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“All Aboard Wheat Harvest” Blog Follows 2017 Wheat Harvest

The 2017 wheat harvest is underway on the U.S. Plains and the High Plains Journal is spending another year following the custom harvesters. The “All Aboard Wheat Harvest” blog, sponsored by John Deere, enlists five correspondents to cover the harvest as the harvesters make their way from Texas to the Dakotas.

Keep up with the blog at https://allaboardharvest.com/ or sign up for daily emails from the crew on the site’s homepage. The correspondents will also be busy on social media:

Twitter: @AllAboardTour

Facebook: https://www.facebook.com/allaboardharvest

YouTube: https://www.youtube.com/user/AllAboardTour

Flickr: https://www.flickr.com/photos/allaboardtour

You can also follow the progress of the 2017/18 crop through the USW Harvest Report every Friday afternoon at https://www.uswheat.org/harvest.

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Variable Conditions Dominate as 2017/18 Harvest Begins

By Stephanie Bryant-Erdmann, USW Market Analyst

Combines are beginning to roll for winter wheat harvest in the United States with highly variable wheat and field conditions. The U.S. National Weather Service reported that in May much of the U.S. Plains region received 1.5 to 3 times more rain than normal. On Tuesday, May 30, USDA rated 50 percent of the winter wheat crop in good to excellent condition, down 2 percentage points from the prior week; 15 percent of the crop was rated in poor or very poor condition. The following is a summary of harvest progress, crop conditions, field conditions and planted area by state.

Colorado. Growing conditions across Colorado have been highly variable this year with some parts of the state experiencing very favorable conditions and others quite the opposite. The late April snowstorm dumped snow across eastern Colorado, albeit on less mature wheat. Parts of the state have also been hit by severe storms and hail in the last two weeks, with damage still being assessed. Farmers noted crop development is 7 to 10 days ahead of normal across the state. On May 30, USDA rated 50 percent of Colorado winter wheat in good to excellent condition compared to 43 percent the prior week; 16 percent of the crop is in poor or very poor condition. USDA reported 70 percent of Colorado wheat is headed, behind the 5-year average of 61 percent. Colorado farmers planted 891,000 hectares (2.20 million acres) of wheat last fall, down 6 percent from 2015. USDA expects winter wheat production to fall to 1.96 million metric tons (MMT), or 72.1 million bushels, down an estimated 31 percent from the prior year.

Kansas. Kansas Wheat CEO Justin Gilpin reports that the extent of damage from the May snowstorm that dropped as much as 22 inches (54 cm) of snow on western Kansas will depend largely on planting date, maturity and varieties. Since that storm, Kansas has continued to receive excessive rain leading to standing water in fields and increased disease pressure. On May 30, USDA rated 45 percent of winter wheat as good to excellent compared to 47 percent the prior week; 25 percent of Kansas wheat is rated poor or very poor. Kansas wheat is 97 percent headed, ahead of the 5-year average of 93 percent. Last fall, Kansas planted 3.00 million hectares (7.40 million acres), down 13 percent year over year and the lowest planted area in 60 years. USDA expects Kansas to produce 7.89 MMT (290 million bushels) in 2017/18, down 38 percent from last year.

Montana. Montana farmers noted good stands of wheat, but soil moisture conditions are variable across the state. USDA rated topsoil moisture supplies at 34 percent short or very short, 62 percent adequate and 4 percent surplus, compared to 17 percent short or very short, 72 percent adequate and 11 percent surplus last year on the same date. On May 30, USDA rated 48 percent of Montana winter wheat in good to excellent condition compared to 52 percent the week prior. Montana wheat has not yet started to head, which is behind the 5-year average pace of 5 percent headed. Farmers planted 770,000 hectares (1.90 million acres) of wheat in 2016, down 16 percent from 2015 due to wet field conditions and strong price competition from peas and lentils. USDA expects Montana to produce 2.22 MMT (81.6 million bushels), down 23 percent from 2016/17.

Nebraska. Farmers report that a cool, wet spring is increasing disease pressure across the state. They also noted abandonment of some fields after a late spring freeze badly hurt yield potential. USDA rated 47 percent of Nebraska winter wheat in good to excellent condition on May 30, up slightly from the prior week. Winter wheat is 86 percent headed, compared to the 5-year average of 55 percent on the same date. Nebraska farmers planted 441,000 hectares (1.09 million acres) of wheat in 2016, down 20 percent from 2015 and the lowest planted area on record for Nebraska. USDA expects Nebraska winter wheat production to total 1.4 MMT (51.5 million bushels), down an estimated 27 percent from the prior year.

Oklahoma. Harvest is underway in Oklahoma, though storms are causing some delays. Many of the recent storms included damaging hail and farmers are concerned about getting the wheat safely into the bin. USDA rated 45 percent of Oklahoma winter wheat in good to excellent condition on May 30, compared to 49 percent the week prior; 14 percent of the crop is in poor or very poor condition. USDA reported wheat harvest in Oklahoma is 3 percent complete, behind the 5-year average of 10 percent complete on the same date. Oklahoma farmers planted 1.82 million hectares (4.50 million acres) of wheat in 2016, down 10 percent from the year prior because late-season rain prevented some wheat planting. USDA expects Oklahoma winter wheat production to fall to 2.42 MMT (89.1 million bushels), down 35 percent year over year.

South Dakota. Temperatures fell below freezing last week in South Dakota, though the damage has not yet been assessed. Topsoil moisture is rated as 56 percent adequate, compared to 82 percent adequate last year, with subsoil moisture rated as 39 percent short to very short and 58 percent adequate. USDA rated 50 percent of South Dakota winter wheat in good to excellent condition compared to 54 percent last week; 20 percent of South Dakota winter wheat is in poor or very poor condition. Winter wheat is 32 percent headed in the state, on par with the 5-year average. South Dakota farmers planted 364,000 hectares (900,000 acres) of winter wheat, down 24 percent year over year. USDA expects South Dakota winter wheat production to decline to 1.19 MMT (43.7 million bushels), down 32 percent year over year.

Texas. Harvest started two to three weeks ahead of average in Texas and, as in Oklahoma, severe storms and hail threaten the crop. As of May 30, harvest is 22 percent complete, ahead of the 5-year average of 15 percent complete. Last fall, Texas farmers planted 1.82 million hectares (4.50 million acres) of wheat, down 10 percent from the year prior in very dry field conditions. In the past two years, Texas planted wheat area has dropped by 20 percent. USDA expects Texas wheat production to total 1.88 MMT (69.0 million bushels), down 23 percent from 2016/17. On May 30, USDA rated 31 percent of Texas winter wheat in good to excellent condition compared to 36 percent the week prior; 17 percent of the Texas crop is in poor or very poor condition.

Soft Red Winter (SRW) Conditions. Harvest is underway in the mid-South (13 percent of SRW wheat has been harvested in Arkansas). Crop conditions are generally good. However, recent rainy, cool conditions from the mid-South through the Midwest, Mid-Atlantic and Southeast have slowed maturity. In Ohio, Extension workers reported that the crop would benefit from drier and warmer weather. A poor price outlook compared to alternate crops has SRW planted area on a steady decline. USDA calculates SRW planted area at 2.24 million hectares (5.53 million acres) for 2017/18.

To track harvest progress, subscribe to the USW Weekly Harvest report.

To read the latest USW Weekly Harvest report, click here.

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Renegotiating Bilateral FTA with Korea Risks Disrupting Effective Trade

By Ben Conner, USW Director of Policy

It was a decade ago this month that the United States completed its last successful free trade agreement negotiation. Under the Bush Administration, the United States and South Korea signed the U.S.-Korea Free Trade Agreement (KORUS) on June 30, 2007. However, it would be almost five more years before it entered into force following minor modifications by the Obama Administration.

Now the Trump Administration has hinted that it, too, may try to make its mark on the U.S.-Korea trade relationship, citing statistics that the U.S. goods trade deficit with South Korea has doubled since KORUS implementation in 2012.

History shows that with bilateral FTAs there are always issues that may block some trade, and balancing all bilateral trade relationships is impossible. For example, KORUS maintained major barriers to U.S. rice exports and the United States maintained significant barriers on Korean automotive exports. Reducing the overall trade deficit is a major policy goal of the United States, so renegotiating free trade agreements one by one is not the best approach.

The only way to reduce overall deficits is to promote savings and decrease consumption by U.S. citizens. The most effective way to do that is recession, as evidenced by 2009, the lowest U.S. trade deficit in the past 10 years and the heart of the “Great Recession.” New restrictions on trade are not likely to affect the trade deficit, except that they could lead to or exacerbate economic recession, an outcome previous U.S. administrations have wisely avoided.

Renegotiating agreements risks disrupting established supply chains and endangering trade. Our organization has worked for many decades to build a preference for U.S. wheat in South Korea. While there were limited policy barriers to U.S. wheat exports before KORUS, the agreement provides strong assurances about the continued viability of the trade relationship between U.S. wheat farmers and Korean customers. This is an extremely valuable trade relationship for both sides and it would be unfortunate for both partners if it does not remain open and fair.

USW will continue to advocate for trade policy that is based on openness to trade, with individual actors being free to choose with whom to buy and sell. That has always been the best policy framework for U.S. wheat farmers and their customers, and KORUS as it exists today for wheat trade is an important part of that system.

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Freeze, Snow Effects Likely Cut into World’s High Quality Wheat Supply

It is still too early to project specific effects on wheat yields for marketing year 2017/18 from the late-season cold and snow event in Kansas and parts of Colorado, Texas and Nebraska. However, those close to the situation suggest the freeze and snow only add fuel to an already established trend.

“The big story with hard red winter wheat in general before the blizzard headlines was about the reduction in planted area,” said Kansas Wheat CEO Justin Gilpin. “Lower planted area, now combined with higher abandonment in this crop, encouraged USDA to project a drop in hard red winter wheat production by 344 million bushels (9.36 MMT).”

Gilpin said he expects the situation in HRW will help reduce the total U.S. wheat stocks-to-use ratio by perhaps 10 percent — but carryover stocks still support a relatively high ratio of 40 percent.

“However, it needs to be pointed out that this does not reflect the balance sheet for the high quality milling wheat that buyers here in the United States and around the world should watch closely,” said Gilpin. “The available stocks-to-use number for quality supplies is projected to be to be much tighter on a global basis.”

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Profiling U.S. Wheat Sustainability: Mark Linnebur, Hard White Wheat Farmer

By Elizabeth Westendorf, USW Policy Specialist

Mark Linnebur’s family and their community are always at the core of every decision made on their farm. The president of the Colorado Wheat Administrative Committee farms 25,000 acres of land in Colorado alongside five of his brothers and their families. He typically grows HRW or hard white (HW) wheat and corn in a wheat-corn-fallow rotation.

“Being a good steward of the land is what every farmer is trying to achieve,” said Linnebur. “We are not trying to mine the land for what we can get out of it in the near term, because we want to pass it on to our children.”

Linnebur is one of six U.S. wheat farmers featured in a USW series on wheat sustainability. There are six U.S. wheat classes, grown in distinct regions and local micro-climates. Aggregate measures of sustainability are important, but they fail to capture the nuances of a crop that is grown across many different climates, soil types and farm environments. These profiles show the differences in farming practices across the country and how those farming practices enhance the sustainability of U.S. agriculture.

The Linneburs switched to no-till farming twenty years ago to help protect their soil and better retain moisture, which is a scarce commodity in his region. In dry years, they now see 20 to 50 percent better yields than before the switch to no-till because they are conserving an average 25 to 30 percent of water resources every year.

“Sustainability is more than just environmental. The fact that we are raising our family on this farm is what keeps our love for the land in place. If we don’t love the land, we are not going to take care of it,” said Linnebur. “First and foremost, sustainability is economical and generational – which leads to environmental sustainability.”

That intergenerational focus has resulted in efforts to innovate and better protect the resources on his land. For example, Linnebur uses “bio-solids” from the nearby metropolitan area to fertilize about half of his land every year and sees better soil quality as a result, which helps increase protein levels of his wheat crops.

“It can be challenging trying to convince the wider population that we are taking care of the ground, because for us, it’s about passing it on to the next generation,” said Linnebur. “We’re building the soil, that’s our real goal.”

U.S. wheat farmers deal with unique challenges and growing conditions. For Linnebur, that challenge is conserving water resources for his dryland crops. The Linnebur family farm has thrived in part because they use no-till and innovative practices like fertilizing with bio-solids to maximize soil health and production together. This formula is one that all farmers strive to balance, and each go about it in ways that make the most sense in their region. Sustainability is not “one size fits all.”

Learn more about Linnebur and his farm at www.uswheat.org/factsheets. U.S. farmers, ranchers, fishermen and foresters also share their values, sustainability experiences and conservation practices at the U.S. Sustainability Alliance.

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Digging Deeper: How Global Supplies Will Tighten in 2017/18

By Stephanie Bryant-Erdmann, USW Market Analyst

While markets focused on USDA’s latest global supply and demand values, a deeper look provides perspective for wheat buyers. Breaking the supply values down into three categories — importer, exporter and China — shows some interesting trends. USDA expects world wheat supply in 2017/18 to fall 2 million metric tons (MMT) year over year to 993 MMT due to a 2 percent decline in its estimated production of 738 MMT. If realized, it would be the first production decline since 2012/13. The anticipated decrease in exporter and importer supplies will be larger, but that decrease is masked by estimated increases for China. Removing China’s 2017/18 projected beginning stocks and production from global wheat supply reveals an 18.2 MMT or approximately 2 percent decline in global supplies.

Importing countries. Ending stocks in major wheat importing countries for 2016/17 — soon to be 2017/18 beginning stocks — are expected to fall to a 6-year low of 68.0 MMT. Production in the importing countries is expected to increase 5 percent year over year, lifted by a 10 MMT increase in India after two poor crops there. Total importing country supplies are expected to remain stable at 300 MMT, with beginning stocks falling and production increasing only marginally in importing countries. However, it should be noted that 107 MMT, roughly 35 percent, of that supply will remain in India.

Exporting countries. USDA forecasts supplies in the top wheat exporting countries of Argentina, Australia, Canada, the European Union (EU), Kazakhstan, Russia, Ukraine and the United States to decrease by 4 percent or roughly 19 MMT year over year to 451 MMT. A 10.5 MMT year over year increase in exporter beginning stocks partially offsets the anticipated 7 percent decrease in production. Of the major eight exporters, only the EU and Argentina expect to see increases compared to last year.

China. USDA expects Chinese beginning stocks to climb to 111 MMT, up 14 percent over 2016/17. If realized, China will hold 43 percent of 2017/18 total global wheat beginning stocks. Chinese wheat production is also expected to rise in 2017/18 to 131 MMT, up 2.15 MMT from 2016/17, yet Chinese wheat consumption is expected to decline 2 percent to 116 MMT due to an anticipated decrease in wheat feeding. With supply up and consumption down, 2017/18 Chinese ending stocks are expected to grow to 128 MMT, up 15 percent from last year and a new record. If realized, Chinese ending stocks would account for 49 percent of all global wheat ending stocks for 2017/18.

Global supply and demand estimates give broad perspective for purchasing decisions, but customers should take care to remove Chinese stocks from the equations because the entire volume will stay in China. Thus, China’s ending stocks skew the total global stocks-to-use ratio higher to 35 percent. Without China, the global ratio would be 21 percent.

Buyers should also note that USDA’s first estimates for 2017/18 wheat production use trendline yields and average harvested area. As last year demonstrated, weather can significantly affect yield potential, abandoned acres, quality and total production. For example, the actual effect of the late April freeze and snow, as well as increasing plant disease pressure, on hard red winter (HRW) production and quality will not be revealed until harvest. Buyers should continue to monitor conditions around the world, and recognize that global wheat supplies are much tighter than traditional global supply and demand estimates show.

To keep up to date on the 2017/18 U.S. wheat harvest and initial quality analysis, it is easy to subscribe to USW Weekly Harvest Reports. To read the first report, click here.

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Wheat Tour Finds Lower Yield Potential; Snow and Freeze Losses Still Uncertain

By Stephanie Bryant-Erdmann, USW Market Analyst

This week I joined the annual Wheat Quality Council (WQC) “Hard Red Wheat Tour” for an early survey of the new crop. Each year, participants gather in Manhattan, KS, and spend the next two and a half days in small team, randomly stopping at 14, 15 or more fields in a full day along the same routes followed for many years. The scout teams measure yield potential, determine an average for the route and estimate a cumulative average for the day when all the scouts come together in the evening.

Just a few hours before USW published this issue of “Wheat Letter,” the tour estimated a final average yield potential of 46.1 bushels per acre (bu/ac) or about 3.10 metric tons per hectare for the 2017/18 Kansas hard red winter (HRW) crop. This year the tour participants made 469 stops to scout fields. Combining seeded area with per-acre yield potential, the total production potential estimate was 282.0 million bushels (7.67 million MT). Last year’s total production estimate was 382.4 million bushels (10.4 MMT). Sampling this year was skewed toward central and eastern Kansas due to difficulties sampling in the west.

On the first day, the tour traveled from Manhattan along several routes covering most northern Kansas counties. The cumulative Day 1 average yield potential was 43.0 bu/ac, which is equivalent to about 2.89 MT per hectare, compared to 47.1 bu/ac (3.16 MT per hectare) in 2016. To reach that average, participants surveyed 222 fields recording a range from a low of 18 bu/ac to a high of 96 bu/ac. We saw moderate pressure from stripe rust, a fungal disease, as well as viral diseases wheat streak mosaic and barley yellow dwarf. Many farmers were having fungicide applied by air to protect against fungal diseases, but there is no input to check viral disease.

Participants also received a report on the Nebraska and Colorado wheat crops. Nebraska estimated an average 40.0 bu/ac (2.69 MT per hectare) for a total production estimate of 41.8 million bushels (1.14 MMT), down roughly 41 percent from last year’s tour estimate. Colorado estimated an average of 31.6 bu/ac (2.12 MT per hectare) with total production estimated at 69.5 million bushels.

On the second day, the tour traveled on routes that led from the city of Colby to Wichita, making 202 stops. The number of observations was down significantly this year due to the challenging field conditions found in the western third of the state where wet, heavy snow continued to blanket wheat fields. After digging the wheat out of the snow, scouts noted the combination of heavy snow and accompanying 50 to 60 mile per hour winds had laid substantial portions of the wheat down and in some instances had broken the wheat stems. Wheat that was knocked over by the heavy snow, then endured several days of cold temperatures.

Standing water in fields and flooded ditches made field evaluation difficult in the south central part of the state where lodging and some freeze damage was also noted. Wheat streak mosaic was prevalent on Day 2, and participants reported seeing barley yellow dwarf, leaf rust and stripe rust. This year the tour estimated Day 2 average yield at 46.9 bu/ac (3.15 MT per hectare), for a combined two-day average of 44.9 bu/ac (3.02 MT per hectare) across 427 stops. Last year, the Day 2 average was 49.3 bu/ac (3.31 MT per hectare) and the combined two-day average was 48.2 bu/ac (3.24 MT per hectare).

A word of caution to our overseas customers is prudent. The wind, snow and cold events this year are unprecedented. Participants in the tour did the best they could to evaluate the western Kansas crop, but Dr. Romulo Lollato, Assistant Professor, Wheat and Forages Production, Kansas State University told us the most accurate assessment of the storm and freeze will not be possible for 10 to 14 days after each event. “High Plains Journal” magazine is reporting from the Tour and provides more details on Day 2 activities here. Kansas Wheat published additional information here.

Participants also received a crop report from Oklahoma, where drought conditions severely impacted the southern half of the state which received one inch (2.5 cm) of rain between September and mid-February. The northern half of the state benefited from the recent rainfall. The estimated average yield in Oklahoma is 33.7 bu/ac (2.26 MT per hectare), for a total production estimate of 100 million bushels or about 2.72 MMT. If realized, that would be down 27 percent year over year. The crop development is well ahead of normal with farmers expecting to start harvest in the next three weeks.

The third and final day of the tour was shorter, with each car making 3 to 4 field stops on the way from Wichita back to Manhattan for the final report. The Day 3 estimated average yield was 58.3 bu/ac, (3.92 MT per hectare) across 49 stops.

View highlights and photos from the tour by searching #wheattour17 on Facebook and Twitter. The WQC also sponsors a spring wheat tour in the Northern Plains in July. For more information, visit the Council’s web site at https://www.wheatqualitycouncil.org.

 

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Profiling U.S. Wheat Sustainability: Roy Motter, Desert Durum® Farmer

By Elizabeth Westendorf, USW Policy Specialist

Roy Motter farms 2,500 acres in the Imperial Valley of California, and while that may be small compared to other U.S. wheat farms, his operation supports three families. Motter has been farming with his two brothers-in-law since the 1970s, and he oversees their wheat production. They grow Desert Durum® wheat, as well as lettuce, cabbage, onions, sugar beets, sugar cane, alfalfa seed and hay, Sudan grass, melons and tomatoes.

“I chose to start farming more than 40 years ago because I like being outdoors, and I like the dynamics of working for yourself and making those decisions,” said Motter. “Farming is multi-dimensional; every crop is different and has different demands.”

Motter is one of six U.S. wheat farmers featured in a USW series on wheat sustainability representing the six U.S. wheat classes, grown in distinct regions and local micro-climates. The series suggests that while aggregate measures of sustainability are important, but they fail to capture the nuances of a crop that is grown across many different climates, soil types and farm environments. These profiles show the differences in farming practices across the country and how those practices enhance the sustainability of U.S. agriculture.

For Motter, wheat is a pivotal part of their approach to sustainable farming.

“We can’t grow our money crops — lettuce, onions and sugar beets — year after year,” said Motter. “You have to have a rotation, and wheat is a good rotational crop for us. It lets us control weeds and disease that affect the other crops and gives the ground a chance to rest.”

Farmers in the Southwest increase economic water productivity (the dollar value of crop production per acre-foot of water consumed) by 9 to 21 times by rotating wheat production with vegetable production. And in an arid climate like the Imperial Valley, maximizing water productivity is vital.

“We get a lot of criticism for using irrigation water from the Colorado River. But if you want to sustain a growing world population with food and fiber, you must modify the environment to satisfy those needs,” said Motter. “If we want to talk about sustainability issues in relation to wheat crops, the primary issue is to use our water as efficiently as we can, and we work to improve that every year.”

Motter’s reliance on irrigation does not mean his farm is less sustainable. The Imperial Valley grows 85 percent of the nation’s lettuce in the winter months of the year, and with or without its wheat production, the region will continue to grow its vegetable crops. By rotating wheat with that lettuce production, Motter reduces the amount of water his farm uses. In fact, over the past 30 years, farmers in the desert Southwest have reduced their water usage for barley and wheat by approximately 30 percent and consistently invest money in water and energy conservation efforts.

U.S. wheat farmers deal with unique challenges and growing conditions. For Motter, those challenges are managing water use in an arid climate and controlling crop diseases without the benefit of a cold winter in between growing seasons. Motter and his family’s farm have thrived because they use rotation and best practices to maximize soil health and production while minimizing required inputs. This formula is one that all farmers strive to balance, and each go about it in ways that make the most sense in their region. Sustainability is not “one size fits all.”

Learn more about Motter and his farm at www.uswheat.org/factsheets. There is also more information about U.S. farmers, ranchers, fishermen and foresters share their values, sustainability experiences and conservation practices at the U.S. Sustainability Alliance.

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First Reports on HRW Damage from Late Season Snow and Freeze Events: “Just Terrible.”

By Steve Mercer, USW Vice President of Communications

Kansas Wheat CEO Justin Gilpin is not a fellow who is prone to hyperbole. So, when @jp_gilp “Tweets” to the world that “we lost the Western Kansas wheat crop,” people notice.

Blizzard conditions and up to 18 inches (45.8 cm) of heavy, wet snow came down hard on the rapidly maturing hard red winter (HRW) wheat crop in northwest Oklahoma, western Kansas, eastern Colorado and southwest Nebraska April 29 and 30. Much of that wheat looked very good before the storm. Its higher yield potential was a cautious hope for some farm profit this year, a hope now broken like the stems under the snow in so many fields.

This unusual event may have overshadowed separate freeze events April 22, 23 and 27 that affected a big portion of central Kansas as well as south central Nebraska and north central Oklahoma. Kansas Wheat said “the freezes may cause significant damage in many areas because the crop was in boot and early heading stages at the time.”

Local agronomists say it will take 10 to 14 days before the final effects of the unprecedented late-season freeze and snow events can be determined with any accuracy. The first estimate from the snow alone put loss potential at 50 million bushels or almost 1.4 million metric tons (MMT). That would be roughly equal to 5 percent of the 23.8 MMT 5-year average total U.S. HRW crop.

National Association of Wheat Growers (NAWG) President David Schemm, who farms near Sharon Springs in far western Kansas, captured what is probably on the minds of most Kansas farmers. In a Facebook Live video from one of his fields as he surveyed the damage, he said, “all we can say, thankfully, in these situations is that with crop insurance we can maybe keep our farm for another year.”

More tough blows to already strapped farmers are, as Justin Gilpin added in his striking Tweet, “Just terrible.” Perhaps some of the wheat — and all Central and Southern Plains wheat farmers — will recover from these stresses.

We can only hope.

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USTR Report Highlights Need for Rules-Based Trading System

By Ben Conner, USW Director of Policy

Every year, the USW Wheat Letter features an article on the annual release of the National Trade Estimate (NTE) report by the Office of the U.S. Trade Representative (USTR). While the issues it quantifies do not change rapidly, the latest NTE shows the extent of the problems facing the Trump Administration, which has made trade enforcement a cornerstone of its economic policy.

The NTE is the U.S. government’s most comprehensive report on trade barriers. It covers more than 40 countries or country groupings. In just under 500 pages, it clearly shows that these barriers pose a major challenge for U.S. exporters and investors. Most of the issues are policies that violate rules of a U.S. trade agreement or the World Trade Organization (WTO).

Considering trade enforcement, the NTE may understate the challenge. For the wheat industry alone there are several barriers not listed in this massive report. If USTR decided to pursue every long-standing issue facing the United States through dispute settlement, it would stretch its resources far past the breaking point. Unfortunately, new problems seem to arise faster than it takes governments to fix old problems.

This underscores the need for countries to commit strongly to a rules-based trading system. Trade disputes are one way to address the problems, but even a country with considerable resources for trade disputes like the United States, which has sued or been sued in nearly half of all WTO disputes, can barely begin to address outstanding issues through disputes alone.

However, strategic enforcement is important to maintaining the effectiveness of international trade rules. There are economic benefits from fixing specific trade barriers, but just as vital is the deterrence effect on countries that would consider implementing new barriers. If we must litigate every issue, the system could collapse.

Last year, USTR took a big step in challenging non-compliant domestic support programs in China — a growing problem for at least a decade. The NTE mentions similar problems in India, Turkey and Brazil and the hope is that the China cases lead to serious reforms to subsidies in these countries as well. USW and USTR need to stay vigilant to help reverse the trend of increasing WTO-violating subsidies and ensure that countries consider their trade commitments before implementing new policies.

Every country, including the United States, has unique internal pressures that may divert them from trade commitments at the margins. The NTE is an important way to demonstrate how those pressures affect U.S. industries, but without effective enforcement and negotiated solutions, it is just a very long list.

As an industry stakeholder, USW provided input on its key trade barriers through comments submitted in October 2016. Read those comments here. The full 2017 NTE report is posted online here.

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