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Northern Crops Institute Names Next Director

Everyone at USW is looking forward to working with Mark Jirik who was recently selected as the next director at the Northern Crops Institute (NCI), Fargo, N.D.

NCI is a respected educational partner with USW that supports regional agriculture and value-added processing by conducting educational and technical programs that expand and maintain markets for northern-grown crops. After working closely with Mark Weber over the six years he led NCI, USW was sad to learn that he planned to retire at the end of 2017. With Mark Jirik’s background, NCI should not miss a beat in the transition.

“We are confident that Mark is the right choice to lead NCI,” said Northern Crops Council Chairman Greg Kessel, a producer from Belfield, N.D.

Jirik has more than 17 years of experience in commodity merchandising and commercial management at Cargill. He earned a bachelor’s degree in agricultural economics from North Dakota State University and a master’s degree in agricultural economics at the University of Illinois, Urbana-Champaign.

We wish Mark Jirik the best of luck in this new position, and we also wish Mark Weber a very long and happy retirement.

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Annual Crop Quality Seminars Help Customers Make Purchasing and Milling Decisions

By Amanda J. Spoo, USW Assistant Director of Communications

Each year, after thousands of wheat crop samples are analyzed and the results are published in the USW Crop Quality Report, USW invites its overseas customers, including buyers, millers and processors, to seminars led by USW staff, U.S. wheat farmers, state wheat commission staff and educational partner organizations. The seminars dive into grade factors, protein levels, flour extraction rates, dough stability, baking loaf volume, noodle color and texture and more for all six U.S. wheat classes, and are tailored to focus on the needs and trends in each regional market.

In 2017, USW hosted 33 seminars in 25 countries, and many reported seeing record participation. Customers share that they use the report throughout the year as a reference manual and to guide them through purchases and future planning. The seminars provide a first look at the overall crop and a deep dive into the data and how to use it.

“The crop quality booklet is very useful for us as millers for reference and information on wheat quality available for production,” said one participant from Indonesia.

“If we encounter quality issues in our products, we use the wheat quality data to help us make necessary adjustments,” said participants from the Philippines.

Customers will often use the seminars and report as educational training for new employees.

The reports and seminars have been a traditional part of USW’s strategy since 1959, growing to become its single largest marketing activity.

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USDA Reports Offer Early Snapshots of 2018/19 U.S. Winter Wheat Crop

From USDA and Media Reports

Hours of work will come to fruition this week for market analysts at USDA and the farmers and buyers they serve. The results of some new reports provide an early look at the next U.S. winter wheat crop, which includes hard red winter (HRW), soft red winter (SRW) and fall-planted soft white (SW) classes.

Starting with a brief look back, we do know that U.S. farmers harvested the smallest area of wheat in 2017 since detailed records started in 1919. That was not a surprise because USDA had estimated planted area for all wheat classes, including spring wheat, for 2017/18 at a similar record low. Winter wheat planted area was down 9 percent from 2016/17.

New estimates suggest the base will be even lower for 2018/19. Reuters reported Nov. 28 that USDA estimates U.S. farmers are likely to expand corn and soybean plantings while reducing wheat seedings to 45.0 million acres for 2018/19, down from the record low of 46.0 million for 2017/18. Reuters noted that the forecasts are developed by consensus within the USDA on a long-term scenario for the agricultural sector for the next decade. USDA will release its complete report on projections for the next 10 years in February.

Arlan Suderman, chief commodities economist for INTL FCStone, expects U.S. wheat farmers will continue plant less wheat because of the price pressure from the record global wheat stocks. He estimates seeded area will be down another 4 percent to 6 percent in 2018. Suderman said the strong U.S. dollar pressures demand for U.S. wheat while encouraging wheat expansion overseas, such as in the Black Sea region. He believes markets that value high quality wheat and strong protein offer stronger opportunity for U.S. wheat.

As a counterpoint, a poll by a national agricultural publication fielded last July suggests farmers may slightly increase wheat seedings. The Farm Futures magazine survey found growers wanting to boost wheat seedings by 2.5 million acres to 48.1 million, a 5.4 percent increase over 2017. The survey suggested that winter wheat would make up nearly 90 percent of that increase.

The first official estimate of winter wheat planted area from USDA will be released in its Prospective Plantings report in March 2018.

USDA’s latest conditions report released on Nov. 26 suggests the new HRW wheat crop seeded in the Central and Southern Plains is stressed by dry weather. Oklahoma farm broadcaster Ron Hays reported that “winter wheat crop ratings continue to slide as Oklahoma, Kansas and Texas wheat conditions all fell in the latest reporting week. Oklahoma has seen its good to excellent score on the 2018 wheat crop drop from 41 percent two weeks ago to 30 percent this week; Kansas dropped five points from two weeks ago to 51 percent good to excellent and Texas dropped ten percentage points to 36 percent good with no score for excellent in this week’s final weekly score of the season.”

On Nov. 30, USDA will issue a quarterly update to its forecast of U.S. farm exports for fiscal year 2018 (Oct. 2017 to Sept. 2018). In a previous report, USDA said the total of $140.5 billion for FY2017 ended a two-year decline and was the third-highest on record. USDA currently forecasts U.S. wheat exports for marketing year 2017/18 at 27.2 million metric tons (MMT), down slightly from 28.7 MMT in 2016/17.

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New Study Examines Shifts in Global Agricultural Trade

Participants at the U.S. Agricultural Export Development Council annual meeting, Nov. 14 and 15, 2017, in Baltimore, Md., got an early look at a new study indicating that developing countries have been competing quite effectively in global agricultural trade. In addition, the study showed that agricultural products are often classified as “sensitive products” in trade agreements, leading to a significant level of protection, especially by developing and advanced developing countries.

The report is “The Global Landscape of Agricultural Trade, 1995-2014,” just released by USDA’s Economic Research Service. The authors’ summary says the Uruguay Round Agreement on Agriculture (URAA) of 1994 imposed new disciplines on market access barriers, domestic support and export subsidies, and set up rules for non-tariff measures. In the two decades since the URAA, government interventions in agricultural trade have evolved, agricultural trade has expanded and BRIIC countries (Brazil, Russia, India, Indonesia, and China) and other emerging economies have become significant agricultural traders. The summary adds that although clear progress has been made in such areas as tariff reductions and elimination of export subsidies, there is room for further disciplines on tariffs, nontariff measures and domestic policy.

Specifically, the study showed that the value of global agricultural exports adjusted for inflation has doubled since 1994, indicating a significant increase in the total market size. Overall, as the BRIIC country share of total imports is increasing, North American and Western European countries are importing a smaller percentage of the total. Conversely, the total share of world agricultural exports from the United States is down from 20 percent to 14 percent, while BRIIC country share is up from 14 percent to 23 percent. Global wheat trade has displayed a similar pattern: as U.S. exports have remain fairly stable, the U.S. share of a growing total world wheat market has declined.

The report summary adds that major emerging economies have increased the support they provide to farmers, sometimes using methods like price supports or input subsidies that are more likely to distort trade. In some of these countries, the study showed, recent emphasis on agriculture support is a sharp departure from earlier policies that implicitly taxed agriculture. Read the entire report online here.

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Promoting Wheat Around the World

As 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 September and October to promote all six classes of U.S. wheat in an ever more complex world grain market.

Asia. USW scheduled several meetings and wheat grading and flour milling seminars for Rob Bundy, Quality Assurance Specialist with the Federal Grain Inspection Service (FGIS), during a temporary duty (TDY) assignment to Southeast Asia in September. Throughout his trip, Bundy made stops with USW staff in China, Singapore, Myanmar, the Philippines, Taiwan and Japan. He discussed U.S. wheat grading procedures and documentation with hands-on grading exercises, wheat classes and characteristics as well as the FGIS review and appeals processes.

China. USW worked with a flour mill to help sponsor the Savor USA Home Baking Competition held in China via the online platform, WeChat, where contestants could submit recipes and food photographs. USDA’s Agricultural Trade Office (ATO) in Shanghai created the competition to bring together U.S. ingredient providers and Chinese customers, and capitalize on increasing interest in home baking. USW chef consultant Heinz Fischer demonstrated U.S. wheat flour performance with a live baking demonstration at the competition’s award ceremony.

United Arab Emirates (UAE). In October, USW participated in the 28th Annual International Association of Operative Millers (IAOM) Middle East and North Africa (MEA) Conference and Expo 2017, in Dubai, UAE. As a founding organization of the IAOM MEA, USW has maintained an active role in the annual event. Vice President of Overseas Operations Mark Fowler and Regional Vice President Ian Flagg are currently members of the IAOM MEA Leadership Council.

Philippines. Also in October, USW staff conducted two baking workshops entitled “The Korean Way of Bread Making,” to help Philippine bakers diversify product offerings and production techniques. The workshops focused on Korean baking processes and formulations, including several Korean pan bread and baguette styles.

Mexico. Colleagues from USW Mexico City conducted a Transportation and Logistics Workshop in Mexico, Sept. 11 to 13 for wheat buyers and executives from U.S. and Mexican railroads. Forty-five participants, attended the workshop to learn more about vital information and technology used to facilitate U.S. wheat shipments to Mexico via rail.

Belgium. USW participated in the 57th European Commodities Exchange, Oct. 12 to 13, in Brussels, Belgium, which attracted 3,000 professionals involved in grain trade and processing from 56 countries. Visitors to the USW booth received updates on U.S. wheat quality data and marketing and were invited to USW’s upcoming Crop Quality Seminars.

Costa Rica. USW conducted an on-site Contracting for Wheat Value Seminar with a leading Costa Rican flour miller in September. USW Consultants Dr. Bill Wilson from North Dakota State University and Shawn Thiele from the IGP Institute helped lead the seminar with a focus on how to increase U.S. wheat value by making appropriate adjustments to purchasing specifications and production methods. Staff from the mill’s purchasing, quality control and production departments learned how to maximize the value gained from quality attributes such as lower moisture content and maximizing flour extraction rates through proper tempering times.

Colombia. The Servicio Nacional de Aprendizaje (SENA) is Colombia’s largest technical institute that prepares students for technical service jobs, including bakers. USW Consultant Didier Rosada conducted a five-day seminar for SENA instructors from the bread baking department, with the goal of providing improved baking methods to incorporate into the regular SENA curriculum. The seminar also provided a chance to discuss the characteristics and end uses of U.S. wheat classes.

Chile and Bolivia. USW Consultant Jay O’Neil traveled to La Paz, Bolivia, and Santiago, Chile, to conduct purchasing seminars for wheat buyers. He focused on the U.S. wheat production and marketing systems, U.S. grain standards, purchasing contracts and negotiations, futures markets and ocean freight. USW covered wheat classes and their use, and in Bolivia, a local grain trader led a discussion on the current Bolivian market.

Ecuador. USW and milling consultant Andrea Saturno, traveled to Quito, Ecuador, to conduct two technical milling seminars, Oct. 17 to 20. The first seminar for a private mill focused on the control elements critical to maintaining efficiency and quality. The second seminar for ASEMOL, the Ecuadorian Milling Association, included an introduction to wheat cleaning, tempering, quality control, mill performance, new developments in milling science and the best application of U.S. wheat classes for different end products. An FGIS official joined the seminar to discuss the U.S. grain grading system and different buying strategies, and led a hands-on activity to identify grain damage.

South Korea. Wheat import managers and wheat flour quality control managers from flour mills in Korea participated in a Contracting for Value Workshop at the Wheat Marketing Center (WMC), Aug. 19 to 26, in Portland, Ore. During the workshop, the participants also visited the EGT export facility in Longview, Wash., met with several grain traders and toured an Oregon wheat farm. In the WMC lab, participants saw several functional test demonstrations and participated in WMC product evaluations on a variety of end products.

Indonesia. In August and September, USW’s milling and baking specialists provided in-plant consultations for four of Indonesian flour milling companies on the island of Java, and sanother milling company in Medan on the island of Sumatra. The consultations focused on contracting for U.S. wheat value, best practices to improve end product quality, baking tests, troubleshooting technical issues and concerns, assessing potential opportunities and increasing the use of solvent retention capacity (SRC) tests to analyze flour streams.

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Study Finds No Link Between Cancer and Glyphosate Use

In 2015, the U.S. wheat industry expressed concern about a report by the non-regulatory International Agency for Research on Cancer (IARC) that moved to reclassify glyphosate as a “probable” human carcinogen, even though more than 25 years of several, separate studies had concluded that the mammalian toxicity levels of glyphosate are low and glyphosate is not carcinogenic.

On Nov. 9, 2017, the Journal of the National Cancer Institute (JNCI) published new research on the use of glyphosate by agricultural workers. The study found no association between exposure to glyphosate, “and any solid tumors or lymphoid malignancies overall, including non-Hodgkin Lymphoma…and its subtypes.”

This research was conducted as a part of the Agricultural Health Study (AHS), described on a website as “a prospective study of cancer and other health outcomes in a cohort of licensed pesticide applicators and their spouses from Iowa and North Carolina. The AHS began in 1993 with the goal of answering important questions about how agricultural, lifestyle and genetic factors affect the health of farming populations. The study is a collaborative effort involving investigators from the National Cancer Institute, the National Institute of Environmental Health Sciences, the Environmental Protection Agency and the National Institute for Occupational Safety and Health. More than 89,000 farmers and their spouses in Iowa and North Carolina have participated in the study. Their participation has provided, and continues to provide, the data that researchers need to help current and future generations of farmers and their families live healthier lives.”

Glyphosate is an active ingredient in many “non-selective” herbicide formulations. To learn more about how U.S. wheat farmers manage the use of glyphosate, visit the National Wheat Foundation for a five-part blog series on “The Facts About Glyphosate.”

This new research comes at an important time, as several U.S. agriculture groups, including the National Association of Wheat Growers (NAWG), recently “joined forces to file a lawsuit in federal court against the State of California for ignoring science and conclusions from regulatory bodies around the world in a fundamentally flawed regulatory classification of glyphosate.” The coalition’s case was filed in the U.S. District Court for the Eastern District of California. Read the full announcement here.

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Latest USDA Forecast Accounts for Increased U.S. Wheat Export Demand

By Steve Mercer, USW Vice President of Communications

USDA market analysts cited Iraq’s major purchase of hard red winter (HRW) wheat as the specific basis for a significant drop in U.S. ending stocks in the November World Agricultural Supply and Demand Estimates (WASDE) report. The report correspondingly put its total U.S. export forecast for 2017/18 up 0.7 million metric tons (MMT) to reach 27.2 MMT. This would be down 5 percent from 2016/17 but 2 percent above the 5-year average, if realized.

The ending stocks forecast continues to be the primary plot of the 2017/18 global wheat market story. The WASDE report noted that even with slightly lower supplies and higher use, ending stocks are still expected to hit a record level.

USW Market Analyst Stephanie Bryant-Erdmann, who is currently on an international assignment, shows in USW’s latest Supply and Demand Report that global ending stocks are projected to reach a record level: 268 MMT, or 5 percent higher than 2016/17, if realized. Estimated Chinese ending stocks of 127 MMT account for 48 percent of global ending stocks, which is 58 percent greater than the 5-year average.

Bryant-Erdmann provides a more nuanced analysis of global stocks by charting the current global stocks-to-use ratio with and without China’s stocks, which are not likely to move to export. She shows that the 2017/18 ratio drops about 64 percent from 36 percent to 22 percent without Chinese stocks. More significant, though, is the historical look, showing that exportable stocks are on a three-year downward trend. In fact, Bryant-Erdmann shows that exporter ending stocks are expected to fall 5 percent year over year to 74.3 MMT, and ending stocks in importing countries are forecast to fall to 66.0 MMT, 5 percent below the 5-year average of 70.5 MMT.

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Success in the U.S.-Morocco Free Trade Agreement

By Elizabeth Westendorf, USW Assistant Director of Policy

In 2006, the United States signed the U.S.-Morocco Free Trade Agreement, making it the first U.S. free trade agreement (FTA) that did not fully eliminate tariffs on wheat. Instead, the FTA included a tariff rate quota (TRQ) for U.S. wheat, which is now set at 360,000 metric tons (MT) per year. Over the years, this TRQ has presented a challenge to U.S. wheat exports to Morocco. It is typically only briefly opened once a year, which makes it difficult for Moroccan customers to gain preferential tariff access to high quality U.S. wheat.

U.S. government officials have consistently raised this issue with their Moroccan counterparts, and this year the TRQ administration was improved to allow access to U.S. wheat exports multiple times per year. The first tender of the year filled because of a poor wheat harvest in Morocco in 2016, but Morocco only tenders for 90 percent of the tender at once because buyers can bid 10 percent over that amount in the tender. In October, Morocco agreed to issue a second tender for the remaining 30,000 MT of the TRQ. That tender was filled, and the wheat will arrive in Morocco in December. With the exception of last year and early this year, when Morocco had a poor wheat crop and needed to import more wheat, this is the first time in years that a significant quantity of U.S. wheat has gone in under the TRQ, and these efforts ensure that U.S. wheat will have improved access to the Moroccan market in the future.

Trade agreements do not automatically work perfectly, but this cooperative solution to a problem in the U.S.-Morocco FTA is an important example of the benefits of working within the FTA framework. Trade agreements are a vital tool for opening and expanding new markets and help reduce costs for international wheat buyers. They are especially important in the increasingly competitive global wheat market.

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Vietnam Lifts Restrictions on U.S. Wheat Imports

Recently, Vietnam’s government advised the USDA that it would lift restrictions on imported U.S. food grains and feed grains. This change helped open an opportunity for Vietnamese flour millers who recently bought a large volume of U.S. soft white (SW) wheat, the first substantial sale of U.S. wheat to the Vietnam market in several months.

On Dec. 1, 2016, Vietnam implemented a requirement that all shipments of U.S. wheat, corn and distillers dried grain solids (DDGS) be fumigated with a product that U.S. export elevators are generally unable to use in bulk shipments. Vietnam now allows treatment with a generally accepted fumigation product throughout the global grain trade, to enter the country. An official phytosanitary certification from the USDA Animal and Plant Health Inspection Service will also be required.

USW continued to provide trade service to Vietnamese flour millers after this restriction was implemented. For example, Vietnamese flour milling executives recently joined a team of millers visiting the United States to learn more about U.S. wheat quality and the supply chain.

“Several of our staff worked with the grain trade, U.S. government agencies and our customers to develop workable solutions to this restriction,” said USW Vice President of Overseas Mark Fowler. “We appreciate their work and the cooperation of the U.S. and Vietnamese governments. We look forward to more normal trade with these customers.”

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Sound Science: Two More Reasons to Eat Wholesome Whole Grains

By Megan Meyer, PhD, International Food Information Council (IFIC) Foundation

Original article first appeared in March 2017

[IFIC is] rounding out National Nutrition Month [March], with a new Sound Science analysis. In fact, this Sound Science piece includes a double feature. Recently published in the American Journal of Clinical Nutrition, a pair of studies focused on a variety of health benefits associated with whole grain consumption, specific to the body weight and microbiome. Whether you are a carb enthusiast, carb skeptic, or somewhere in the middle, it’s important to take note new scientific findings and see how they align, enhance, or refute the current body of evidence. This will help you get the whole (grain) story.

A Closer Look at The Science

First up, the study by Karl et al., examined the effects of whole and refined grains on energy and metabolism endpoints. The study enrolled 81 participants in an eight-week study. The participants were divided into two groups: a whole grain group and refined grain group. The diets differed only in the types of carbohydrates consumed. Interestingly, the study found that the whole grain group had a calorie deficit (burned off more than they took in) more each day due to a few different factors, including an increased resting metabolic rate. Moreover, the authors postulated that this calorie loss could “translate into a ~2.5-kg (5.5 lbs.) body weight loss over one year.”

The other complementary study by Vanegas, et al., analyzed different endpoints and samples from the Karl et al., study to investigate the impact of whole grains on the microbiome. The microbiome is a complex community of microorganisms such as bacteria, fungi, and viruses found on and in our bodies. While we are only at the early stages of understanding the impact of the microbiome, current research indicates that these communities provide us with important health functions.

One of the largest microbial communities resides in our gastrointestinal (GI) tracts. Data from Vanegas et al., demonstrate that short-term whole grain consumption altered the GI microbiome composition and modified specific immune system and inflammatory markers. However, the researchers acknowledged that these effects were “modest” and that additional follow-up studies are “needed to observe more dramatic effects on immune and inflammatory responses.”

How does this impact what we already know?

So how do these findings stack up with the body of evidence? These findings feed in nicely to the current recommendations regarding carbohydrates and whole grains, which is to make half of your grain intake whole grains. In fact, comprehensive evidence from the Nutrition Evidence Library indicates that there is moderate evidence linking whole grain intake and lower body weight. If you are looking to boost your whole grain intake and meet the daily recommended 48 grams, try to incorporate more whole wheat flour, oats, cornmeal, popcorn, brown rice, bulgur, barley, rye, and quinoa into your diet.

However, this does not mean that there isn’t a place for other grains, such as enriched refined grains. Enriched refined grains contribute a variety of essential micronutrients such as B vitamins, thiamin, riboflavin, niacin, and folic acid, as well as iron. These micronutrients are key for supporting your overall metabolism and some specific micronutrients, such as folic acid, decrease the risk of neural tube development during pregnancy.

While these two studies on whole grains reveal a compelling reason to make half your grains whole, don’t forget about their other half. Both whole and enriched refined grains contribute important nutrients and are key components of a healthy eating pattern.

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