You are here: / / Wheat Letter Blog
thumbnail

Wheat Industry News

Recent news and highlights from around the wheat industry. 

Speaking of Wheat: “Despite all the disruption the coronavirus epidemic is causing the United States, the food supply system is working well. Disruptions are largely limited to changes in demand (such as hoarding), as opposed to challenges to supply. There is zero reason to expect the United States to need to bar food exports,” – Peter Zeihan, April 15, 2020, “Coronavirus: The American Food Security Guide.” Copyright © 2020 Zeihan on Geopolitics. All rights reserved. 

Congratulations to our Western Canadian Wheat Growers Association friends celebrating the organization’s 50th anniversary in 2020. The WCWG has produced a commemorative book, “Warriors For Wheat,” illustrating its active engagement in Canadian agriculture policy on behalf of its farmer members. 

USW is Sad to Learn that Ben Handcock has passed away after a long illness. Ben directed the Wheat Quality Council for 25 years. Dave Green, who now directs the Council, called Ben “a true friend of the industry and a close personal friend to many of us.” On his retirement in 2017, USW thanked Ben for all he had done for wheat farmers and the amazing experiences shared on WQC tours. Our sincere sympathy goes out to his wife Patsy and their family. 

USDA Releases April WASDE Report. The World Agricultural Supply and Demand Report showed an increase in wheat stocks and a reduction in expected 2019/20 (June to May) U.S. exports to 26.8 MMT on slower late year sales pace and higher prices compared to other exporters.   

2020 National Wheat Yield Contest. On February 18, the National Wheat Foundation (NWF) officially opened the 2020 National Wheat Yield Contest. Farmers can submit entries in winter wheat and spring wheat with subcategories for dryland and irrigated. NWF is accepting entries for winter wheat until May 15 and entries for spring wheat from June 15 to August 1. 

New Tool to Combat Major Wheat Disease. USDA/Agricultural Research Service (ARS) scientists and their colleagues have discovered a gene that can be used to develop wheat varieties that will be more resistant to Fusarium Head Blight (FHB) or scab, a disease that is a major threat both overseas and to the nation’s $10 billion annual wheat crop. Collaborating scientists from the United States and China published a paper reporting the discovery recently in the journal Science.

Subscribe to USW Reports. USW publishes a variety of 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 at 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. 

/by
thumbnail
,

Dependable People: A Spotlight on the Oklahoma Wheat Commission

For 40 years, U.S. wheat farmers have supported U.S. Wheat Associates’ (USW) efforts to work directly with buyers and promote their six classes of wheat. Their contributions to state wheat commissions, who in turn contribute a portion of those funds to USW, qualifies USW to apply for export market development funds managed by USDA’s Foreign Agricultural Service. Currently, 17 state wheat commissions are USW members and this series highlights those partnerships and the work being done state-by-state to provide unmatched service. Behind the world’s most reliable supply of wheat are the world’s most dependable people – and that includes our state wheat commissions.

Member: Oklahoma Wheat Commission
Member of USW since 1980

Location: Oklahoma City, Oklahoma
Classes of wheat grown: Hard Red Winter (HRW), Hard White (HW)
USW Leadership: Don Sherrill, 1988/89 Chairman; Henry Jo Von Tungeln, 2001/02 Chairman; Keith Kisling, 2004/05 Chairman; Don Schieber, 2010/11; Michael Peters 2020/21 Secretary-Treasurer-elect (slated for 2022/23 Chairman).

Established in 1965, the Oklahoma Wheat Commission promotes greater utilization of wheat in domestic and international markets through research, market development and public education. Twenty percent of all producer funds collected by the Commission are allocated to the Oklahoma Wheat Research Foundation. The Commission supports numerous wheat research projects conducted by the Oklahoma State University Division of Agricultural Sciences and Natural Resources, all aimed at ensuring the future of Oklahoma wheat.

2020-21 USW Officers (L to R): Michael Peters, Oklahoma; Rhonda Larson, Minnesota; Darren Padget, Oregon; Doug Goyings, Ohio; Vince Peterson, USW.

Why is export market development important to Oklahoma wheat farmers and why do they continue to support USW?

Export markets are critical to the success of U.S. agricultural products because it allows us to capture value for the U.S. farmer in markets that might not be able to grow crops such as wheat. We continue to face greater competition from Russia, Canada, the European Union, Australia and other countries that also grow wheat, so it is extremely important for us to continue offering technical assistance to millers and bakers overseas. Demonstrating the benefits of U.S. wheat and why it is the most reliable choice for their products is important. If we do not tell the story about U.S. wheat value, nobody will. We must also continue working on quality analysis and research that offers the best value to our foreign buyers.

The Oklahoma Wheat Commission host Grupo Trimex in 2016 at Sidwell Farms in Northwest Oklahoma. From left to right are: Eric Vandebrouck, Grupo Timex; Luis Cortes Velasco, Grupo Trimex; Brady Sidwell, Sidwell Farms; Mike Schulte, Director of the Oklahoma Wheat Commission; Mark Hodges, Director of Oklahoma Genetics Inc. & Plains Grains Inc.; Kenneth Failes, OWC Board Member District I; Chad Weigand, USW Mexico City and on the tractor Hector Martinez Gonzalez, Grupo Trimex.

How have Oklahoma wheat farmers recently connected with overseas customers?

Mexico is the largest market for Oklahoma wheat and the relationships created between Oklahoma wheat farmers and Mexican flour millers over the past 30 years are greatly valued. This last year we have worked with Oklahoma State University (OSU) and the Wheat Marketing Center (WMC) in Portland, Ore., to focus on functionality studies for products like tortillas for the Mexican market. While traditionally our focus has been on Latin American, African and Middle Eastern export markets, we have also recently shifted some focus to Far Eastern markets, specifically China and Taiwan. Based on feedback from a visiting Taiwanese trade delegation in 2019, we are working on HRW and HW functionality studies for steam breads and Asian noodles. In the past, HRW wheat was not used for these types of products but we have seen Taiwanese customers react to technical assistance offered by U.S. Wheat Associates, WMC and on-going research at OSU. This past year Taiwan has sourced HRW to make up 30 percent of their production blends, or about 16 million bushels of U.S. HRW purchased over the last three months. In March, China also purchased 12.5 million bushels of HRW for the same blending purposes. These purchases are particularly important because it showcases the value of HRW for blending due to advancements in quality. Renewed Chinese purchases are a positive signal that the new Phase One U.S.-China trade agreement signed in January 2020 is working.

The Oklahoma Wheat Commission hosted a Chilean delegation in 2017 at their new offices: From left to right are Eduardo Bustamante, Grupo 9; Sergio Morales, Molino San Cristobol; Casey Chumrau; USW Santiago; Tom Stephens, OWC Board Member, District 2; Jose Eugenio Grohnert, Molino La Estampa; Juan Enrique Ojeda, Molinos Cunaco; Michael Peters OWC Board Member, District 3; Mike Schulte, Executive Director of the OWC; and David Gammill, OWC Board Member, District IV.

What is happening lately in Oklahoma that overseas customers should know about?

Our current focus is on end-use quality characteristics for the functionalities that our overseas customers need for many different end products. Traditionally Oklahoma is known for growing HRW wheat for bread consumption, and while that continues to be a significant part of our role in domestic and international markets, our focus is changing to meet changing consumer demands. We are trying to create products that can be prepared in a matter of minutes rather than products that take 30 minutes to an hour. We are seeing consumer preferences change across the globe. People want meals to taste good, but they also want them to be easy and quick to make. We certainly are seeing greater emphasis on tortilla demands and we expect to see more emphasis on steam breads that can be utilized for several different cooking purposes.

Learn more about Oklahoma Wheat Commission on its website here and on Facebook and Twitter.

 

Taiwan Flour Millers Association members are hosted by Don and Cecelia Schieber on their family farm in Kildare. Representatives and flour companies involved on this delegation tour with Taiwan Flour Millers Association included Mr. Bo-Yuan Chen, Country Director Taipei Office, U.S. Wheat Associates; Mr. YuMin Cho, Executive Assistant, Hsin Chu Flour Mill Co., Ltd.; Mr. Peter CY Chen, Director General of the Taipei Economic Cultural Office in Houston; Ms. Stacey H.C. Lin, Taipei Economic and Cultural Representative Office; Mr. Tony Yi-Cheukn Shu, Executive Director, Taiwan Flour Mills Association, President Formosa Oilseed Processing Co., Ltd.; Mr. Charles C.K. Hung, General Manager of Chia Fha Enterprise Co., Ltd.; Ms. Chih-Ping Chen, International Trade Assistant, Ta Fong Flour Mill Co., Ltd.; The Honorable Roland Pederson, Oklahoma State Senator, District 19; Mr. Tsung-Yuan Lin, Assistant to General Manager, Hon Hsing Flour Mill Co., Ltd.; Mike Schulte, Executive Director of the Oklahoma Wheat Commission, and Benjamin Hsu, Taipei Economic Cultural Office in Houston.

In 2014, Don Schieber, Oklahoma wheat farmer and past USW Chairman welcomed Anna-Mart Rust, a customer from South Africa to his farm during a USW trade delegation tour. In 2018, Don and Anna-Mart reconnected in South Africa while Don was traveling with USW on a board team trip.

 

Oklahoma Wheat Commission Executive Director Mike Schulte participated in the USW food aid trip to Tanzania in 2017.

/by
thumbnail

COVID-19 Changes Global Wheat Trade Dynamics

By Claire Hutchins, USW Market Analyst

It is no secret that these are uncertain times. As countries across the world work to contain and combat the novel coronavirus (COVID-19) outbreak, U.S. Wheat Associates (USW) is closely monitoring the effects of the outbreak on global wheat trade dynamics. Over the past several weeks, several major wheat exporters have implemented measures to curb 2019/20 wheat exports to stabilize domestic prices amidst greater demand uncertainty—spurring upward price movement across the world. In its April World Agricultural Supply and Demand report, USDA updated its global wheat trade estimates to reflect new policy and price dynamics.

Russia. Between March and April, USDA reduced its total Russian wheat export forecast for 2019/20 by 4 percent to 33.5 million metric tons (MMT), 7 percent less than last year, if realized, on the news of potential grain export restrictions for the remainder of the marketing year. In late March, Russia’s Agriculture Ministry proposed a 7.0 MMT quota on the country’s grain exports between April and June to stabilize prices and protect food security during the COVID-19 pandemic. Despite USDA’s reduced Russian wheat export estimate, members of the grain trade believe the quota will not have a serious impact on the country’s grain exports. During the same period last year, Russia exported a total 4.90 MMT of all grain, well below the quota threshold. According to a Russian grain trader interviewed by AgriCensus, “I think some 4.5 to 5.0 MMT of wheat exports between April and June were expected … so a 7.0 MMT quota is not dramatic.” Between March 19 and April 12, according to AgriCensus, Russian FOB prices for 12.5% protein wheat (on a dry moisture basis) increased 10 percent from $208/MT to $229/MT.

Ukraine. During the week of March 27, Ukrainian millers and bakers asked the government to limit grain exports and related products to maintain domestic bread prices during the coronavirus pandemic. According to Reuters, Ukraine’s economy ministry said it would control wheat exports, sell flour on the domestic market and agree with traders on a maximum volume of exportable wheat. UGA, Ukraine’s major trader’s union agreed with an economy ministry proposal to limit the country’s 2019/20 wheat exports to 20.2 MMT, 26% higher than last year, if realized. USDA’s total 2019/20 Ukrainian wheat export forecast is unchanged month-over-month at 20.5 MMT. By April 8, Ukraine’s total grain exports reached a record 47.0 MMT, 18.1 MMT of which is wheat, up 21% on the year.

Romania. On April 10, Romania’s government issued a military decree banning cereal and other food exports including wheat to non-European Union destinations during a state of emergency, expected to last until mid-May, in response to the COVID-19 pandemic. Romania is a key origin for Egypt’s General Authority for Supply Commodities (GASC) and the unexpected absence of Romania from the global market supported prices between GASC’s February and April tenders. On April 14, GASC bought 120,000 metric tons (MT) of Russian wheat at $240/MT FOB, 5 percent more expensive per metric ton than its February 11 tender when it bought 180,000 MT of Romanian wheat at $228/MT FOB. According to a European grain trader interviewed by Reuters, “There is not much 11.5% or 12% protein (dry matter basis) left in big volumes of 60,000 MT in Russia and Ukraine while Romania is temporarily out of the game.”

European Union, Other. To date, besides Romania, other countries in the EU have not implemented wheat export restrictions. According to USDA, European Union (EU) wheat exports have surged in the past month on ample supplies and competitive prices. In France, the EUs’ top wheat-producing country, total wheat exports in 2019/20 now stand at 8.0 MMT, 12% greater than this time last year. USDA expects total EU wheat exports will reach 31.0 MMT this marketing year, 25% greater than last year and 7% greater than the 5-year average.

 

United States. The U.S. grain export industry and the government agencies that protect and promote U.S. agriculture are working to ensure continuous trade flows despite market uncertainty during COVID-19. As of April 2, U.S. wheat export sales to date total 25.0 MMT, up 2 percent from last year. On April 9, USDA reduced its 2019/20 U.S. wheat export estimate from 27.2 MMT to 26.8 MMT, still 5% greater than last year and 9% above the 5-year average, if realized. Seasonally slower export sales and higher U.S. wheat export prices through the last half of March pressured USDA’s total U.S. wheat export forecast month-over-month. Heightened domestic demand and large hard red winter (HRW) sales to China supported U.S. export prices between mid-March and early April.

Under these unprecedented circumstances, USW is doing everything it can to continue to promote the reliability, quality and value of all six U.S. wheat classes to our overseas customers. USW encourages our customers and stakeholders to reach out to our colleagues by telephone or email. We are ready to provide the information our customers need about U.S. wheat supplies or market factors, or to answer any marketing and processing questions that may arise. Another option is to submit a question to our “Ask the Expert” page on our website at https://www.uswheat.org/market-and-crop-information/ask-the-expert/.

/by
thumbnail
, , ,

Effects of 1980 Grain Embargo Echo Through the Years

By Vince Peterson, USW President

As a new decade and a new future for wheat export market development dawned in January 1980, the urgency facing the wheat-producer boards of both Great Plains Wheat and Western Wheat Associates could not have been much greater.

They were under the strain of discussions and negotiations for months in the effort to merge the two existing regional wheat market development groups into one, single national association. Then, on January 4, these farmer leaders and all U.S. wheat producers sat in disbelief hearing President Jimmy Carter address the nation and summarily cancel 17 million metric tons (MMT) of existing wheat, corn and soybean sales contracts between U.S. exporters and the former USSR. That was 17 MMT of production that had already been grown and harvested and scheduled for movement by truck, barge, rail car and ocean vessels through the U.S. grain export system; 17 MMT of system revenue, margins and farmers’ annual income – all cancelled.

In announcing this action and a longer-term grain embargo as sanctions against the Soviet Union’s invasion of Afghanistan, the President promised protection to farmers. He also said he had faith that our competitors would not exploit the opportunity to take up the cancelled U.S. sales. Never was such a naïve assumption more foolishly made. Spurred on by the unfilled Soviet demand, export origins in Europe and South America were quite literally handed a windfall on a silver platter. It is hard to criticize them for taking up that opportunity, but that was the spark for many of them that launched them into a new permanent place as competitors of the United States in the export market.

A crisis was at hand and it was becoming clear that no action of the government was going to heal the long-term financial damage and repair the loss of export markets suffered on that day. Those making an honest historical analysis can fairly claim that the next 20 years of high inventories, stagnant prices, booming farm programs and an export subsidy war all had their roots firmly planted in that one single policy decision.

The newly founded U.S. Wheat Associates (USW) had more than its hands full as a national market emergency now far outpaced any internal issues that may have seemed monumentally disagreeable during the merger discussions. Those were now just minor bumps in the road by comparison to the tasks in front of them. Ultimately, USW’s new leaders and staff fought hard to replace the lost export sales, build a reputation for reliability and create a more conducive policy environment for global trade.

Never Again

One of the longer-term benefits to the U.S. wheat industry and its domestic and overseas customers that came out of this very difficult time originated in a very simple thought and demand: “This can never be allowed to happen again.” The U.S. grain export industry from farm to port were all completely unified in the pursuit of legal protection from an action of this nature for all time. These political efforts were successful. The U.S. Congress eventually passed, and the President signed, new contract sanctity laws which, short of a national emergency or war, precluded even the President from canceling any pre-existing grain export sales contacts.

The implications of this important protection echoes through the years to today, a new time of global crisis and uncertainty in the face of the coronavirus pandemic. Selfish hoarding is causing shortages and prices to rise. To combat that, some countries retreat behind protectionism to limit, tax or cut off exports in order to secure their own domestic supplies and hold down inflationary prices at home – with little apparent concern about the effects their actions will have.

Today, very concerned import-dependent countries are rightly asking: “Are there adequate supplies of wheat in the United Stated to cover all of our demand? Is there hoarding or a price shock? And, will our vessels be loaded?”  We are quite humbled and yet proud to be able to tell them yes, there is plenty of wheat available. In the commercial market, there is no hoarding and prices remain relatively low during this time. Perhaps most importantly, as opposed to governments that hide from global obligations, the U.S. government has declared the entire U.S. food industry, from farm to table and to export, to be essential services. We are also very pleased to know USDA’s agencies that handle grain inspection and phytosanitary compliance and certification are committed to making every effort possible to maintain those services to both domestic and export markets during this time.

No Export Taxes

As for the export taxes that some countries are so quick to consider and employ as the easy tool to control their own domestic market and economy, our country’s founders took care of that issue for us in 1787 when they wrote the Constitution of The United States of America. Article I, Section 9, Clause 5 states that “No Tax or Duty shall be laid on Articles exported from any State.” No export taxes. Period.

Situations such as the Soviet Grain Embargo and, perhaps, the coronavirus pandemic, while very difficult to experience and understand, can provide lessons and new policies that continue to serve wheat farmers, our country’s export supply industry and our customers securely and quite well.

Today, in part because of what happened back in 1980, the U.S. wheat store remains open, equally and fairly to all market participants at home and abroad.

/by
thumbnail
, ,

India Invokes WTO “Peace Clause” with Implications for Global Wheat Trade

By Shelbi Knisley, USW Director of Trade Policy

India has invoked the “peace clause” on its domestic agricultural support limits for rice, by notifying the World Trade Organization (WTO) that it has breached its support limits. By claiming its subsidies are part of its public stocks program for food security, invoking the “peace clause” cannot be challenged under the WTO. This is concerning to U.S. producers as many of the same subsidy programs that caused India to exceed its limits on rice are also applied to wheat, which have been shown to distort trade.

The “peace clause” was accepted at the Bali Ministerial in 2013, where WTO members agreed temporarily to not challenge a developing country’s domestic support programs that exceed their agreed-to limits, if the support was in the form of stocks for food security purposes. There are other conditions that must be met, including that the programs must not distort trade.

With all due respect to India’s right to help feed its large impoverished population, it is hard to believe a country that is the largest exporter (making up a quarter of global exports) of rice can claim the “peace clause” for the purpose of food security. India implements minimum support prices (MSP) and input subsidies for many of its crops (including wheat), far exceeding its allowable limits for trade distorting domestic support policies. Policies such as these tend to be some of the most trade distorting programs because they directly encourage additional production. As a result of these hefty subsidy programs, Indian rice and wheat production increases and at times leads to larger stocks and increased exports.

India also has schemes with its wheat subsidies that affect the global wheat market. India is the second largest producer of wheat and, in general, is not considered a large participant in global wheat trade. India has used these market distorting policies to increase wheat production and accumulate stocks overtime.

Based on historical trends, once India’s wheat stocks exceed 20.0 million metric tons (MMT), they become burdensome. Then India struggles with storage capacity and will dump them on the international market at prices assumed to be subsidized by the Government of India (GOI). At such times, India becomes a significant wheat exporter, averaging around 4.0 MMT during the period of exports.

Currently India’s wheat stocks are forecast at a near record 24.0 MMT for 2019/20 (USDA-FAS PS&D), therefore it is expected India will soon need to push those excess wheat supplies onto the market at discounted prices, especially as production is forecast to be the highest on record.

While India should be commended for trying to meet its WTO notification obligations, unfortunately the GOI still uses methodological tricks to disguise its true support levels. With these tricks, India tries to claim a negative support level for wheat production. But as the Office of the U.S. Trade Representative (USTR) demonstrated in a 2018 counter notification, wheat and rice support levels have been out of compliance at levels well beyond what India now admits, leading to over production of these commodities and burdensome stocks.

Those excess stocks have significant implications for U.S. wheat producers. A 2015 study conducted by Iowa State found that India’s wheat subsidies cost U.S. wheat farmers $358 million in lost revenue. As India’s programs continue to grow and distort the global market, USW will continue working to raise awareness of their effects to help ensure fairness in global trade for wheat producers everywhere.

/by
thumbnail

National Milling Federation Congratulates U.S. Wheat Associates on 40 Years

Behind the world’s most reliable supply of wheat are the world’s most dependable people. Those people, from U.S. Wheat Associates staff to the state wheat commissions and U.S. wheat farm families to the many hands along the U.S. supply chain, and finally our overseas customers – are all a part of our story. Despite the different roles or distances between us, all of the people in our story share an unspoken connection, not only through U.S. wheat but through our shared values of growth, hard work and family. We appreciate the many congratulatory messages and well wishes from our friends and customers from all over the world.

Message from Mr. Moulay Abdelkader, President, National Milling Federation, Morocco:

“The celebration of the 40th anniversary of U.S. Wheat Associates provides an opportunity to honor the historic relationship between our two institutions! For over three decades, the National Milling Federation (NMF) and U.S. Wheat Associates have been forging strong cooperation and partnership relations, which were rewarded in 1993 by the construction of and equipment for the Milling Training Institute (IFIM), dedicated to the training of Moroccan and African milling technicians, with a vision to improve the industry’s overall level of expertise. The Institute’s graduates have now reached more than 500, working in … [North] Africa and the Arabian Gulf countries.

Not to mention the efforts made by U.S. Wheat Associates for the implementation of the Miller Outreach Program (MOP), which has made it possible to finance the functioning of IFIM by providing paid services to milling industry professionals, and the annual allocation of U.S. wheat for the IFIM pilot mill practical sessions.

U.S. Wheat Associates is continuing its efforts to support the NMF’s work in promoting and upgrading the Moroccan milling industry, particularly by sponsoring the “Grain & Milling Expo” trade show (formerly IFIM’s technical sessions), and by organizing training seminars for industry professionals.

We look forward to further strengthening our bilateral relations and remain the partner of U.S. wheat in the Maghreb and West Africa… long live the U.S. Wheat Associates!”

Mr. Moulay Abdelkader, President, National Milling Federation, Morocco.

In March 2018, USW/Casablanca Milling and Baking Specialist Tarik Gahi (second from right) evaluated the mill streams from U.S. wheat donated to IFIM by USW through the Quality Samples Program administered by USDA’s Foreign Agricultural Service. Gahi is an IFIM graduate.

/by
thumbnail

Wheat Industry News

Recent news and highlights from around the wheat industry. 

Speaking of Wheat: “Our satellite vegetation greenness model suggests near-trend [yield] potential, largely due to a Great Plains crop that is in good shape as it emerges from dormancy,” – Jude Kastens, PhD, Research Associate Professor at the Kansas Applied Remote Sensing Program (KARS) located at the University of Kansas.  

USDA and USTR Announce Continued Progress on Implementation of U.S.-China Phase One Agreement: On March 24, 2020, the USDA and the Office of the U.S. Trade Representative (USTR) announced continued progress in the implementation of the agriculture-related provisions of the U.S.-China Phase One Economic and Trade Agreement. The Agreement entered into force on February 14, 2020, and the recent actions described below build upon the actions announced by USDA and USTR on February 25 and March 10. 

Catlyxt Launches New Website Showcasing the Power and Possibility of Plants: Calyxt, a plant-based technology company, is doing what farmers and plant breeders have been doing for hundreds of years: choosing the best crops and breeding them to make stronger, more sustainable plants. A company release suggested the new website demonstrates a “company at the forefront of accelerated plant breeding with a focus on wellness and sustainability.” Visitors can also now access assets including sales sheets, seed variety technical specifications, as well as new videos and photos. 

A New Twist on Take and Bake Month: March is Bake and Take Month, but in these unprecedented times, sharing baked goods with friends isn’t as easy. Marsha Boswell offers ideas like handwritten notes, kid-drawn pictures and more to accompany baked treats dropped on a neighbor’s doorstep, in this week’s Kansas Wheat Scoop. 

National Ag Day: A Celebration of Wheat: Farmers only make up 1.3% of America’s labor force, yet they have an enormous impact on feeding the world. This can be attributed to the advancements and improvements of plant technologies and farm management practices that started with Dr. Norman Borlaug in the Green Revolution. On March 24, National Ag Day, the National Wheat Foundation recognized the importance of wheat farmers and programming that helps improve our crop.

2020 National Wheat Yield Contest. On February 18, the National Wheat Foundation (NWF) officially opened the 2020 National Wheat Yield Contest. Farmers can submit entries in winter wheat and spring wheat with subcategories for dryland and irrigated. NWF is accepting entries for winter wheat from April 1 and May 15, and entries for spring wheat from June 15 to August 1. 

Northern Crops Institute Online Pasta Course Open. The Northern Crops Institute announced a Pasta Production and Technology course to be offered online, April 28 to 30. For more course information and to register, click here.  

Subscribe to USW Reports. USW publishes a variety of 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 at 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. 

/by
thumbnail
,

USDA Predicts Slight Decline in U.S. Spring Wheat Planted Area

By Claire Hutchins, USW Market Analyst

According to the March 31 USDA Prospective Plantings report, U.S. total spring-planted wheat area is expected to fall to 12.6 million acres (5.1 million hectares), down 1 percent from 2019/20, if realized. This estimate includes 11.9 million acres (4.82 million hectares) of hard red spring (HRS), down slightly from last year. USDA expects U.S. durum planted area to total 1.29 million acres (522,000 hectares), down 4 percent from 2019/20. For all U.S. wheat, USDA now expects all wheat planted area for harvest in 2020 to total 44.7 million acres (18.1 million hectares), down 1 percent from 2019 and the lowest all wheat planted area since records began in 1919.

North Dakota farmers are expected to plant 6.10 million acres (2.47 million hectares) of HRS, 9% below last year. Last year’s overly wet field conditions affected HRS quality and led to significant cash price discounts at country elevators. According to Dr. Frayne Olson, Crop Economist and Marketing Specialist at North Dakota State University, farmers are “getting very frustrated with HRS quality discounts and the net price they receive at the elevator,” which he says is a disincentive for farmers to plant more HRS.

“I think the North Dakota HRS acreage number is a little low, but it may also reflect USDA concerns about Prevented Planting this spring,” said Dr. Olson. Farmers are eligible for crop insurance payments on fields when extreme conditions prevent them from planting a crop by a final, prescribed planting date, “There are areas in eastern North Dakota and western Minnesota that are going to have potential problems with Prevented Planting. However, that should not be an issue from central North Dakota to eastern Montana.”

The risk of quality challenges with HRS and more favorable marketing opportunities for soybeans compared to HRS also adds pressure to North Dakota HRS planted area. North Dakota producers are expected to plant 6.60 million acres (2.67 million hectares) of soybeans for harvest in 2020, up 18 percent from last year.

Of USDA’s prediction of reduced durum planted area, North Dakota Wheat Commission’s Market Development and Research Manager Erica Olson said, “North Dakota’s durum numbers surprised us a little bit, they were very low last year and we expected to see an increase this year.” USDA expects durum planted area in North Dakota to fall 11 percent on the year to 674,000 acres (273,000 hectares) as producers recoil from last year’s difficult, delayed harvest and cash price quality discounting.

Similar to the situation with HRS, North Dakota farmers are getting “very frustrated with durum quality cash price discounts” at North Dakota elevators, Dr. Olson said, “Farmers look at net income versus risk for growing each crop when deciding what to plant. If a farmer can raise Choice durum, net income is good. However, if you raise Ordinary durum, the math does not work. The risk to reward tradeoff has not been good the past several years.” Stable to slightly higher durum planted area in Canada adds pressure to U.S. durum prices which also discourages U.S. durum planted area.

In Minnesota, USDA predicts HRS planted area will fall 7 percent to 1.35 million acres (550,000 hectares), while soybean planted area will increase 8 percent to 7.40 million acres (3.0 million hectares) and corn planted area will increase 8 percent to 8.40 million acres (3.40 million hectares).

Charlie Vogel, Executive Director of the Minnesota Wheat Research and Promotion Council, has a slightly different opinion about the outlook for HRS.

“We expected HRS planted area to go down in Minnesota—two weeks ago, but it’s a different world now,” he said, citing the recent strong HRS futures rally attributed mainly to increased nearby domestic demand for bulk products.

“Given the futures rally, I now expect Minnesota HRS planted area could be in line with or slightly above last year’s acreage, if we get warm, dry planting conditions through spring,” said Vogel. However, if western Minnesota receives too much precipitation in the coming weeks, he does think farmers in certain areas may also be expected to make Prevented Planting claims for HRS.

Montana producers are expected to plant 3.30 million acres (1.34 million hectares) of HRS this spring, up 14% from last year and the highest since 2002.

According to Sam Anderson, Industry Analyst and Outreach Coordinator at the Montana Wheat and Barley Committee, “It is important to think about harvest and planting conditions last autumn: with lots of moisture, it was hard to get in the field and snow came very early. Those conditions explain most of the changes in this year’s prospective plantings estimate. Farmers were not able to get all their winter wheat in the ground last fall, resulting in the 400,000-acre (162,000-hectare) shift from winter wheat to spring wheat.”

Montana winter wheat planted area is down 20 percent on the year to 1.60 million acres (648,000 hectares).

Updated Winter Wheat Estimates

On March 31, USDA also made minor revisions to the country’s winter wheat planted area from its January forecast, which still hovers around 30.8 million acres (12.5 million hectares), down 1 percent from last year. The hard red winter (HRW) wheat planted area forecast fell slightly from January’s estimate to 21.7 million acres (8.79 million hectares). The soft red winter wheat planted area estimate increased slightly from January to 5.69 million acres (2.30 million hectares), up 9 percent from last year. The white winter wheat planted area forecast increased slightly from January to 3.42 million acres (1.38 million hectares). USDA expects total white wheat acres, planted in both winter and spring, to total 4.10 million acres (1.66 million hectares), in line with last year.

/by
thumbnail
,

A Commitment to Reliability in a Time of Uncertainty

By Dalton Henry, USW Vice President of Policy

For the better part of a century the United States has been known as the breadbasket of the world. Today, that reputation continues ringing as true as ever at a time when it may be needed most.

Reliability and certainty go hand in hand. That is why the U.S. export grain industry and the government agencies that protect and promote U.S. agriculture snapped into action when the first COVID-19 “shelter-in-place” orders forced many workers to stay home. Individual businesses developed mitigation plans including more cleaning shifts and personal protective equipment for employees. Workarounds were found to limit staff member contact and to ensure trade could continue to flow, even when items as routine as loading paperwork were being curtailed.

It wasn’t just private businesses that took steps to keep wheat exports flowing smoothly. While other countries used bureaucratic delays on regular functions such as permits and inspections to slow down exports, the U.S. Federal Grain Inspection Service (FGIS) issued a public letter stating they would “take all necessary steps” to ensure export inspection services would continue unabated. The Animal and Plant Health Inspection Service (APHIS) issued a similar letter, promising to continue critical inspections and issuance of phytosanitary certificates. Both agencies clearly understand that maintaining U.S. agricultural exports is vital, not just to the U.S. economy, but also to meeting our commitments to our partners around the world.

Federal Grain Inspection Service

USDA wasn’t the only federal agency to recognize that U.S. farmers need to stay on the job. The Department of Homeland Security is responsible for providing federal guidance in national emergencies, especially concerning critical industries. In less than a month, they have expanded the guidance defining “essential” workers and should, therefore, stay on the job in the event of “stay-at-home” or “shelter-in-place” orders to include the entire grain supply chain. That guidance includes workers in transportation, inspections, production, input suppliers and even business providing repair services. Keeping those businesses running, keeps U.S. farms running, and helps give our overseas customers peace of mind.

U.S. wheat is still flowing through U.S. ports such as here in Portland, Oregon.

As we saw at a container facility in the Port of Houston when a worker tested positive for COVID-19, there will no doubt still be small disruptions as we work through this uncertain time. But with government and industry commitment to maintaining supply chains, wheat will continue flow to customers at home and abroad from the U.S. breadbasket.

If you have questions, please contact your local U.S. Wheat Associates (USW) representative here.

/by
thumbnail
,

Dependable People: A Spotlight on Minnesota Wheat Research & Promotion Council

For 40 years, U.S. wheat farmers have supported U.S. Wheat Associates’ (USW) efforts to work directly with buyers and promote their six classes of wheat. Their contributions to state wheat commissions, who in turn contribute a portion of those funds to USW, qualifies USW to apply for export market development funds managed by USDA’s Foreign Agricultural Service. Currently, 17 state wheat commissions are USW members and this series highlights those partnerships and the work being done state-by-state to provide unmatched service. Behind the world’s most reliable supply of wheat are the world’s most dependable people – and that includes our state wheat commissions.

Member: Minnesota Wheat Research & Promotion Council
USW Member since 1980

Location: Red Lakes Falls, Minnesota
Classes of Wheat Grown: Hard Red Spring (HRS), Hard Red Winter (HRW)
USW Leadership: Don Loeslie, 1989/90 Chairman; Bruce Hamnes, 2000/01 Chairman; Rhonda K. Larson, 2019/20 Secretary-Treasurer (slated for 2021/22 Chairman)

The Minnesota Wheat Research & Promotion Council builds opportunities for farmer profitability working to enhance wheat research and promote wheat in the marketplace.

(L to R): Michael Peters, Oklahoma; Rhonda Larson, Minnesota; Darren Padget, Oregon; Doug Goyings, Ohio; Vince Peterson, USW.

Why is export market development important to Minnesota wheat farmers and why do they continue to support USW?

Like most of the country, more than half the wheat grown in Minnesota is exported. Developing and maintaining wheat export markets is vital to improving farm profitability.

“We produce more wheat in Minnesota than can be consumed by Minnesota, so overseas customers are essential customers for our wheat farmers,” said Charlie Vogel, Chief Executive Officer.

Scott Swenson (second from left), a farmer from Minnesota, participated on the 2018 USW Board Team that traveled to China and Taiwan.

How have Minnesota wheat farmers recently interacted with overseas customers?

Minnesota has proudly hosted many trade teams over the years and are excited to continue to elevate this effort in the future. Most recently, Minnesota hosted a team from Africa that visited the Duluth Seaway Port Authority, toured the CHS Export Terminal, met with Riverland Ag regarding storage in Duluth, wheat farms and elevators throughout Northern Minnesota.

“Most of our interaction with overseas customers has been possible because of U.S. Wheat Associates and the Northern Crops Institute,” said Vogel. “This face to face interaction is where we have a chance to tell our story and demonstrate the value and quality of Minnesota Wheat to our customers.”

In 2017, a USW Regional African trade delegation visited farmers in Minnesota.

What is happening lately in Minnesota that overseas customers should know about?

University of Minnesota wheat breeders and private breeders are increasing their emphasis on improving wheat quality in our varieties. They are making strides in improving yield that helps farmers, but at the same time, elevating the level of quality wheat we’re able to provide. Historically, HRS wheat in Minnesota produces a high protein product and a high-quality baking experience.

“Minnesota growers are by far the most progressive people I’ve ever worked with in terms of weighing economic, environmental and consumers demands,” said Vogel. “They look beyond the farm gates, to a bigger picture of the customers we serve around the world.”

Learn more about the Minnesota Wheat Research & Promotion Council on its website and on Facebook and Twitter.

 

 

Greg LeBlanc (fourth from right), a farmer from Minnesota, participated on the 2016 USW Board Team that traveled to Japan and Korea.

Minnesota representatives Mark Jossund (second from left) and Kevin Leiser (third from left) at the 2016 USW Board of Directors Summer Meeting.

Minnesota Wheat CEO Charlie Vogel with USW Market Analyst Claire Hutchins and South Dakota Wheat CEO Reid Christopherson at the Northern Commodity Transportation Conference in Bloomington, MN, in March 2020.

 

/by

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

GET THE REST OF THE STORY

DTN Wheat Detail
DTN Corn Detail

2008-2013 U.S. Wheat Associates. All Rights Reserved
Privacy Policy | Non-Discrimination Statement