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National Festival of Breads Offers Model for Meeting Food Trends and Consumer Demand

By Amanda J. Spoo, USW Communications Specialist

Earlier this year, I had the opportunity to travel abroad with some U.S. wheat farmers to learn more about the world wheat market and see how those markets use U.S. wheat. We visited many end-product manufacturers, and as we reviewed their various products, most of our conversations circled back to consumer demand. In the United States, the consumer’s relationship with food is becoming increasingly sophisticated — following new trends and seeking out convenience and information on where it came from. The fuel for this change comes from increasing disposable income, television networks dedicated to food and the growing number of online platforms like food blogs, Pinterest, etc. Although products and taste preferences vary from market to market, the demand for food that is high quality, creative and has a story, is universal.

Here in the United States, I recently had the chance to participate in an event that represents a potentially successful way for the global milling, food ingredient and wheat food industries to tell their stories to consumers. It was the National Festival of Breads, a biennial event held in Manhattan, KS, hosted by the Kansas Wheat Commission and sponsored by King Arthur Flour and Red Star Yeast to showcase bread, U.S. wheat and the art of baking. At the center of the festival on June 17 were eight people selected as finalists in a baking contest, the only U.S. amateur bread-baking competition in the United States. They prepared their original bread recipes live for festival visitors and were judged on creativity, healthfulness and taste to determine a grand prize winner. Judges selected the “Seeded Corn and Onion Bubble Loaf,” made by Ronna Farley of Rockville, MD, as the 2017 National Festival of Breads Champion. The champion recipe and all eight finalists’ recipes are available at https://nationalfestivalofbreads.com.

The festival also featured diverse educational baking demonstrations focused on the versatility of bread, baking tips, convenience and health. The more than 3,000 festival visitors joined in hands-on children’s activities, bread tasting and a trade show featuring the baking industry and a well-rounded look at the  U.S. wheat supply chain, including wheat farmers, milling companies, research and extension, and those in product development.

Prior to the festival, the eight finalists also went on a farm-to-fork tour of central Kansas, which included a flour mill, a wheat farm and the Kansas Wheat Innovation Center. On the Kejr family wheat farm, the finalists rode along in the combine to actually participate in the wheat harvest, which one finalist said helped complete the story of the bread into which she put so much of her own care and hard work.

What was advertised as a fun, family-friendly festival for baking really serves as an opportunity to learn about what is important to the consumer and, in return, share information on the role of wheat in their diet — and why bread is so important in so many cultures. My experiences on my trip overseas and at the National Festival of Breads had many parallels, most importantly that listening to the consumer and creating product advantages and stories around their desires is an effective model for success.

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World Wheat Production to Decline in 2017/18

By Stephanie Bryant-Erdmann, USW Market Analyst

With wheat harvest underway in the Northern Hemisphere and wheat planting underway or complete in the Southern Hemisphere, wheat buyers are beginning to see a downward trend in production numbers. As discussed in the June 15 Wheat Letter, the high quality, high protein wheat supply is shrinking and supporting prices. USDA expects global output to decrease for the first time in five years to 739 million metric tons (MMT) (27.2 billion bushels), down 14.6 MMT (535 million bushels) from the 2016/17 record of 754 MMT (27.7 billion bushels). If realized, production would be 3 percent above the five-year average. In this issue, we summarize current expectations and conditions in the world’s major wheat exporting countries, which account for 90 percent of all world wheat exports.

Argentina. In June, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers will plant 17 percent more wheat acres in 2017/18 as wheat production continues to expand under President Macri’s favorable policies. Bolsa estimated wheat planted area at 13.6 million acres (5.5 million hectares). On June 22, 53 percent was planted, up from 37 percent the prior week. USDA’s July estimate for 2017/18 Argentinian wheat production was 17.5 MMT (643 million bushels), up 3 percent from 2016/17 and 41 percent greater than the five-year average.

Australia. In its June report, the Australian Bureau of Agricultural and Resource Economics and Science (ABARES) forecasted 2017/18 production at 24.2 MMT (889 million bushels). That is 31 percent below 2016/17, due to an expected 25 percent reduction in average yield and a slight decline in planted area from 2016 to 31.4 million acres (12.7 million hectares). Autumn rainfall was below normal in Western Australia and variable across South Australia, states that account for roughly half of Australia’s winter crop planted acres and production. The Australian Bureau of Meteorology expects drier than average conditions across wheat producing regions during the next three months.

Black Sea. Winter wheat harvest is underway and USDA projects combined 2017/18 output from Russia, Ukraine and Kazakhstan will decrease 6 percent to 107 MMT (3.93 billion bushels) based on an expected return to trendline yields. If realized, the combined harvest would still be greater than the five-year average. Russian consultancy SovEcon pegged Russian planted wheat area at 68.9 million acres (27.9 million hectares), down slightly from 2016/17 due to a 4 percent decrease in spring wheat area. Russian wheat production is expected to decline to 70.4 MMT (2.59 billion bushels), down 3 percent from 2016/17 due to the smaller planted area and anticipated lower yields. SovEcon forecast Russian winter wheat yields at 52.1 bu/acre (3.50 MT/ha), down from 55.5 bu/acre (3.73 MT/ha) in 2016/17. Spring wheat yields are expected to fall 7 percent year over year to 21.1 bu/acre (1.42 MT/ha). UkrAgroConsult reported Ukrainian wheat planted area decreased slightly year over year to 15.6 million acres (6.30 million hectares), and expects yields to fall 7 percent year over year to 58.2 bu/acre (3.91 MT/ha). 2017/18 Ukrainian wheat production is forecast at 24.5 MMT (900 million bushels), compared to 26.1 MMT (959 million bushels) in 2016/17. UkrAgroConsult noted yield declines and a 3 percent smaller planted area will lower Kazakhstan wheat production to 13.7 MMT (503 million bushels), down 9 percent from 2016/17, if realized.

Canada. Agriculture and Agri-Food Canada (AAFC) expects wheat production of 29.5 MMT (1.08 billion bushels) in 2017/18. That is down 7 percent year over year because average yield is expected to decline to 47.6 bu/acre (3.20 MT/ha) in 2017/18. Slightly higher planted area will partially offset expected yield declines. StatsCan put planted area at 22.4 million acres (9.07 million hectares) of wheat in 2017/18. Spring wheat planted area rose 2 percent to 15.8 million acres (6.39 million hectares) due to low carry-in stocks and increased price competitiveness with alternative crops. Durum planted area decreased 16 percent year over year to 5.2 million acres (2.11 million hectares) due to high carry-in stocks and lower prices. Canada’s winter wheat seeding decreased 16 percent year over year from a shift to spring wheat. Crop conditions this year are variable with excessive moisture in northern areas while southern areas remain dry. As of June 23, topsoil moisture in Saskatchewan was rated 18 percent short or very short compared to 40 percent short or very short last week. In Alberta, 84 percent of spring wheat is rated in good to excellent condition compared to 83 percent last year. Surface soil moisture is rated 79 percent good to excellent; 14 percent of surface soil moisture is rated excessive. Saskatchewan and Alberta account for roughly 82 percent of 2017/18 planted wheat acres.

European Union. After a challenging 2016/17, Strategie Grains expects EU common wheat production will rebound 4 percent to 142 MMT (5.20 billion bushels) in 2017/18 with a 5 percent increase in yield expected to offset a 1 percent decrease in planted area. French production is expected to increase 7.66 MMT (281 million bushels) year over year to 35.6 MMT (1.31 billion bushels) — a 33 percent improvement in yields. Precipitation across France is 25 percent below normal since March, however. The French crop bureau FranceAgriMer rated 68 percent of French soft wheat in good or excellent condition, down from 74 good to excellent percent the prior week. Dry conditions are also threatening yield potential in Austria, Germany, Italy and Poland. In Spain, drought conditions are expected to cut wheat production by 32 percent year over year to 4.72 MMT (173 million bushels). Additionally, the EU’s crop monitoring service MARS reduced its forecasts for wheat yields to 87.2 bu/acre (5.86 MT/ha), from 87.9 bu/acre (5.91 MT/ha) in May, but greater than the five-year average of 86.7 bu/acre (5.84 MT/ha). Weather forecasts for early July provide little relief for EU farmers, which could further threaten yield potential.

United States. USDA forecast U.S. 2017/18 wheat production at 49.6 MMT (1.82 billion bushels), down 21 percent year over year and 15 percent below the five-year average due to an anticipated 10 percent decline in average yield and the lowest number of planted acres since USDA records began in 1919. USDA expects the average yield to be (3.18 MT/ha) compared to the five-year average of (3.14 MT/ha). In the March 31 Prospective Plantings report, USDA reported U.S. farmers intended to plant 46.1 million acres (18.7 million hectares) of wheat for 2017/18.

USDA will update planted area estimates June 30. The first U.S. by-class estimates will be released in the July 12 World Agricultural Supply and Demand Estimates (WASDE) report.

Follow #wheatharvest17 on Twitter for the latest harvest photos and conditions.

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

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Profiling U.S. Wheat Sustainability: John Hoffman, Soft Red Winter Wheat Farmer

By Elizabeth Westendorf, USW Policy Specialist

John Hoffman farms some of the same land that four generations of his family have managed since the late 1800s. Today, the farm covers roughly 3,200 acres where he grows corn, soybeans and soft red winter (SRW) wheat. For Hoffman, sustainability is key to preserving his family’s farming tradition for the next generation.

“I think we’re sustainable when every year we are able to plant a crop, harvest a crop, and do it again the next year,” said Hoffman. “If we are not sustainable, that would not happen — we would not stay in business every year.”

Hoffman believes being sustainable means being an early adapter of emerging practices on his farm. He tries to embrace the latest farming technologies to help improve his business, such as no-till and minimum till practices to improve soil health, GPS technology to increase accuracy and use inputs efficiently, and government conservation programs to give back to the environment.

Hoffman is the fourth of six U.S. wheat farmers featured in a USW series on wheat sustainability. These profiles show the differences in wheat production practices across the country and how those farming practices enhance the sustainability of U.S. agriculture.

“Family farming is a way of life, but it is also a large business,” said Hoffman. “Anything we can do to improve on what we do as business people, farmers and human beings to make things better, we are going to attempt to do it.”

A good example is how Hoffman uses a combination of no-till and minimum-till practices depending on crop need. No-till farming does not disturb the soil, which increases the amount of water that penetrates the soil surface and improves organic matter. Minimum-till helps warm the soil or reduce excess moisture. Both techniques reduce erosion compared to traditional tillage. He produces all his wheat and 80 percent of his soybeans with no-till technology, and he uses minimum tillage in corn production.

Access to better seed over the years has allowed Hoffman to improve his farming practices and use innovative techniques so that his farm is constantly improving. This story is true for many farmers, as plant breeding comes up with new varieties that respond to specific agronomic and economic challenges. That innovation is just another facet of the sustainability story.

“With the new genetics available in seed today, we can be more cost-effective and utilize less chemicals. That also made the no-till option a lot more practical,” said Hoffman. “Plus, the soil savings — the conservation aspect of it — we thought it was better for our land. It really helped reduce soil erosion.”

Another issue in Hoffman’s area is how farming affects water quality. By reducing soil erosion, he and other farmers reduce the amount of water that runs off their fields. Hoffman has also tried to reduce his inputs over the years to help with water quality and makes sure to use them intelligently — by not applying fertilizer on frozen ground or before a large rain, he makes sure that those inputs stay in the field instead of being washed away. On some of his land, he has been able to use government conservation programs and plant grass around the natural water runoff areas.

Hoffman’s farm has thrived because he has been able to innovate and adopt new technologies and practices over the years. At its core, that is what sustainability is about — constant improvement. Each of the farmers featured in USW’s Sustainability Profiles embody this idea. They do it in different ways, but with that one idea in common.

Learn more about Hoffman 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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Oklahoma’s Public Wheat Breeding Sows Benefits for Farmers and Customers

By Jack Money, Excerpted from “The Oklahoman” with Permission

This time of year, talk about wheat always focuses on the harvest. Researchers at Oklahoma State University and land grant universities across the country aren’t focused on what’s being cut this year, though. Instead, they’re thinking about the complex testing they never stop doing to develop the future wheat varieties farmers will want to grow.

Historically, they’ve geared their work to develop wheat varieties that can hold up in drought conditions and are resistant to insects or disease. They’ve also worked to develop dual purpose varieties that can be grazed early on and still grow quickly enough to provide a decent yield for harvest at the end of each year’s growing season.

Now, their focus is shifting somewhat to developing varieties that have the milling and baking qualities the … food industry desires. Achieving that, they say, will give farmers who grow those varieties the ability to make better money at harvest time — something they hope will encourage more farmers to invest a little more to plant certified seed in their fields.

Sales of that certified seed generates revenues to support further research, something that’s a key part of keeping Oklahoma’s wheat industry strong, those researchers say.

“We want to see farmers go more for growing the grains that millers are looking for, where they are sourcing wheat grown from a particular region of the state,” said David Marburger, a small grains extension specialist and assistant professor at Oklahoma State University (OSU). “In a world where we have a lot of wheat, we need ours to start floating toward the top,” Marburger noted. “Right now, people are buying our wheat at a discounted price and that costs our economy money.”

In nearly three dozen wheat fields across Oklahoma this year, plots of various wheat varieties were planted and then grown to maturity to both analyze the varieties’ performances and to give wheat farmers an opportunity to consider planting them. Marburger made his comments, for example, at a test site on wheat farmer [and past USW Chairman] Don Schieber’s land near Ponca City as he and other researchers discussed the strengths, weaknesses and genetic origins of more than a dozen wheat varieties grown at the site.

The breeding program is overseen by Brett Carver, who joined OSU in 1985 to begin a research and teaching career in quantitative genetics and wheat development. In 1998, he assumed leadership of the university’s wheat improvement team, becoming just the third person to lead the group since the program began in the mid­ 1940s.

Before that, farmers used to develop new varieties of wheat on their own, and early on in the university’s program, researchers pollinated two kinds of wheat just to see what might result. Later, that evolved into crossing varieties of wheat to create a new variety containing positive characteristics from both.

Now, genetics are playing a bigger role. Carver’s wheat improvement team, for example, includes three molecular geneticists, an entomologist, a plant pathologist and other specialized researchers.

“The program I direct is all about developing the lines that become varieties. It is a long, complicated process and one that you just don’t want to start and stop. You have to keep it going,” Carver said.

The process to develop a new hybrid starts, he said, with his improvement team and its technicians working in greenhouses to cross pollinate varieties of wheat to get something new.

“You have to go against the grain, both literally and figuratively, because you have to force it to do that,” Carver said. That requires the removal of the male parts of the plant on one type of wheat, and then fertilizing the plant with pollen from another. And it all has to be done by the hands of researchers and their technicians, “like bees moving pollen from one plant to the other,” Carver said.

The team seeks to make more than 1,000 cross combinations each year, then evaluates mature plants to see if they are worth further research. If one is worthy, the team spends another five to six years to get the plant ready for field tests, and those take anywhere from three to as many as six years to complete. On average, OSU’s team spends 11 years creating and testing a new variety, Carver said.

“When it’s released (made commercially available to wheat growers), it’s like putting out a song and making it available for public use, but it is still going to be researched and evaluated,” Carver said.

Mark Hodges, executive director of Oklahoma Genetics Inc., handles the business side of wheat research in Oklahoma. Oklahoma Genetics, Inc. is an education nonprofit that promotes the stewardship and publicizes and markets the use of certified varieties of wheat. It also promotes educational programs and scientific research for the benefit of crop producers and markets, and supports plant breeding programs designed to meet current and future consumer demands.

Hodges said Oklahoma Genetics was formed in 2005. It also works with OSU and the Oklahoma Wheat Commission to educate farmers about wheat varieties produced by the university’s research, and to distribute certified seed from those varieties so they can be sold to farmers.

Seed sales generate royalty revenues that flow back to the university [and other organizations that may hold patents].

“That’s extremely important, because it supports the efforts of Dr. Carver and his team to develop new varieties,” Hodges said.

The university also receives money collected from wheat growers by grain operators at harvest for the Oklahoma Wheat Commission’s checkoff program, which captures 2 cents per bushel of harvested wheat.

Mike Schulte, executive director of the Oklahoma Wheat Commission, said the checkoff program [funding goes in part] to OSU to support its wheat research program.

“I think it really is impressive to see the commitment made by Dr. Carver and the wheat improvement team to make these programs happen,” Schulte said. “Without the support of the wheat commission, Oklahoma Genetics and the state’s wheat producers, it would be extremely hard to keep our public wheat research program at OSU viable, especially given Oklahoma’s current economy.”

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Premiums for Protein on the Rise

By Stephanie Bryant-Erdmann, USW Market Analyst

Much needed rain across the U.S. Northern Plains this week gave emerging hard red spring (HRS) and durum crops a drink, but the rain was bookended by hot, windy conditions and likely did little to alleviate drought conditions.

Total rainfall for the region ran 60 to 75 percent below average for three months before this week’s storms, with Minot, ND — in the heart of the HRS growing area — recording just 1.23 inches (3 cm of rain) since March. The June 13 U.S. Drought Monitor showed 83 percent of North Dakota is in a moderate or severe drought and the remainder of the state is abnormally dry. Similarly, 79 percent of South Dakota and the eastern third of Montana are abnormally dry or in a moderate to severe drought.

The lack of rain and above normal temperatures is taking an early toll on crop conditions. On June 13, USDA reported 45 percent of spring wheat was in good to excellent condition, down 10 percentage points from the prior week and the lowest rating on record for that week. USDA noted 20 percent of the spring wheat crop was in poor or very poor condition, up from 11 percent the prior week and just 2 percent at the same time last year. Markets will be closely watching next week’s USDA crop condition report, and further deterioration of crop conditions will support Minneapolis Grain Exchange (MGEX) HRS wheat futures.

In the past two weeks, the nearby MGEX HRS wheat futures contract rallied 8 percent or 49 cents to $6.28 per bushel, the highest level since December 2014. Concern about the HRS crop and early harvest reports of low protein hard red winter (HRW) also support widening HRW protein premiums. Last June, the protein premium for 12.0 percent protein HRW (on a 12 percent moisture basis) averaged 12 cents per bushel ($4.59 per metric ton) over 11.0 percent protein HRW. This year, the same premium is 60 cents per bushel ($22 per metric ton).

With 60 percent of high protein wheat exports (13 percent protein on a 12 percent moisture basis or higher) originating from the United States and Canada, protein premiums are also widening due to Canadian crop and soil moisture conditions. In Saskatchewan, where Canadian farmers are wrapping up spring planting, topsoil moisture is rated 40 percent short or very short compared to 8 percent short or very short last year.

Farmers in northern Alberta and Saskatchewan are having the opposite problem — too much moisture. On June 6, the Alberta crop report rated topsoil moisture at 29 percent excessive in the Northeast and 40 percent excessive in the Northwest. Wet fields and harvesting 1.16 million acres (2.86 million hectares) of overwintered crops delayed spring planting progress in the province. Spring wheat planting was 95 percent complete on June 6, up from 84 percent the prior week but behind the 5-year average of 98 percent complete. Agriculture and Agri-Food Canada estimated total Canadian wheat production for 2017/18 will be 29.5 million metric tons (MMT), down 7 percent year over year due to a slight decline in planted area and a return to trendline yields.

“Conditions are variable right now with too much water in many northern areas, too little in the southern areas and probably very good conditions in between the two,” noted Robin Speer Executive Director of Western Canadian Wheat Growers Association. “We think the next two weeks become very important for this crop.”

Though HRS planted area is expected to be 7 percent smaller this year and yield potential for this year’s HRS crop is still unknown, U.S. farmers will continue to have the high quality, high protein wheat the world needs. In its June World Agricultural Supply and Demand Estimate, USDA pegged 2016/17 HRS ending stocks at 5.86 MMT, slightly more than the 5-year average of 5.28 MMT. The larger than normal ending stocks ensure the U.S. wheat store will always be open; the only unknown is how much customers will need to pay.

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

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Profiling U.S. Wheat Sustainability: David Clough, Hard Red Spring Wheat Farmer

By Elizabeth Westendorf, USW Policy Specialist

David Clough’s career as a farmer has been a journey of constantly evolving technology and improving practices. Clough started farming in North Dakota in 1969. The first few years were difficult because as a first-generation farmer he didn’t have a farm legacy to get him started; he was on his own. Now, he has been farming for almost 50 years, and his farm is thriving. Over the years, Clough has grown HRS wheat, edible beans, sunflowers, soybeans and barley. He says sustainability is a smart business decision and helps ensure his farm’s survival in the future.

Clough is one of six U.S. wheat farmers featured in a USW series on wheat sustainability. These profiles show the differences in wheat production practices across the country and how those farming practices enhance the sustainability of U.S. agriculture.

“As farmers, we have always been conservationists,” said Clough. “The land is our livelihood. We need it, so we try to preserve it in many ways.”

Clough has made a lot of changes on his farm over the years. Now, he uses advanced GPS technology to increase efficiency and conserve resources on his farm. These features mean there are no overlaps when he applies fertilizer or crop protection products, which is good for the environment, but also good for business.

“We weren’t as sustainable when I first started farming almost 50 years ago, but we have changed and adapted and we will keep changing and adapting,” said Clough. “We’re doing it to survive here and to keep our land in good shape for future generations.”

In the years that Clough has been farming, he has had to adapt to new technology, unpredictable markets and lean years. But diversifying his business on the farm helped him weather those changes. Today he has many more crops to plant in rotation, which also helps improve soil health and control weeds. He also sells seed and previously sold farm equipment as a side business. Clough credits his success in farming to his ability to embrace new technology and new sustainable farming practices.

“You’re writing stories as you go through life. How many good stories are you going to write? I have had about 47 chances to tell my farming story. I only get one chance a year to get it right, and some years, you don’t get it completely right,” said Clough. “Each year is a different story, and the way we react cannot be the same either. That is what makes farming challenging and rewarding every year.”

Learn more about Clough 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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“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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Think Farm Export Programs Don’t Matter? Think Again.

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