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A Legacy of Commitment – Evolution of a Public-Private Partnership

By Steve Mercer, USW Vice President of Communications

Wheat farmers in post-World War II United States were producing more wheat than ever before. So, to improve marketing opportunities, they organized and reached out to the U.S. Department of Agriculture (USDA) for help. These visionary state wheat leaders ultimately formed two regional organizations to coordinate export market development: Western Wheat Associates and Great Plains Wheat Market Development Association.

In the third of a series on the “Legacy of Commitment,” Wheat Letter offers historical perspective on how changes in federal programs, global market factors and relationships drew Western Wheat Associates and Great Plains Wheat ever closer together and led to the establishment of one export market development organization – U.S. Wheat Associates.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change, that lives within the means available and works cooperatively against common threats.” – Charles Darwin

In 1959, foreign currency funds were building in several countries that were buying U.S. wheat under U.S. Public Law 480. The funds could only be used for export market development.

USDA’s Foreign Agricultural Service (FAS) told Great Plains Wheat Market Development Association (GPW) it was time to step up their efforts. And when Western Wheat Associates (WWA) was founded, FAS told its leaders that the agency wanted to move wheat to overseas markets regardless of their potential for becoming cash customers.

“It is interesting to note that FAS, being the banker of market development funds, has had an influence on our internal policies from the very first meeting,” wrote WWA CEO Richard K. Baum in his report The First Twenty Years.

As the history of organized, public-private export market development of U.S. wheat evolved, these three partners would find themselves adapting to many changes and threats at home and abroad. Though the relationships at times were tested – and there was what Baum termed a “healthy and friendly competition” between WWA and GPW – the spirit of cooperation remained strong.

Regional Focus

The formation of regional export promotion organizations by state wheat farmer leaders was a logical outcome of circumstances in the 1950s.

In Kernels and Chaff, A History of Wheat Marketing Development, Marx Koehnke noted that soft red winter (SRW) grown east of the Mississippi River had been the most exported U.S. wheat class because it was more accessible to export points. Overseas buyers were not getting the quality they needed to make bread from SRW. Koehnke also wrote that hard red winter (HRW) grown in the Great Plains and “needed by the foreign buyers” was going into government surplus stockpiles. With support from FAS, GPW was established specifically to promote HRW and hard red spring (HRS) in Europe and Latin America served by Gulf, East Coast and eventually Great Lakes ports.

With soft white (SW) production concentrated in Pacific Northwest states, a region gifted with natural export tributaries, it was logical for WWA to focus on promoting SW in Asian wheat markets. Even as state wheat commissions in Oregon, Washington and Idaho were organizing WWA, however, discussions with GPW leaders revealed an interest in promoting HRW in Asian markets, too.

GPW and WWA signed a Memorandum of Understanding in May 1959 to share expenses equally for export development programs in the PL 480 markets of India, Pakistan and Sri Lanka. Koehnke wrote this agreement “was a coordination of joint efforts to expand the total market for U.S. wheat…and was to continue through the years.”

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

Dealing with Resistance

A bit of early resistance to coordinated market development appeared after GPW identified in 1961 the growth of bread and roll consumption in Japan. Even though the higher protein wheat grown in the Plains was needed to meet that demand, Kernels and Chaff indicates that the organization sensed some reluctance on WWA’s part to have GPW participate in the Japanese market. The reasons for this alleged “reluctance” are not recorded, although in hindsight PNW farmers had opened and developed this market and WWA’s leaders may have had strong feelings of ownership.

The spirit of cooperation prevailed and in return for promoting hard wheats in Japan, GPW invited WWA to participate in European and South American market activities to identify potential demand for SW wheat. A committee to help coordinate all wheat export market development activities was also formed with members from WWA, GPW, the domestic export grain trade, and the domestic U.S. milling organization (which was likely selling bread flour to Japan at the time). In addition, WWA gained agreement from GPW to represent the interests of both organizations in Washington, D.C. FAS strongly supported such cooperation – support that, to Baum at least, indicated FAS was “already pushing for a merger of GPW and WWA.”

The cooperation on promoting HRW and HRS in Asia was tested over the next several years because of the cost constraint to move these U.S. classes to ports and to Asian markets. There were proposals by Plains farmer organizations to increase the existing U.S. government subsidy on wheat exported from Gulf ports, and to reduce rail rates on wheat moving from the Plains to West Coast ports. The WWA board of directors opposed these proposals “without similar reductions from states closer to the West Coast.” Ultimately, WWA’s board created a transportation committee that worked out agreeable solutions with GPW.

By maintaining frequent contact and coordination, customizing ways to represent all regionally produced wheat in markets designated in their separate marketing agreements with FAS, GPW and WWA developed a steady collaboration. For example, they worked together to try to gain representation at PL 480 planning meetings and International Wheat Agreement negotiating sessions, observing that there was not enough representation from people well-versed in wheat production and trade. Together they also supported FAS in resisting calls from other U.S. farm and business organizations to reduce PL 480 program funding. By 1971, both organizations and USDA were celebrating the fact that Japan was the first overseas customer to import an annual volume of U.S. wheat valued at $1 billion and now including more HRW and HRS than SW .

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

The Waring Report

In the mid-1960s, FAS sponsored a team to evaluate the work of GPW and WWA. Fred Waring, a retired USDA auditor, led the team on visits to Europe, Asia and the Middle East to review specific activities and confer with U.S. ag officials, importers and others engaged in wheat trade. The so-called Waring Report recommended many changes to improve and strengthen market development. In terms of activities, the report suggested that detailed plans with clearly defined and measurable goals, objectives and activities be developed, and recommended emphasizing trade and technical services customized for each market.

In addition, the report suggested that one organization focused on U.S. wheat export development should be developed.

Kernels and Chaff notes that GPW and WWA responded to the evaluation “by agreeing to the general observations and recommendations.” Specific responses are not carefully recorded but in 1965, GPW was surprised to learn that the Nebraska Wheat Commission (NWC) intended to end its membership in the organization and join WWA. Koehnke wrote that NWC cited several issues leading to its decision including “resistance to recommendations in the Waring Report…a tendency to avoid cooperation with WWA…and a perceived belief among GPW staff that FAS gave WWA preferred treatment.”

After GPW reviewed and reorganized its operations, NWC returned to membership in the organization, but maintained its membership with WWA. In some ways NWC’s actions offered the first signs that circumstances in the global wheat market were changing. As new states formed commissions, more of them joined both GPW and WWA, whittling away at regional views of how best to promote the wheat their farmers were growing.

Stronger Together

Once again, there is little specific insight into why the concept of combining U.S. wheat farmer groups into one organization continued to be put forward. In 1967, at a meeting of the National Association of Wheat Growers (NAWG), a committee to study the feasibility of combining NAWG, GPW and WWA was formed. No change was made but it appeared the committee continued to meet. In 1971, Baum and Koehnke recorded that WWA authorized funding to evaluate the merits of merging WWA, GPA and NAWG. Koehnke wrote that of mutual concern to GPW and WWA was pressure from FAS to increase the portion of producer funding for export market development. Looking back, the dramatic effects of the huge U.S. wheat purchases by the Soviet Union probably put merger talks on hold for many years.

Adjustments to accommodate market factors continued without a merger. In about 1972, WWA assumed all responsibility for promoting all U.S. wheat classes in Asia and GPW assumed the same responsibility for Latin America, Europe, the Middle East and Africa. Separate agreement with FAS continued but this meant that, for example, GPW would bring potential customers on trade team visits to the Pacific Northwest to learn more about SW wheat production and value. The circumstances were drawing GPW and WWA even closer together.

Gene Vickers was a cereal scientist who worked for many years for both WWA and GPW. Photo from “Kernels and Chaff; A History of Wheat Market Development.”

Plans Revived

In Kernels and Chaff, Koehnke wrote that enthusiasm among farmer leaders for a merger of GPW and WWA seemed to grow during 1976. Merger plans and joint committee work were “revived.” In conjunction with NAWG’s annual meeting in Hawaii in January 1977, GPW and WWA held a joint meeting, billed as “Meeting Your Customers Half Way,” that included 220 Japanese executives and representatives from many other Asian countries. At separate discussions during these meetings, the farmer leaders identified several advantages of a merger including “greater efficiency, avoiding duplication of efforts, greater strength in obtaining federal funding, and expansion of markets for all classes of U.S. wheat.”

At this meeting, the name “U.S. Wheat Associates” was first proposed for a merged organization.

It is interesting to note that an FAS representative at the meeting said the agency was “neutral on the proposed merger and the decision was up to the producers themselves.” Funding would be based on the merits of proposed projects, the representative said.

Even as they took the time to take care of their own seasonal farm work, enthusiasm among the farmer leaders for a merger remained. Koehnke wrote that GPW took up discussion of a merger proposal and analysis completed by the North Dakota Wheat Commission in December 1978. At GPW’s January 1979 board meeting, WWA presented its own merger plans. That is when the hard work of making the merger a reality really started.

Wheat Letter has attached Koehnke’s detailed description in Kernels and Chaff of the merger actions in 1979.

One Organization

Recently, former Kansas Secretary of Agriculture and Kansas wheat farmer Adrian Polansky, who represented his state on a merger task force as a first-year Kansas Wheat commissioner in 1979, told High Plains Journal that “combining two distinct entities with differing geographical regions, differing market focuses and completely different structures was a large challenge … but the challenges had to be met.” USDA, from then Secretary of Agriculture Robert Bergland to everyone at FAS, now believed the merger should take place.

U.S. Wheat Associates was officially formed at a board of directors meeting on Jan. 12, 1980, in Phoenix, Ariz.

Koehnke summarized the 20-year history of Great Plains Wheat and Western Wheat Associates this way:

“Both Dick Baum [WWA CEO] and Mike Hall [GPW President] had built formidable staffs and organizations which were merged into U.S. Wheat Associates. Both [organizations] were highly respected by FAS and the U.S. wheat industry, from producers to exporters, and by the import trade in many countries over the world. Other exporting countries with wheat boards respected the competitiveness of the U.S. wheat [organizations] and emulated their activities in many areas.”

 

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

 

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

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Sources for this post include:

Read other stories in this series:

Western Wheat Associates Develops Asian Markets
Great Plains Wheat Focused on Improving Quality and HRW Markets
The U.S. Wheat Export Public-Private Partnership Today
NAWG, USW Lead the Way Through Issues Affecting Wheat Farmers

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Finding the Comparative (Competitive) Advantage in U.S. Wheat

By Mark Fowler, USW Vice President of Global Technical Services

While global wheat importers have many wheat types and origins to consider, U.S. wheat farmers offer the most diversity in the six distinct classes of wheat they produce. The United States is the only exporting country with grain standards that allow buyers to specify for both wheat class and protein content in their contracts.

However, to achieve the best value for the wheat purchased, the buyer must be well informed to understand the subtle yet critical differences in wheat contract specifications when comparing the quality and value of U.S. wheat to wheat from other origins.

Let us use protein content, perhaps the most basic quality characteristic in wheat, as an example.

How wheat quality characteristics are reported varies from country to country depending on “standards” set by regulations in each country. For protein content, the reporting standard is to compare protein based on moisture content, or the calculated moisture content equivalent.

However, within the major exporting countries there are three different reporting standards for protein content. U.S. wheat grade standards require the percent protein to be reported at a 12% moisture basis. Canadian standards report protein content at 13.5% moisture basis. All other exporting countries, such as Russia, report protein content at 0.0% moisture basis, also referred to as dry basis or d.b.

What that means for the buyer is the only way to get an accurate comparison of protein content in wheat supplies from different exporting countries is to compare them on a common moisture basis. Fortunately, that can be done with a relatively simple calculation – or by contacting your local U.S. Wheat Associates (USW) representative. Let us look first at how protein content is reported and calculated.

Example 1

A sample of wheat is evaluated, and the protein content is measured at 11.8% with the moisture content measured at 11.0%. If the reporting standard is 12% moisture basis (m.b.), the reported protein content must be calculated using the formula commonly referred to as the Dry Matter (DM) ratio, expressed here:

The full equation looks like this:

Using the variables in our example, we calculated that the wheat has 11.67% protein on a 12% m.b.

An easy way to determine if the math is done properly is comparing the direction of the final value. If the actual moisture content is lower than the reported moisture basis, the reported protein content will be lower than the actual measured protein content.

Next, let us use the same numbers to calculate the protein at a dry basis or 0% moisture.

Example 2

In this calculation, the actual moisture content (11.0%) is higher than the reported moisture basis (0.0%), so the reported protein content will be higher than the actual measured protein content.

The importance of this example is to understand that the actual protein content of the wheat does not change based on moisture, it is simply math and how the protein content is reported.

Reporting protein content and other wheat and flour attributes such as water absorption at a standard moisture basis is critical to compare expected flour performance of wheat from different origins.

Here is one last example to illustrate this difference. How does Russian grade #3 wheat at 12.5% protein reported at a dry basis, compare to U.S. hard red winter (HRW) wheat reported at 12% moisture basis?

To answer this question, we do the math.

Example 3

In this calculation, the reported moisture basis of Russian origin wheat is 0.0%, lower than the reported moisture basis of U.S. wheat at 12.0%. As a result, the standard reported protein content of Russian wheat is higher than the standard reported protein content of U.S. wheat, even though the actual protein content is the same for both at 11%.

This difference has been challenging buyers of wheat for years. That is just one reason why USW, the wheat farmers we represent, and the USDA’s Foreign Agricultural Service continue to make trade servicing and technical support a priority in its activities with overseas wheat buyers, millers and wheat food processors. Contact your regional USW office representative for more information or visit our website and leave a question in our “Ask The Expert” section.

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Wheat Industry News

Recent news and highlights from around the wheat industry.

Speaking of Wheat: “These [export] customers are making million-dollar purchase decisions based on the data we generate. I know [farmers] are growing for bushels, but they are paying the high price for spring wheat because it has high quality for bread baking applications.” ­– Senay Simsek, Ph.D., Bert L. D’Appolonia Cereal Science and Technology of Wheat Endowed Professor, North Dakota State University, from an article in Farm and Ranch Guide. Photo above: Dr. Simsek (center) with Japanese wheat customers at a November 2019 reception in Tokyo recognizing the passage of the U.S.-Japan Agreement

“Feed Your Mind” Agriculture Biotechnology Education. On March 4, the U.S. Food and Drug Administration (FDA) released a new education and outreach initiative to inform and broaden understanding about agricultural biotechnology through science-based educational information. The Agency received $7.5 million from congress and has partnered with the U.S. Department of Agriculture (USDA) and the U.S. Environmental Protection Agency (EPA) to make this outreach program possible.

Cuba Still a Wasted Export Opportunity. Paul Johnson, chair of the U.S. Agricultural Coalition for Cuba in an interview with Successful Farming, said this week: “Cuba wants … normalized relations with the U.S. farmers [who] have an advantage in the Cuban market, mainly logistics. We can get product down to Cuba quicker than any other country – in a few days. So not only can we get products there, which reduces the cost to the Cuban buyer, but also we promote the quality of the goods.” USW strongly supports a change in policy toward Cuba and an end to the trade embargo.

Consumer Research on Gene-Edited Food. Several food and agriculture organizations have released a U.S. consumer research study measuring market potential for gene-edited products. “Gene editing … is a relatively new food technology, so we believed it was important to establish a baseline for consumer understanding and how that level of understanding impacts purchasing decisions,” stated Leslie Sarasin, President and CEO of FMI, the Food Industry Association. “We … hope that these research results serve as a path forward for the food and agriculture industries to collaborate and facilitate a better understanding and a common language around gene-edited products.”

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.

IGP Institute Milling Courses. The IGP Institute in Manhattan, Kan., has announced a series of milling courses in its upcoming summer schedule, including two Buhler-KSU Executive Milling courses (one in English and on in Spanish), as well as an IAOM-KSU Introduction to Flour Milling course. Click here to register and for more information on these courses.

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 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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A Legacy of Commitment – Great Plains Wheat Focused on Improving Quality and HRW Markets

By Steve Mercer, USW Vice President of Communications

Wheat farmers in post-World War II United States were producing more wheat than ever before. So, to improve marketing opportunities, they organized and reached out to the U.S. Department of Agriculture (USDA) for help. These visionary state wheat leaders ultimately formed two regional organizations to coordinate export market development: Western Wheat Associates and Great Plains Wheat Market Development Association.

In the second of a series on the “Legacy of Commitment,” Wheat Letter offers historical perspective on the founding of Great Plains Wheat and its activities. Additional stories will review how Western Wheat Associates and Great Plains Wheat evolved together into one national export market development organization.

Wheat production on the Great Plains took root in the late-1860s with Mennonite farmers emigrating to the heartland of the United States to escape religious persecution in the Crimea. They planted the hardy, drought-resistant winter wheat seed they carried with them to Kansas and Nebraska, and “Turkey Red” would become the parent for most hard red winter (HRW) wheat varieties well into the 20th Century.

After surviving the infamous “Dust Bowl” of the 1930s, inconsistent quality and yields, and the challenges of a world war, Plains farmers pooled their time, talent and treasure to improve their industry. They established the Western Kansas Development Association in 1947 with a “Farm and Wheat Division” (which later became the Kansas Association of Wheat Growers). Three years later, with knowledge of a similar effort by farmers in Oregon, Nebraska formed the Nebraska Wheat Research Foundation. It was funded by about 300 members who agreed to authorize local elevators to collect one-half of one cent per bushel that would be spent to “help stabilize wheat production.”

Improved agronomics and varieties followed but added to a burdensome wheat surplus in the 1950s. This caught the attention of the U.S. government, which created federally managed grain reserves to help increase cash prices. In 1954, Public Law (PL) 480 was implemented to help expand exports of surplus agricultural products while supporting so-called “friendly” nations as the Cold War intensified.

Yet “there had been no effort to promote wheat exports by growers,” according to Marx Koehnke, author of Kernels and Chaff: A History of Wheat Market Development. The Nebraska Wheat Commission, formed in 1955, changed that as the first Plains state organization to sign an agreement with USDA’s Foreign Agricultural Service (FAS) to co-fund and implement export market development activities. They sponsored two teams of government buyers and milling industry representatives from Italy in 1956 and Greece in 1957, who observed wheat production, handling, milling and baking in Nebraska, Kansas and Oklahoma. The resulting purchases of U.S. wheat encouraged signing of the first regional agreement between Plains farm organizations and FAS to promote U.S. wheat exports in Europe and Latin America.

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

A two-month long survey trip in 1957 to evaluate the market opportunities in Europe by representatives from Nebraska, the newly formed Kansas Wheat Commission and FAS proved to be a pivotal activity. The insight into customer needs gained from that trip formed a basis for export development strategies that U.S. Wheat Associates (USW) still emphasizes more than 60 years later.

In its report, the survey team made these recommendations:

  • Establish a permanent presence in the market (the Nebraska and Kansas wheat commissions opened a U.S. wheat export office in Rotterdam, The Netherlands, in January 1958);
  • Discourage production of “low grade” wheat worldwide;
  • Establish tighter grade specifications for U.S. wheat exports;
  • Make information about the milling and baking quality of wheat in each cargo available to the buyers before arrival.

A survey of South American markets added the recommendation that grower organizations should help wheat buyers, most of whom were government officials, write specifications for U.S. wheat to ensure they receive the best quality at the best value.

Something for Themselves

According to Kernels and Chaff, the Nebraska wheat organizations first discussed a regional organization in 1958. Their contacts at FAS recommended that an organization of Plains states must also promote U.S. hard red spring wheat (HRS). That is why North Dakota farmers were represented at a meeting in Dodge City, Kan., where influential Kansas farmer Herbert Clutter advocated a regional organization so “growers can be in a position to do something for themselves instead of expecting others to do something for them.”

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

With a goal to add more resources from more farmers to export market development, Plains state wheat leaders drafted bylaws and proposed a name for a regional organization. On Dec. 15, 1958, state commissions from Nebraska, Kansas and Colorado made the commitment to form and fund Great Plains Wheat Marketing Development Association, Inc., later shortened to Great Plains Wheat, Inc. (GPW). Over the next 10 years, state commissions from Oklahoma, Texas, North Dakota, South Dakota and Minnesota would join GPW.

The new organization took over already established export promotion offices in Rotterdam and Lima, Peru. A prior agreement with Pacific Northwest (PNW) states Oregon and Washington to promote HRW in Asian markets transferred to Western Wheat Associates (WWA) after it was established in 1959. Garden City, Kan., was selected as the first GPW headquarters office and the organization integrated into a Washington, D.C., office set up by the Nebraska Wheat Growers Association in 1958 to maintain coordinate contact with FAS officials.

The first Chairman of GPW was Lloyd Kontny of Nebraska who led the staff (left) and the first President of GPW was Clifford R. Hope (right), a wheat farmer and former U.S. Congressman from Kansas. In a later restructuring, these titles were switched, and the President was given additional responsibilities for staff and activities. Photo from “Kernels and Chaff; A History of Wheat Market Development.”

Those officials had a big influence on the expansion of GPW’s activities in the early years. With foreign currency funds growing from PL480 sales, FAS strongly encouraged GPW to study broader opportunities in South America, Central America, the Caribbean and in Africa. Of course, the U.S. government wanted to move wheat from reserve stocks into PL480 export markets and that required trade servicing and local support that GPW provided, but FAS also supported GPW’s export development efforts in commercial markets.

Better Quality Needed

No matter where U.S. HRW was being promoted, the issue of quality was a significant constraint. Because U.S. wheat grade standards at the time included much more tolerance for defects, overseas customers had legitimate concerns about imported U.S. supplies. Export supplies often came out of long-term storage and limited oversight of grain inspectors licensed by USDA occasionally created complaints about short sales and out-of-specification cargos.

Based on previous survey work, GPW started collecting samples of U.S. wheat export cargos in Europe and established a wheat and flour testing site in Lima. This yielded information GPW could use to inform grain handlers and government reserve managers about problems. The organization also advocated for expanded storage at U.S. Gulf elevators and for limiting the export of government owned reserve stock wheat to PL480 markets. Progress on such changes was slow, however, and alternative exporters like the Canadian Wheat Board aggressively touted quality relative to U.S. wheat. The general reputation for poor quality persisted. More work needed to be done.

GPW turned to James Doty, one of GPW’s cereal consultants and head of Doty Laboratories in Kansas City, Mo., to start conducting wheat quality analysis on HRW export supplies as the laboratory had been doing for U.S. flour mills. The “Doty Report” on the 1960 HRW crop quality was the first in an annual effort to inform overseas buyers, millers and wheat food processors about each year’s crop, which has expanded to include all six U.S. wheat classes in the annual USW Crop Quality Report.

The first printed promotion of U.S. wheat from 1957. Even before GPW was formed, farmer organizations from Nebraska and Kansas were educating overseas customers about U.S. hard red winter wheat and its benefits. Photo from “Kernels and Chaff; A History of Wheat Market Development.”

The need to build U.S. wheat into a quality supplier grew with market development to Europe, most of Latin America, the Middle East, North Africa, Nigeria and South Africa, and to Asian markets through contracts with WWA. Herbert Hughes, a dedicated wheat leader from Nebraska, who had served as the first Vice President of GPW, was selected to chair a Grain Standards Committee that identified that crucial changes to U.S. wheat grade standards for HRW and HRS were needed to remain competitive in global markets.

According to Kernels and Chaff, Hughes warned the GPW board and staff in 1963 that improving the official standards “is a fight we cannot…and must not lose.”

GPW promoted the changes to country elevators and their farmer customers, farm organizations, local and state officials, and the grain trade, ultimately winning support from Secretary of Agriculture Orville Freeman. USDA held several hearings on the proposed wheat grade standards. With government export subsidies in place at the time, GPW argued that improved standards would allow the government to adjust the subsidy more accurately.

USDA implemented revised standards in 1964 and adjusted the export subsidy based on grade. The results of a GPW cargo sample study and “reactions of many buyers attested to definite improvement in quality of [exported U.S. wheat]. Compliments were taking the place of complaints…” wrote Koehnke in Kernels and Chaff.

Photo from “Kernels and Chaff; A History of Wheat Market Development.”

Organization Expands with Export Sales

GPW programs were supporting significant export sales growth in Latin America with offices now added in Bogota, Colombia; Rio de Janeiro, Brazil; and Panama City, Panama In 1965, for example, GPW developed mobile demonstrations and school lunch programs that introduced pasta made from HRW to Brazilian children and families. GPW supported a new baking school in Caracas, Venezuela, and baking trade schools in Colombia. Even in the face of tight specifications enacted among members of the European Economic Community U.S. HRW and HRS continued flowing to the port of Rotterdam to be offloaded to barges and smaller vessels for delivery to European customers. Trade service and technical assistance to developing markets in Africa from a GPW office in Rome initially. Coverage of the Middle East shifted from an office in Beirut, Lebanon, to Cairo, Egypt.

In addition to its local market development support, GPW invested significant effort in general promotion of U.S. HRW and HRS wheat as well as reports back to the farmers and state organizations who directed and co-funded its activities. Brochures, wheat sample cards and a series of films about U.S. wheat were produced. Printed newsletters translated to local languages kept customers informed about U.S. and global wheat market supply and demand factors and a magazine called The Great Plainsmen informed stakeholders at home about progress.

GPW leaders and staff, like their counterparts at WWA, had to operate within the parameters of active government policies and regulations for most of its existence. For example, they fought through the battle of the “Great Grain Robbery” by the Soviet Union and advocated for more transparency and information from USDA to help farmers and their overseas customers that helped lead to weekly commercial sales reports. Their testimony about the critical need for more oversight of export grain inspection informed the Grain Standards Act of 1977 that established the Federal Grain Inspection Service and independent certification of export specifications.

Tried…and Tried Again

With more than 800 names identified in the Kernels and Chaff book index and hundreds of export market development activities in dozens of countries, a complete survey of Great Plains Wheat, Inc., achievement in this space would be almost impossible. Marx Koehnke summarized the experience well.

“Ideas were tried and rejected, and tried again, before success was achieved…Many problems had to be solved; but with a spirit of compromise…and a determination to succeed, a viable organization was formed. By collaboration with its sister WWA and of course with FAS, many successful projects were accomplished.”

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Sources for this post include:

Read other stories in this series:

Western Wheat Associates Develops Asian Markets
Evolution of a Public-Private Partnership
The U.S. Wheat Export Public-Private Partnership Today
NAWG, USW Lead the Way Through Issues Affecting Wheat Farmers

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Pandemic Adds Pressure to U.S. Wheat Prices

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. According to a host of U.S. grain traders, it is too soon to tell the immediate effects of the pandemic on the international demand for U.S. wheat.

However, there is a clear relationship between the turbulence in global economic markets and the export price of U.S. wheat. Over the past several months, the export price for all classes of wheat out of the Gulf and Pacific Northwest (PNW) has fallen due to substantial pressure in the U.S. wheat futures markets, pressure that the pandemic has only increased.

Between late January and mid-March 2020, nearby Chicago Board of Trade (CBOT) soft red winter (SRW) wheat futures fell 12% from $5.74/bu to $5.06/bu. Nearby Kansas City Board of Trade (KCBT) hard red winter (HRW) wheat futures fell 11% from $4.86/bu to $4.32/bu. Nearby Minneapolis Grain Exchange (MGEX) hard red spring (HRS) wheat futures fell 7% from $5.48/bu to $5.08/bu.

During the same period, PNW HRW 11.5% protein (on a 12% moisture basis) FOB prices fell 7% from $241/MT to $224/MT. Gulf HRW 11.5% protein FOB prices fell 9% from $235/MT to $214/MT and Gulf SRW FOB prices fell 13% from $262/MT to $228/MT.

Gulf HRS 14% protein FOB prices fell $16/MT from $267/MT to $251/MT and PNW HRS 14% protein FOB prices fell $12/MT from $263/MT to $251/MT.

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 answer any marketing and processing questions that may arise.

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Seeking Beneficial Cooperation at the Canadian Crops Convention

As an organization that has represented farmers in export markets for 40 years, U.S. Wheat Associates (USW) has a sincere interest in their welfare no matter where they farm. That concern is perhaps most intense for the world’s wheat farmers. For example, USW values its relationship with Canada’s wheat producers. And while we compete wholeheartedly in global markets (by the way, the United States imports more Canadian wheat on average than any other country), we encourage cooperation with them on issues that present constraints to global wheat trade and consumption.

Before the shared constrain of the global COVID-19 pandemic hit its peak, USW Director of Trade Policy Shelbi Knisley attended the Canadian Crops Convention March 3 to 5, 2020, in Vancouver, British Columbia. The convention, hosted by the Canada Grains Council and Canola Council of Canada, brings together a range of participants, largely leaders and staff from industry organizations and agribusinesses associated with the country’s grain value chain. The conference focused around the current international trade situation, increased competitiveness across Canadian commodities, as well as on the changing demands from consumers.

Both Canadian and U.S. grain organizations share a similar view of such new technologies as plant breeding innovations like gene-editing and non-tariff trade barriers including sanitary and phytosanitary (SPS) issues. Those shared interests create opportunity to collaborate on science-based initiatives.

USW also believes the mutually beneficial relationship is set to grow even stronger as last week Canada’s parliament passed the U.S.-Mexico-Canada Agreement (USMCA) implementing text, which removes a significant grain grading barrier for U.S. producers who wish to sell into the Canadian market. The Western Canadian Wheat Growers Association (WCWGA) has, like USW and the National Association of Wheat Growers (NAWG), strongly advocated for the USMCA. In fact, as WCWGA wrote in May 2019: “Specifically, the USMCA agreement supports what the Wheat Growers have been advocating for several years, namely that registered wheat varieties on either side of the border should be recognized in the other country.” USW sincerely thanks Canada’s farmers for their support of this important trade agreement.

Before the conference began Knisley visited the Alliance Grain Terminal (AGT) at the Port of Vancouver, which offered perspective of how investments are being made to keep Canada competitive in the growing global market. The Port of Vancouver is Canada’s largest port and has been growing as demand has increased. There are several grain handling facilities located at the port, with AGT being the third largest. With the growing demand, a new G3 terminal is being built, which is expected to open this year.

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Dependable People: A Spotlight on the Oregon 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: Oregon Wheat Commission
USW Member since 1980

Location: Portland, Oregon
Classes of wheat grown: Soft White (SW), Hard Red Spring (HRS), Hard Red Winter (HRW)
USW Leadership: William L. Hulse, 1981/82 Chairman; Stan Timmermann, 1993/94 Chairman; Darren Padget, incoming 2020/2021 Chairman

The Oregon Wheat Commission works to enhance the profitability of Oregon wheat growers by communicating, educating, assuring markets and conducting and stimulating research. Oregon grows primarily soft white (SW) wheat in the vast expanses of Eastern Oregon, and in the lush Willamette River Valley.

Photo from “Kernels and Chaff; A History of Wheat Market Development.” Read more about this history here.

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

About 10% of Oregon wheat is used domestically, therefore most of our marketing efforts are focused on overseas markets. Oregon SW wheat is low-moisture with excellent milling results, providing a whiter and brighter product for making Asian-style noodles. It is also ideal for exquisite cakes, pastries and other confectionery products.

With closer proximity to Pacific Rim markets and their high importance to Oregon wheat growers, our state is also home to the USW West Coast Office, as well as the Wheat Marketing Center — the education and research bridge connecting growers and customers.

How have Oregon wheat farmers recently interacted with overseas customers?

Oregon Wheat was proud to help host a recent reception welcoming Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF). The group came to Portland to commemorate the successful conclusion of the trade negotiations and to renew its connection with the U.S. wheat industry.

Mr. Yusaku Hirakata, MAFF, and Darren Padget, Oregon wheat farmer and USW 2019/20 Vice Chairman.

Many of our Oregon representatives travel throughout the year to various trade missions as well as host customers in our state.

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

  • Commitment to Quality: Oregon Wheat continues to invest in research and development in wheat breeding programs, at Oregon State University and the USDA-ARS Western Wheat Quality Laboratory, focusing on high quality wheat varieties to support our customers and the end use of our wheat product.
  • A Focus on Long-Term Sustainability: Pacific Northwest published Best Management Practices and our growers’ production practices involve a high use of certified seed and agronomic practices to meet quality and sanitary-phytosanitary (SPS) requirements.
  • Leading Innovations: Investment into the Resilient Dryland Farming Initiative (RDFI) at the Columbia Basin Ag Research Center supports adaptation of farming practices in low rainfall areas.
  • Supporting the Multi-Modal Transportation System: Oregon Wheat continues efforts to maintain and enhance critical infrastructure, with a particular focus on the Columbia-Snake River dams. The Columbia Snake River System is the nation’s single largest wheat export gateway and each year nearly 10% of all U.S. wheat exports move by barge on the Snake River. In partnership with Idaho, Montana and Washington, Oregon Wheat is highlighting the importance of the river system’s navigation to our federal and state partners. View the Oregon Wheat Growers League website for more information.

Learn more about the Oregon Wheat Commission on its website here and on Facebook, Twitter and Instagram.

Oregon Wheat commissioner Jason Middleton (United Grain Corporation) and USW Vice President of Communications Steve Mercer at the 2020 Introduction to Flour Milling short course at the IGP Institute.

A Contracting for Wheat Value Delegation from China at Darren Padget’s farm.

Oregon Wheat commissioner Walter Powell (white shirt, middle, back row) participated on the 2019 South Asia Board Team to the Philippines, Singapore and Indonesia.

USW led five representatives of the Taipei Bakers Association and three officials from Taiwan’s Department of Public Health on a trade team to Oregon in late April 2018.

Attendees from the 2016 USW Latin America Buyer’s Conference visited Darren Padget’s farm.

USW Director of Communications Amanda Spoo visited Darren Padget’s farm in October 2019 to lead a video shoot that will focus on U.S. wheat farm families and the U.S. wheat supply chain.

Jeff Newtson says precision agriculture helps his family produce a more consistent soft white wheat crop for overseas buyers. Jeff’s father, Bob Newtson, has served on the USW Board of Directors for several years. Learn more about their production here.

Outgoing Oregon Wheat CEO Blake Rowe presenting at the 2018 USW Latin American Buyer’s Conference in Brazil.

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An Update on USW Operations Regarding COVID-19

In response to the COVID-19 pandemic and the recommendations of the Centers for Disease Control and Prevention, U.S. Wheat Associates (USW) has asked colleagues in our Headquarters and West Coast Offices to work from home through March 31. Our overseas offices are also implementing individual plans to protect the health and well-being of our colleagues, their families and our customers.

We will continue to review our operational policies as needed with guidance from government officials in the United States and overseas.

Many formal wheat export market development activities, especially those that require travel, have been suspended. However, we plan to reschedule as many of them as possible.

In this unprecedented circumstance, we remain committed to fulfilling our mission. We encourage our customers and stakeholders to reach out to our colleagues by telephone, email or online communications apps. We remain ready to provide the information our customers need about U.S. wheat supplies or any market concerns that may arise.

Contact information for all of our offices are posted online at https://www.uswheat.org/about-us/office-locations/.

All of us at USW has been and will continue doing all we can to support our customers while taking care of our families and ourselves. Thank you for your patience as we navigate these uncharted waters together.

Sincerely,

 

 

 

Vince Peterson

President

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Taiwan Flour Millers Share a Long History with U.S. Wheat Farmers

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, represent an industry that is always changing. But many of the overseas customers USW works with overseas can also say the same. 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.

These connections are a part of our story.

TONY YI-CHUEN HSU
Taiwan Flour Mills Association (TFMA); Taiwan

“Through the years, U.S. Wheat Associates has been a faithful and trustworthy partner and friend to TFMA. Every year, USW shares the latest milling technology and innovative baking skills, and monthly harvest and quality reports. Moreover, our millers and customers have the greatest of trust in U.S. wheat, and we are grateful for the support from USW. With a rich and long history in Taiwan’s milling industry, we are proud to provide the service to our customers with the support from our dear friends at USW. Please accept our heartiest congratulations on your 40th anniversary.”

2019 Taiwan Goodwill Mission in Washington, DC.

TSUNG-YUAN (JOHN) LIN
General Manager Assistant, Ta Fong Flour Mill, Taiwan

“U.S. wheat has always been the major source [of information] for us to produce quality flour. As the third generation, I am proud that our mill has expanded to three mills, not only supplying flour to local stores, but also creating a livelihood for local citizens. In 2019, my wife and I were hosted by U.S. wheat farmers and staff in Oregon, Washington and Idaho prior to joining the Taiwan Good Will Mission. Bill Flory of Idaho and others were wonderful hosts and I realized that all farmers are so family oriented. The [production of] good quality of wheat is passed from one generation to another.”

Ta Fong Flour Mill 70th Anniversary Celebration

In Washington with Washington Grain Commission staff in a soft white (SW) wheat field.

HSIN HONG KUO
Chairman of the Board, Hong Ming Flour Mill, Taiwan

“Open for over 70 years, Hong Ming Flour Mill is the third largest in Taiwan. I have been in the business more than 30 years and am the second-generation owner. We received a government award in 2018 for producing high quality flour for the Taiwan baking and Chinese flour products industries. I have traveled to the United States several times with Taiwan Flour Millers Association and on the Taiwan Good Will Mission. We visited Idaho, Kansas, Montana, North Dakota, Oregon and Washington to discuss wheat quality with U.S. wheat farmers. I am very supportive of USW programs and attend the annual Crop Quality seminar every year.”

2005 Taiwan Goodwill Mission in Idaho.

2017 USW Board Delegation visiting Hong Ming Mill in Taiwan.

Additional stories from other TFMA members are shared here.

Discover more stories about the connection between U.S. wheat farmers and their customers.

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Retired Washington Wheat Farmer Reflects on Traveling with U.S. Wheat Associates as Chairman

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.

A letter from Randy Suess, retired Washington wheat farmer, 2011/12 USW Chairman:

“I had the opportunity of a lifetime traveling with U.S. Wheat Associates (USW) to many countries and visiting with U.S. wheat buyers, millers and bakers. My thanks go out to those people who made us feel so welcome in their countries.

Traveling to Yemen with Dick Prior1 was quite an eye-opener. Our customers were so delighted to have a farmer there who grew the wheat they milled. I received several invitations to come back and stay with their families. In Salif, I received a stainless steel can filled with honey as a gift. Since it had an open lid, I was not going to be able to take it on the plane with me, so we gave it to our taxi driver. He was overwhelmed to receive it, as honey is extremely rare and valuable in Yemen.

In Yemen, people buy sacks of wheat at the store, and take them to the local corner mill to be ground into flour. 

I always enjoyed visiting cookie factories in Guatemala. They always sent us out the door with grocery bags full of the products they made. I brought these products home with me and shared with other U.S. wheat farmers at meetings. They looked identical to products in the United States but tasted different. Many thanks to those bakers, who were so proud of their products made from U.S. wheat grown in the Pacific Northwest.

Tom Mick2 and I traveled with Mark Samson3 to Bangladesh, which was the second largest food aid recipient in the world. Traffic was a nightmare with thousands of bicycle rickshaws mixed in with a lot of buses and a few cars, so our appointment with 15 flour millers was delayed by over three hours. We did not expect the millers to be still be waiting, but they were. We thanked them for their patience and were surprised at their interest in learning more about the U.S. wheat industry, and how to contract for wheat based on specifications.

The Bangladesh shot is of pastries made within their country, mainly using wheat obtained through food aid.

The Philippine flour millers are the most gracious and accommodating hosts. I was fortunate enough to be there for the 50th anniversary of having an office for U.S. wheat export market development (first as Western Wheat Associates, followed by USW) in their country. They always showed up in large numbers to attend our presentations on supply and demand, and crop quality.

It was an honor to be invited to dinner with Philippine flour miller Norman Uy and his family after one of our presentations. His son Stevie is taking over the mill and was in a group that visited my farm the following year.

(L) Stevie Uy visits Randy’s farm in Eastern Washington with a trade delegation from the Philippines; (R) Norman Uy accepts a framed photo from Randy at the 2012 anniversary event in the Philippines.

While my thanks go out to the buyers, millers and bakers of our wheat around the world, none of it would be possible without the work of our dedicated overseas staff. People like Takeo Suzuki4, who was in the Tokyo office. Takeo was a tireless worker on our behalf, who had many contacts in the industry. If you ever had the chance to travel with him, you had to almost run to keep up with him. I will be forever grateful for his service to our industry. I had the distinct honor of traveling with so many during my eleven-year tenure on the USW board. I started writing down all their names but decided to just thank them as a group for their dedication. While faces have changed over the years, I still see their commitment to providing the world’s most reliable choice of wheat.”

1Dick Prior, retired in 2012 as USW Regional Vice President, Middle East, East and North Africa, in Cairo, Egypt, after serving 22 years managing wheat export market development in the region.

2Tom Mick served eight years as USW Regional Vice President, South Asia, in Singapore, and two years as USW Director of Overseas Operations in Washington, D.C. He retired as CEO of the Washington Grain Commission in 2012.

3Mark Samson served as assistant director of Western Wheat Associates (now U.S. Wheat Associates) in Washington, D.C., as administrator of the Idaho Wheat Commission and USW regional vice president for South Asia in Singapore and regional vice president for Europe, the Middle East, East and North Africa in Cairo,Egypt, and Rotterdam, The Netherlands.

4Takeo Suzuki served as USW Country Director, Tokyo, until his death in 2007.

Randy Suess on his farm in Washington.

The bread delivery in Eritrea has Dick Prior taking a look at the small loaves of bread made from soft white wheat, as it is being delivered on bicycles.

The Malaysia bread town was a factory selling breads and all kinds of sweets, that was set up for tours. Over 30,000 kids were bused in each year to go through their tour.

USW 2011/12 Officers (L to R): Randy Suess (WA), Chairman; Dan Hughes (NE), Secretary-Treasurer; Darrell Davis (SD), Vice Chair; Don Schieber (OK), Past Chairman.

 

 

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