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Wheat Industry News

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

Speaking of Wheat. “It was just an excellent wheat crop. On our farm, we had the best wheat … we’ve ever had. It was a challenging harvest, between the [rain] showers, but the quality held up and our test weight stayed above 58. The genetics and farmers’ overall management of wheat is also better than in the past.”– Danny Rubin, farmer and President of the Illinois Wheat Association, describing in an article by “FarmWeek Now” how farmers in that state have harvested record yields of soft red winter wheat this year. Photo above: Illinois Wheat Field © Nordike899 | Dreamstime.com

FAS Administrator Daniel Whitley

FAS Administrator Daniel Whitley. Photo courtesy of USDA.

Congratulations to FAS Administrator Whitley. Agriculture Secretary Tom Vilsack has named Daniel Whitley as Administrator of the USDA’s Foreign Agricultural Service, who has served as the agency’s Acting Administrator since December 2020. He is no stranger to FAS stakeholders like U.S. Wheat Associates (USW) and the agricultural trade community, having served a 20-year career with the agency. USW President Vince Peterson congratulated Administrator Whitley, saying, “our worldwide staff, who so closely work with those on your side, all join me in expressing just how pleased we are to have you settled in this position.”

2020 Annual Report for the CGIAR Research Program on Wheat. The International Maize and Wheat Improvement Center (CIMMYT) recently published its 2020 Annual Report for the CGIAR Research Program on Wheat. This report focuses on significant impacts made during a time of unprecedented challenges. Although they are reported for 2020, the stories reflect years of dedicated science and strong collaborative relationships with partners. Sixty-three new CGIAR-derived wheat varieties were released globally in 2020 – including six high-yielding and nutritious varieties in Nepal, a historic first. View the report online here.

School Meals: Nutrition, Health and Education for Every Child. Led by USDA, the United States is joining a global coalition focused on improving the nutrition, health, and education of vulnerable children and adolescents worldwide, Agriculture Secretary Tom Vilsack announced in June. The coalition, called “School Meals: Nutrition, Health and Education for Every Child,” will officially launch at the United Nations’ Food Systems Summit in September. It is led by U.N. member states and spearheaded by Iceland, Finland, and France, with support from the U.N.’s World Food Program (WFP). WFP is already a key partner in implementing USDA international food assistance programs. Read more about this coalition.

Close up of durum wheat kernelsNCI Offering Online Durum Foods Course from August 1 to 30. The course will touch on many unique traits of durum, nutritional components, baking and working with durum, as well as a basic understanding of the milling process through networked lectures and video tours. Participants can also interact with presenters during live Q & A sessions. Learn more and register by July 30 here.

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, 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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Agriculture Calls on STB to Increase Rail Competition Following Executive Order

On the heels of a White House Executive Order on competition this month, a large group of agricultural shippers recently wrote to the U.S. Surface Transportation Board (STB) to advocate for several policy proposals in front of the board that can make a significant difference in increasing rail competition in transportation of wheat and other commodities.

The letter was written by a diverse grouping of agricultural organizations, including U.S. Wheat Associates (USW), that created an informal coalition, the Agricultural Transportation Working Group (ATWG), in 2003. The group meets regularly to discuss critical transportation policy issues that affect U.S. agriculture. The group also identifies policy priorities and suggests needed changes to help maintain U.S agriculture’s international competitiveness.

Elevator and train to illustrate rail competition story.

About 70% of U.S. wheat is transported by train from inland country elevators to domestic and export markets, so rail competition is important for the entire supply chain.

More Room for Negotiation Needed

With about 70% of U.S. wheat moving to domestic and export markets by rail, railroads provide an essential logistical function that neither farmers nor grain companies can perform on their own. Yet those shippers are often “captive” because they lack economic alternatives to a single railroad.

The letter specifically encouraged STB to enable “competitive switching” (see below for more information) and urged “the Board to finalize other regulations … to provide rail customers greater ability to negotiate prices and challenge unreasonable rates and fees.” The letter points out that “fees are increasingly becoming a larger source of revenue for railroads and expense for their customers.” Click here to read more about how rail rates affect U.S. wheat export basis.

The President’s Executive Order was particularly broad and focused on proposals to increase competition in many industries, with the transportation portion including rail competition and maritime initiatives,  stating that “robust competition is critical to preserving America’s role as the world’s leading economy … inaction has contributed to these problems, with workers, farmers, small businesses, and consumers paying the price.”

“Competition is critical to the health of the rail industry and the significant role rail serves in the larger economy, and this Executive Order will help focus attention on these important issues.” – Surface Transportation Board Chairman Martin J. Oberman

The Order explicitly states that agencies like the STB and Federal Maritime Commission (FMC) can influence the conditions of competition through their exercise of regulatory authority. In addition to the competitive switching rule, the STB has the latitude to propose or finalize other options such as bottleneck rate rules and Final Offer Rate Review – for which USW has advocated – both of which would start to tip the scales in favor of a level playing field for rail shippers.

Opposition Anticipated

While the rail industry will almost certainly oppose any changes to the current regulatory model that affects rail competition, executive pressure and political initiative may encourage the STB majority to act on these proposals (click here to read STB Chairman Martin J. Oberman’s statement on the President’s Executive Order). Many industry watchers are even speculating that the focus on increasing competition and attention on consolidation will factor into the STB’s consideration of the proposed Canadian National Railways purchase of Kansas City Southern Railroad – something the USW Wheat Transportation Working Group is closely watching.

In USW’s mission “to enhance wheat’s profitability for U.S. wheat producers and its value for their customers,” a potential solution may be found in the President’s directive if it indeed does rebalance the relationship between railroads and their customers.

By Michael Anderson, USW Market Analyst

“Competitive switching” is a policy proposal in which a rail customer such as an inland country grain elevator could seek bids for service from nearby competing railroads even if the customer is not located directly on the competing railroad’s track. It is designed to inject competition into what is otherwise a captive transportation market, where many rail customers, especially grain elevators, have direct access to only a single freight railroad, leaving them with little to no bargaining power over shipping rates. Freight rail reform advocates who have sought such policies for a long time are enthusiastically looking to the President’s “Promoting Competition in the American Economy” executive order to add momentum to the call for greater competition.

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Rail Rates Directly Affect Basis Values for Wheat Importers

Grain companies serving Pacific Northwest (PNW), Gulf, Lakes and Atlantic ports overcome challenging logistics to efficiently deliver wheat that consistently meets contract specifications to buyers around the world. Rail rates, for example, make up a significant percentage of U.S. wheat export basis and, ultimately, the FOB price paid by importers.

Exporting grain companies draw from inland country elevators that play a vital role in the U.S. wheat export system. And, according to the National Grain and Feed Association (NGFA), which represents and provides services for country elevators and other related commercial businesses, having access to efficient, competitive rail transportation is crucial. In fact, NGFA notes that 72% of U.S. wheat moves to domestic and export markets by rail.

Base and Secondary Rail Markets

Dr. Frayne Olson, Crop Economist/Marketing Specialist with the North Dakota State University Extension, says the United States has a very strong network of reliable freight rail systems that move wheat and other grains from where it is produced to domestic and export locations. He suggests that most deliveries to export elevators in the Pacific Northwest (PNW) or the Western Gulf rely on 110-car shuttle trains dedicated to wheat or other grain deliveries. The total cost of shuttle train delivery includes a base tariff rate and, if needed, a secondary market.

Shuttle loading system to present rail rates background

A shuttle train is loaded with grain at an inland elevator in this image from a video lecture by Dr. Frayne Olson, North Dakota State University, produced for USW. Arrows indicate the rail engines and covered grain cars.

“The base rate does not change rapidly,” Dr. Olson said in a recently produced video lecture on grain transportation for U.S. Wheat Associates (USW). “With shuttle systems, the base rate reflects the use or leasing of a train for about a 12-month period by the exporting company.”

U.S. railroads are also allowed to apply a fuel surcharge per car.

The secondary market allows exporters to contract for unanticipated rail requirements by purchasing unused space in a rail car and move the grain to the export terminal. Because the secondary rail market correlates directly with the principles of supply and demand, it can be considerably more volatile than the base rate tariff.

The Agricultural Marketing Service (AMS) of USDA notes that secondary rates are most often a small fraction of the full cost or rail shipments relative to the base tariff rate.

Total rail rates make up a significant percentage of U.S. wheat export basis. Each week, USW Market Analyst Michael Anderson polls export grain traders about changes in export basis. In their reports, the traders consider factors that directly affect basis including rail capacity’s effect on rates. Nearby futures prices and average basis are included in the USW Price Report to provide an estimate of weekly FOB prices for several classes and protein levels from PNW, Western Gulf and Lakes ports.

Current Rail Rates

Overall, current rail rates for shipping U.S. wheat are about equal to or slightly less than they were one year ago. In its July 15, 2021, “Grain Transportation Report,” AMS reported the following base rail tariffs, plus a fuel surcharge, per metric ton (MT) for shuttle trains:

Great Falls, Mont., to PNW Ports:                  $39.90

Wichita, Kan., to Western Gulf Ports:            $42.07

Grand Forks, N.D., to PNW:                            $56.37

Grand Forks to Western Gulf:                         $59.54

Colby, Kan., to PNW:                                        $63.35

NGFA points out that agricultural producers and shippers now are dependent upon only four U.S. Class 1 carriers to haul most grains and oilseeds by rail. Those four railroads typically originate more than 80 percent of such traffic, compared to only 53 percent in 1980.

USW map of Class 1 U.S. railroads to help demonstrate rail rates.

U.S. Class 1 railroad routes are shown in this image from USW’s interactive map of the U.S. Wheat Export Supply System.

Monitoring Rail Rates and Policies

Like NGFA, the U.S. wheat industry is closely watching the current proposal for control of Kansas City Southern Railroad by Canadian National Railway and a potential competitive offer by Canadian Pacific Railways. USW’s Wheat Transportation Working Group will weigh in on these proposals to the U.S. Surface Transportation Board (STB) with public comments.

In addition, USW has joined several other organizations, including NGFA, urging the STB to adjust rail regulations to ensure sufficient competition and, ultimately, the most efficiency and value for farmers, the grain trade and overseas wheat buyers. Anderson will report on that effort in the next Wheat Letter post July 22, 2021.

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Northern Crops Institute Announces Wheat Webinar Series

U.S. Wheat Associates (USW) links overseas customers directly to the wheat they purchase and to the farmers who grow it by sponsoring participants at short courses, bringing trade delegations to the United States, creating end-product seminars and sending experts overseas. USW and the world’s wheat buyers are fortunate to work with world-class educational partners including Northern Crops Institute (NCI), IGP Institute and Wheat Marketing Center.

This week, Northern Crops Institute announced a series of market update webinars on topics that should be valuable to overseas customers and stakeholders here in the United States. Following are webinar descriptions, dates, times and registration information.

“July World Agricultural Supply and Demand Update Featuring Tregg Cronin,” Wednesday, July 21, 2021, 08:00 Central Daylight Time (CDT)

Portrait of Tregg Cronin, speaker at a Northern Crops Institute webinar

Tregg Cronin, Market Analyst, Halo Commodities, and contributing analyst to DTN/Progressive Farmer.

Tregg Cronin is a fourth-generation farmer and rancher from Gettysburg, S.D., as well as a contributing analyst to DTN/Progressive Farmer. Tregg graduated from the University of St. Thomas in St. Paul, MN in 2009 before working for agriculture cooperative CHS, Inc. With CHS, Tregg worked in the company’s grain marketing division as well as its commodity brokerage, CHS Hedging. Currently Tregg is a Contributing Analyst to DTN/Progressive Farmer. Tregg farms with his wife Sara and son Morgan as well as his father, uncles and cousins in what is truly a family farming operation.

Click here to register.

“2021 Hard Spring and Durum Wheat Tour Featuring Dave Green,” Thursday, July 29, 2021, 14:30 CDT

Portrait of Dave Green, Wheat Quality Council, speaker at a Northern Crops Institute webinar

Dave Green, Executive Director, Wheat Quality Council.

The Wheat Quality Council Hard Spring and Durum Wheat Tour will wrap up early the afternoon of July 29. This webinar will give the post survey results and give people a view of the situation on the ground as Northern Plains farmers deal with a devastating drought. Dave Green from the Wheat Quality Council will be with us to discuss the 2021 Hard Spring and Durum Wheat Tour. His presentation will include a review of the tour, what was viewed on the tour, estimated yield potential, and more.

Click here to register.

“Challenges and Opportunities in Global Agricultural Trade and Competition Featuring Dr. William W. Wilson,” Wednesday, Aug. 4, 2021, 08:00 CDT.

Portrait of Dr. William Wilson, Professor, Agribusiness and Applied Economics, NDSU, speaker at Northern Crops Institute webinar.

Dr. William Wilson, Professor, Agribusiness and Applied Economics, NDSU.

Dr. Wilson is a distinguished Professor, Agribusiness and Applied Economics, at North Dakota State University (NDSU). Dr. Wilson has spent his career working with the global grain trade on everything from global futures, cash, and derivative markets, transportation, logistics, technology, and biotech. He was recently selected by NDSU to present the 60th annual faculty lectureship which is one of NDSU’s oldest and most prestigious awards. It recognizes sustained professional excellence in teaching, scholarly achievement and service among current faculty at NDSU. The honor is conferred on an individual who has demonstrated excellence in all three areas. The title of Dr. Wilson’s lecture is: “Challenges and Opportunities in Global Agricultural Trade and Competition” which includes a lifetime of research, thoughts, and observations. Dr. Wilson was instrumental in developing NCI’s procurement course that has benefitted so many U.S. wheat customers around the world.

Click here to register.

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Wheat Industry News

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

Speaking of Wheat. “We know what the [world] population is expected to grow to, and … they are …  going to eat more so we need to improve our grain yield by 1.4% to 1.7% annually. And currently in the Great Plains, the breadbasket of America, we are at 0.9%. So, if you do not have a plan to raise grain yield by 1.4% to 1.7% annually, you have a plan to fail. And failure cannot be an option.” – Dr. Stephen Baenziger, Professor Emeritus of Agronomy, University of Nebraska-Lincoln describing an important reason why hybrid wheat should be developed and commercialized in an article, “At Last, A Future for Hybrid Wheat” by Josh Sosland in World-Grain.com.

U.S. Wheat Associates (USW) Co-sponsors Wheat Quality Initiative. A research project just underway aims to prove properly managed wheat of specific varieties can simultaneously be high yielding, high quality and be highly profitable for the grower. The project will unfold over the next three years under the auspices of the Wheat Action Plan, created collaboratively by the National Association of Wheat Growers, the National Wheat Foundation and key partners from several segments of the wheat industry including USW, which has contributed funding and quality analysis concepts. Read more about the project from Sosland Publishing.

Spring Wheat Prices. DTN Lead Analyst Todd Hultman on July 6 wrote that September Minneapolis (hard red spring) wheat prices turned more volatile the past three months, but continue to challenge their highs, while crops have USDA’s lowest good-to-excellent rating since 1988, (see DTN ProphetX chart below). Meanwhile, Kansas City (hard red winter) and Chicago (soft red winter) futures prices are down considerably from May 7 highs of $7.45 and $7.67 per bushel respectively.

DTN chart of HRS futures for Wheat Industry News story.

Source: DTN Prophet X

Israeli Scientists Test Lost Wheat Varieties. Under a project called “Land of Wheat,” scientists and other researchers in Israel are collaborating with a commercial mill to produce flour and bread from ancient wheat lines discovered and preserved from archives and plant gene banks in Israel and then produce breads. Reviving such heirloom grains as cultural touchstones is the goal. Read more in an article about the project.

Harvest Reports Available. Every Friday through the U.S. harvest season (May to October), U.S. Wheat Associates (USW) and its partner organizations compile a Harvest Report. It includes updates on crop quality, harvest progress and crop conditions for hard red winter, soft red winter, hard red spring, soft white and durum wheat. 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, 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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2021 Soft Red Winter Wheat Crop Outlook is Positive

While drought has dominated the headlines about U.S. wheat, the outlook for the 2021 soft red winter (SRW) wheat crop is a more positive story. Farmers growing this weak gluten class in the eastern third of the United States enjoyed timely rainfall and mild temperatures as the crop developed, leading to good yield potential and at least average quality so far.

The July 6 Crop Progress report published weekly by the National Agricultural Statistics Service indicated the percentage of SRW crops rated in good to excellent condition were 50% in Arkansas, 49% in Missouri, 74% in Illinois, 78% in Indiana and 74% in Ohio.

Big Crop Ahead

Many of the SRW producing states saw planted area increase for the 2021 crop from 5.63 million acres in 2020 to 6.59 million acres according to USDA’s June 30, 2021, Acreage Report.  With yield potential up, too, the 2021 SRW crop is expected to be significantly bigger. At the spring conference of the North American Millers’ Association, millers estimated SRW wheat production for 2021 to increase 25% compared to 2020, to 332.7 million bushels (9.05 MMT). The most recent crop production estimates, published by the USDA in June, forecast SRW bushels to be 335.4 million. Either way, there will be plenty of high-quality SRW available.

2021 soft red winter wheat crop image

Grown in the eastern third of the United States and shipped via Gulf, Atlantic, and Great Lakes ports, soft red winter (SRW) wheat is a high-yielding wheat with low protein, soft endosperm, red bran, and weak gluten. It is used in pastries, cakes, cookies, crackers, pretzels, flatbreads and for blending flours.

The 2021 SRW harvest is well underway. Even with recent rains slowing progress, the July 2 USW Harvest Report showed 57% of the growing region has completed harvest. The report, which will be updated July 9, included grade and non-grade data from analysis of 135 SRW harvest samples from the southern and southeastern states. That data showed an improvement in grade from to U.S. No. 2 week-over-week. Both test weight (TW) and falling number (FN) increased this week compared to last. USW’s goal is to test a total of 300 samples for its 2021 SRW Crop Quality Report.

Better Quality than Expected

Jason Scott, 2016/17 USW Chairman and a Maryland SRW wheat farmer, just completed his harvest and said that the crop was “way better than expected despite a very wet fall.” He added that disease concerns are minimal including limited vomitoxin levels. He said conditions during mid-spring at flowering were dry, which helped hold back pressure from the fusarium (scab) disease that causes vomitoxin.

The image shows a crop and sprayer to illustrate the 2021 soft red winter wheat crop.

A field of soft red winter wheat growing toward maturity on Jason Scott’s farm in Maryland. Scott’s 2021 soft red winter wheat crop produced higher yields and better quality than he expected.

Shawn Branstetter, a SRW wheat trader with The Andersons, noted that SRW quality is good overall in the Mid-Atlantic region, and prospects are expected to stay good.

Brad Reynolds, Communication Director for the Ohio Small Grains Marketing Program (OSGMP), said that with increased production and good quality, overseas customers are interested in the Ohio SRW crop. To date, total SRW exports are up 75% in the 2021/22 marketing year that began June 1 compared to 2020/21. Exports to Mexico, a leading importer of SRW from the U.S., are up 129% compared to the same time last year.

USW Trade Support Included

USW works closely with its state wheat commission members and the U.S. government to help customers get the most value from their U.S. wheat purchases. In 2020, for example, USW’s Mexico City regional office arranged for quality control managers from a Mexican mill to meet with the USDA-ARS Soft Wheat Quality Laboratory in Wooster, Ohio, and OSGMP to identify SRW quality and supply. OSGMP collected samples that were analyzed at the ARS laboratory. Based on the two rounds of tests, the mill identified SRW harvested in 2020 from southern Ohio as having the flour and baking qualities needed to meet their snack food customer’s needs. Supported by additional trade service information from USW and OSGMP, the mill purchased Ohio SRW that was loaded in Toledo, shipped via the St. Lawrence Seaway.

With strong production numbers, promising quality data, and dependable export service, the outlook for the 2021 SRW wheat crop should remain positive.

By Michael Anderson, USW Market Analyst

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Caring for the Crop: Making Responsible Decisions on the Farm

Every farmer marks the passage of the year by the work that must be done. U.S. Wheat Associates (USW) recently described the planning and decision-making that go into seeding a wheat crop in the fall or spring.

As the crop grows, the work continues. Even with a good stand, crucial midseason factors must be monitored, and making responsible decisions on the farm ensure efforts are not wasted and the ultimate consumer of that wheat is satisfied that it is a wholesome ingredient in hundreds of wheat food products.

“Now there are decisions and risks and potential problems that must be checked every day,” Montana wheat farmer Angie Hucke told USW in a story about her family’s farm.

Each farmer is constantly making responsible decisions on the farm about soil fertility as well as weed, disease and insect control that may be needed to protect the crop’s yield and quality potential.

But like Kansas farmer Justin Knopf, they keep in mind the fact that members of their communities and families, as well as families around the United States and the world will be consuming the crop as a food ingredient.

“I always weigh those trade-offs with the end in mind and in a responsible way that consumers can be confident that we’ve done our due diligence at making responsible decisions in utilizing products on our farm, Knopf said.

As a part of its film, “Wholesome: The Journey of U.S. Wheat,”  USW is sharing individual chapters of the video throughout the year. “Midseason: Caring for the Crop” provides more information about how U.S. wheat growers are making responsible decisions on the farm.

 

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U.S. Wheat Supply and Demand Outlook Available

U.S. wheat Associates (USW) Market Analyst Michael Anderson recently prepared a Wheat Supply and Demand Outlook report based on USDA’s latest market data published in May 2021.

The report is shared with the USW Board of Directors three times per year. Directors include wheat farmer leaders representing the organization’s 17 state wheat commission members.

Vie the full Summer 2021 report online here.

The World Wheat Supply and Demand Outlook includes the first look at USDA’s estimates of marketing year 2021/22 (June 1 to May 31) world wheat supply and demand and production in the major wheat exporting countries and regions. U.S. by-class estimates for 2021/22 are not published until July, but this report includes USDA’s estimate of U.S. commercial wheat sales for 2020/21 and its first forecast for 2021/22.

USDA Production and Use data to support world wheat supply and demand outlook.

USDA’s latest forecast continues the trend of record world wheat supply and demand.

USDA sees a record-setting trend in world wheat production and use continuing in 2021/22. Based on USDA’s May estimates, total world wheat production is expected to reach a record 794.4 million metric tons (MMT). Among exporting regions, production is forecast to increase in the United States, the Black Sea (Russia, Ukraine, Kazakhstan), the European Union (EU) and Argentina. Declines are expected in Australia and Canada. USDA estimates 2021/22 world wheat ending stocks will reach 296.8 MMT, a volume similar to last year.

Higher global production is matched by increased global demand as USDA expects total global wheat consumption will reach a record 791.1 MMT, or 9.6 MMT more than last year. This forecast is driven primarily by higher feed and residual use. Global human consumption of wheat is expected to increase 1% on the year but still a record level of 630.4 MMT. USDA expects global trade to reach 203.2 MMT, up 4.1 MMT from last year.

2021/22 U.S. Commercial Sales

Throughout the year, even in the face of the pandemic restrictions on travel and meetings, USW representatives were able to sustain a strong level of service and information flow to its customers, with support from its state commission members and USDA’s Foreign Agricultural Service export market development programs.

The World Wheat Supply and Demand Outlook report shows USDA’s final estimate of total 2020/21 U.S. wheat commercial sales was 25.5 MMT, 4% less than in 2019/20. In part because of larger exportable supplies in other major exporting regions, USDA currently expects 2021/22 U.S. wheat export sales to be 24.5 MMT.

2020/21 U.S. wheat commercial sales by class and importing country

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Wheat Industry News

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

Speaking of Wheat.

“I don’t think anybody is expecting to see anything that is above average, for certain. Average would be ambitious. We’re probably looking at below-average overall. As an industry, agriculture has a huge ripple effect down the supply chain. You need to have a healthy agriculture industry to have a healthy economy overall. We’re resilient. I will say, it will be an extraordinarily tough year with what we have out there.” – Amanda Hoey, chief executive officer, Oregon Wheat Growers League and Oregon Wheat Commission. Read more about the record-breaking drought condition U.S. wheat farmers are facing here and here.

NAWG CEO Visits PNW to Discuss the Importance of the Columbia-Snake River System. This week, NAWG CEO Chandler Goule toured the dams and rivers that transport 40% of all U.S. wheat to markets overseas. Approximately 15 million metric tons (MMT) of wheat were transported on the Columbia-Snake River system in 2020, making it the nation’s single largest wheat export gateway. Goule joined several national and regional agricultural leaders to learn and join discussions about preserving the waters and how crucial they are to the success of U.S. wheat farmers. Read more about the visit here and here.

National Wheat Yield Contest for Spring Wheat. Registration for the spring wheat portion of the National Wheat Yield Contest is open. Spring wheat entries will be accepted until August 1. The contest offers U.S. wheat farmers the opportunity to compete with their peers across the United States and learn from each other’s innovative techniques to improve wheat productivity. Registration is available here.

From the Field: Farm Chat with Idaho Wheat. The Idaho Wheat Commission has taken its monthly webinar series “From the Field: Farm Chat with Idaho Wheat” and repurposed it for listening on the go. The webinars are now available as podcasts on Spotify and other preferred podcast platforms and YouTube. Join Idaho Wheat for conversations with Idaho wheat growers and experts on a wide range of topics related directly to production and profitability on the farm.

The Passing of Lajpat “Pat” R. Kandhari. USW received news today that our retired colleague Pat Kandhari has passed away in India. Pat was promoting U.S. wheat in India even before there was a Western Wheat Associates, already working as Assistant Director in a New Delhi office funded by Pacific Northwest state wheat organizations in April 1958. He continued in that position until he was named Director in 1974, six years before USW was formed. USW closed the Delhi office almost exactly 20 years ago, in June 2001, when Pat retired. We send our sincere condolences to Pat’s family and friends.

The late Lajpat “Pat” Kandhari, left, visited the USW office in Washington, D.C, in 2007. He is joined here (left to right) by USW Vice President of Finance Kevin McGarry, former Assistant to the Vice President of Marketing Programs Fleur Noeth, former Vice President of Marketing Programs Rick Callies, and former Vice President of Planning Jim Frahm.

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, 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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Pacific Northwest Drought Signals Production Challenges

Hot, dry weather following a parched fall and a winter with less snow in some areas has many parts of Washington, Oregon and Idaho experiencing some of the driest weather in a generation. Much of the area that grows spring and winter soft white (SW) and white club wheat is experiencing some form of drought. All eyes will be on USDA’s first estimate of new crop SW production in its July World Agricultural Supply and Demand Estimates report, although a reduction in yield potential and concerns about protein levels are already anticipated.

The market has reacted to the weather with FOB prices for ordinary SW up $140.00 per metric ton ($4.00 per bushel) more than a year ago. Demand for the 2020/21 SW crop was quite strong and ending stocks of 1.31 million metric tons are half of what they were in 2019/20. The stocks-to-use ratio for SW ended the year at only 13%.

Now, the hot dry weather leaves farmers unwilling to forward contract new crop sales as they struggle to identify what volume they will produce and because dry conditions tend to increase protein, what protein levels they will be able to offer. Traders are cautious because the drought’s effect on protein levels could make securing lower protein SW difficult. It is important to remember that SW protein levels have been elevated in some past years. Your local U.S. Wheat Associates (USW) office is an excellent resource to help you identify how to get the most value from every new crop.

Showing the U.S. Drought Monitor for the Western states.

Extreme drought is intensifying in the Pacific Northwest and throughout the western United States.

Michelle Hennings, Executive Director of the Washington Association of Wheat Growers, recently noted that while winter planted SW is stressed with lower yield potential, spring planted SW has had so little moisture some farmers may not have any harvest.

Washington state, which accounts for around 50% of the Pacific Northwest (PNW) SW crop, has received only half of its usual average rainfall according to NOAA’s National Centers for Environmental Information and areas falling into the drought category makeup well over half the state. Areas rated in extreme drought are increasing fast week-over-week and winter wheat conditions in Washington are rated 15% good to excellent.

Karin Bumbaco, Assistant State Climatologist, University of Washington, recently noted that the drought in the state has expanded quickly. Just three months ago none of Washington was in extreme drought versus today when more than 23% of the state – and almost all the state’s wheat country – falls into the category (see the PNW SW wheat production area above from the interactive U.S. wheat export supply system map on www.uswheat.org).

Driest in More than 40 Years

The once-in-a-generation drought led one farmer to observe “if you can get an average crop, consider yourself lucky!”

Darren Padget, a dryland wheat farmer in north-central Oregon and the current USW Chairman, noted that harvest may come early this year. The lack of rain has matured his crop enough that harvest, which usually comes at the end of July, may start in less than a month. Padget also mentioned that it is the driest weather he has seen since 1977, a year many farmers remember when looking for a comparison to this year. In Oregon, which accounts for around 20% of the PNW SW crop, winter wheat conditions are rated 11% good to excellent.

Some Good to Excellent Wheat

Idaho, which accounts for around 30% of the PNW SW crop, has also been very dry. Similar to neighboring states, spring planted SW in Idaho is severely stressed, especially on non-irrigated fields. However, some wheat in Idaho is grown under irrigation and farmers there are more optimistic about the condition of fall planted SW fields. In fact, USDA’s latest report puts 44% of SW winter wheat in good to excellent condition.

Despite the challenges to the 2021/22 PNW SW crop, many farmers do have crop insurance and the state governments are also considering other ways to help farmers through this challenge, and USW is there for overseas buyers who have questions and concerns.

Producers, by nature, remain optimistic. One producer in Washington state put it best: “…we are not going to give up.”

By Michael Anderson, USW Market Analyst

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