reported potential leaf damage and developmental delays caused by a severe cold front in July. Neighboring Brazil and Paraguay have also experienced potentially damaging cold weather. Brazil experienced some of the lowest temperatures in years throughout July. One local newspaper in Paraguay, “La Nación,” reported there may be a need to import wheat this year instead of marketing excess domestic production.

EU

The European Union’s top wheat-producing states, France and Germany, received persistent rain leading to flooding in some areas, which slowed harvest and created quality concerns. On Aug. 3, France’s farm ministry lowered the estimate for wheat production there by 410 thousand metric tons (TMT), but total production is still expected to be at least 25% more than in 2020/21. In a report following the flooding, a German farmers group suggested there may be crop failures in many areas. Despite this, total German production is expected to be 23.1 MMT, up almost 5% compared to last year. Further east, Romania and Bulgaria each expect to harvest record crops, although official reports said rains could downgrade a portion of Bulgaria’s harvest to feed.

Black Sea

USDA’s May Russian wheat production forecast of 85.0 MMT was seen as bullish by many at the time. Two private Russia-based analysts cited lower-than-expected yields in the Central and Volga regions when they cut their production estimates recently. IKAR cut its forecast for the 2021 wheat crop by 3.0 MT to 78.5 MMT and SovEcon cut its forecast 6.6% to 76.8 MMT. Rosstat, the Russian state statistics agency, reduced winter wheat planted area by 7.5% compared to last year, blaming dry weather. Export prices, as a result, increased at least $7 per MT following the news. The current Russian government export tax scheme is also adding part of that increased export cost.

Ukraine’s wheat harvest lags last year’s pace but yields are up 12% compared to 2020. In reaction to reduced wheat production in Russia, prices for Ukrainian wheat gained $3 to $5 per MT settling between $240 to $243 per MT. The USDA estimates Ukraine’s wheat production to rise 15% this year to 30.0 MMT.

According to one Ukrainian-based broker, farmers in Kazakhstan are expecting a 30% drop in wheat production this year from hot, dry weather in the early summer. The Kazak government is considering banning feed wheat exports while also considering a tax on milling wheat exports following a meeting of the foreign affairs and trade commission last month.

Australia

Wheat growing areas of Australia, especially Western Australia, are “looking extremely good” said one analyst with the Australian Export Grain Innovation Centre. Production estimates are expected to fall 17% compared to 2020/21 when Australia produced a record crop. This year’s crop is expected to be 15% above the 10-year average to 28.5 MMT following a 1% increase to the planted area. Some areas are reporting water logging and would benefit from a couple of weeks of sunny dry weather to dry out the fields.

screenshot from Australian Export Grain Innovation Centre

The Australian Export Grain Innovation Centre reports a second year of good wheat production potential after breaking a severe drought in 2020.

In-Born Optimism

Back in the drought areas of the United States, many wheat farmers are looking ahead to the next crop with winter wheat seeding likely to start in some areas by early September. In an interview with the Pacific Northwest Ag Network, Casey Chumrau, Executive Director of the Idaho Wheat Commission, described the farming community’s outlook this way: “The overall sentiment is not great, but they are farmers, so they are thinking next year is going to be better.”

By Michael Anderson, USW Market Analyst

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U. S.  Wheat Associates (USW) colleagues and many friends in Taiwan were very sad to learn that retired USW Country Director Ron Lu passed away July 23, 2021, in Taipei at the age of 73. Our most sincere sympathy goes out to Ron’s family and friends.

Ron Lu at CGPRDI with bakery students

In 2016, Ron Lu talked with Taiwanese bakery students at the China Grain Products Research Institute (CGPRI), which he served as Chairman. This photo was taken during a joyous celebration marking 50 years of representation in Taiwan by USW and its legacy organization Western Wheat Associates.

Ron L. J. Lu retired from USW in 2017 after 33 years of service to U.S. wheat farmers and the Taiwan milling and baking industry he loved. In September 2016, USW shared these tributes to our colleague.

“Today, per capita wheat consumption in Taiwan has exceeded that of rice. It is a market that prefers the quality and reliability of U.S. wheat and Ron played key roles in that success,” said USW Regional Vice President Matt Weimar. “USW has a strong presence in Taiwan, across all sectors and entities in the food industry because of that dedication and commitment representing U.S. wheat farmers. By hosting so many public introductions of those new wheat food products with his customers and educational partners, Ron truly [was] the face of U.S. wheat in Taiwan.”

Ron Lu with USW colleagues and the owner of R Den Dessert Factory

Ron Lu (right) often brought visiting colleagues and U.S. wheat farmers to the delightful R Den Dessert Factory in Yilan City, Taiwan. Here, USW Regional Vice President Matt Weimar (left), Past USW Chairman and Ritzville, Wash. wheat farmer Mike Miller visit with R Den proprietor Lai Wen-dian.

Lu joined USW in 1983 as a technical specialist and was appointed country director in 2004. During his tenure, Lu worked directly with end users and importers to help them strengthen commercial links with U.S. export companies through trade servicing, technical assistance and promotional activities. From 2007 to 2009, Lu served as the chairman of the China Grain Products Research and Development Institute (CGPRDI). During his USW career, he has facilitated countless customer and trade team visits to the United States, including the biennial Agricultural Trade Goodwill Mission during which the Taiwan Flour Mills Association (TFMA) traditionally signs letters of intent to purchase U.S. wheat during the following two marketing years.

Ron Lu and Taiwan team at the Wheat Marketing Center, Portland, Ore., in 2013.

Ron Lu (left) often travelled to the United States during his 33 years with USW, hosting Taiwanese flour miller trade teams like this one in 2013 outside the Albers Mill Building headquarters of USW West Coast Office, the Wheat Marketing Center (WMC) and Oregon Wheat Commission. This photos is from a tribute to Ron from his colleague and friend Gary Hou (right), who was WMC’s Technical Director at the time and is now Managing Director, Flour Business Unit, SPC Group, Korea.

“Over many years, Ron added value to every level of USW’s work in Taiwan — from improving and creating the finest wheat food products for consumers to strengthening the long-standing trade relationship between Taiwan and the United States,” said USW President Vince Peterson. “Through his steady efforts and successes, he made immeasurable contributions to both the wheat food industry in Taiwan and the U.S. wheat production and export industries.”

Ron Lu at a 2011 media event celebrating the development of healthy bread products for the Taiwanese people.

In his position as USW Country Director, Ron Lu (second from right above) worked closely with the Taiwan milling and baking industry to help develop and promote new wheat products made primarily with flour from imported U.S. wheat. Today, per capita consumption of wheat food exceeds rice.

 

 

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Commenting on his participation in the 2021 Wheat Quality Council Hard Spring and Durum Tour completed July 29, U.S. Wheat Associates (USW) Market Analyst Michael Anderson said “variable” was the word of the week.

“The crop condition varied across North Dakota, across counties and even across every 10 miles we traveled,” Anderson said. “We would see one nice looking field with wheat up to my waist then see sparse fields with stalks below my knee.”

USW Vice President of Programs Erica Oakley noted the variability in crop maturity.

“Most of the fields in the south and central areas of North Dakota will be ready for harvest within a week,” she said. “But as we moved north along the U.S.-Canada border, those fields were 4 to 6 weeks from harvest.”

It will come as no surprise that the tour confirmed that the U.S. hard red spring (HRS/DNS) wheat and northern durum production will be down significantly for 2021/22. The tour’s HRS yield estimate was 29.1 bushels per acre (bu/a) compared to the 2016 to 2019 tour average of 47.5 bu/a. The tour’s durum yield estimate was 24.3 bu/a, slightly higher than the tour’s durum yield estimate of 23.3 bu/a in 2008.

(L to R) USW staff Catherine Miller, Michael Anderson and Erica Oakley attended the Wheat Quality Council Spring Wheat Tour in North Dakota this week.

There is Good News

However, there seemed to be much less variability with what tour participants said about HRS/DNS quality.

Wheat Quality Council Executive Director Dave Green said even in the driest area of North Dakota, kernel quality looked good. Josh Longtin with Miller Milling Company told the Red River Farm Network that, “on a positive note, we hardly saw any quality issues, which is good for millers.”

“We saw many fields where the wheat was short, but the kernels were round and plump,” said Oakley. “So, the general consensus is the quality will be there – it is just a matter of how much wheat there will be.”

Wheat farmer and USW Director representing the North Dakota Wheat Commission Phil Volk was on tour and shared this observation with Progressive Farmer: “The bottom line is that we want our foreign customers to see that we will do our best to get them the best wheat possible, even with the drought conditions.”

Wheat Quality Council Spring Wheat Tour Day 2 stop in Burleigh County, North Dakota on the blue route. Photo shared by Kim Chapman, Bloomberg.

Great Experience

Every year, the Wheat Quality Council hosts the HRS and durum crop tour in North Dakota, bringing together participants from across the industry, including millers, traders, farmers, researchers, government officials and media. These participants travel in small teams along eight distinct routes covering most of the state’s wheat production, as well as into parts of South Dakota and Minnesota. The 2020 tour was canceled due to COVID-19. During the three-day tour this year, 43 participants inspected 273 fields. When scouting fields, participants measure yield potential, determine an average for the day’s route and estimate a cumulative daily tour average when all scouts come together again in the evening. The tour is also a tool to help educate a broad range of stakeholders about wheat production challenges.

USW is always pleased to send colleagues to the Wheat Quality Council tours. Michael Anderson and Erica Oakley have participated in other tours, but this was the first time for USW Programs Coordinator Catherine Miller.

“The tour was an incredible learning experience,” Miller said. “I got hands-on knowledge of the new spring wheat crop and the chance to meet so many new people from our shared industry. I have a much stronger appreciation for the challenges our farmers face every year to produce quality wheat for people here and around the world.”

USW is happy to share several photos from the tour here and thanks to Dave Green and the Wheat Quality Council for bringing the U.S. wheat industry together again.

USW will continue monitoring crop conditions and sharing updates in its weekly harvest report published every Friday during the U.S. wheat harvest season. The 2021 U.S. Crop Quality Report will be published in October. Subscribe here to receive the harvest reports and other crop quality updates directly to your inbox.

Green wheat field

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There is an easily understood expression in English that “you cannot judge a book by its cover.” Applied to the new 2021/22 U.S. soft white wheat crop that is good advice for the world’s flour millers and wheat food producers.

The persistent Pacific Northwest (PNW) drought is expected to lower yields and push 2021/22 SW protein levels higher than average. As USW Bakery Consultant Roy Chung says, however, protein level alone does not say everything about soft white end-quality performance.

Instead, U.S. Wheat Associates (USW) is helping flour millers learn that testing for Solvent Retention Capacity (SRC) is the most effective and valuable method for predicting the true performance characteristics of flour for biscuits (cookies) and crackers.

The SRC method, approved by the American Association of Cereal Chemists (56-11.02), examines the characteristics of glutenin, gliadin and arabinoxylan and the level of starch damage in flour. These values describe the flour’s ability to absorb water during the mixing process and its ability to retain or release that water during and after the baking process, among several other performance characteristics.

The combined pattern of the four component SRC values establishes a practical flour quality profile useful for predicting functionality, giving the miller and baker a ‘fingerprint’ of U.S. soft white (SW) and soft red winter (SRW) wheat flour end-quality performance.

Image of a video describing SRC analysis of soft white wheat and other classes

Noted cereal chemist Dr. Art Bettge, ADB Wheat Consulting, described SRC use and interpretation in-depth in a video lecture for USW’s 2020 Crop Quality Seminars.

“While rheological analysis tools measure the combined effect of the components in flour, individual component functionality, measured by SRC, gives a better picture of whether you are going to get the desirable performance from the flour for the product you want to make,” Chung told a large audience of millers and bakers in a USW webinar on SRC in June 2021.

With a more complete understanding of the functional value of wheat proteins, carbohydrates and other properties, flour milling quality control managers will have additional information to evaluate the characteristics more accurately of U.S. soft white wheat and Western White (a blend of SW and a minimum 10% white club) this year compared to competing supplies.

Test of cookie spread using soft white wheat flour and other low protein flour to show protein % does not always predict performance.

These test results, provided by USW Bakery Consultant Roy Chung, show cookie spread increases and then declines as the flour protein percentage lowers, demonstrating that protein percentage alone is not an accurate predictor of performance.

Clean Label Input

“In addition, more wheat food manufacturers are looking for ways to ‘clean up’ their ingredient labels,” said USW Regional Technical Director Peter Lloyd. “USW can show SRC results to millers and bakers that prove flours from U.S. soft white wheat and SRW wheat can make beautiful end products without adding any ‘magic powder’ like enzymes that have to be added to medium protein wheat flour to make weak gluten products.”

USW has helped flour mills understand the advantages of SW by introducing SRC analysis and training mills to use the tool to expand their business. Vietnam is one example, where several flour mills use SRC analysis of flour products milled from SW to demonstrate how end-product performance is improved compared to flour milled from alternative wheat supplies.

“Our baking experts have already had several sessions with flour millers across South and North Asia about the benefits of evaluating flour from SW with SRC over protein levels alone,” said USW Regional Vice President Matt Weimar. “We were also pleased with the number of millers who participated in the June webinar on SRC, in which Roy Chung and Tarik Gahi, our Milling and Baking Technologist, demonstrated the SRC method. We also had a well-attended second session in July featuring Peter Lloyd discussing how to use SRC data to blend flour streams for better performance and profit.”

Excellent SW Will Be Available

Buyers, millers and end-users can be reassured that excellent quality SW is available even with a short 2021/22 crop. Beginning stocks carry in 1.91 million metric tons of total U.S. white wheat following a 2020/21 PNW SW crop with excellent performance characteristics. Local USW offices and U.S. export grain companies are also prepared to help their customers develop tenders that will deliver the wheat qualities needed at the highest value possible.

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By Ben Conner, Partner, DTB AgriTrade

Over the last several years, U.S. Wheat Associates (USW) and other industry groups have demonstrated how the policies of a few advanced developing countries are distorting world wheat trade and hurting farmers in the United States and other wheat exporting countries. Chinese government grain policy attracted special attention, leading to two dispute cases at the World Trade Organization (WTO), one on excessive subsidies and one on China’s administration of a tariff rate quota on wheat, corn, and rice. By April 2018, WTO dispute panels had sided with the United States in both cases.

Today, the official settlement process for one of those cases has entered the next phase. On July 26, 2021, the United States asked the WTO Dispute Settlement Body (DSB) for authorization to raise tariffs on imports from China due to its failure to comply with the DSB recommendations on its tariff-rate quota (TRQ) administration. China blocked the request, which puts the matter before an arbitration panel. Simultaneously, China made its own request for another panel to review whether it has brought its policies into compliance.

Very close observers of WTO processes might experience deja vu because this is exactly what happened with the case on China’s subsidies for the same commodities last summer.

The next step is for the WTO to form two panels to review the requests of both China and the United States. The compliance panel will look at whether China’s TRQ administration is now functioning on a “transparent, predictable, and fair basis … using clearly specified administrative procedures,” as required by the DSB recommendations. An arbitration panel will review the U.S. request to raise tariffs and decide whether its methodology is appropriate.

Two Reasons for the Challenge

Why is the U.S. government taking this step forward on this case? After all, China has been importing record amounts of wheat and corn since the signing of the Phase One deal (rice is notably lagging) that included implementation of the WTO recommendations on TRQs and subsidies. There are two main reasons.

Procedurally, the U.S. government had to continue extending the window for China to comply (they had already agreed to seven extensions), allow that window to expire with no further action and forfeit its right to suspend concessions, or request that right within 20 days after the window expired. It chose the third option.

Even though China has allowed higher imports, there is still little clarity on how TRQ shares are allocated and reallocated.

If the process remains opaque and unpredictable, China will not be in compliance with its TRQ obligations, which could prevent imported wheat with qualities supplementing Chinese domestic wheat from reaching the Chinese wheat millers who could use it most effectively. It is encouraging that the U.S. and Chinese governments are continuing this case as it will help resolve disagreements over whether China is in compliance with its TRQ commitments and exert pressure to fix problems with Chinese government grain policy permanently.