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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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Wheat Industry News

Recent news and highlights from around the wheat industry.

Speaking of Wheat: “Innovation in agriculture and food is the key to global food security; the world has to stop farming with systems that my grandfather gave up on 125 years ago. Innovation is an imperative — and it’s not just needed [in the United States], but around the world.” Ambassador Kip Tom, U.S. Permanent Representative to the United Nations Agencies for Food and Agriculture in Rome and a seventh-generation farmer from Indiana.

Congratulations. Andrés Saturno and his wife Berenice “Bere” recently welcomed their first child, a baby boy, Alessio Massimiliano Saturno Ramos, 7 lbs, 9 oz, on February 19, 2020. Andrés is a Technical Specialist in the USW Santiago Office. Everyone is healthy and doing well.

China Lifts Some Trade Barriers in ‘Phase One.’ China has begun making policy changes and will soon be accepting applications for tariff exemptions as part of its agreements under the “phase one” trade pact with the United States, the Trump administration announced Tuesday, February 25. Imports of a wide variety of commodities will be eligible, including wheat, soybeans, pork, corn, whey, oranges, cherries, sorghum, soy oil and beef. Read more here.

Coronavirus Could Prevent China from Meeting $80B Agriculture Trade Pledge. With the phase one trade deal with China in effect for just under three weeks, agricultural experts fear the coronavirus outbreak will impede China’s ability to buy a promised $80 billion in farm goods from the United States over the next two years. Read more here.

Ancient Wheat Genome Reveals Clues to the Agricultural Past. A museum sample of a 3,000-year-old Egyptian crop plant yields genomic information that helps researchers track the plant’s domestication and migration reports “The Scientist.” The museum wheat, which carbon dating showed was from between 1130 and 1000 BC, was genetically much more similar to modern domesticated varieties than to modern wild ones, suggesting that the plant lineage the samples came from had already been domesticated. Read more here.

2020 National Wheat Yield Contest. On February 18, 2020, 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.

Farmers Join Forces for Sustainability and Responsible Climate Policy. The National Association of Wheat Growers (NAWG) joined twenty farm and ranch groups representing millions of U.S. farmers and ranchers to launch Farmers for a Sustainable Future (FSF), a coalition committed to environmental and economic sustainability. This coalition will serve as a primary resource for lawmakers and policymakers considering climate policies. FSF’s guiding principles call for policies that support science-based research, voluntary incentive-based conservation programs, investment in infrastructure, and solutions that ensure vibrant rural communities and a healthy planet. Read the group’s recent release here.

Oklahoma Governor’s Wheat Challenge. The Oklahoma Department of Agriculture (ODA), working with the Oklahoma Wheat Commission (OWC) and the Oklahoma State University (OSU) Wheat Improvement Team recently featured the first ever State of Oklahoma’s Governor’s Wheat Challenge in an event at the ODA headquarters March 3. Wheat industry representatives welcomed Governor Kevin Stitt and Lt. Governor Matt Pinnell as they checked on respective wheat plots planted in their names last November in front of the agency’s headquarters, and to get an update from OWC Executive Director Mike Schulte on the marketing and research aspects of Oklahoma’s wheat industry. Oklahoma Secretary of Agriculture Ms. Blayne Arthur called it “a very exciting day for Oklahoma’s wheat industry,” with a friendly competition between the Governor and Lt. Governor spotlighting two newer wheat varieties developed by the Wheat Breeding Team led by Dr. Brett Carver of OSU. The wheat plots will be harvested and evaluated for flour and baking qualities. Read more here.

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 page at https://www.facebook.com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at https://twitter.com/uswheatassoc and video stories on Vimeo at https://vimeo.com/uswheatassociates.

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A Legacy of Commitment – Western Wheat Associates Develops Asian 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 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 first of a series on the “Legacy of Commitment,” Wheat Letter offers historical perspective on the founding of Western Wheat Associates and its activities. Future posts will focus on Great Plains Wheat, and how the two organizations evolved together into one national export market development organization.

Homesteaders in the semi-arid region of eastern Washington state and Oregon slowly started growing wheat to supply flour for mining camps in the mid-1800s. These growers soon found a route to new overseas markets via the Snake and Columbia river system, though not initially to Pacific rim countries. Early histories of the region’s grain trade include news of a full cargo of wheat loaded in Portland, Ore., on a British vessel bound for Liverpool in 1868.

That trade with Britain and domestic West Coast markets continued to grow into the 20th Century. The first indication of Asian market trade dates to 1906 when Japan’s Masuda Flour Milling Co. imported flour from Centennial Mills in Spokane, Wash.

The effort to build greater demand for wheat at home and abroad took wing in 1926 at a meeting hosted by the Oregon Agricultural College extension service in Moro, Ore., where wheat farmers decided to form the Eastern Oregon Wheat League. In 1945, that organization asked its state government to create a wheat “commission” with the power to “tax” each bushel of wheat entering commercial channels to fund wheat promotional activities. The Oregon Wheat Commission (OWC) was established in 1947 (see photo below) and in 1949 sent representatives to Japan who reported “great opportunities for trade,” depending on the ability of Pacific Northwest (PNW) farmers “to establish a productive relationship with flour millers and provide high-quality wheat at a competitive price.”

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

In the book “Kernels and Chaff; A History of Wheat Market Development,” Marx Koehnke wrote that “these Oregonians had established a unique approach to self-help… It was a revolutionary and challenging idea” that “in turn resulted in other states exploring and adopting similar plans.”

In the PNW, Washington state and Idaho soon established their own state commissions and began cooperating with the OWC to promote the region’s soft white (SW) wheat in overseas markets. Surplus U.S. production was poised to meet growing demand for food in a post-war world. Farmers took a key step in 1956 when the Oregon Wheat Growers League opened the first U.S. wheat office in Tokyo. Commissions from Washington state established relationships with India and Pakistan, joined by agreements with the Nebraska Wheat Growers Association and the USDA’s Foreign Agricultural Service (FAS).

According to “Western Wheat Associates, The First Twenty Years,” by Richard K. Baum, PNW farm leaders met with farmers from the Plains in early 1959 to discuss establishing working relationships between the regions and export promotion plans. With Plains growers indicating they planned to promote hard red winter (HRW) wheat in “Far East and South Asia markets, if permitted,” the PNW state commissions decided to unify export activities.

In Pendleton, Ore., on April 23, 1959, Western Wheat Associates, U.S.A., Inc., was created. Officers were elected and a board of farmer directors from the PNW states was appointed. Baum was selected to serve as executive vice president, a position later changed to president that he would hold until U.S. Wheat Associates (USW) was formed in 1980. The organization’s headquarters office was established in Portland.

A Different World

In many ways, Western Wheat Associates (WWA) operated for 20 years in a global wheat market and trade policy environment that few in the trade today would recognize. In 1954, for example, the U.S. federal government established Public Law (PL) 480, allowing food-deficient countries to pay for U.S. food imports in their own currencies instead of in U.S. dollars. The law helped the United States create the environment for exports of surplus agricultural products while supporting so-called “friendly” nations as the Cold War intensified.

Under the early PL480 program, the government purchased U.S. wheat and sold it to designated countries including India, Pakistan and South Korea. WWA received matching funds from the PL480 program to help facilitate the transactions, acting in a sense as the U.S. government’s service representative in in those countries.

Wheat supply and price management ruled both international and domestic U.S. wheat policies during WWA’s existence. As early as 1933, wheat exporting and importing countries formed an “International Wheat Agreement” to help “adjust the supply of wheat to effective world demand and eliminate the abnormal surpluses which have been depressing the wheat market” and to stabilize prices. Similar price and supply agreements continued well into the 1990s that were, in effect, efforts to control the international wheat market.

Through the 1960s and into the early 1970s, U.S. policy supported international agreements to export wheat at a “world price” but also attempted to protect farmers and the grain trade from rapid changes in prices. Production quotas were established. Subsidies incentivized farmers not to plant too much wheat or other crops or paid farmers when cash prices fell below minimum levels. Export subsidies were established to allow grain traders to sell at agreed-to world prices with minimal risk.

Even in importing countries that were not designated as PL480 markets, which WWA and the trade referred to as “cash” markets, government agencies were charged with importing food commodities, a situation that put significant weight in the transaction on the per-metric-ton price of U.S. wheat. Much of the early WWA development work in PL480 and “cash” markets focused on introducing wheat foods to primarily rice-eating cultures.

Even before WWA was formed, PNW wheat farmers were working with Japanese officials to introduce bread to school lunch programs, allowing Japanese children to enjoy the taste and nutrition of a new type of food. Photo from U.S. Wheat Associates archive.

Building the Case for U.S. Wheat

Sales of U.S. wheat continued to increase as WWA expanded its staff and activities. Eventually, wheat farmer organizations from Montana, Nebraska, North Dakota, Wyoming, Colorado and Texas became members of WWA or contracted with WWA to represent their wheat supplies. Working under contract with the U.S. government and Great Plains Wheat (GPW), WWA developed markets in Asia for the SW class grown in the PNW, for hard red spring (HRS) grown in Montana and North Dakota, and HRW grown in the Plains states. Great Plains Wheat (GPW) had a similar cooperator relationship with USDA as WWA and its state wheat organization members, representing their interests in Latin America, Europe, the Middle East and Africa.

WWA worked from offices in Tokyo, Delhi, Karachi, Manila and eventually Taipei, Singapore and Seoul. Limited records of specific activities make it difficult to list the many market development activities implemented by WWA over the years. In addition to introducing wheat foods, more familiar trade activities included: participation in trade shows; sending trade delegations of farmers and government representatives to overseas markets to promote U.S. wheat and to evaluate market potential; and bringing buyers and flour millers to the PNW and Northern Plains.

A luncheon at the American Club in Tokyo in April 1971 with USDA and Japanese officials and WWA representatives commemorated the Japanese purchase of more than 100 million bushels (more than 2.7 million metric tons) of U.S. wheat. Photo from “Kernels and Chaff; A History of Wheat Market Development.”

The work certainly had unique challenges that WWA had to maneuver. For example, the organization and its state members worked with the U.S. government to improve grade standards for U.S. wheat in the 1960s. Information from customers, especially from Japan, about high levels of sprout damage were shared with growers, wheat breeders and other researchers. WWA even took dock worker union leaders to Asian markets to demonstrate the broad economic effects of U.S. wheat trade. All these efforts and more were focused not only on building demand, but also on building a case that customers could count on the U.S. wheat export supply system.

In 1975, U.S. President Gerald R. Ford met with a joint meeting of WWA and GPW in Vail, Colo., and discussed the wheat leaders’ approach to longshoreman labor negotiations. Photo from U.S. Wheat Associates archive.

It was government intervention, however good intentioned, that greatly endangered the reliable reputation of the United States as a grain supplier. In 1972, the Soviet Union took advantage of U.S. government guarantees of low wheat export prices and a politically motivated offer of credit guarantees to quickly purchase massive volumes of U.S. wheat. The Soviet purchases coincided with low production in other exporting countries and created a supply shock that literally doubled world wheat prices in just a few weeks. Established customers such as Japan were unprepared for the supply and price problems that followed. Interventions continued in the 1970s including an embargo on U.S. soybean exports to Japan and the U.S. grain export embargo following the Soviet Union’s invasion of Afghanistan in 1980.

Yet, the farmers who established WWA and the people the organization hired to represent their interests persevered. The legacy they, and the people who started and ran GPW, created lived on through WWA’s existence and continues even today through U.S. Wheat Associates and its 17 state wheat commission members and board of directors.

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

WWA’s Richard K. Baum captured the enduring spirit of the organization as he wrote to his board about “The First Twenty Years” of WWA.

“It has been my privilege, and an unusual one at that, to have served throughout this entire period as chief executive officer of Western Wheat Associates. Many of our staff people have also served for 18 and 19 years. Our personnel record is a stable one. Our employees, particularly those overseas, feel they are a part of a close-knit family and work as hard for you wheat producers as they would if this were their own business.”

“Those of us who have worked with you [farmers] believe fully in the goal of obtaining a fair return to the farmer for his investment, management and labor. We admire his dedication and unselfish service. We believe your leadership as evidenced by these past board Chairman have been outstanding.”

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Sources for this post include:

Read other stories in this series:

Great Plains Wheat Focused on Improving Quality and HRW 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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U.S. Wheat Associates Launches New Price Charting Tools

By Claire Hutchins, USW Market Analyst

Navigating U.S. export markets and making purchasing decisions is a complicated, risk-involved process, especially when wheat customers have so many options for sourcing their supplies. As representatives of the U.S. wheat industry, U.S. Wheat Associates (USW) recognizes it has a social contract to ensure our customers have access to accurate, unbiased price information to help them make timely buying decisions.

One of the ways USW has done that over many decades is by publishing a weekly Price Report on Friday afternoon that gives the world’s buyers an independently derived baseline of export prices for U.S. wheat by class, protein level, export region and delivery month. This report provides an independent assessment of weekly export prices across a broad segmentation of the U.S. wheat sector and delivers independent estimates of export basis and export prices based on industry surveys.

USW recently launched new Price Charting Tools based on Price Report data to help overseas customers visualize current and historic U.S. wheat FOB prices and export basis values by export region, class, protein level and date. The Price Charting Tools, found on the USW website, also feature wheat futures prices by date and grain exchange. Customers can also chart FOB and basis spreads between different classes, protein levels and export regions.

“The new charting tools are valuable resources for overseas buyers to view historical price trends of four of the six wheat classes produced in the United States,” says Mike Spier, USW Vice President of Overseas Operations. “USW’s new charting tools will give buyers valuable insight by showing them how past changes in the U.S. and world wheat supply and demand situation influenced U.S. wheat prices.”

These new graphing tools link users to the most detailed, public database of historic U.S. wheat FOB and export basis levels.

“Not only can users look back at historical market behavior as one clue toward looking to and anticipating future action, but they can also look at a breadth of historical value relationships including intra wheat class relationships and winter wheat class protein level spreads,” says USW President Vince Peterson. “This is one exceptional tool for wheat buyers that are trying to analyze and select the value proposition best offered and delivered by the various U.S. wheat classes.”

To access USW’s new Price Charting Tools directly, click here. To access the Price Charting Tools from anywhere on the USW website, click “Price Charting Tools” under the Market and Crop Information menu at the top of the page. For more information on the USW Price Report, click here.

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