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Fair Weather and Adequate Soil Moisture on HRS Tour Predict Good Yield Potential

By Claire Hutchins, USW Market Analyst

This week, my colleague, Michael Anderson, and I joined four U.S. wheat customers from Mexico and Chile for the annual Wheat Quality Council (WQC) Spring Wheat Tour, an early survey of the 2019/20 hard red spring (HRS) crop in North Dakota and surrounding states. Today the tour estimated a final average yield potential of 43.1 bushels per acre (bu/ac) or about 1.17 metric tons (MT) per hectare for the 2019/20 North Dakota HRS crop. That is 5% higher than last year’s average of 41.1 bu/ac (1.12 MT/hectare). This year, tour participants made 371 stops to scout fields compared to 325 in 2018.

Each year, industry participants from across the United States and several countries gather in Fargo, N.D., and spend two and a half days in small scout teams, randomly stopping at several fields in a full day. Teams follow individual routes established many years ago by WQC to ensure most of North Dakota and parts of northern South Dakota and western Minnesota are scouted by tour participants. Teams measure yield potential, determine an average for the route and estimate a cumulative, daily tour average when all scouts come together again in the evening.

Twitter Post: Day 2 on #wheattour19. Yellow route, Car #3. Near Hensler, ND. 35 estimated bu/acre. Healthy looking wheat in the soft to hard dough stage.

Dusty boots. Another purpose of the tour is to help educate a broad range of stakeholders about wheat production challenges. Scouts are asked to look for disease, weed and insect pressure, as well as soil conditions. This year, scouts enjoyed warm, dry tour conditions, a big change compared to a very wet period from August 2018 well into this year. Soil moisture is still adequate in some parts of the region, but the July 16 U.S. Drought Monitor shows abnormally to severely dry conditions in north central North Dakota.

On the first day, the tour traveled from Fargo along routes covering most southern North Dakota counties. The cumulative first day average HRS yield potential was 45.6 bu/ac (3.07 MT/hectare), compared to 38.9 bu/ac (2.61 MT/hectare) in 2018, on adequate soil moisture conditions, warm weather and minimal disease or insect pressure. Participants surveyed 153 fields recording a range from 13.5 bu/ac to 96.2 bu/ac. We saw strong stands of healthy wheat that were three to four weeks from harvest, depending on weather. Fields were mostly dry but standing water could be seen alongside roads and fields. Temperatures were in the mid- to high-70s Fahrenheit (24 to 26 degrees Celsius) and moderate Fusarium Head Blight (also known as “scab”) development was seen along several routes.

Twitter Post: “Yellow route, east of Mapes, ND. Jack Detiveaux with @AmericanBakers is riding along with USW’s Claire Hutchins today. Estimated yield 48 bu/acre on 7″ rows.”

On the second day, teams traveled north and east through north central North Dakota where wheat does not compete as much with corn or soybeans for acreage as it does in the southeastern region of the state. Participants noted significantly larger fields, more mature wheat and less head scab pressure. The cumulative Day 2 average HRS yield potential was 40.6 bu/ac (2.74 MT/hectare), compared to 41.3 bu/ac (2.78 MT/hectare) in 2018. Participants surveyed 139 fields recording a range from as low as 14.2 bu/ac to a high of 74.7 bu/ac.

On the third day, participants traveled south and east back to Fargo for the final scout meeting hosted by the Northern Crops Institute (NCI). Teams noticed wetter field conditions, slight lodging, light scab pressure and more delayed overall crop development. The cumulative average HRS yield potential for the day was 48.6 bu/ac (1.32 MT/hectare), compared to 46.3 bu/ac (1.26 MT/hectare) in 2018.

Soil moisture impact. During the tour teams met many farmers in their fields. North Dakota farmers commented that beneficial rainfall throughout the spring and summer gave the 2019 HRS crop a boost over last year. Nearly every route averaged higher estimated yields on this wheat tour than the same routes in 2018, supporting farmer claims that 2019 could surpass 2018 harvest levels. One farmer near Wishek, N.D., expects 60 bu/ac on his farm due to cool temperatures earlier this spring and adequate soil moisture levels, which minimizes disease pressure and helps wheat yield potential. If realized, his farm would yield 39% higher than the tour’s total estimated average of 43.1 bu/acre (1.17 MT/hectare).

Days to harvest. Scouts on the tour identified most fields in the soft to hard dough stages, indicating harvest is two to five weeks away depending on weather. If warm, breezy conditions persist, some North Dakota farmers could begin the HRS harvest in as few as 20 days.

For more information, visit the WQC website at https://wheatqualitycouncil.org. Highlights and photos from the tour are posted on Facebook and Twitter using #wheattour2019.

Twitter Post: Yellow route, car #3. Near Barlow, ND. Estimated yield 37.3 bu/acre. A few spots of Fusarium Head Slight, but otherwise a good looking field.

 

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Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: ““We are concerned that Chinese customers are learning to make do without us. We are hoping that business will bounce back if we return to normal tariff treatment and can again go toe to toe with other imported origins.” – Jeff Coey, Regional Vice President, Hong Kong and China, U.S. Wheat Associates, from an article in Agri-Pulse about the on-going effects of the U.S.-China trade dispute.

Spring Wheat Buying. Reuters reported that Asian flour millers have been actively buying U.S. and Canadian spring wheat since last week as competitive prices drive demand for the grain used largely in making breads and pizza crusts. Millers from the region’s top importer Indonesia, and other countries such as Japan, the Philippines and Thailand, have signed contracts to import about 300,000 to 400,000 [metric tons] since last week, two Singapore-based trade sources said. Read more here.

A Complicated Web of Ideas. Conservationist in the Pacific Northwest have long advocated for opening federally owned dams on the Columbia and Snake Rivers to benefit salmon and other wildlife. Yet the lock and dam systems are essential for the highly efficient barge transportation system that benefits wheat farmers and their overseas customers. Boise (Idaho) Weekly examines this challenge in an article posted online here.

U.S. Grocery Shopping Trends. Farmers and overseas food processors may be interested in Food Marketing Institute’s (FMI) 45th edition of U.S. Grocery Shopper Trends, an annual look at grocery shopper attitudes and behavior. The 2019 report, prepared by The Hartman Group, Inc., studies what consumers want from their retailers when personalizing their grocery shopping. “One third of households have at least one family member following a non-medically prescribed diet, and this rate is higher for younger generations,” said the CEO of FMI. “In an effort to meet their idea of eating well, households are eating in increasingly personalized ways, challenging the food shopping experience.”

IAOM-KSU Flour and Dough Analysis. The IAOM-KSU Flour and Dough Analysis short course will be held at the IGP Institute in Manhattan, Kan., Sept. 10 to 12, 2019. The course will focus on flour and dough analysis practices and methods and correct interpretation and understanding of the results. Click here to learn more and register.

IAOM-KSU Basic and Advanced Milling Principles. Through hands-on training in the Kansas State University milling facilities and classroom discussions at the IGP Institute, these two courses will further develop participants basic and advanced milling skills and understanding of the milling process. The IAOM-KSU Basic Milling Course will be held Oct. 7 to 11, 2019. Click here to learn more about this course and register. The IAOM-KSU Advanced Milling Course will be held Oct. 14 to 18, 2019. Click here to learn more about this course and register.

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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First Bulk Grain Vessel Docked in Myanmar Carries U.S. Wheat

Many years of work conducting trade service and technical support in South Asian countries like Myanmar (Burma) showed U.S. Wheat Associates (USW) there was a growing opportunity to compete with nearby Australian wheat supplies. Knowing two deep-water ports were opening in Myanmar in 2019, USW intensified its activities. In mid-May 2019, USDA Foreign Agricultural Service representatives were on hand to welcome the first bulk grain vessel to dock at one of the ports loaded with 22,000 metric tons (MT) of high-quality U.S. hard red spring (HRS) wheat purchased by a local flour mill.

With funding from the Market Access Program (MAP) and Foreign Market Development (FMD) program, USW has provided technical and trade servicing to mills and bakeries in Myanmar for more than 20 years.  With the ability only to take container loads, U.S. wheat had to compete with less expensive supplies shipped mainly from nearly Australia. Still, its political situation was changing and consumer purchasing power was growing.

To lay the groundwork for U.S. wheat bulk shipments to customers in Myanmar, USW hosted a workshop on FGIS inspection and certification in marketing year 2017/18 for three milling companies and government officials. USW separately brought in a private trading company and the FAS staff in Yangon to brief the Myanmar Plant Protection Department about the bulk U.S. wheat export supply system. The briefing provided information that helped increase the confidence in purchasing and handling U.S. bulk wheat shipments.

The vessel New Journey carrying 22,000 metric tons of U.S. HRS at berth in Thilawa port at Yangon, Myanmar, May 2019.

Technical training continued with seven individuals from Myanmar baking companies who participated at their companies’ expense in three USW-sponsored baking courses at the UFM Baking School in Bangkok, Thailand, between May and July 2018. In a survey about their participation, these customers said they planned to demand flour produced from U.S. HRS wheat in their processing plants. And in December 2018, USW Bakery Consultant Roy Chung made a technical service call on a milling and wheat food processor in Myanmar to provide additional information on the potential value in milling U.S. HRS for bread flour and blending for other products.

In 2019/20, USW will apply funding from the FMD program to bring purchasing managers from selected Myanmar flour mills to the United States for a course called “Contracting for Value.” Participation will help the milling executives quantify the economic value of U.S. wheat classes and will help them understand possible adjustments in contract specifications to enhance that value.

Myanmar-based customers are embracing the benefits of working with imported U.S. wheat. Exports of HRS and soft white (SW) wheat to Myanmar grew from 26,300 MT in 2017/18 to about 65,000 MT in 2018/19. USW will continue to provide valuable trade and technical support there and throughout the growing wheat markets in South Asia.

*Header Photo Caption: Myanmar International Terminal Thilawa (MITT)

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U.S Wheat Industry Supports International Food Assistance Programs

By Elizabeth Westendorf, USW Assistant Director of Policy

“We know that a peaceful world cannot long exist, one-third rich and two-thirds hungry.” – President Jimmy Carter

Conflict and population displacement are both on the rise around the world. From war in Yemen to natural disasters in Southern and Eastern Africa, when these events happen, the people most at risk are also the most vulnerable to malnutrition—women and children. While there are no easy answers to these problems, the U.S. government and U.S. wheat farmers are doing their parts to help.

In marketing year 2018/19, the United States donated 800,100 metric tons (TMT) of wheat through international food assistance programs. Of this, 46% (364.4 TMT) was hard red winter wheat donated primarily to Ethiopia, and 52% (418.1 TMT) was soft white (SW) wheat primarily donated to Yemen. Other countries that received wheat included Ghana, Kenya and Bangladesh. Some of these donations were part of USDA Food for Progress monetization programs, under which wheat is sold commercially in-country and then the proceeds of that sale are used to fund an agricultural development project in the area.

September 2018 – USAID hosted an event in Portland, Ore., to bring attention to the need for food in Yemen and ongoing U.S. efforts to provide aid. Read more about this event here.

U.S. Wheat Associates (USW) has long supported these programs and the economic value they bring to countries. Other donations, like the SW wheat going to Yemen, were part of USAID’s Food for Peace emergency feeding initiatives. Yemen has been embroiled in civil war for several years now, and that instability has very real negative effects on its population. This program works to ensure that the most vulnerable people, such as women and young children, have access to food despite such turmoil.

Food aid donations are not a “market.” These programs feed hungry people and generate diplomatic goodwill, making the world a safer place. If these programs are working effectively, there would be no need to donate commodities at all because there would not be food insecurity abroad. However, until that day comes and while political crises continue to outpace natural disasters, the United States’ leadership and commitment to supplying these resources, as it has for over 60 years, is as crucial as ever.

In 2017, USW led a team of U.S. wheat farmers, state wheat commission staff members and others to Tanzania to visit current USDA Food for Progress projects funded by wheat monetization. Read more about this experience here.

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USW’s Experience in Many Countries Helps Introduce New Wheat Foods

U.S. Wheat Associates (USW) with the support of several export market development programs administered by the USDA’s Foreign Agricultural Service (FAS), has built a team of very effective end-product technical experts in Korea and Taiwan. These are very sophisticated markets with many different wheat foods. Now, USW is sharing that product and technical knowledge to help customers in the Republic of the Philippines introduce new products in a market that is hungry for innovation.

In 2018, for example, USW worked with a large flour mill in the Philippines to plan a customer appreciation learning visit to observe innovations in the Korean baking industry. USW’s representatives in Seoul set up meetings for the team of 19 customers at Korean bakeries where they saw new products and formulations made with flour from U.S. hard red spring (HRS) and hard red winter (HRW) wheat.

USW chose that milling customer for this activity knowing that Bakery World 2018, the first bakery trade show in the miller’s region, was scheduled for October 2018 where the organization would be very visible on behalf of U.S. wheat farmers. At the show with more than 6,000 bakers and allied industry representatives, USW’s Korea Country Director CY Kang presented a look at bakery trends in Korea. USW Korea Food and Bakery Technologist David Oh demonstrated production methods for five different types of breads currently popular in the Korean market. USW Manila Bakery Consultant Gerry Mendoza made a presentation on bakery operations.

With additional support from three state wheat commissions, USW also hosted 30 Philippine managers at a noodle production workshop presented by USW Taipei Asian Food Technologist Shu-Ying “Sofia” Yang in Taiwan. Yang demonstrated how milling U.S. soft white (SW) wheat yields both high quality cake flour and higher protein “clear” flour that is ideal for bright white noodles.

Participants at the 2019 Korean Bakery Workshop.

Using funding from FAS’ newly implemented Agricultural Trade Promotion (ATP) program, USW’s Manila and Seoul offices collaborated on a Korean Bakery Workshop held in Seoul, South Korea in June 2019. USW designed the workshop as a service to 30 additional Philippine bakers and millers to familiarize them with Korean products, formulations and production methods.

Sharing product knowledge and technical expertise across regions is just one of the ways USW demonstrates its commitment of service to its customers on behalf of the wheat farmers it represents.

*Header Photo Caption: Participants at the 2018 Philippine Noodle Course in Taiwan

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USW Continues Gathering Harvest and Farm Family Stories in Ohio

Contributions made by Brad Reynolds, Ohio Corn & Wheat Director of Communications

As the 2019 U.S. wheat harvest rolls on in other parts of the country, it started only recently for soft red winter (SRW) wheat harvest in Ohio, the next stop for U.S. Wheat Associates (USW) to capture the images and words of another farm family. Our organization is producing a video that focuses on the people who contribute to the wholesome quality of U.S. wheat for dozens of different food products around the world. We began in Kansas and the project to be completed in 2020 will take us around the United States.

USW’s second video shoot for this project took our team to Paulding, Ohio.

It was a busy day in Paulding, Ohio at the Goyings Family Farm late in the week of July 8. The sky was clear with puffy white clouds and a slight breeze blowing and temperatures were expected to top out around 85 degrees F. — both signals that Northwest Ohio may be pressing on from cool wet weather that has plagued the region this spring.

Doug Goyings, current USW Chairman, prepared for a day of harvest at his farm that has grown significantly since his ancestors moved there in the 1800s. Harvest is always a busy time that needs to be carefully planned, but spirits were high. This “organized chaos” was evident as the first video interview with son Jeremy began. Upon completion, his wife Jessica and his twin boys showed up at the shop to “supervise” the activities.

Doug’s son Jeremy Goyings does an interview.

“Working hard and going strong” was the theme of the day as wheat harvest, bailing the wheat straw and planting soybeans in the same fields they had just harvested went on into the night. There is no question that a supportive family is what makes Doug’s operation strong and that challenging work and long days are made slightly easier when spent doing something that you love surrounded by the people that you love.

Doug’s twin grandsons are the newest generation on the farm.

While growing SRW wheat in Ohio this year has been a challenge and acres to be harvested are down, wheat is still an important crop for the state. In addition to supplying a source of food and animal feed, growing wheat in Ohio helps improve water quality, soil health and fertility.

Thanks to Brad Reynolds, Director of Communications with the Ohio Small Grains Checkoff, for his help arranging our visit. And many thanks to the Goyings family for graciously taking so much time to share their love of producing U.S. wheat for the world.

Wheat harvest is a family affair for the Goyings family.

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Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “Today we can say that we’ve moved from precision ag to decision ag. The digital revolution is here … here to stay, and it’s going to have a profound impact on our [agricultural] business. I never in my wildest dreams, growing up on a 600-acre farm, thought any of this would be possible.” – David Hollinrake, President, Syngenta Seeds.

Congratulations. We are fortunate to have devoted, loyal colleagues at USW. This month, Stacy Taylor, Meeting Planner and Executive Assistant to the President, from the USW Headquarters Office in Arlington, Va., is celebrating 30 years. Thank you, Stacy for your service to our organization, to U.S. wheat farmers and to our customers around the world.

Agricultural Resources and Environmental Indicators Report. Agriculture is dynamic, adjusting in response to changes in the economy, technology, the environment, and policy – and agricultural production affects a wide range of natural resources. Understanding the complex links among public policies, economic conditions, farming and conservation practices, productivity and technological change, resource use, and the environment, is important for agricultural decision making. A new report from USDA’s Economic Research Service provides a comprehensive review of the use of natural resources (land and water) and commercial inputs (such as energy, nutrients, and pesticides) in the U.S. agricultural sector, as well as the impact of agricultural production on environmental quality.

Food Technologist Doug Engle Retires. After 35 years with USDA’s Western Wheat Quality Lab, food technologist Doug Engle retired on July 6. He will remain at the lab—based on Washington State University’s campus in Pullman, Wash.—for two years, working three-quarter time, in a new position funded by the Idaho Wheat Commission, Oregon Wheat Commission and Washington Grain Commission, to ease the transition as a replacement is hired. Read more about Engle’s career here.

Marketing Seminar to Offer Perspectives on 2019 Wheat Outlook. The North Dakota Wheat Commission is sponsoring a Pre-harvest Marketing Seminar in conjunction with the North Central Research Extension Fields Days in Minot, N.D., on Wednesday, July 17. The seminar will focus on marketing strategies for harvest and beyond, key issues affecting markets and demand outlook for hard red spring and durum wheat. Read more about the free seminar here.

A Cereal Science Events Calendar is available through Prof. Dr. M. Hikmet Boyacıoğlu. Contact him at [email protected] to join the subscription list.

IAOM-KSU Flour and Dough Analysis. The IAOM-KSU Flour and Dough Analysis short course will be held at the IGP Institute in Manhattan, Kan., Sept. 10 to 12, 2019. The course will focus on flour and dough analysis practices and methods and correct interpretation and understanding of the results. Click here to learn more and register.

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

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Wheat food products to illustrate Wheat Industry News

U.S. Grain Chain Testifies on Health Benefits of Increased Grain Servings

Excerpts reprinted with permission from the American Bakers Association; Read the original release here.

The “Grain Chain”, a farm to fork coalition of stakeholders in the U.S. grain industry chaired by the American Bakers Association (ABA), testified July 11, 2019, on the nutritional benefits of bread and grain-based products at the Dietary Guidelines Advisory Committee (DGAC) meeting. The recommendations in the Committee’s scientific report, due next year, will form the basis of the 2020-2025 Dietary Guidelines for Americans (DGAs). The DGAs are the cornerstone of U.S. federal nutrition policy and nutrition education guidelines, shaping consumer health decisions and doctor recommendations.

“The Grain Chain endorses maintaining the 2015 DGAs recommendation of carbohydrate intakes between 45-65% of calories and at a minimum, the recommended six servings daily of traditional grains with at least half as whole grains,” testified Kathy Wiemer, MS, RD, speaking on behalf of the Grain Chain. “Further, given that Americans continue to under consume whole grains, we support an increase in daily recommended Whole Grain servings, while maintaining at least three servings of enriched grains.”

Kathy Wiemer, MS, RD, testifies on behalf of the Grain Chain. Photo Credit: American Bakers Association

The testimony and written comments highlighted key recommendations:

  • Both whole and enriched grains play a leading role in diet quality
  • Enrichment, fortification of grain foods have made lasting contributions to health
  • Total grain consumption results in positive health outcomes
  • Grains are important to growth and development in infants and children
  • The current body of scientific evidence does not support a recommendation of low-carbohydrate dietary patterns to the U.S. population
  • Grain food manufacturers are constantly innovating to improve the nutritional profile of their products and deliver more health benefits to consumers

A 1990 law requires the U.S. Departments of Agriculture, and Health and Human Services, to publish nutritional and dietary guidelines for the public every five years. Members of the U.S. Grain Chain provide information to these agencies as guidelines are developed to help ensure that recommendations on grain foods consumption reflect current grain science research and data.

There is strong evidence that both whole and enriched grains are important sources of valuable nutrition and both the domestic and global baking industries continue to offer innovative, healthy grain products to meet consumer needs. Overseas, U.S. Wheat Associates (USW) works on behalf of U.S. wheat producers to help bakers and wheat food processors understand the quality and value of all six classes of U.S. wheat. USW provides technical assistance and training in baking, snack food and pasta production, and sponsors participation in technical courses, workshops and seminars to help strengthen these industries.

Learn more about the nutritional value of wheat foods from the Wheat Foods Council, the Grain Foods Foundation, the National Pasta Association and the International Pasta Organization.

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Promoting U.S. Wheat Around the World

As U.S. Wheat Associates (USW) President Vince Peterson often says, at any given hour of the day there is someone, somewhere, talking about the quality, reliability and value of U.S. wheat. Wheat Letter wants to share some of the ways USW was working in June to promote all six classes of U.S. wheat in an ever more complex world wheat market.

Mexico. The USW Mexico City Office hosted the Mexico Wheat Trade Conference in Cancun, Mexico. Mexican millers, representing more than 85% of total Mexican milling capacity, attended the conference, as well as Mexican government officials, U.S. farmers from 13 states, U.S. grain trade representatives, and representatives from the four railroads serving the Mexican market including BNSF, Ferromex, Kansas City Southern-Mexico and Union Pacific. The program included messages from USW Chairman Chris Kolstad and USW President Vince Peterson, thanking the Mexican milling industry for their business and many years of close friendship, as well as presentations and discussions on the United States-Mexico-Canada Agreement (USMCA), price risk management, rail transportation, ocean freight, contracting for wheat value and more. Read the full article about the conference here.

https://youtu.be/tvytAcIROE4

Jamaica. USW Technical Specialist Marcelo Mitre and Assistant Regional Director Stephanie Bryant-Erdmann accompanied Bakery Consultant Kirk O´Donnell to Jamaica to conduct two, 2-day seminars in partnership with a local mill. The seminars—attended by a combined 57 participants from four countries representing the baking, milling and distribution sectors—focused on the quality and versatility of U.S. wheat, baking technology, ingredient functionality, traditional fermentation methods, puff pastries and shelf life.

USW Bakery Consultant Kirk O´Donnell at a seminar in Jamaica. Photo Credit: JF Mills

A participant a the baking seminar in Jamaica. Photo Credit: JF Mills

Brazil. Accompanied by USW Marketing Manager, Casey Chumrau, and Technical Specialist, Andres Saturno, a delegation of Brazilian flour milling managers who are responsible for quality control in their wheat purchases, traveled to Kansas, Ohio and Texas. During its travels, the delegation met with the Federal Grain Inspection Service (FGIS), milling companies, analysis laboratories, wheat breeding facilities and visited wheat farms.

The 2019 USW Brazilian Trade Delegation visits Texas A&M University. Photo Credit: Texas Wheat

The Philippines. The USW Manila and Seoul offices hosted a Korean Bakery Workshop in Seoul, South Korea, for Philippine bakers and millers to learn about Korean products, formulations and production methods to help the industry take advantage of growing opportunities and improving processes in the Philippines. The workshop took place at the Korean Baking School (KBS) under the direction of a Grand Master Baker and was facilitated by KBS program staff, along with USW Food Technologist, David Oh, and Country Director, CY Kang.

USW Korean Bakery Workshop in Seoul, South Korea.

Taiwan. USW collaborated with Chia Nan University (CNU) of Pharmacy and Science to host a full-day 2019 CNU Symposium on Chinese-style Steamed Breads for baking and catering professionals, souvenir development companies and culinary faculty and students. The symposium including hands-on training on how to make fermented steam bread and buns, as well as presentations on quality control of steamed bread, an introduction to wheat flours used for steamed breads and wheat flour inspection and milling.

2019 CNU Symposium on Chinese-style Steamed Breads

China. Together, USW and the Wheat Marketing Center (WMC) hosted a Contracting for Wheat Value Workshop (CFWC) for Chinese buyers and technical officials. This workshop highlighted the strengths of U.S. wheat production and its reliability and high quality. Participants also had the opportunity to travel to visit Padget Ranches in Oregon’s Sherman County. Darren Padget is a wheat farmer and current USW Vice Chairman and invited the workshop participants for a farm tour and dinner barbeque with several local farmers and neighbors.

Contracting for Wheat Value Workshop participants visit Darren Padget’s farm in Oregon’s Sherman County.

*Header Photo Caption: Contracting for Wheat Value Workshop participants visit with a farmer in Oregon’s Sherman County.

Italy. USW Regional Marketing Director Rutger Koekoek spoke at the Romacereali Conference on the outlook for durum wheat for North America and North Africa. The conference is a popular event for the Italian cereal sector organized by the Rome Chamber of Commerce. Its 200 participants primarily work in the Italian durum milling, durum trading and pasta processing industries.

Sub-Saharan Africa. Accompanied by USW Assistant Regional Director, Chad Weigand, and Marketing Specialist, Olatunde Omotayo, a delegation of milling and procurement staff representing companies from Nigeria, South Africa, Senegal, Ghana and Cote d’Ivoire spent 10 days traveling to Washington D.C., North Dakota and Kansas to learning more about the excellent quality of hard red winter (HRW), hard red spring (HRS) and durum supplies available, as well as the promise of more exportable supply of hard white (HW) and the logistical advantages of purchasing from the United States

The 2019 USW Sub-Saharan Delegation at the Kansas Wheat Innovation Center. Photo credit: Kansas Wheat

Nigeria, South Africa and Kenya. USW Vice President of Global Technical Services, Mark Fowler, and IGP Institute Associate Director, Shawn Thiele, conducted on-site milling consultations and hands-on technical training in four flour mills in Nigeria and three flour mills in South Africa. During their visits, Fowler and Thiele gave recommendations for improving milling operations and flour quality for HRW, HW and soft red winter (SRW) flour. They also spoke at the African Milling School (AMS) in Kenya about U.S. wheat classes and milling for U.S. wheat for the AMS Apprenticeship Program

 

Mark Fowler (L) and Shawn Thiele (R) inspect flour at a mill in Nigeria.

USW and IGP staff at a mill for training in Nigeria.

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U.S. Wheat Prices Competitive with Corn for Domestic Feed Use

By Claire Hutchins, USW Market Analyst

According to USDA’s June WASDE (World Agricultural Supply and Demand Estimates) report, U.S. feed wheat consumption will increase 64% in marketing year (MY) 2019/20 to 3.81 million metric tons (MMT), compared to 1.36 MMT in MY 2018/19. U.S. Wheat Associates (USW) believes the current price relationship between domestic wheat and corn and the nutritional value of U.S. hard red winter (HRW) wheat and soft red winter (SRW) wheat support USDA’s estimates.

When the cash price gap between U.S. wheat and corn shrinks, wheat becomes an attractive feed ingredient for the cattle, swine and poultry industries. Per bushel, wheat is typically more expensive than corn, making it economically less practical as a staple ingredient in U.S. feedlots. However, recent market conditions are changing wheat and corn feeding ratios across the United States. The spot price gaps between U.S. winter wheat and corn have diminished, and even inverted, over the past several months as the potential for a bountiful wheat harvest offsets the potential for lower corn production due to late spring planting in the Midwest.

HRW can be substituted for corn as cattle feed in the High and Southern Plains where much of the country’s HRW wheat is grown. The cattle industry, predominant in Kansas and Texas, favors wheat as a feed ingredient when HRW is less than $1.00/bu more expensive than corn. Between early May and late June, the average cash price for wheat and corn increased steadily in both states, but the price gap narrowed and eventually inverted by early July.

In early May, the cash price for HRW in Kansas, the third largest cattle-producing state in the country, was $0.49/bu higher than corn. By early June, the price gap dropped to $0.29/bu. On July 1, the average cash price for both commodities settled around $4.06/bu and by July 5, HRW was $.06/bu cheaper than corn at $4.20/bu. According to Aaron Harries, Kansas Wheat Commission Vice President of Research and Operations, Kansas feedlots are already feeding more wheat than usual as managers respond to market incentives. Importantly, the decision to feed more wheat is made based on months of efficient market conditions as the ideal cattle diet consists of at least six months of a consistent ingredient blend.

Source: Reuters Eikon

In Texas, the largest cattle-producing state in the country, the recent spot price relationship between HRW and corn has been much tighter. In the first half of May, the cash prices for HRW and corn were nearly tied around an average of $3.92/bu. By early June, the average cash price for HRW dropped $0.24 below corn’s $4.50/bu. The cash-price relationship between wheat and corn is still inverted as of early July and HRW is, on average, $0.37/bu cheaper than corn.

“We are seeing a trend of feedlots purchasing more wheat directly from producers and elevators,” says Darby Campsey, Texas Wheat Producers Board, Director of Communications and Producer Relations. “Market conditions and wheat quality are increasing the value of wheat compared to corn in some cases.”

Campsey explains that in addition to market conditions, Texas livestock producers make grain purchasing decisions based on nutritional needs and local supplies. When wheat protein is lower than average, producers may be more likely to sell to feedlots, where quality requirements are slightly easier to meet than milling standards.

In the Midwest and South, where much of the country’s SRW is grown, swine producers are willing to pay more for wheat than corn because of wheat’s high nutritional value, according to Joel DeRouchey, Kansas State University professor in swine nutrition and management. Corn is used as a feed ingredient for swine because it is cheaper and a higher source of energy than wheat, but wheat brings a higher concentration of amino acids and phosphorous to the animal’s diet. The same market conditions affecting Kansas and Texas can be seen in Illinois and North Carolina, making wheat an even more attractive feed ingredient for swine producers.

In Illinois, the fourth largest swine-producing state in the country, the average spot price gap between SRW and corn decreased significantly between early May and early July. In early May, SRW was, on average, $.90 more expensive than corn. By July 8, the difference collapsed to $.50 as SRW prices continued their decline to $4.92/bu and corn prices continued their incline to $4.42/bu.

Source: Reuters Eikon

At an elevator in North Carolina, the second largest swine-producing state in the country, the spot price for corn surpassed the spot price for SRW between early June and early July. Between June 24 and July 5, the spot price for SRW sank from $4.82/bu to $4.38/bu while the price of corn hovered around an average $4.81/bu.

Wheat is also used as a corn feed substitute in the poultry industry due to its high protein content. Wheat becomes attractive to broiler producers when the price gap between SRW and corn narrows to $.50/bu. The average cash price for SRW in Kentucky, the seventh largest broiler producer in the country, decreased significantly between June 26 at $5.39/bu and July 5 at $4.91/bu, while the average price of corn increased from $4.36/bu to $4.60/bu. In early June, the average spread between SRW and corn was $.81/bu. As of July 5, the spread narrowed to just $.31/bu.

Source: Reuters Eikon

“I wouldn’t be surprised if more chicken producers are feeding wheat. Corn is preferred for chickens, because of its high energy levels, until corn prices rise too high, and right now cash prices for wheat and corn in Maryland are pretty close,” says Jason Scott, Maryland wheat farmer and USW past chairman. As of July 8, the average SRW spot price in Maryland, a top ten broiler producing state, was only $.10/bu higher than corn.

If the narrow or inverted price gaps between wheat and corn persist across the country, producers could continue to increase the amount of wheat used in feed blends for cattle, swine and poultry, potentially surpassing USDA’s estimate of 3.81 MMT.

Every month, USW publishes a graphic summary of the latest data from USDA’s WASDE report, including global wheat market factors, major country and regional export history and U.S. wheat supply and demand summaries by class. View the monthly summary here.

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