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Wheat Industry News

Recent news and highlights from around the wheat industry.

Speaking of Wheat: “The U.S. farmer is still holding about half a [hard red] spring wheat crop from last year that will provide some decent quality supplies. Canada, on the other hand, was an aggressive exporter of wheat last year; a poor quality crop will reduce their exportable supplies in this marketing year.” – Michael Krueger, Independent Market Analyst.

Columbia River Reopens to Barge Traffic. A critical navigation lock on the lower Columbia River reopened Sept. 27, according to the U.S. Army Corps of Engineers. That means barges full of grain and other materials waiting to get from Inland Northwest ports to Vancouver and Portland and out to export markets can resume. Boat traffic on the international trade route has been stopped since September 5 to repair a lock at Bonneville Dam. Crews with the Army Corps’ Portland division have been working around-the-clock the past three weeks to open the channel. Read more here.

New Partner in New Grain Trade Initiative. Glencore Agriculture Ltd. is joining several other major grain traders in the industry’s initiative to modernize global agricultural commodity trade operations. The initiative is looking at such new technologies as blockchain and artificial intelligence to automate grain and oilseed post-trade execution processes, reducing costs needed to move agricultural and food products around the globe. The group is projecting launch of a new platform in the second half of 2020 subject to regulatory approval. Read more from a joint news release here.

More Women Are Running U.S. Farms. According to the most recent USDA Census of Agriculture, over the last five years, the number of female farmers in the United States has increased, while the number of male farmers declined. Women now represent 36% of farmers, a 27% increase from 2012. Now, 56% of farms have at least one female producer, although only 38% have a female primary producer, the person who makes the most decisions on the farm. USW looks forward to sharing the story of several women engaged in wheat production in 2020. Currently, two female farm owners serve as directors of USW: Rhonda K. Larson grows HRS wheat in northwestern Minnesota and was elected as USW Secretary-Treasurer for 2019/20; Denise Conover grows HRS and HRW wheat in south central Montana. Past Chairperson Janice Mattson of Chester, Mont., served as USW director and an officer, holding the chair in 2009/10.

Oregon Wheat Seeking New Chief Executive Officer. The Oregon Wheat Commission and Oregon Wheat Growers League are seeking a dynamic and proven Chief Executive Officer (CEO) to provide leadership, vision, focus, and unity to their organizations, following the announcement that Blake Rowe plans to retire from the position. The CEO will serve as the principal administrator of both the OWC and OWGL, operating under the direction of the OWC and the Board of Directors of the OWGL, respectively. The full job announcement and position description can be found at www.owgl.org/careers. Applications must be submitted by 4:00 PM on Oct. 20, 2019.

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 www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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Production Update: USDA Confirms High U.S. Wheat Yields Offset Reduced Planted Area

By Claire Hutchins, USW Market Analyst

On Sept. 30, USDA released its Small Grains Summary noting that 2019/20 U.S. wheat production increased to 53.3 million metric tons (MMT), up 4 percent from last year due to significant improvements in yield despite lower planted area. While this is still 2 percent below the 5-year average of 54.2 MMT, the production volume coupled with significant carry-in stocks ensure that the U.S. wheat remains the most reliable supply for 2019/20. Here is a look at 2019/20 U.S. wheat production by class.

USDA’s Small Grains Summary indicates U.S. wheat yields offset a reduced planted area for 2019/20.

Hard Red Winter (HRW). Last fall, U.S. farmers decreased HRW planting in the U.S. Southern and Central Plans due to extremely wet conditions which delayed the soybean harvest and in turn HRW planting. A slight uptick in planted area in Montana and South Dakota partially offset reductions in other states. Total U.S. HRW planted area fell 2 percent year-over-year to 22.7 million acres (9.19 million hectares), 15 percent below the 5-year average of 26.6 million acres (10.8 million hectares). Cool temperatures and favorable moisture during the growing season boosted HRW yields substantially year-over-year in Kansas, Nebraska and Oklahoma. In Kansas, the largest HRW producing state, a higher average yield offset lower planted area and production increased 22 percent over 2018/19 levels to 338 million bushels (9.17 MMT). USDA estimates total 2019/20 HRW production increased 26 percent over last year to 834 million bushels (22.7 MMT).

Hard Red Spring (HRS). Cold soil temperatures and excessive moisture in certain areas delayed HRS planting across much of the Northern Plains. USDA says U.S. farmers planted 12.0 million acres (4.86 million hectares), 6% below last year but slightly higher than the 5-year average of 11.8 million acres (4.78 million hectares). A cool summer boosted HRS yields in Montana and South Dakota. Heavy, persistent rain has severely delayed the 2019 HRS harvest. According to USDA, as of September 30, U.S. spring wheat harvest is only 90 percent complete compared to the 5-year average of 99 percent. USDA estimates 2019 HRS production will total 558 million bushels (15.2 MMT), 5 percent lower than 2018, but 8 percent higher than the 5-year average of 518 million bushels (14.1 MMT).

Soft Red Winter (SRW). Last fall, U.S. farmers planted 5.54 million acres (2.24 million hectares) of SRW, down 6 percent from the year prior and 18 percent from the 5-year average of 6.7 million acres (2.71 million hectares) due to low wheat prices compared to soybeans and delayed planting. Excessive moisture continued through the growing season and slowed harvest progress in many places. USDA reported SRW production totaled 239 million bushels (6.50 MMT), down 16 percent from last year and 31 percent below the 5-year average of 348 million bushels (9.46 MMT).

White Wheat (Soft White, Club and Hard White). U.S. white wheat planted area fell 4 percent below 2018/19 levels to 3.95 million acres (1.60 million hectares). Mild growing conditions and good soil moisture in the Pacific Northwest (PNW) supported above-average winter and spring wheat yields. The average white winter wheat yield in Oregon increased 1.0 bu/acre (.067 MT/hectare) over last year to 68.0 bu/acre (4.57 MT/hectare) in 2019. Slightly lower planted area and above-average yields kept U.S. white wheat production stable year-over-year at 273 million bushels (7.43 MMT) and 8 percent higher than the 5-year average of 252 million bushels (6.87 MMT).

Durum. Anticipating less-than break even prices, farmers planted less durum area this year. In its Small Grains 2019 Summary, USDA estimated 1.34 million acres (542,000 hectares) were planted to durum, down 35 percent from 2018/19 and 32 percent below the 5-year average of 2.0 million acres (664,000 hectares). USDA estimated total 2019/20 U.S. durum production at 57.3 million bushels (1.57 MMT), down 26 percent from last year. Cool, wet weather boosted yields in the U.S. Northern plains. Both Montana and North Dakota durum yield potential reached a record high in 2019. The country’s average durum yield also reached a record high of 44.8 bu/acre (3.01 MT/hectare), up 13 percent from last year. However, as with HRS, a significant portion of the northern durum crop has not yet been harvested. Desert Durum® production fell 46 percent year-over year to 5.67 million bushels (154,000 MT) due to sharply lower planted area in both Arizona and California.

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Expanding Wheat Breeding Resources for Better End-Use Quality, Disease Resistance

The International Maize and Wheat Improvement Center (CIMMYT) reports that an international team of scientists has identified significant new chromosomal regions for wheat yield and disease resistance and created a freely-available collection of genetic information and markers for more than 40,000 wheat lines.

Reported recently in Nature Genetics, CIMMYT says the results will speed up global efforts to breed more productive and climate-resilient varieties of bread wheat, a critical crop for world food security that is under threat from rising temperatures, rapidly-evolving fungal pathogens, and more frequent droughts, according to Philomin Juliana, wheat scientist at CIMMYT and first author of the new study.

“This work directly connects the wheat genome reference map [published in 2018] with wheat lines and extensive field data from CIMMYT’s global wheat breeding network,” said Juliana. “That network in turn links to over 200 breeding programs and research centers worldwide and contributes to yield and other key traits in varieties sown on nearly half the world’s wheat lands.”

CIMMYT noted that the study found genomic selection could be particularly effective in breeding for wheat end-use quality and for resistance to stem rust disease, whose causal pathogen has been evolving and spreading in the form of highly-virulent new races.

Bread wheat improvement using genomic tools will be critical to accelerate genetic gains in the crop’s yield, disease resistance, and climate resilience. (Photo: Marcia MacNeil/CIMMYT)

“Farmers and societies today face new challenges to feed rising and rapidly-urbanizing populations, and wheat epitomizes the issues,” said Ravi Singh, CIMMYT wheat breeder and corresponding author of the study. “Higher temperatures are holding back yields in major wheat-growing areas, extreme weather events are common, crop diseases are spreading and becoming more virulent, and soil and water are being depleted.”

Juliana said the study results help pave the way to apply genomic selection, an approach that has transformed dairy cow husbandry, for more efficient wheat breeding.

“Molecular markers are getting cheaper to use; meanwhile, it is very costly to do field testing and selection involving many thousands of wheat plants over successive generations,” Juliana said. “Genome-wide marker-based selection can help breeders to precisely identify good lines in early breeding generations and to test plantlets in greenhouses, thereby complementing and streamlining field testing.”

The new study also documents the effectiveness of the global public breeding efforts by CIMMYT and partners, showing that improved wheat varieties from this work have accumulated multiple gene variants that favor higher yields, according to Hans-Joachim Braun, director of CIMMYT’s global wheat program.

“This international collaboration, which is the world’s largest publicly-funded wheat breeding program, benefits farmers worldwide and offers high-quality wheat lines that are released directly to farmers in countries, such as Afghanistan, that are unable to run a full-fledged wheat breeding program,” Braun explained.

The study results are expected to support future gene discovery, molecular breeding, and gene editing in wheat, Braun said.

USAID’s Feed the Future Innovation Lab for Applied Wheat Genomics funded the study. Contributing to the research are teams engaged in wheat improvement at CIMMYT, and the lab of Jesse Poland, Associate Professor at Kansas State University and Director of the USAID Applied Wheat Genomics Innovation Lab.

Photo above: U.S. Department of Agriculture, Crop Bioprotection Research.

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Best Wishes to Utsunomiya-San on His Retirement

In February 2019, U.S. Wheat Associates  (USW) announced that Mr. Kazunori “Rick” Nakano was joining the organization as Associate Country Director in Tokyo. Rick will become Country Director on September 30, 2019, when our colleague and friend Mr. Wataru “Charlie” Utsinomiya begins a well-earned retirement.

In that announcement, USW President Vince Peterson said Charlie’s sage counsel has guided “our efforts in Japan properly and effectively through the intricate business culture that accompanies any problem or opportunity there. Charlie’s successful stewardship will leave U.S. wheat interests in a strong position at a very important time in Japan.”

Charlie joined USW in May 2007 after working in grain trading management with Marubeni, including as Chairman of Columbia Grain, Inc. He also served as President and Chief Executive Officer of Marubeni’s invested rice mill subsidiary, General Manager of the company’s soy processing division and Assistant General Manager of its food division among other positions over his 30-year career with Marubeni.

Charlie recently told his USW colleagues that he is happy his retirement is starting right after President Trump and Prime Minister Abe announced the trade deal that will keep U.S. wheat on equal footing with imported Australian and Canadian wheat.

“There are still some doors not yet opened,” Charlie told us. And while challenges remain, he said “good days will return and you can overcome the difficulties, I am sure. I hope our paths will cross again somewhere.”

We certainly hope so, too, Charlie, and we wish you a long and happy retirement.

Please read more about the transition in the USW Tokyo office here.

Mr. Wataru “Charlie” Utsunomiya

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USW Video Team Records the Hope of Winter Wheat Seeding in Oklahoma

“Seeding is an exciting time – and it can be stressful, too, because you are anxious to get the seed in the ground,” said Okarche, Okla., wheat farmer Michael Peters. “There are a lot of decisions to be made and sometimes the weather makes you wonder if you made the right choices. But once you see the wheat starting to grow you think, well, there is hope that it will be a good crop.”

That is how Peters recently described his experience seeding hard red winter (HRW) wheat with a team from 502 Marketing, Manhattan, Kan., that is working with U.S. Wheat Associates (USW) to produce a video program focused on the people who contribute to the wholesome quality of U.S. wheat for dozens of different food products around the world. With previous visits to Kansas, Ohio, Washington state, and North Dakota, the show will be completed in 2020 and include additional farm families and information about the U.S. wheat supply system.

Preparing the seeding equipment includes carefully connecting hydraulic lines, a process being videotaped here as Fred Peters (left), Tyler Peters (center) and Michael Peters prepare to plant another hard red winter wheat crop in September 2019.

Peters Farms is a family-owned operation that was started when Michael Peters’ great-great grandfather homesteaded a piece of land in central Oklahoma in the 1880s. Today, Michael farms with his farther Fred Peters and his son Tyler. They grow HRW wheat and graze cattle on some of that crop over the late fall and winter. Linda Peters, Michael’s wife, is a teacher and church musician who remains an active participant in the farm operations.

Early seeded HRW wheat on Peters Farms provides the backdrop for an interview with Michael Peters about the steps his family farm takes to grow a high-quality crop.

Michael is a commissioner with the Oklahoma Wheat Commission (OWC) and represents OWC on the USW Board of Directors where he serves as Chair of the USW Wheat Quality Committee and is a member of the USW and National Association of Wheat Growers Joint International Trade Committee.

USW wants to thank OWC Executive Director Mike Schulte (shown on the left in the photo with Fred and Michael Peters above) and OWC Marketing and Communications Manager Chris Kirby for their help arranging this important part of the USW video production. All of us at USW are proud to represent Peters Farms and other farm families in overseas markets – and we thank the Peters family for giving their time and effort to share their story at one of their busiest, but most hopeful, times of the year.

Murals representing the historical changes in Oklahoma’s wheat industry greet visitors to the Oklahoma Wheat Commission’s office in Oklahoma City. The murals were donated by the family of Dr. Brett Carver, head wheat breeder at Oklahoma State University.

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Meet the USW Technical Experts: Tarik Gahi – ‘For a Piece of Bread, Son’

Name: Tarik Gahi

Title: Milling and Baking Technologist

Office: USW Middle Eastern, East and North African Region, Casablanca Office

Providing Service to: North Africa and the Middle East

2018 – Running a Bread test at Atlantic Flour Mills in Morocco using 50% SRW + 50% HRW flour.

U.S. Wheat Associates (USW) Milling and Baking Technologist Tarik Gahi has spent his entire career working with millers from around the world. But the first person to really make his career a passion was his mother.

“The main element on the breakfast, lunch, and dinner table in Morocco is bread. Growing up, my role at home was to follow my Mom’s instructions while helping her turn the wheat into bread. We would weigh 100 kilograms of the wheat stored in the roof, which was carefully hand cleaned, water washed, and spread under the day sun for two days to dry out,” said Gahi. “Then I would take it to a traditional flour mill – meters from our house – and pass on the message that Mom sent with me: ‘Please make the flour coarser and separated from the bran.’ Because if you didn’t ask for it, the worker at the mill would produce whole wheat flour, and my Mom didn’t want the additional job of separating the bran. Without being aware of it, she was a miller.”

(L) Tarik with his Dad in 1985; (R) Tarik with his Mom in 1987

Gahi grew up in Beni Mellal, a small city in Morocco at the base of Taseemit Mountain and near the plains of Tadla, a region known for its olive, wheat, and orange production. He and his two sisters were raised by their father, a philosophy teacher and later a school director, and mother, a homemaker. Growing up, Gahi’s favorite subject was math, so he pursued and received a bachelor’s degree in mathematics from Ibn Sinaa School in Beni Mellal, Morocco. When deciding what to pursue next, Gahi turned to his uncle, who had previously been the president of the first wheat importing group after the Moroccan wheat market liberalization in the late 1990s. His uncle introduced him to the Moroccan Milling Training Institute (IFIM) and shared with him something he would never forget.

He said, “Tarik, if you ask any Moroccan in the street why he wakes up every morning and goes to work, his answer is always going to be “for a piece of bread, son.” This means that wheat, flour, and bread are in our blood, and any business related to these three may lose at times but never dies.”

Following his uncle’s advice, Gahi studied milling engineering for two and a half years at IFIM, where he was introduced to USW, seeing its logo displayed throughout the school and meeting USW Regional Technical Director Peter Lloyd. After graduation, the top five students from the class, including Tarik, were offered a job in the United Arab Emirates (UAE) with Al-Ghurair, one of the largest milling companies in the Middle East.

“At Al-Ghurair, I learned to be patient and never underestimate the people around you, no matter their position,” said Gahi.

After six years with Al-Ghurair, Gahi worked as a mill operation manager at Seaboard West Africa Limited in Sierra Leone for two years, which challenged his managerial skills and taught him the importance of building relationships with customers. Next, Gahi returned to his home country and served as a chief miller at a milling company in Casablanca for three years before finally joining USW in 2015.

2019 – Visiting Bakhresa Group in Tanzania for a trade servicing activity. Beside Tarik (far left) is Peter Muni, current Bakhresa group technical vice president and Gahi’s past colleague from their time together at Al Ghurair Group in UAE.

An Ambassador for U.S. Wheat

The first wheat Gahi ever milled was U.S. hard red winter (HRW) donated by USW through the USDA Foreign Agricultural Service’s Quality Samples Program (QSP).

“That marked my professional life a lot. The USW logo was engraved in my mind from my time at IFIM,” said Gahi. “I learned the basics of milling in a school built by USW, and to come back and work with the man who helped train me (Peter Lloyd), was something special. To technically convince people to use a product (wheat) that is a beautiful story for me is a job I want to do for the rest of my life. My story is with U.S. wheat.”

As a Milling and Baking Technologist, Gahi is involved in the development, service, and expansion of technical service for U.S. wheat and wheat products. He conducts cake and cookie courses in USW’s Middle East and North Africa (MENA) region, inviting major regional soft wheat flour users to share with them the quality of U.S. soft wheat and demonstrate its functionality as an ingredient.

2019 – Touring the Bakhresa Mill in Zanzibar, Tanzania, and answering one of the chief miller’s questions about flour extraction and bran.

The MENA region is a wide geographic area comprised of widely differing milling and baking industries. From bakers in large cookie processing companies in Egypt to large flour mills in the UAE, North and West Africa, Gahi is equally at home carrying the message of what benefits U.S. wheat can provide customers.

“My job is to represent U.S. wheat growers in our region, and USW provides the necessary tools and conditions to help me pass on the farmer message to existing and potential customers,” said Gahi.

Through QSP, the same program that Gahi encountered in his first milling training, he now trains other young millers in processing U.S. wheat and helps introduce bakers and biscuit manufacturers to the right flour ingredient for their products.

“Tarik has a really good basic grounding in flour milling technology, upon which he has added layers of technical experience both overseas and in Morocco,” said Lloyd. “He has worked in both large and small mills, both new and older plants, and has furthermore added layers of mill management, quality control, and baking expertise to his basket of skills.”

Tarik Gahi explains variations in a QSP sample during a training at IFIM in 2018.

“Tarik is doing a great job providing technical support,” said a research and development regional manager with a large snack food company in Morocco. “He brings positive and great values to the baking industry through his regular visits and always supports us when needed. We have benefited from his bakery seminars and biscuit trainings.”

Gahi also spends time meeting with bakers and millers across the MENA region to get updates on each country’s market and help troubleshoot their technical problems. These meetings give him the opportunity to build stronger relationships among U.S. wheat customers and helps identify new needs and possible customers in each market.

“Gahi brings a lot of clarification and precious advice to cereals professionals along the supply chain by emphasizing the advantages of U.S. wheat compared to other origins and helps them adapt their practices to extract the most value. And he does that all in three languages,” said a supply chain manager with a grain agency in Algeria. “It is a great honor to work and collaborate with Tarik. His value is characterized by a great education, a great dedication to his work, and a developed professional sense, which all make him an excellent ambassador for U.S. wheat.”

Family

As his mentor, Peter Lloyd has watched Gahi interact with customers and how his unique blend of skills as a “people person” and his ability to communicate in English, Arabic, and French has positively impacted many cultures and markets.

“A major part of the job is the ability to communicate effectively across a very wide range of people, from millionaire industry giants to cleaners in a mill – and here Tarik once again excels,” said Lloyd. “He has an innate ability to communicate with people in our region, putting all at ease and, most importantly – listening effectively. He is just a great guy to work with.”

A USW technical manager trip to the USDA-ARS Soft Wheat Quality Laboratory in Ohio in 2016. Pictured (L to R) Peter Lloyd, USW; Marcelo Mitre, USW; Byung-Kee Baik, USDA-ARS; Brad Moffitt, Ohio Corn & Wheat; and Tarik Gahi, USW.

Lloyd is very proud that his student, colleague, and understudy has become a part of the legacy Lloyd will eventually leave behind.

“As the person who has helped introduce Tarik to U.S. Wheat Associates and perhaps worked more closely with him than anyone – I can say that the future of technical support into the MENA region and across Africa is in excellent hands with Tarik.”

For Gahi, who enjoys playing chess and cycling in his free time (though he says he is tired of being beaten every time he plays chess), family is his most important interest. He is a husband and a father of two small children, but family will always be also woven into his passion for his career.

Tarik and his son.

“Every time I think about my career history, I think about my Mom, Uncle, U.S. Wheat Associates, and Peter Lloyd. If I were asked to give U.S. Wheat Associates a new name, I would simply add the word “family” – U.S. Wheat Associates Family,” said Gahi. “Since I joined USW, I have felt like a member of a family. People care, people respect each other, and people do what it takes to make the family happy.”

By Amanda J. Spoo, USW Director of Communications

Editor’s Note: This is the fifth in a series of posts profiling U.S. Wheat Associates (USW) technical experts in flour milling and wheat foods production. USW Vice President of Global Technical Services Mark Fowler says technical support to overseas customers is an essential part of export market development for U.S. wheat. “Technical support adds differential value to the reliable supply of U.S. wheat,” Fowler says. “Our customers must constantly improve their products in an increasingly competitive environment. We can help them compete by demonstrating the advantages of using the right U.S. wheat class or blend of classes to produce the wide variety of wheat-based foods the world’s consumers demand.”

Header Photo Caption: Tarik Gahi (far left) with USW colleagues Mark Fowler, Ian Flagg and Peter Lloyd at the IAOM MEENA meeting in 2017.

Meet the other USW Technical Experts in this blog series:

 

Ting Liu – Opening Doors in a Naturally Winning Way
Shin Hak “David” Oh – Expertise Fermented in Korean Food Culture
Gerry Mendoza – Born to Teach and Share His Love for Baking
Marcelo Mitre – A Love of Food and Technology that Bakes in Value and Loyalty
Peter Lloyd – International Man of Milling
Ivan Goh – An Energetic Individual Born to the Food Industry
 Adrian Redondo – Inspired to Help by Hard Work and a Hero
Andrés Saturno – A Family Legacy of Milling Innovation
Wei-lin Chou – Finding Harmony in the Wheat Industry

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Too Much Rain on a Smaller Soft Red Winter Crop

Following planting in the fall of 2018, much of the U.S. soft red winter (SRW) growing area received excessive moisture throughout the winter and spring, which also caused lengthy harvest delays in many areas. The excessive moisture adversely affected quality by reducing falling number values and increasing DON values in some areas. At an estimated 7.01 million metric tons (MMT), this is a smaller crop than in 2018 because farmers seeded less and average yield per harvested acre was below last year and the five-year average. Processors should find good qualities in the 2019 SRW crop for cookies and crackers and segments of the crop showed good cake qualities.

That is a summary of results from the U.S. Wheat Associates (USW) 2019 SRW Crop Quality Report, now posted online at https://bit.ly/SRWCQ0919. To complete the report, Great Plains Analytical Laboratory in Kansas City, Mo., collected and analyzed 261 samples from 18 reporting areas in the 11 states that account for about 72% of total 2019 SRW production. Funding for the annual survey come from state wheat commission USW members and the USDA Foreign Agricultural Service.

As always, buyers are encouraged to review their quality specifications to ensure that their purchases meet their expectations.

Wheat and Grade Data. The overall average grade of the samples collected for the 2019 SRW harvest survey is U.S. No. 2. The average test weight is 58.1 lb/bu (76.5 kg/hl), equal to the 5-year average and above the 57.9 lb/bu (76.2 kg/hl) average in 2018. The Gulf Port average of 58.5 lb/bu (76.9 kg/hl) is above both last year and the 5-year average. The East Coast test weight average of 56.9 lb/bu (75.0 kg/hl) is above last year but below the 5-year average of 57.4 lb/bu (75.6 kg/hl).

The East Coast Total Defects average of 2.5% is above last year and the 5-year average, indicating that damaged and shrunken and broken kernels are slightly higher than usual in that portion of the crop. The Gulf Port Total Defects is 1.1%, above 2018 but almost half of the 5-year average. Other Gulf Port grade factors, dockage and moisture are close to or higher than 2018 and 5-year average values.

The Composite average wheat protein content of 9.5% (12% moisture basis) is lower than 2018’s 9.9% and the 5-year average of 9.7%. Both the Gulf Port protein average of 9.4% and East Coast average of 9.7% are below the respective 2018 and 5-year averages. The Composite average falling number of 288 seconds is significantly lower than 2018 and the 5-year average. The Gulf Port average of 289 seconds and the East Coast average of 283 seconds are both significantly below 2018 and the 5-year averages. Approximately 21% of samples had a falling number below 250 seconds in 2019, with 13% below 225. The Composite DON average of 1.3 ppm is above the 2018 average and close to the 5-year average of 1.2 ppm. The East Coast value of 0.5 ppm is below the 5-year average while the Gulf Port value of 1.5 ppm is above the 5-year average. Of the samples tested for DON, 33% of the Gulf Port results and 84% of the East Coast results were less than 1.0 ppm.

Flour and Baking Data. The Composite, East Coast and Gulf Port Buhler laboratory mill flour extraction averages are below 2018 and the 5-year averages. The farinograph peak and absorption values are similar to 5-year averages, but the stability values are all below the 5-year averages. The SRC values generally indicate good quality for cookies. The Composite, East Coast and Gulf Port alveograph L averages of 81 are lower than last year and the 5-year average, indicating lower extensibility. All other alveograph averages are similar to the respective 5-year averages given the variability of alveograph analysis. The Gulf amylograph average of 392 BU and East average of 462 indicate relatively high levels of amylase activity in the crop and are consistent with the low falling numbers.

The Composite, East Coast and Gulf Port cookie spread ratios are all higher than last year and the 5-year averages, indicating good extensibility. Average loaf volumes are all lower than last year and the 5-year averages.

USW will share complete data for all classes of U.S. wheat in future Wheat Letter posts and with hundreds of overseas customers at several upcoming events, including USW’s annual Crop Quality Seminars, and in its annual Crop Quality Report.

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Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “New drought tolerant traits have helped corn acres expand [and cut wheat area]. In looking at the adoption … drought tolerant corn traits, since 2012, have been planted at a faster rate by farmers than herbicide tolerant traits when they were released. As a smart farmer in Leoti told me, ‘These drought tolerant corn varieties look more like drought resistant.’” – Justin Gilpin, Executive Director, Kansas Wheat.

Rain Slows Spring, Durum Harvest. The North Dakota Wheat Commission reported on Sept. 17 that very little harvest progress was made in the hard red spring (HRS) and northern durum region over the last week as precipitation was widespread. The U.S. HRS crop is now 76 percent harvested, up only 5 percent from last week. Durum harvest is even farther behind. With the wet conditions, quality on the remaining crop is a concern, but will be highly dependent on maturity level in the crop. Read more on Sept. 20 in the USW Harvest Report at https://www.uswheat.org/market-and-crop-information/harvest-reports/.

Modern Bread Wheat Benefits from ‘Synthetic Hexaploid Wheat.” In a new study, scientists have found that genome segments from a wild grass are present in more than one in five of elite bread wheat lines developed by the International Maize and Wheat Improvement Center (CIMMYT). Scientists at CIMMYT and other research institutes have been crossing wild goat grass with durum wheat—the wheat used for pasta — since the 1980s, with the help of complex laboratory manipulations. The new variety, known as synthetic hexaploid wheat, boosts the genetic diversity and resilience of wheat, notoriously vulnerable due to its low genetic diversity, adding novel genes for disease resistance, nutritional quality and heat and drought tolerance. Read the full article here.

Trade Deal to Come? The Wall Street Journal recently reported that President Trump has notified Congress that the U.S. and Japan are prepared to enter a limited agreement that would lower some tariffs and set terms of digital trade. Pres. Trump and Prime Minister Shinzo Abe announced in August that they had reached an agreement in principle to lower agricultural tariffs and industrial tariffs. The two sides said they expected to sign the deal at the United Nations General Assembly this month. By sending formal notification to Congress, Mr. Trump can now sign such an agreement. The congressional letter did not spell out the terms of the deal.

Register for the 2019 World Food Prize Borlaug Dialogue International Symposium. The 2019 Symposium theme, “Pax Agricultura: Peace Through Agriculture,” will serve as an opportunity to take stock of the current state of global agriculture and food security. Learn more and register here.

Subscribe to USW Reports. USW publishes a variety of reports and content that are available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts, the weekly Price Report and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online. Visit our 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 www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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USW Hosts Overseas Customers at Annual NCI Grain Procurement Course

By Claire Hutchins, USW Market Analyst  

U.S. Wheat Associates (USW) believes customer engagement, supply chain transparency and accessible global market information are the building blocks for robust relationships with U.S. wheat customers. Every year, USW partners with the Northern Crops Institute (NCI) at North Dakota State University (NDSU) in Fargo, N.D., to offer NCI’s annual Grain Procurement Management for Importers Course.

This month, USW hosted 19 U.S. wheat customers including international procurement managers, supply chain managers, mill managers, wheat traders, agronomists and other industry executives at the eight-day course focused on the grain merchandising process. The course provided an overview of the U.S. grain handling and marketing system and the risk management tools available to help buyers purchase U.S. grains that meet their quality needs at the best value possible.

Daily lectures by industry experts and distinguished NDSU professors helped customers learn about cash and futures markets, risk management strategies, contracting for wheat value, USDA grain inspection services and U.S. and global supply and demand fundamentals. In addition to classroom lectures, course participants experienced the U.S. grain handling system through farm tours, country elevator visits, grain export facility tours and short seminars held at the Minneapolis Grain Exchange and various grain merchandising company offices in the Minneapolis, Minn., area

USW Market Analyst, Claire Hutchins, and NCI Programs Manager, Brian Sorenson tour a wheat farm in Casselton, N.D. after a day of NCI risk management courses at NDSU in Fargo, N.D.

Dr. Bill Wilson, NDSU professor of applied economics, presented on the U.S. grain transportation system, export basis, normal and inverted markets, pricing spreads and buyer decision timing, and alternative hedging strategies to help importers minimize price risk. Wilson emphasized the role USW’s weekly Price Report plays in price discovery to help buyers understand current U.S. wheat market conditions.

Dr. Frayne Olsen, NDSU professor of applied economics, led participants through a futures trading simulation in NDSU’s commodity trading lab, the largest in the world, which helped participants understand the fundamentals of standardized wheat trading through the U.S. futures markets. Through a futures buying exercise, he taught buyers how to minimize risk by identifying ideal buying opportunities in the futures market. Olsen also focused on the significance of fundamental analysis (supply and demand factors) in marketing decisions. He explained how to read USDA’s monthly Supply and Demand Report so importers better understand USDA surveying and statistical analysis in building each report.

Dr. David Bullock, NDSU associate research professor, lectured participants on basic hedging principals. This section helped buyers understand how to balance cash and futures positions while keeping risk at an acceptable level. He also instructed participants on options trading, which is another risk management tool ideal for importers.

Brandon Mortensen, BNSF market manager, educated participants on the intricacies of the U.S. rail transportation system. He emphasized the efficiency of the U.S. supply chain based on railroad investments in shuttle (110 to 120 cars) trains over the past few years. Mortensen explained that exports account for two thirds of all BNSF grain shipments and that BNSF works day in and day out with shippers to keep an effective system running to the benefit of U.S commodity importers.

NCI Grain Procurement Management for Importers Course participants watch elevator experts grade spring wheat according to USDA standards at a country elevator in Alton, N.D.

USW Vice President and West Coast Office Director Steve Wirsching educated participants on contracting for wheat value. He emphasized the need for buyers to have as much information as sellers when it comes to crop quality and supply so buyers can write import tenders to get the best end-use value. Wirsching encouraged buyers to communicate regularly with sellers and to build relationships with USW overseas staff.

Mike Krueger, an independent grain industry consultant, and Jim Peterson, North Dakota Wheat Commission policy and marketing director, discussed global and U.S. supply and demand factors affecting wheat prices. Peterson emphasized the difficult planting and harvesting conditions many U.S. producers faced during the 2019 growing season, especially in North Dakota, where much of the country’s spring wheat and durum is grown.

Participants also went on several tours during the course, including a CHS export facility in Superior, Wis. In a first for the NCI course, Ryan Caffrey, CHS senior durum merchant, took participants aboard a durum export vessel bound for Tunisia After the tour, representatives from USDA and the Duluth-Superior Seaway Port Authority educated participants on USDA wheat-grading practices and on the Duluth-Superior export system.

International wheat buyers tour outbound vessel at CHS export facility in Superior, Wisc. This ship will take approximately 11,000 metric tons (MT) of durum wheat to Tunisia.

Next, officials from the Minneapolis Grain Exchange (MGEX) shared the history of the exchange and current functions of the exchange in the U.S. and global marketplace. Frontier Futures broker Adam Knosalla talked about spring wheat buying opportunities, including the fact that MGEX spring wheat futures hit ten-year lows just a few weeks ago. Participants then travelled to Cargill headquarters to learn about its history, international contracts and arbitration. There was also a visit to CHS headquarters to learn about its grain merchandising practices.

NCI is a collaborative effort among North Dakota, South Dakota, Minnesota and Montana to support the promotion and market development of crops grown in this four-state region. It is an international meeting and learning center with a mission to support regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain domestic and international markets for northern grown crops. USW and NCI believe strong relationships between customers and sellers of U.S. wheat build lasting, transparent relationships that last well into the future. NCI’s 36th annual Grain Procurement Management for Importers Course, and many like it in the future, will continue to build strong connections between U.S. exporters and international importers of U.S. wheat.

Header Photo Caption: USW Regional Program and Marketing Specialist Domenique Opperman; photo courtesy of Northern Crops Institute

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Taiwan Mission Will Sign Letters of Intent for U.S. Wheat Purchases

By Dalton Henry, USW Vice President of Policy

Representatives from the Taiwan Flour Millers Association (TFMA) are in Washington, D.C. this week to sign letters of intent for the purchase of wheat and other U.S. grown commodities over the next two years. The trip is part of a biennial Agricultural Trade Goodwill Mission that takes TFMA delegates to both D.C. and major wheat-producing states. During their trip, the delegation is also making stops in Oklahoma, South Dakota and Idaho to meet with farmers, grain handlers and state officials before returning to Taiwan.

The Republic of China, known as Taiwan, is consistently a top ten market for U.S. wheat. TFMA imports wheat on behalf of all 20 Taiwanese flour mills and has imported far more wheat from the United States compared to other origins, at an average of 1.07 million metric tons (38.9 million bushels) per year since marketing year 2014/2015.

“We have long had mutually beneficial trade relations with the Taiwan milling and flour products industry,” said Vince Peterson, USW President. “They continue to be a reliable trading partner that fully recognizes the value of purchasing quality U.S. grown wheat”

Members of the Taiwan delegation in Idaho with state commissioner Joe Anderson.

This year, a team of four flour millers is joining the delegation of association representatives.

Significant hard red spring (HRS) imports reflect a need for strong gluten flour for breads, rolls and frozen dough products as well as for blending with hard red winter (HRW) to make traditional Chinese flour foods and noodles. Year-to-date sales to Taiwan in marketing year 2018/19 (June to May) are up 11% from 2017/18. Imports of soft white (SW), including Western White (a blend of SW and up to 20% club), help meet growing demand for cake, cookie and pastry flours.

Follow U.S. Wheat Associates (USW) on Facebook and Twitter for pictures from this weeks activities.

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