You are here: / / Wheat Letter Blog
thumbnail
,

U.S. Wheat Farmers See Opportunity for Growth in Southeast Asia Markets

By Catherine Miller, USW Programs and Planning Coordinator

Every year, U.S. Wheat Associates (USW) invites farmers (selected by state wheat commissions) to participate in a “Board Team” trip overseas to follow their wheat and learn from customers about the quality characteristics needed in those markets. In February the first USW Board Team of 2019 traveled to Southeast Asia—one of the largest and fastest growing wheat import regions. Stops in the Republic of the Philippines, Singapore and Indonesia gave the team the opportunity to visit important markets and learn more about how wheat-based products are re-shaping consumer demand.

The 2019 USW Southeast Asia Board Team included Joe Anderson of Lewiston, Idaho, representing the Idaho Wheat Commission; Wally Powell of Condon, Ore., representing the Oregon Wheat Commission; Philip Volk, of York, N.D., representing the North Dakota Wheat Commission; and team leader Catherine Miller, USW Program and Planning Coordinator.

In the Philippines, the team enjoyed a meeting and tour with Wellington Flour Mills. They were joined by company President Ty Weevens (center, front row), whose grandparents originally start the family-owned mill, along with a few cousins who are also apart of the mill’s operations.

In Manila, Republic of the Philippines, the team met with traders, millers and bakers. Each meeting focused on the importance of high-quality wheat to create high quality end-products. The team visited a flour mill, as well as an industrial cracker facility. The team found a common theme that consumers here are looking for more convenience and shifting from traditionally rice-based staple foods to more wheat and grain-based meals. This is a huge market driver for a variety of cookies, crackers and bread products.

“One of our lunches with USW staff and four different mills was one of the highlights,” said Powell. “It was so beneficial to spend that time with them and share a meal.”

Lunch with grain traders in the Philippines.

One of the highlights in Manila was attending the 10th International Exhibition on Bakery, Confectionery and Foodservice Equipment and Supplies, known as “Bakery Fair 2019,” hosted by the Filipino-Chinese Bakery Association Inc. While visiting different exhibits, labeling on some of the flour bags stood out to Anderson: “They said ‘Certified U.S. Wheat.’ That shows the success USW has had building a preference for our wheat, and I’m proud of that.”

In Singapore, the team members next visited a bakery training and supply company. They also had briefings from USW/Singapore regional staff member, who demonstrated how producer-funded USW activities are carried out in the region and how USW works together with local USDA Foreign Agricultural Service (FAS) staff to represent U.S. farmers.

Next, the team traveled to Jakarta, Indonesia, where they met with the largest flour mill in the world, as well as three competing milling companies. The contrast in bakeries between the Philippines and Indonesia, where small-medium end-user enterprises (SME’s) dominate 67 percent the market, was quite clear.

“This was one of the biggest surprises for me, especially since these SME’s sometimes only use one 25 kilogram bag of flour per day,” said Anderson.

During their visit to Indonesia, the team visited Dynamic Bakery, which is a customer of Bogasari, the largest flour mill in Indonesia.

The team toured three of those bakeries in Jakarta. SME’s vary from home-based bakeries to medium scale businesses with a store front. The at-home bakeries were truly unique, and the importance of these niche producers really resonated with the group.

In such a rapidly growing wheat foods market, there are fears that “Indonesia will run out of milling capacity within the next few years if markets keep growing at the present pace,” according to one milling executive. One reason: the cost of production is a limiting factor; logistics alone make up 10 percent of variable costs.

At another flour mill, the group learned more about current market trends. In Indonesia, about 50 percent of flour in the market goes to instant noodle production. Currently, noodle production is met largely with flour from Australian white wheat. However, the team was told there is at least a window of opportunity for U.S. hard red winter wheat, especially given the recent production challenges that have significantly bumped up Australian wheat import prices.

During their visit to Indonesia, the team visited and toured Bogasari, the country’s largest flour mill, which has approximately 50% of the country’s market share. They were also joined in Indonesia by Matt Weimar, USW Regional Vice President for South Asia; and Ivan Goh, USW Biscuit/Bakery and Noodle Technologist.

“It was clear that the uncertainty of low margins and where the price of wheat will be next year was an overall concern for all markets” said Volk. “This just proves that overall U.S. wheat quality needs to be consistent from year to year.”

The team will report to the USW board of directors later this year. To see pictures from this and other Board Team trips, please visit the USW Facebook Page at https://www.facebook.com/uswheat/.

*Header Photo Caption: Visit to MY San – the market leading biscuit company in the Philippines. Mt. Makiling is in the background. (L to R) Phil Volk, North Dakota Wheat Commission; Joe Anderson, Idaho Wheat Commission; Catherine Miller, USW Programs and Planning Coordinator; Wally Powell, Oregon Wheat Commission; and Joe Sowers, USW Regional Vice President for Philippines and Korea.

/by
thumbnail

U.S. Wheat Export Pace Quickens

By Claire Hutchins, USW Market Analyst

As wheat futures hit contract lows, trade negotiations with China wind on and the window for export sales delivered in marketing year 2018/19 (June to May) draws to a close, U.S. Wheat Associates (USW) sees a more optimistic picture in the U.S. Department of Agriculture’s (USDA) most recent series of commercial sales data.

During and after the partial U.S. government shutdown, which spanned from Dec. 22, 2018, to Jan. 25, 2019, industry “buzz” was increasingly skeptical that the United States would hit the USDA’s 2018/19 wheat exports projection of 27.2 million metrics tons (MMT). Given that the USDA’s final commercial sales release before the shutdown (as of Dec. 13, 2018) revealed a 12 percent lag in the year-to-date export pace in December 2017, implying a U.S. export pace of 438,800 metrics tons (MT) per week would be needed to hit USDA’s final trade estimate, numerous trade stories that circulated in January and February did little to mitigate industry consensus.

However, actual sales data gathered during and after the shutdown and released in late February revealed a far more robust trade environment for U.S. wheat. When up-to-date commercial sales information emerged again, it revealed a remarkable uptick in weekly average wheat exports compared to the same six weeks in 2017/18. Significantly, the numbers showed U.S. wheat exports surpassed last year’s year-to-date sales in a matter of weeks despite uncertainty surrounding the partial government shutdown, delayed USDA reports, domestic weather and transportation issues, and virtually no access to the Chinese market.

Total exports between Jan. 4 and Feb. 14, 2019, reported on Feb. 22, 2019, totaled 3.57 million metric tons (MMT), which is more than double the accrued export level during the same time last year. In 2017/18, the weekly average export volume totaled 292,000 metric tons (MT) during the six weeks in question. While exact total sales per week between Jan. 4 and Feb. 14, 2019, are unreported, the weekly average sales pace (3.57 MMT divided by six) hit nearly 600,000 MT. A similarly high export pace continued between Feb. 15 and Feb. 21 and totaled 476,400 MT, a 149 percent increase over the same week in 2018. Between Dec. 13, 2018, and Feb. 21, 2019, the United States averaged 582,343 MT per week in commercial sales.

 

 

To date, U.S. commercial sales of wheat for marketing year 2018/19 total 22.0 MMT, 81 percent of the USDA’s total projected exports and 2 percent ahead of last year’s commercial sales pace. With 13 weeks left in marketing year 2018/19, the United States must now export, on average, 403,077 MT per week to hit the USDA’s final export projection of 27.2 MMT, or 8 percent less per week than was required as of mid-December.

USW cannot predict the future pace of U.S. wheat export sales, but the new data does call into question some pessimism about USDA’s sales 2018/19 estimate. If U.S. FOB prices remain more cost-competitive and late-season logistical challenges ease, the United States is in a better position than before to hit the USDA’s wheat export prediction of 27.2 MMT by May 31, 2019.

/by
thumbnail
, ,

Meet the USW Technical Experts: Peter Lloyd – International Man of Milling

Name: Peter Lloyd

Title: Regional Technical Director

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

Providing Service to: North Africa and the Middle East

Peter Lloyd’s eyes lit up the moment he saw the MIAG pilot flour mill and baking lab at Mennel Milling‘s Fostoria, Ohio, plant.

Lloyd, who was with U.S. Wheat Associates (USW) colleagues gathering information on new U.S. wheat export opportunities, said: “there is no end to that plant’s potential in soft wheat product development.”

That is strong praise coming from someone who has designed, serviced, and visited more flour mills worldwide than he can count. Lloyd’s USW title of Regional Technical Director does not do justice to his global responsibilities. Based in USW’s office in Casablanca, Morocco, Lloyd travels the world to conduct technical support that helps prove the value of U.S. wheat in the customer’s mill.

“I believe the work I do and that my USW colleagues and consultants do brings the greatest value where it makes the most difference — on the bottom line profit for a supply chain manager, miller or baker,” Lloyd noted. “A clear knowledge of the customer’s business is also vitally important to opening the door to U.S. wheat farmers as valued suppliers.”

Peter Lloyd; Marcelo Mitre, Technical Specialist, USW/Mexico City; Dr. Byung-Kee Baik, Acting Research Leader, USDA-ARS, Wooster, Ohio; Brad Moffitt, Director of Market Development and Membership, Ohio Small Grains Marketing, Program; Tarik Gahi, Milling & Baking Technologist, USW/Casablanca. February 2016 at the USDA-ARS Soft Wheat Quality Laboratory, Wooster, Ohio.

A Storied Career

Just a thumbnail of Lloyd’s professional credentials would be enough to open that door, starting with his British father’s successful flour milling career that took him from Liverpool to Kenya, where Lloyd was born. Intrigued by his youthful visits to mills with his father, Lloyd decided to follow him into the business in 1977.

Milling engineering training and working with Henry Simon in the United Kingdom and South Africa built the foundation for Lloyd to become a mill manager in Botswana in his mid-20s. He returned to the UK with the Simon Group in an engineering sales position in 1986 that, along with his emerging knowledge of high technology applications, led to a job with the United Milling Systems division of the Carlsberg Research Center in Denmark. Lloyd eventually started his own consulting business that continued his work in Africa.

“Then, in 1991, I saw an advertisement in World Grain magazine for the post of Dean of the new Egyptian Milling School in Cairo from an organization called U.S. Wheat Associates,” Lloyd recalled.

Peter Lloyd, left, discusses soft red winter wheat variety development with Dr. Clay Sneller, Associate Professor, Dept. Horticulture and Crop Science, The Ohio State University, Tarik Gahi, USW/Casablanca and Dr. Byung-Kee Baik, Director, USDA-ARS Soft Wheat Quality Laboratory, Feb. 2016, Wooster, OH.

Per its agreement with its Egyptian business partners at the time, USW had management responsibilities for the school’s development and first two years of operation. Lloyd applied for and eventually earned the position where he directed construction and curriculum development — and discovered a love of teaching. Moreover, he was impressed by USW’s approach to export market development.

“Building trust is crucial, and I think USW’s biggest asset is not having sales objectives. We give advice based upon its merit only,” Lloyd observed. “From U.S. wheat farms to the school in Cairo, we were truly committed to forging a long-term partnership with overseas customers, offering technical assistance without a commercial profit motive.”

USW’s substantial funding for the school ended in 1994, and Lloyd moved on to a technical support position in Egypt with the Australian Wheat Board (AWB), which was, at the time, a fully governmental organization. After the organization was privatized, Lloyd said the drive to meet sales goals, and quarterly returns did not match his values. A return to consulting in the Middle East, including for USW, opened an opportunity to join the Wheat Marketing Center (WMC) in Portland, Ore., in 1996.

L-R: Nihal Habib, formerly with USW/Cairo; Peter Lloyd; Hoda Moawad, formerly with USW/Cairo; two Egyptian grain officials; Tarik Gahi, USW/Casablanca, at a USW Buyers Conference in Sharm El Sheikh, Egypt, 2013.

“Working with the director Bob Drynan (who had also worked for USW and the California Wheat Commission), wheat growers, the grain trade, and the researchers at USDA and Washington State University was one of the most enjoyable periods in my career,” Lloyd recalled. “Perhaps most significant in terms of my future work with USW was the interaction with Asian millers and bakers to learn about the product quality and diversity in their markets.”

An Invaluable Resource

After personal choices drew him back to the UK and consulting work in 1998, Lloyd answered another call from USW to help address some challenges at the new IFIM Milling School in Casablanca. That role grew into a longer-term opportunity to implement a Miller Outreach Program with the goal of building professional expertise and a greater understanding of U.S. wheat quality and value in North Africa and the Middle East through the IFIM school.

“That was very rewarding, but I recognized I needed to get reacquainted with the latest mill operations and moved to a technical milling position in Dubai for two years,” Lloyd said. “In 2005, I returned to USW to run the Tunisian Outreach Program and served in Tunis until 2009. During this time, we expanded the technical assistance role from Tunis to many of the other USW offices in Asia, the Middle East, and North Africa, as well as supporting the opening of new markets in Libya and Algeria at that time.”

Though much has changed in the last ten years, including his move to USW’s Casablanca, Morocco, office, Lloyd’s work with USW in North and South Asia, the Middle East, Africa, and occasionally Latin America and Europe in support of U.S. wheat export market development continues today.

Peter Lloyd providing technical support at a Colombian flour mill, October 2009.

“Our objective remains the success of the people we support,” he asserted. “Why? Because successful millers and bakers are most likely to buy what we have to offer: high-quality wheat from high-quality farmers to produce high-quality flour for high-quality products.”

The beneficiaries of his work agree.

“Peter Lloyd has been an invaluable resource for us for the better part of 10 years, giving advice ranging from mill cleanliness and fumigation to more complex topics like milling economics and flour customization,” said an executive with a large flour milling company in the Philippines. “We cannot thank him enough for all his help. He is a true encyclopedia of flour milling.”

A Chinese milling executive said Lloyd’s efforts helped his team better understand the processing characteristics of the individual classes of U.S. wheat.

Peter Lloyd, current President Vince Peterson, and customers at USW Middle Eastern Grain Buyers Conference, Sharm El Sheikh, Egypt, 2009.

“His constructive opinions on our production process have helped us be more efficient in milling U.S. wheat and helped improve the competitiveness of our flour products,” the executive concluded.

“USW is so lucky to have such a talented, charismatic individual like Peter on our staff,” said USW Regional Vice President Ian Flagg, who directs export market development activities in North Africa, the Middle East, and Europe. “Not only is Peter a great technical asset, he is completely committed to our mission to return value to the farmers we represent and their customers, and that is what he does all over the world.”

“I am doing exactly what I want to be doing at this point in my career with and for some of the nicest people on Earth,” Lloyd said. “Our customers welcome us to their offices, listen to what we have to say, and trust us. Then coming back months later and finding that we helped them improve their business is very rewarding. And the U.S. wheat farmers we work for represent values I hold in the highest esteem: honesty, integrity, human decency, hard work, a love of the land, and a deep respect for our Creator.”

He also remains very upbeat about the global wheat industry.

“End products are made from flour, not whole wheat kernels, so the growth of the milling and food processing industries are inextricably linked,” Lloyd noted. “As much as any foodstuff, wheat-based products have a prominent place in shopping baskets in every country of the world, and for every income group for the foreseeable future — and there are more and more shoppers every day.”

Peter Lloyd visits Mennel Milling, Fostoria, Ohio, Feb. 2016

Peter Lloyd visits Mennel Milling, Fostoria, Ohio, Feb. 2016

By Steve Mercer, USW Vice President of Communications

Editor’s Note: This is the second 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: Peter Lloyd’s presentation at the 2015 USW Crop Quality Seminar, Cairo, Egypt

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
Marcelo Mitre – A Love of Food and Technology that Bakes in Value and Loyalty
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

/by
thumbnail

The Benefits of U.S. Investment in Global Wheat Research Collaboration

By Elizabeth Westendorf, USW Assistant Director of Policy

Seventy-five years ago, the seeds of the Green Revolution were planted when Norman Borlaug began his work on wheat breeding in Mexico. The success of that effort, which was a partnership between the Mexican government and the Rockefeller Foundation, led to the eventual founding of the International Maize and Wheat Improvement Center (CIMMYT).

In 1971, CGIAR was established as an umbrella organization to create an international consortium of research centers. CIMMYT was one of the first research centers supported through the CGIAR, which today includes 15 centers around the world with a local presence in 70 countries. Each center focuses on unique challenges, but they are all driven by three broad strategic goals: to reduce poverty; to improve food and nutrition security; and to improve natural resources and ecosystem services.

For 50 years, wheat has been one of the core crops of CGIAR’s focus. CGIAR receives annual funding of about $30 million for wheat, and the economic benefits of that wheat breeding research range from $2.2 to $3.1 billion. This is a benefit-cost ratio of at least 73 to 1 — for every $1 spent in CGIAR wheat research funding, there is more than $73 in economic benefits to global wheat farmers. CIMMYT’s international wheat improvement programs generate $500 million per year in economic benefits. Globally, nearly half of the wheat varieties planted are CGIAR-related; in South, Central and West Asia and North Africa, that number rises to 70 to 80 percent of wheat varieties. When wheat supplies 20 percent of protein and calories in diets worldwide, CGIAR wheat research can have a major impact on the livelihoods of the world’s most poor people.

CGIAR Research Centers have also led to significant benefits for U.S. farmers as well. Approximately 60 percent of the wheat acreage planted in the U.S. uses CGIAR-related wheat varieties. CIMMYT wheat improvement spillovers in the United States repay the total U.S. contribution to CIMMYT’s wheat improvement research budget by a rate of up to 40 to 1. Another partner, the International Center for Agricultural Research in the Dry Areas (ICARDA), has delivered innovations that protect U.S. farmers from crop losses due to destructive pests, and has also partnered with CIMMYT to develop the One Global Wheat Program under CGIAR.

One aspect of the CGIAR success story in the United States is about partnership. Public U.S. universities around the country have partnered with CGIAR on agricultural research, to the benefit of U.S. farmers and farmers worldwide. This partnership allows for knowledge transfer and idea-sharing on a global scale. USW is proud that many of our member states have universities that have partnered with CGIAR on wheat projects.

The news is not all good, however. As we anticipate world population growing to 10 billion in 2050, the demand for wheat is expected to increase by 50 percent. To meet that demand, wheat yields must increase by 1.6 percent annually. Currently they are increasing by less than 1 percent annually. There is plenty of work to do to continue Borlaug’s mission of achieving food security. CGIAR Research Centers will continue to play a critical role in that effort.

The United States’ investment in CGIAR Research Programs makes a vital contribution to agricultural improvements and fosters partnerships with U.S. public research universities, international research centers, private sector partnerships and others. Partnerships with CGIAR make it possible to do the win-win collaborative wheat research that helps meet global food needs, brings tremendous economic benefits to U.S. agriculture and leverages U.S. research dollars.

We invite our stakeholders and overseas customers to learn more about this important partnership and the benefits of CGIAR wheat research in part through a fact sheet posted here on the USW website.

/by
thumbnail
, , , ,

Positioned to Return More Value to Wheat Buyers and Producers

By Vince Peterson, USW President

Recently, I was searching online for some wheat market information to share at an upcoming meeting. I saw a headline that asked: “What country exports the most wheat?” Great, I thought, here we go again with more propaganda about Russia beating the United States in the global wheat export market contest.

Instead, I was quite pleased to scroll down to find that the United States was still the world’s largest wheat exporter in 2017 in terms of “value” according to the “World’s Top Exporters.” Russia produced almost twice the volume of wheat than the United States and more than matched U.S. export volume that year; but at an estimated $6.1 billion, U.S. wheat exports generated $300 million more value than Russian wheat exports.

The reason is clear: there are many private and public wheat buyers, millers and processors around the world that prefer the quality, variety and value of U.S. wheat; and that remains a primary asset to our farmers.

U.S. Wheat Associates (USW) has adjusted its allocation of wheat farmer dollars and program funds from USDA’s Foreign Agricultural Service to activities in markets that have a growing need for a variety of flour products with high quality functional characteristics. There our differential advantages shine through and where the investment offers the most return. On the other hand, USW continues to provide the trade servicing needed in the more cost-sensitive markets that are buying Russian wheat. There is value there, too, with a market environment like today’s in which the price spread between U.S. wheat classes and Black Sea supplies has narrowed. We continue to provide technical support to those buyers to demonstrate and build more knowledge about the true functional value of U.S. wheat. In addition, we are strong advocates for continuous improvement in wheat quality.

Looking ahead, I believe this is the right position for U.S. wheat in a global market with growing income levels, increasing urbanization and record setting consumption every year. It also reflects our mission: to enhance wheat’s profitability for U.S. producers and its value for their customers.

 

USW President Vince Peterson

/by
thumbnail

Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “Obviously we hope that the trade environment improves soon but in the meantime, these funds will allow USW to increase marketing efforts and work on expanding markets in our key customer regions. Some of our largest, highest value markets took decades to build and we need to preserve those relationships to the best of our ability, while exploring new market opportunities…” — Bruce Freitag, a wheat farmer from North Dakota and Chairman of the North Dakota Wheat Commission, discussing new funding for export market development awarded by USDA. Read the full release here.

Two Changes to Official Falling Number Determination for Wheat. The USDA Federal Grain Inspection Service (FGIS) plans changes to the Falling Number test to reduce inconsistency and variability in test results. Changes are a result of research work undertaken after farmers encountered a significant falling number problem in parts of the Pacific Northwest (PNW) in 2016 and increased efforts to reduce inconsistent results across FGIS lab locations. Learn more here. 

Minnesota Wheat Accepting Applications for Executive Director. The Minnesota Wheat Research and Promotion Council (MWRPC) and the Minnesota Association of Wheat Growers (MAWG) are seeking candidates to succeed long-time Executive Director Dave Torgerson. After serving the two organizations and Minnesota wheat growers for over 30 years, Torgerson will retire on March 31, 2019. Click here for more information.

Buhler-KSU Milling Short Courses. The IGP Institute offers milling courses this spring at its campus in Manhattan, Kan., including: The Buhler-KSU Expert Milling course, offered in English March 4 to 8, 2019, and in Spanish March 11 to 15, 2019; the Buhler-KSU Executive Milling course, offered in English May 20 to 24, 2019. Click here to register for these courses.

Pasta Production and Technology Course. The Northern Crops Institute is hosting a Pasta Production and Technology Course April 30 to May 2, 2019, at its facilities in Fargo, ND. This course introduces participants to the fundamental and applied aspects of pasta production and quality. 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 at www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

/by
thumbnail
, , ,

Fighting for Fairness Through the Rules-Based Trading System

On Feb. 15, 2019, the United States submitted a counter notification, co-sponsored by Canada, in the World Trade Organization (WTO) Committee on Agriculture on India’s market price support for pulse crops – based on publicly available information. With this counter notification, the U.S. government continues to use the rules-based trading system established by the WTO as an appropriate and welcome step toward fairness and transparency for all its member countries.

In May 2018, the U.S. Trade Representative (USTR) formally questioned data India has reported to the WTO about its market price support programs for wheat and rice from marketing years 2010/11 to 2013/14. And in 2016, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed two trade dispute actions by the USTR challenging Chinese government policies that distort the wheat market and harm wheat growers throughout the rest of the world.

Specifically, in September 2016 a U.S. trade enforcement action challenged the level of China’s trade-distorting market price support programs for wheat as well as for corn and rice. In describing its action, the USTR said domestic price support to Chinese farmers “significantly exceeds China’s aggregate measure of support commitments under the WTO Agreement on Agriculture.” In December that year, a U.S. dispute case alleged that China is not fairly administering its annual tariff rate quotas (TRQ) for corn, rice and 9.64 million metric tons of imported wheat. This request stated that China’s TRQ administration unfairly impedes wheat export opportunities.

The WTO is expected to announce the panel decision in the next few weeks on the original U.S. challenge to China’s domestic agricultural subsidies. The TRQ challenge also continues moving through the dispute process at the WTO.

Progress in these dispute cases indicate the WTO dispute mechanisms continue to provide an effective way to challenge unfair practices and policies. But the approach represented by the Trump administration’s use of unilateral tariffs and the threat of escalation to challenge unfair trade practices threatens the stability of the global trading system. That said, instability channeled properly could be beneficial to the trading system and result in greater long-term stability if it results in eliminating trade barriers, rather than creating new ones.

The past two decades have been a lost opportunity for the WTO negotiating function as major countries like China have refused to take on new responsibilities. Perhaps this unfortunate situation will be the wake-up calls countries need to realize that restricting trade and unfairly advantaging domestic industries in global markets winds up hurting everyone.

USW’s stakeholders hope that that the Administration’s alternative policy does result in positive shifts toward a more open trade environment that encourages strong domestic development in all countries. Yet the Administration’s continued use of the WTO dispute settlement and counter notification processes is also a positive sign that trade disciplines, supported by most of the world, will remain an essential part of global trade.

 

 

/by
thumbnail
,

Key Facts from USDA’s February 2019 World Wheat Supply and Demand Report

By Claire Hutchins, USW Market Analyst

In its February 2019 World Agricultural Supply and Demand Estimates (WASDE) report, USDA predicted global wheat production to fall 3 percent below last year’s volume to 735 million metric tons (MMT) due to significant weather challenges in the European Union (EU), Russia, and Australia. EU production of 136 MMT falls 11 percent under last year’s harvest, Russian production of 72.0 MMT falls 15 percent below last year and Australian production of 17.0 MMT is the country’s lowest output since 2007/08. Meanwhile, USDA predicts increased production for Canada at 32.0 MMT and the United States at 51.0 MMT.

While USDA decreased its global production estimates for 2018/19, it bumped its estimates of total global use to 747 MMT, a sixth consecutive annual record, driven primarily by a 3 percent increase in Chinese feed and residual use.

Though production is down year over year in several key export regions, world wheat trade estimates are nearly in line with last year’s volume at 179 MMT, 7 percent higher than the 5-year average of 167 MMT. Argentina, Canada and the United States are all expected to increase exports year over year to 14.0 MMT, 24.0 MMT, and 27.2 MMT, respectively. Based on weekly USDA Foreign Agriculture Service (FAS) commercial sales data, U.S. wheat export sales (as of Jan. 3, 2019) total 17.9 MMT, or 66 percent of market year 2018/19’s expected export volume.

U.S. Gulf free on board (FOB) prices have been relatively stable for the past few months. Hard red winter (HRW) and hard red spring (HRS) export prices remain relatively unchanged from mid-October while soft red winter (SRW) export prices are on the rise. Though SRW prices are higher now than in recent months, they are still highly competitive on the world stage. As of Feb. 8, 2019, U.S. SRW prices were competitive enough with the French and the Black Sea offers for an Egyptian purchase of 120,000 metric tons (MT). As competitor exportable supplies continue to decrease into the second half of marketing year 2018/19, U.S. wheat is expected to remain more competitive in this and other price-sensitive markets.

Each month, U.S. Wheat Associates (USW) updates a graphic summary of USDA’s WASDE (World Agricultural Supply and Demand Estimates) report. View the February summary here.

/by

Educating Government Leaders About the U.S. Wheat Value Chain

U.S. Wheat Associates (USW) is looking forward to joining 22 U.S. wheat production, handling, milling and food processing organizations at an event in Washington, D.C., Feb. 14, 2019, to educate U.S. government officials about our industry. The event is sponsored by the National Wheat Foundation with a goal to demonstrate the breadth and influence of the wheat industry to the U.S. economy and food supply as well as its prominent place in the global food supply chain.

 

USW agrees that helping Administration officials, members of Congress and their staff understand the many challenges U.S. wheat growers have faced the past few years is very important. Our organization participated in a similar event a year ago that came at a critical time when Congress was debating the 2018 Farm Bill that was approved and implemented in December. That legislation renewed export market development programs administered by USDA’s Foreign Agricultural Service — programs that help USW continue its trade service and technical support activities with the world’s wheat buyers, millers and food processors.

Senator Pat Roberts of Kansas (center) with Phil McLain (right) of North Carolina representing the National Wheat Foundation and Gordon Stoner (left) of Montana representing the National Association of Wheat Growers at the first educational meeting on Capitol Hill in February 2018.

 

USW and many of our state wheat commission members work closely with the organizations participating in the event including public and private seed producers, crop input companies, farm equipment manufacturers, railroads, Wheat Quality Council, Wheat Foods Council, Wheat Marketing Center, North American Millers’ Association, American Bakers Association and Grocery Manufacturers Association.

 

The National Wheat Foundation (NWF) works to advance the U.S. wheat industry through strategic research, education and outreach collaborations. It is a non-profit organization headquartered in Washington, D.C., governed by a nine-member board of directors and managed by staff of the National Association of Wheat Growers, the NWF’s sole member.

 

Assistant Secretary of Agriculture Steve Censky (right) talks with USW Vice President of Communications Steve Mercer (left) at the 2018 educational event on Capitol Hill.

/by
thumbnail

Wheat Industry News

Recent news and highlights from around the wheat industry.

Quote of the Week: “It is clear that we are at a tipping point for a growing number of producers. You can only lose money for so long. We’re at a vulnerable stage.” — Marc Knisely, CEO, AgCountry Farm Credit Services, Fargo, N.D., from an article in Politico, Feb. 6, 2019.

It is National Pizza Day in the United States on Feb. 9. More than 3 billion pizzas are served in U.S. restaurants and another 1 billion pizzas are sold frozen every year. Whether it is thin crust, Chicago-style, deep dish or anything in between, pizza is an American favorite – and that crust is ideal for holding your sauces and toppings because it is made with strong flour from U.S. hard red spring wheat! Enjoy your pizza and read more here.

Field to Market Strategic Plan. Field to Market: The Alliance for Sustainable Agriculture’s new Strategic Plan builds on more than a decade of Field to Market’s role as the leading organization committed to defining, measuring and advancing sustainability in U.S. crop production. A major premise of the new plan involves leveraging the collective influence of the group’s diverse membership to meet this challenge and drive continuous improvement in environmental outcomes. National Association of Wheat Grower’s (NAWG) Environmental Policy Advisor Keira Franz represents NAWG on the board of directions. Read Field to Market’s release here.

2019 National Wheat Yield Contest. The National Wheat Foundation (NWF) is now accepting grower enrollment for the 2019 National Wheat Yield Contest. The Contest includes winter wheat and spring wheat primary categories and dryland and irrigated subcategories. NFW is accepting winter wheat entries between April and May 15, 2019, and spring wheat entries between June 15 and Aug. 1, 2019. Learn more here.

Buhler-KSU Milling Short Courses. The IGP Institute offers milling courses this spring at its campus in Manhattan, Kan., including: The Buhler-KSU Expert Milling course, offered in English March 4 to 8, 2019, and in Spanish March 11 to 15, 2019; the Buhler-KSU Executive Milling course, offered in English May 20 to 24, 2019. Click here to register for these courses.

Pasta Production and Technology Course. The Northern Crops Institute is hosting a Pasta Production and Technology Course April 30 to May 2, 2019, at its facilities in Fargo, ND. This course introduces participants to the fundamental and applied aspects of pasta production and quality. 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 at www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

/by

Think Farm Export Programs Don’t Matter? Think Again.

GET THE REST OF THE STORY

DTN Wheat Detail
DTN Corn Detail

2008-2013 U.S. Wheat Associates. All Rights Reserved
Privacy Policy | Non-Discrimination Statement