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Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “I am convinced that the majority of American people do understand that we have a moral responsibility to foster the concepts of opportunity, free enterprise, the rule of law, and democracy. They understand that these values are the hope of the world.” – The late U.S. Sen. Richard Lugar who, with former Senate Finance Committee Chairman and Ambassador to China Max Baucus, founded “Farmers for Free Trade” in 2017. Sen. Lugar passed away April 28.

USDA Moves to New Notifications Platform. As of May 1, 2019, USDA moved its email subscription service to a different platform. To continue receiving notifications such as press releases, blogs and trade announcements you must re-enroll on their new site here.

2017 Census of Agriculture: Highlights for Wheat. The USDA National Agricultural Statistics Service (NASS) released its 2017 Census of Agriculture statistics on April 11. The Census, released every 5 years, includes data on farm demographics, land area, production and production value and more at the national, state, and county levels. The National Association of Wheat Growers (NAWG) posted a blog highlighting wheat-specific data from the 2017 Census that shows a reduction in total U.S. farms producing wheat, production and planted area; spring and durum planted area increased. Read it here.

Earth Day. Monday, April 22, 2019 was the 49th Earth Day! In its recent blog, NAWG highlights how wheat growers incorporate conversation and sustainability practices into their operations. Read the blog here.

Minnesota Wheat Hires New Executive Director. The Minnesota Wheat Research & Promotion Council (MWRPC) and the Minnesota Association of Wheat Growers (MAWG) recently hired Charlie Vogel to serve as the Executive Director for both organizations. Vogel will start his duties on June 1, 2019. Read the full announcement here.

U.S. EPA: Glyphosate Not A Carcinogen. From a press release: “The U.S. Environmental Protection Agency (EPA) is taking an important step in the agency’s review of glyphosate. As part of this action, EPA continues to find that there are no risks to public health when glyphosate is used in accordance with its current label and that glyphosate is not a carcinogen. The agency’s scientific findings on human health risk are consistent with the conclusions of science reviews by many other countries and other federal agencies. While the agency did not identify public health risks in the 2017 human health risk assessment, the 2017 ecological assessment did identify ecological risks. To address these risks, EPA is proposing management measures to help farmers target pesticide sprays on the intended pest, protect pollinators, and reduce the problem of weeds becoming resistant to glyphosate.” Click here to read more.

Baking with Whole Wheat and Whole Grains Course. The Northern Crops Institute is hosting a course focused on the utilization of whole wheat flour made from hard red spring (HRS) wheat and how to incorporate other whole grain ingredients into wheat-based products. The July 30 to Aug. 2, 2019 course will be at its facilities in Fargo, N.D. Click here to learn more and register by Monday, July 8.

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.

Buhler-KSU Executive Milling Short Courses. IGP Institute offers this executive milling course several times in 2019 at its campus in Manhattan, Kan. The course, focused on the underlying principles of the milling process and operational management, will be offered in English May 20 to 24, 2019, and Nov. 4 to 8, 2019, as well as in Spanish Aug. 26 to 30, 2019. Click here to register to 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 www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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Promoting 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 the past few months to promote all six classes of U.S. wheat in an ever more complex world wheat market.

Brazil. During President Bolsonaro’s meeting with President Trump in March, the Brazilian president announced the implementation of the tariff rate quota (TRQ) that would allow 750,000 MT of non-Mercosur wheat into Brazil tariff free, something USW has pushed for years to be implemented. Soon after the announcement, USW offered support to Brazilian buyers and any purchasing information they may need to consider U.S. now and in the future. When realized, this change will give U.S. wheat farmers the chance to compete fairly for a sizable part of Brazil’s import needs every year.

The Philippines. With funding provided by the Washington Grain Commission, USW organized a team of research and development managers from the Philippine milling industry to take part in an End Products Collaborative in March at the Wheat Marketing Center in Portland, Ore. Recent expansion in the ASEAN milling industry has increased competition and created a need for millers to differentiate their flour products. This activity helps identify the best U.S. wheat options available.

Members of the Philippine Milling Industry participate in an End Products Collaborative at the Wheat Marketing Center.

During the End Products Collaborative the participants visited with the Wheat Marketing Center Board of Directors.

Malaysia. In March, USW South Asia Regional Vice President Matt Weimar conducted two days of trade servicing for a mill in Malaysia, which also has operations in Vietnam and Indonesia. In the past two years, this mill has doubled imports of U.S. wheat to Malaysia alone. Weimar gave a seminar on the World and U.S. Supply and Demand as of March 2019 and shared the value of utilizing additional information resources from USW and USDA.

South Korea. USW Baking Consultant Roy Chung and Food and Bakery Technologist Shin Hak (David) Oh visited Seoul in March to conduct a pre-mix seminar and workshop to demonstrate the versatility of U.S. wheat in a wide range of end products. Workshop participants enhanced their understanding of ingredient functionality and chemical leavening systems while experimenting with new product formulations in pre-mixes.

Participants of the Pre-Mix Seminar with the instructors in black: (L) USW Food and Bakery Technologist Shin Hak (David) Oh; (R) USW Baking Consultant Roy Chung.

Taiwan. In April, USW Regional Technical Director Peter Lloyd spoke at a milling seminar attended by members of the Taiwan Millers Association and faculty members of the China Grain Products Research & Development Institute (CGPRDI). Lloyd’s program focused on hard and soft wheat milling, solvent retention capacity (SRC) and SDS testing methods and their application in the mill, and profitability in the milling industry.

Milling Seminar Participants at the China Grain Products Research & Development Institute (CGPRDI).

China. To meet industry demand for deeper knowledge of techniques in frozen dough production, USW is collaborating with the Sino-American Baking school (SABS), Lesaffre Yeast and Square Technology Group Co., Ltd., to hold three sessions of frozen dough technology courses this year for millers and bakers. During the first session in March, USW Technical Specialist Ting Liu and Asian Products/Nutrition Technologist Shu-ying Yang spoke on the importance of choosing the correct flour for frozen dough by showing how freezing affects gluten functionality.

Panama. USW sponsored a wheat buyer from Panama to attend the IGP Institute Grain Purchasing Short Course in April. The course focused on contract specifications, financing grain imports, grain grading, ocean transportation, discussions of the cash and futures markets and included a visit to an export facility in Portland, Ore.

Spain, Portugal and Morocco. In March, a USW Board Team including farmers from Montana, Nebraska and Wyoming traveled to Spain, Portugal and Morocco to visit customers, millers, government officials and more to listen and learn more about those markets and how they utilize U.S. wheat. Read more about those visits here.

Visiting IFIM and touring the training mill, where the USW Board Team saw equipment sponsored by U.S. Wheat Associates. (L to R): Al Klempel (Montana), Kent Lorens (Nebraska) and Casey Madsen (Wyoming).

Morocco and Tunisia. In April, USW hosted a delegation from Morocco and Tunisia focused on grain storage and management that was part of the USDA Cochran Fellowship Program traveling to Kansas and Texas. This program provides short-term training opportunities to agricultural professionals from middle-income countries, emerging markets, and emerging democracies. Read more about this delegation here.

The Cochran Fellowship Program delegation from Morocco and Tunisia stopped by the Kansas Wheat Innovation Center where they toured its greenhouse and research facilities. The team was escorted by USW Milling & Baking Technologist Tarik Gahi, pictured far right. (Photo Credit: Kansas Wheat)

Italy. USW Regional Marketing Director Rutger Koekoek recently visited Italy for several meetings with the grain trade, milling companies and a leading pasta processor to discuss the advantages of U.S. hard red spring (HRS) and durum crop quality and functional performance in products for the Italian market.

Wheat Research. USW recently worked with CGIAR to create a fact sheet and other support materials promoting the benefits of U.S. investment in global wheat research collaboration.

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The Long-Term Risks of “National Security” Tariffs Have Appeared

By Ben Conner, USW Vice President of Policy

In June 2017, U.S. Wheat Associates (USW) suggested that pursuing a strategy of import protection under the guise of national security would set a dangerous precedent. Then USW President Alan Tracy said “… if the United States undermines WTO national security exemptions, it would be handing a gift-wrapped roadmap of protectionism to food self-sufficiency advocates all over the world.”

The United States did impose these tariffs and threatens more. The risk of imitation by other countries is a long-term threat to U.S. agriculture, but most affected countries to date have responded by retaliating against U.S. agriculture exports, rather than imitating the U.S. policy. In addition, these countries have brought several cases against the United States at the World Trade Organization (WTO). The United States claims these tariffs are allowed under the WTO’s national security exception, which is self-determined. Other countries claim such measures are allowed only if they fit under one of the criteria established in the WTO rules.

The WTO earlier this month gave a preview of how it might rule on the cases against the United States with its panel decision in a case that Ukraine brought against Russia. The report was adopted last week by the WTO Dispute Settlement Body (DSB). Ukraine argued that Russia’s restrictions on its transshipment rights violated WTO rules, which would be clearly true in normal circumstances. Russia claimed these restrictions were imposed for national security reasons due to the armed conflict with Ukraine. Russia further argued that the panel had no jurisdiction, because Russia had invoked the WTO’s GATT Article XXI, the rule that allows exceptions to normal WTO rules for national security reasons. Russia argued that determining national security is up to each country and therefore not subject to the panel judgment. The United States made the same argument in a third-party brief.

Russia won the case, because armed conflict is a valid national security issue, but lost the argument that the panel had no jurisdiction. At the risk of oversimplifying, the panel found that if the national security rule was meant to be self-judging, the authors of the agreement would not have included specific criteria. It quoted a U.S. delegate who said in 1947 that they supported the specific criteria due to the recognition “that there was a great danger of having too wide an exception…because that would permit anything under the sun.”

Permitting tariffs on “anything under the sun” could lead to devastating consequences for the competitive U.S. agriculture sector as more protectionist nations around the world follow the U.S. example. However, the United States, consistent with the position it has taken to date in this case, opposed this decision and claimed there should be no parameters on any trade restriction if the country imposing the restriction cites the national security exception.

USW takes no position on the respective arguments in the case but remains extremely concerned with the indiscriminate use of 232 tariffs that will likely put this question in front of the WTO DSB soon. This is a major challenge facing the WTO that did not need to happen and threatens to undermine the global trade rules that are so important to U.S. agriculture and its overseas customers.

The Trump Administration’s trade agenda includes fixing an extensive list of long-standing concerns with how some of our trading partners and international institutions have applied trade rules. USW shares many of these concerns. Unfortunately, we believe that the use of Section 232 undermines the long-term interests of the U.S. economy and U.S. agriculture in particular; and any gains made because of these tariffs are likely to be short term while the damage to the rules-based trading system could be permanent.

For additional information, visit https://bit.ly/2EA9HOn and https://bit.ly/2KmTSRx online.

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USDA Confirms Delay in Spring Wheat Planting and Good Potential for Winter Wheat

This week, the USDA’s National Agricultural Statistics Service (NASS) reported that as of April 28, U.S. spring wheat planting progress is significantly behind average as farmers wait for their fields to dry out.  Over the past 5 years, an average of 33% of spring wheat was in the ground by now but this year only 13% has been seeded.

What effect will that have on the 2019/20 U.S. hard red spring (HRS) crop? Experts say late planting typically hurts yield potential. Jonathan Kleinjan, an Extension agronomist with South Dakota State University, recently explained that HRS should be planted as early as possible since cooler weather from emergence to the early reproductive stages generally benefits tiller formation and the development of larger heads. Increased growth during the early season typically results in higher yields.

He noted a study in North Dakota that showed spring wheat planted May 1 had 6 fewer days of growth from emergence to 6-leaf stage when compared to wheat planted on April 15. He said the number of days was further reduced to 11 when planting was delayed until May 15. Yield data related to this research, he said, suggests that wheat loses 1.5% of its yield potential every day after the optimum planting date. His conclusion: the extended weather forecast shows unfavorable planting conditions extending well into May, so farmers may switch from small grains to later-planted row crops such as soybeans.

Progress is less than 10% in the major production area of the Northern Plains. The Pacific Northwest is a bit farther along, although Idaho’s Nez Perce County Extension agent Doug Finkelnburg said that “we’re a little delayed with spring planting this season — sort of like last spring.” He said the last date farmers there can purchase spring wheat crop insurance is in mid-May and suggested that planted area will be reduced if they delay goes beyond that time.

NASS also reported that U.S. winter wheat heading progress at 19% is 10 points less than the 5-year average, but crop condition is improving. NASS estimated 64% of total winter wheat was in good-to-excellent condition as of April 28, up 2 percentage points from the previous week. We will learn more about conditions and yield potential of the hard red winter (HRW) crop in Kansas, southern Nebraska, eastern Colorado and northern Oklahoma this week from the Wheat Quality Council Hard Winter Wheat tour. U.S. Wheat Associates (USW) colleagues will join more than 70 other participants and will report during the tour on Twitter using #wheattour19.

* Photo Credit: Aaron Harries, Kansas Wheat V.P. of Research and Operations, on the 2019 Winter Wheat Quality Tour in Kansas

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Meet the USW Technical Experts: Marcelo Mitre – A Love of Food and Technology that Bakes in Value and Loyalty

Name: Carlos Marcelo Mitre Dieste

Title: Technical Specialist

Office: USW Mexican, Central American and Caribbean Regional Office, Mexico City

Providing Service to: Barbados, Belize, Costa Rica, Cuba, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Leeward-Windward Islands, Mexico, Nicaragua, Panama, Suriname, Trinidad-Tobago, Venezuela

Regional Profile: The combination of economic growth, consolidation, increasing urbanization, and a steadily growing population is a catalyst for rising wheat food product consumption in this region. For example, the evolution of franchising, fast foods, convenience stores, snack foods, dual-income households, and more demanding consumers has led to the establishment of new products, better quality, more uniform standards, and a larger overall market for bread but also for Asian-style noodles, cookies, crackers, and pasta. Given the quality and diversity of U.S. wheat supplies and the comparative geographic advantages, USW’s focus on increased technical service and assistance is paying dividends as the region’s demand for wheat continues to grow.

Growing up in Mexico City and Monterrey, Mexico, young Marcelo Mitre’s experiments in his family kitchen firmly established his interest in food and, eventually, a career in the science of food production.

“I have always loved to eat, and as a kid, I would try to make every recipe I saw in newspapers or on TV shows, and my Mom has many funny stories about my early attempts in the kitchen,” Marcelo said. “But eventually, I was making cakes at home and selling them at my high school.”

Although he wanted to continue exploring his interest, Marcelo did not initially see options to do professional studies in the food sector, so he enrolled as a Marketing major at Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM).

“Then, during a function at school near the end of my first semester, I bumped into this small program called ‘Food Industry Engineering,” he recalled. “When I looked at the academic curriculum, the laboratory courses looked very interesting, and I immediately switched my major.”

A Framework for a Career

Marcelo’s undergraduate experience framed his work today as a Technical Specialist with U.S. Wheat Associates (USW), serving flour milling and wheat food processing organizations in Mexico, Central America, Venezuela, and the Caribbean. Internships at a large brewing company, a meat packing plant, and a frozen food manufacturer gave him experience in different food industries. He also considers his ITESM Professor of Cereal Science, Dr. Sergio Serna-Saldivar, as his mentor.

“After graduating, I continued working at the frozen food products company in Mexico,” Marcelo said, “then Dr. Serna suggested I apply for a master’s program studying cereal science with Dr. Lloyd Rooney at Texas A&M University. My master’s thesis was Barley Tortillas and Barley Flours in Corn Tortillas. We chose the topic because tortillas are the staple food in Mexico, and I wanted to see if we could increase the health benefits and textural characteristics of tortillas.”

Technical Specialist Marcelo Mitre earned a master’s degree with a thesis on improving tortilla nutrition. He continues to promote flour tortilla nutrition and quality improvement using U.S. wheat.

Post-graduate experience in commercial food research and development and technical sales continued Marcelo’s path toward his responsibilities at USW. At Sage V foods in Texas, he developed rice products. At Illinois-based Continental Custom Ingredients, Inc., Marcelo represented the company’s stabilizers, emulsifiers, and ingredient systems with Latin American food customers. He eventually opened a laboratory in Mexico City for that company, later acquired by Tate and Lyle.

“I liked the combination of R&D and sales a lot,” Marcelo said. “I am a very hands-on person, and technical sales gave me the opportunity to interact with the clients and understand their needs. I also liked being in the laboratory using what I learned from the clients to help develop solutions for them.”

The Right Fit for USW

In 2009, Marcelo returned to the United States to work at a cooking fats and oils company in Miami, Fla. At the same time, USW Regional Vice President Mitch Skalicky was searching for the right individual who could serve in a wide-ranging technical position.

“All the candidates I had interviewed were either not qualified or did not fit the profile we needed,” Skalicky said. “I asked a contact at ITESM to let us know if they had a potential candidate. Not long after, Dr. Serna made the connection that brought Marcelo to USW. In Marcelo, we saw a highly intelligent person, having graduated from one of the top universities in Latin America, with a very strong background in engineering, technology, and food science.”

Several things about the job with USW attracted me,” Marcelo said. “It was a chance to continue doing hands-on work across the very active flour and wheat foods industry based in Mexico City but still traveling throughout the region and internationally. Mitch and others explained that this was a not-for-profit organization representing U.S. wheat farmers with a very low turnover of people. That told me this would be a nice work environment.”

Based on customer needs and the annual regional activities plan, Marcelo is responsible for activities that range from helping flour mills blend flour from different U.S. wheat classes to improve product quality and reduce costs, to conducting cookie and bread baking seminars for food processors, alone or with consultants, to pasta production courses across the region.

Baking instruction and quality evaluation with customers in Mexico, Central America, Venezuela, and the Caribbean is a crucial part of Mitre’s work.

“Marcelo represents the very positive and strategic support we get from U.S. Wheat Associates,” said an executive with a large flour milling company in Honduras. “We know we can count on him to guide us or give us suggestions on how to address a challenge, and we bring him to visit our clients to find ways to improve their processes or products.”

Another regional flour milling executive said Marcelo is a very important link to information about U.S. wheat quality and processing.

A baking company manager in Guatemala also testifies to Marcelo’s technical baking knowledge and how he applies it in workshops to demonstrate the benefits of U.S. wheat flour. The manager added: “I can attest that Marcelo is a responsible person who is committed to his work, is very organized, and has excellent people skills.”

A Balanced Approach

Marcelo said long-distance running, which was something he started in high school “to lose weight,” taught him to balance work, social life, sleep, and training for five marathon races, running four of them in less than three hours!

“There are no excuses if you fail to do one of the four,” he said, “because you will be the only one affected. You become very organized in your life because every minute counts in your schedule.”

“Marcelo has shown an exceptional work ethic combined with the ability to learn quickly, adapt to a diverse set of circumstances and respond in a very flexible way to any challenge,” Skalicky said. “He has the interpersonal skills to work with both management as well as production and quality control staff.”

“It is a pleasure to work with U.S. Wheat Associates, and for the U.S. farmers we represent,” Marcelo said. “The people in all our offices are very friendly, and you can contact anyone, anywhere, about any question, and they will share information without hesitation. Most important,” he added, “our work is focused on giving our customers freely, without obligation, the information and skills they need to improve their products and businesses. And we feel very good about being able to do that!”

Mitre’s work and enthusiasm takes him all over the region, working with various customers and groups.

By Steve Mercer, USW Vice President of Communications

Editor’s Note: This is the third 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.”

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
Tarik Gahi – ‘For a Piece of Bread, Son’
Gerry Mendoza – Born to Teach and Share His Love for Baking
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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Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “With these decisions, we call on the Chinese government to come into compliance with the rules it accepted when it joined the WTO. The world now sees that their policies stifle market-driven wheat trade, block export opportunities and force private sector buyers and consumers to pay more than they should for milling wheat and wheat-based foods.” – Vince Peterson, USW President, commenting on the April 18 WTO dispute panel ruling that China does not fairly administer its annual TRQ for imports of corn, rice and 9.64 million metric tons (MMT) of wheat. Read the full news release here.

Congratulations. We are fortunate to have devoted, loyal colleagues at USW. This month Accountant Ana Laura Salinas from the USW Mexico City Office is celebrating 20 years. Thank you, Ana Laura, for your service to our organization, to U.S. wheat farmers and to our customers around the world.

Our Sympathies. We have learned that William L. “Bill” Hulse of The Dalles, Ore., passed away in March at 98 years old. Mr. Hulse was the first Vice Chairman of USW, elected at the January 1980 meeting at which USW was established, and served as Chairman for 1981/82. During his chairmanship, the USW board hired the late Winston Wilson as President, who served until his retirement in 1997. Our condolences to Mr. Hulse’s family and friends.

Wheat Buyers from Morocco and Tunisia Visit Kansas and Texas. Wheat buyers from Morocco and Tunisia got a closer look at the intricacies and reliability of the U.S. grain infrastructure during their Cochran Fellowship Program experience in Kansas and Texas April 12 to 19. The program offers short-term training opportunities to agricultural professionals from middle-income countries, emerging markets and emerging democracies. Read the full story here.

2019 Borlaug CAST Communication Award. The Council for Agricultural Science and Technology (CAST) recognized Dr. Frank Mitloehner, professor and air quality specialist in cooperative extension in the College of Agricultural and Environmental Sciences at the University and California, Davis, with its 2019 Borlaug CAST Communication Award. This award is presented annually for outstanding achievement by a scientist, engineer, technologist or other professional working in the agricultural, environmental or food sectors for contributing to the advancement of science in the public policy arena. Read the full release here.

2017 Census of Agriculture Data Now Available. USDA announced the results of the 2017 Census of Agriculture Apr. 11, spanning some 6.4 million new points of information about America’s farms and ranches and those who operate them. Read the full release here.

Refined Grains and Health. A study showing that current guidelines on refined grains are misguided was recently published in a respected nutrition journal, Advances in Nutrition. The article, Perspective:  Refined Grains and Health:  Genuine Risk, or Guilt by Association? was developed by Dr. Glenn Gaesser, Director of the Healthy Lifestyles Research Center, at Arizona State University. Gaesser conducted a comprehensive literature review looking specifically at the relationship between refined (or enriched) grain intake and risk of major chronic diseases. Read the article here.

Cassidy Anderson Joins IGP Institute Team. The IGP Institute welcomes Kansas State University agribusiness graduate Cassidy Anderson, as the new distance education coordinator beginning May 20, 2019. Anderson first joined IGP as a student intern in 2016 and has since supported vital distance education activities. Read the full release here.

Baking with Hard Red Spring Wheat Flour Course. The Northern Crops Institute is hosting a course focused on hard red spring (HRS) wheat and flour May 14 to 17, 2019, at its facilities in Fargo, N.D. Participants will spend time in the baking laboratory, making pan breads, hamburger buns, hard rolls, bagels, pizza crusts, wheat-flour tortillas and more. Click here to learn more and register by April 22.

Baking with Whole Wheat and Whole Grains Course. The Northern Crops Institute is hosting a course focused on the utilization of whole wheat flour made from hard red spring (HRS) wheat and how to incorporate other whole grain ingredients into wheat-based products. The July 30 to Aug. 2, 2019 course will be at its facilities in Fargo, N.D. Click here to learn more and register by Monday, July 8.

Buhler-KSU Executive Milling Short Courses. IGP Institute offers this executive milling course several times in 2019 at its campus in Manhattan, Kan. The course, focused on the underlying principles of the milling process and operational management, will be offered in English May 20 to 24, 2019, and Nov. 4 to 8, 2019, as well as in Spanish Aug. 26 to 30, 2019. Click here to register to 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 www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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Good Quality, Competitive Prices Spark U.S. Winter Wheat Demand

By Claire Hutchins, USW Market Analyst

As marketing year (MY) 2018/19 draws to a close, customers of U.S. winter wheat are taking advantage of excellent buying opportunities on competitive pricing and high-quality, consistent supplies. Since the first week in January, the 2018/19 export sales pace for hard red winter (HRW) and soft red winter (SRW) surpassed last year’s pace for deliveries in the current marketing year (CMY) and the new marketing year (NMY).

According to USDA commercial sales data as of April 4, 2019, HRW sales for 2018/19 delivery total 8.70 million metric tons (MMT). That is down 4% from this time last year but up 4% from the 5-year average of 8.33 MMT. Between February 14 and April 4, weekly sales of HRW for CMY delivery were significantly higher than the same six weeks in 2017/18 on low prices and high crop quality attributes. In the April 12 U.S. Wheat Associates (USW) Price Report, estimated FOB export price for 12% protein HRW (12% moisture basis) out of the Gulf at $222/MT for May 2019 delivery compared to $258/MT for delivery in May 2018. HRW export basis for the same delivery month, at $1.70/bu, is significantly lower than last year’s $1.95/bu. In addition to lower FOB export prices, the 2018/19 HRW crop features excellent milling and baking qualities.

These market factors also support a significant uptick in HRW commercial sales into the NMY compared to NMY sales booked by the same time in 2017/18. HRW export sales for the 2019/20 marketing year total 396,000 metric tons (MT), up 64% from this time last year and 17% from the 5-year average. This represents the highest volume of HRW NMY sales to date since 2014/15. The most recent USW Price Report estimates 12% HRW FOB price for June 2019 delivery at $224/MT, compared to last year’s estimate of $259/MT for delivery in June 2018.

Members of the grain trade expect HRW FOB prices and export basis out of the Gulf to decrease steadily into the new marketing year on somewhat larger ending stocks, reduced inland logistical challenges, and favorable new crop conditions.

Turning to SRW, commercial sales to date for 2018/19 delivery total 3.30 MMT, up 36% year-over-year and 10% more than the 5-year average. This represents the highest volume of SRW commercial sales for CMY delivery since 2014/15. Competitive prices, higher than average protein levels and lower than average DON levels continue to elevate SRW export business through the second half of MY 2018/19. More information about the 2018/19 SRW crop is available at https://bit.ly/2ZdnMwi.

The latest USW Price Report valued the SRW export FOB price out of the Gulf at $204/MT for May 2019 delivery compared to $208/MT last year. SRW export basis for May 2019 delivery out of the Gulf at $0.90/bu is 5 cents less than last year’s estimate for May 2018 delivery.

Grain traders expect SRW FOB export prices and export basis to decline steadily into the first few months of MY 2019/20 despite tightening 2018/19 U.S. SRW ending stocks, which are forecast to fall to 4.57 MMT, 18% below 2017/18 and 7% below the 5-year average.

As with HRW sales, total SRW commercial sales for 2019/20 delivery are significantly higher than NMY sales booked this time last year. SRW commercial sales for NMY delivery total 302,000 MT, up 23% year-over-year and 15% from the 5-year average. This represents the highest volume SRW NMY sales to date since 2014/15 as customers look to lock in high quality supplies at globally competitive prices. The April 12 Price Report estimates SRW FOB price out of the Gulf for June 2019 delivery at $202/MT compared to last year’s estimate of $213/MT for the same delivery month in 2018.

 

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Old Trading Friends Japan and USA are Talking Again

By Ben Conner, USW Vice President of Policy

The United States and Japan kicked off negotiations this week on a potential trade agreement between these two Pacific Rim economic giants. While the path forward for these negotiations is not yet clear, the pace is likely to speed up with a schedule of additional meetings between these traditional trading partners.

With the knowledge that U.S. farmers and their Japanese customers face significant challenges in the coming years, we were glad to see agriculture mentioned prominently in the U.S. Trade Representative (USTR) statement about the meetings.

USTR also reported that it raised the “very large trade deficit” with Japan as a primary area of concern. For U.S. agriculture, the concern is that the U.S. trade deficit with Japan seems poised to increase due to the disadvantage of being outside the Trans-Pacific Partnership (all other economic factors such as Japan’s significantly higher savings rate being equal). This month, in fact, Japan lowered its trade barriers further to imported agricultural products from many of the world’s major suppliers, but not the United States. Consequently, U.S. products, including wheat, are more expensive for Japanese importers.

U.S. Secretary of Agriculture Sonny Perdue has noted that there are two ways for other countries to shrink their deficit with the United States: buying more or selling less. His priority for overseas customers to buy more U.S. agriculture products. Here at U.S. Wheat Associates (USW), we strongly support that, but right now, in Japan, it is U.S. agriculture that is selling less.

The Trump Administration has described several trade policy problems facing U.S. industry. USW agrees with many and questions some, but we have strong hopes for an improved global trading system following the disruption that many see as necessary to rebalance trade relationships.

The Administration clearly has not forgotten U.S. agriculture, as the USTR statement proves. Concluding an agreement with Japan to offset the effects of withdrawing from TPP would be a crucial and welcome step toward demonstrating to U.S. farmers that their interests still matter.

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Here Are 5 Things to Know About SRW Supply and Demand

By Steve Mercer, USW Vice President of Communications

Grown in the eastern United States, soft red winter (SRW) wheat is a profitable choice for producing confectionary products like cookies (biscuits), crackers and cakes, and to blend its flour for baguettes and other bread products. U.S. Wheat Associates (USW) wants to share some key points about SRW exportable supply in marketing year 2018/19 and look ahead to its potential for 2019/20.

1. Good Quality. While excessive rain on the 2018/19 SRW crop did slightly lower average test weight and falling number, protein (9.9% on 12% moisture basis, composite) is above average and DON level (0.7 ppm composite) is slightly below average. Processors should find good qualities for crackers and segments of the crop with good cookie and cake qualities. The higher protein and good extensibility in the crop should add value in blending for baking applications. See more information at https://www.uswheat.org/market-and-crop-information/crop-quality/.

2. Least Cost. SRW is the lowest cost milling wheat in the world today, offered at an average FOB export price of US$202 per metric ton* for June delivery from U.S. Gulf ports. The International Grains Commission in its March Grain Market Report estimated SRW FOB price at $211, which is $6 less than French soft wheat. SRW exportable supplies are also available from Lakes ports (Toledo, Ohio), and Atlantic ports (Norfolk, Virginia, and Wilmington, North Carolina). See more information at https://www.uswheat.org/market-and-crop-information/price-reports/.

3. Supply is Down. Ending stocks of SRW have declined from 5.9 MMT in 2016/17 to USDA’s latest estimate of 4.6 MMT for 2018/19 (by comparison, SRW ending stocks in 2013/14 were 3.1 MMT after China imported 3.6 MMT that marketing year). Reduced supply relates to a near 50% decline in total production from 15.4 MMT in 2013/14 to USDA’s current estimate of 7.8 MMT in 2018/19, as well as an upturn in exports (see below). See more information at https://www.uswheat.org/market-and-crop-information/supply-and-demand/.

SRW ending stocks have declined steadily since 2016/17 on less production and more exports. Source: USDA

4. Demand is Up. As of April 4, SRW exports of 3.3 million metric tons (MMT) are 36% more than at the same time in marketing year 2017/18. This represents the most volume SRW sales year to date since 2014/15. Commercial SRW sales to Mexico, Colombia, Peru, Ecuador and Brazil are up significantly, as are imports by Central American and Caribbean countries and Nigeria. See more information at https://www.uswheat.org/market-and-crop-information/commercial-sales/.

U.S. SRW wheat supplies are down; export demand takes an upturn. Source: USDA

5. Planted Area is Down. In February 2018, USDA reported that SRW seeded area for 2019/20 is 5.7 million acres (2.4 million hectares), or down 7% from last marketing year. Most of the states that typically produce the most exportable SRW supplies planted less. This decline is not more significant only because some farmers can harvest SRW and then quickly plant soybeans to get a double crop from the same acre. In general, U.S. crop farmers, who are driven by economic circumstances to minimize their net losses at best this year, are turning away from winter wheat to other crops that offer better returns. Total U.S. winter wheat seeded area for 2019/20 is at its second lowest level on record. See more information at https://www.nass.usda.gov/Publications/Todays_Reports/reports/wtrc0219.pdf.

*Source: USW Price Report, April 12, 2019

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Upcoming Tour Offers First Look at U.S. HRW Yield Potential

More than 90 U.S. wheat industry stakeholders will soon get a close-up view of the new wheat crop in Kansas, southern Nebraska, eastern Colorado and northern Oklahoma on the annual Wheat Quality Council (WQC) Hard Winter Wheat Tour April 29 to May 2. This tour and a second one in July focused on U.S. spring wheat are educational for the participants and news worthy as a first snapshot of each year’s new crops.

Tour participants come from as far away as Australia and represent all facets of the wheat industry, including millers, traders, media, farmers, researchers and government officials. By traveling across the region in scout teams that stop at random fields to evaluate crop progress and yield potential, they learn more what it takes for farmers to grow, manage, harvest and market the crop. U.S. Wheat Associates (USW) is sending two colleagues on the tour this year: Director of Programs Erica Oakley and Market Analyst Claire Hutchins.

Domestic and overseas buyers and end-produce processors pay close attention to personal observations and photos during the tour by following #wheattour19 on Twitter and Facebook, through summarized daily reports on Tuesday and Wednesday evenings and in the final report with an estimate of average yield per acre across the region.

The tour provides a statistically significant, early idea of what buyers can expect in new crop yields from the surveyed area. In 2018, for example, 24 WQC scout teams made evaluations at 644 fields and estimated average regional yield at 37 bushels per acre (49.2 kilograms per hectoliter). Official data from USDA’s National Agricultural Statistics Service estimated the average Kansas wheat yield in 2018 at 38 bushels per acre (50.5 kilograms per hectoliter). High Plains Journal posted more about the 2018 Hard Winter Wheat Tour by WQC Executive Vice President Dave Green at https://bit.ly/2XbAmu5.

Watch for observations from Anderson and Hutchins during this year’s tour on USW’s Facebook and Twitter pages and a full report of the 2019 tour May 2 in USW’s Wheat Letter blog.

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