June 21, 2012
U.S. Wheat Associates (USW) is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers.” The activities of USW are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit www.uswheat.org or contact your state wheat commission. Original articles from Wheat Letter may be reprinted without permission; source attribution is requested. Click here to subscribe or unsubscribe to Wheat Letter.
In This Issue
1. A Closer Look Reveals Vulnerability in Wheat Supplies
2. Trade Service in Balance as Senate Debates Farm Bill
3. Perspective on the Nutritional Value of Wheat
4. Wheat Industry News
Online Edition: Wheat Letter – June 21, 2012 (To be posted at http://www.uswheat.org/newsEvents/wheatLetter; check back later)
PDF Edition: (Attached)
1. A Closer Look Reveals Vulnerability in Wheat Supplies
by Casey Chumrau, USW Market Analyst
On a global scale, world wheat buyers appear to be in a very favorable position to begin the new crop year. In its World Agricultural Supply and Demand Estimates (WASDE) report, the U.S. Department of Agriculture (USDA) estimates 2012/13 world wheat supply will reach the second highest level on record at 868 million metric tons (MMT). However, a closer look reveals a more fragile wheat market. In fact, there will be less wheat available this year to meet higher global demand.
The difference is China and India. The two largest wheat-consuming countries will account for more than 30 percent of total world supplies and total wheat consumption in 2012/13. Despite their abundant supplies, the two countries together accounted for less than 1 percent of world exports on average the past five years. In order to meet such high domestic demand, supplies inside these countries are effectively unavailable to meet demand in the rest of the world.
In fact, USDA expects China will be a net importer of wheat for the second consecutive year in order to refill stocks of high quality wheat used to meet growing demand for western-style wheat foods. In India, USDA estimates export of 2.5 MMT in 2012/13, which would be a sharp increase from the five-year average of 190,000 metric tons and just the fifth time Indian exports exceeded 2.0 MMT. If realized, Indian exports would still account for less than 2 percent of total world wheat trade.
USDA expects 2012/13 world wheat production and total supplies including China and India to be 1 percent and 5 percent greater than the five-year average, respectively. If China and India are removed from the equation, the available wheat situation for the rest of the world looks very different. Excluding the two countries, production in the rest of the world is expected to decline an estimated 2 percent from the five-year average with available supplies remaining unchanged. In the five traditional major export countries and the three major Black Sea exporters, which account for 88 percent of world wheat exports, USDA expects production to fall 3 percent below the five-year average.
Yet, estimated consumption outside India and China is up 3 percent from the five-year average. World consumption, both including and excluding China and India, set new records the last four years and USDA estimates total consumption will reach the second highest level on record in 2012/13. In short, USDA expects less wheat available for export and higher demand.
The ending stocks-to-use ratio further shows the fragility of the market. The ratio indicates the level of carryover stocks as a percentage of the total use; a lower percentage indicates tighter supplies. According to current USDA estimates, the 2012/13 global stocks-to use ratio (including China and India) is 27 percent, equal to the five-year average. However, the ratio drops to 22 percent when excluding China and India, compared to the five-year average (also excluding China and India) of 24 percent. If realized, the 22 percent would be the lowest stocks-to-use level for available supplies since 2007/08 when it fell to 19 percent.
Current world wheat stocks are not at the critical levels seen in 2007/08. However, a close evaluation of available world stocks indicates the market is more vulnerable than it appears on a global level. The final production level of southern hemisphere crops and northern hemisphere spring-planted crops is yet to be determined, and the size of the 2012 corn crop will affect the level of wheat feeding around the world. Any significant supply reduction from current estimates would considerably reduce the amount of wheat available to meet growing demand. Given this vulnerability, world wheat buyers might consider securing high quality wheat now to reduce supply risks later.
2. Trade Service in Balance as Senate Debates Farm Bill
Every five years, the U.S. Congress must act to renew or rewrite U.S. farm policy domestic nutrition assistance and various other programs in legislation commonly called the Farm Bill. The U.S. Senate began debate on the 2012 Farm Bill last week, taking another step toward passage and completion of new farm and food policy. Known formally as the Agriculture Reform, Food and Jobs Act of 2012, or S. 3240, the bill would cut $23 billion from federal programs administered by USDA.
The Senate’s current Farm Bill proposal calls for continuing the Market Access Program (MAP) and Foreign Market Development (FMD) program at existing funding levels for another five years. MAP and FMD make possible the trade service and technical support that assist U.S. wheat buyers and wheat food processors overseas. U.S. wheat buyers and wheat food processors overseas to purchase U.S. commodities. USW competes for funding from these programs to match U.S. wheat farmers investment through USW’s state commission member organizations.
“Without the MAP and FMD programs, we would not be able to continue our work overseas,” said USW President Alan Tracy. “Yes, these programs are intended to promote U.S. wheat, but we do that by helping customers get the most value from our wheat and showing them how using U.S. wheat can help them grow their businesses. With deep cuts in federal investment, it is highly unlikely that there would be sufficient private funds to maintain that level of service for all our customers.”
Fortunately, the MAP amendment was defeated in this round of debate but committee and floor debate in the House and in conference lie ahead. Final approval may be months away and many changes will be made along the way, but the National Association of Wheat Growers (NAWG) continues advocating in Congress for policies that support U.S. farm families who supply wheat to the world. USW continues working for the same goal with NAWG and as a member of the Coalition to Promote U.S. Agricultural Exports.
A leading official with the U.S. Department of Agriculture’s Foreign Agricultural Service is optimistic that the next farm bill will include funding for these programs. In a recent roundtable discussion with industry leaders at the Wheat Marketing Center, Portland, OR, Undersecretary for Farm and Foreign Agricultural Services Michael Scuse, USDA, said: “There are a great many members in Congress who recognize the importance of these programs and their funding, and what it does for their states.”
3. Perspective on the Nutritional Value of Wheat
by Judi Adams, MS, RD, President, Wheat Foods Council
[Editor’s Note: Although Ms. Adams originally wrote this article for U.S. consumers, its information is relevant to U.S. wheat buyers, millers, wheat food processors and consumers around the world.]
Wheat has long been a major contributor of nutrients to the American diet through consumption of bread, rolls, cereal and pasta. Grains contribute over 70 percent of the folic acid/folate, 50 percent of the iron and 39 to 60 percent of the three major B vitamins, as well as many others1, to the American diet (see attached chart). Approximately 70 percent of the grains consumed in America are wheat, so it plays a significant role in delivering those nutrients. In addition, wheat delivers 20 percent of the calories consumed by all human beings on the planet.
Unfortunately, the strength of old wives’ tales, myths and the new power of viral “group think” appear to have more power than scientific fact when consumers consider the nutritional value of wheat and other grains.
Perhaps the oldest tales purport that bread and grains are “fattening,” yet the science shows just the opposite. As far back as 1997, Harvard University colleagues published a paper in Diabetes Care showing that men who consumed 6.1 slices of white bread per week had BMIs (body mass indexes) 0.4 units less than men who consumed 1.9 slices per week2. And carbohydrates in general do NOT cause obesity. In 2009, the Canadian Community Health Survey 2.2 concluded, “Consuming a low-carbohydrate (approximately 47 percent energy) diet is associated with greater likelihood of being overweight or obese among healthy, free-living adults…lowest risk may be obtained by consuming 47 percent to 64 percent energy from carbohydrates”3. The National Health and Nutrition Examination Survey, an long-term survey conducted by the Centers for Disease Control and Prevention supports this conclusion.
Wheat, barley and rye all contain the protein gluten that cannot be digested by those with celiac disease (an autoimmune response to gluten by people who are genetically predisposed to this condition) or who are gluten sensitive. In the United States, less than one percent of the population has celiac disease and about six percent may have gluten sensitivity.
In spite of that low percentage, Mintel’s Global New Products Database found that international product launches with a gluten‐free claim nearly tripled in 2011 to roughly 1,700 products as compared to 20074.
Gluten-free diets are very strict and limiting and should remain a therapeutic diet prescribed for a serious medical condition. Unless an individual is diagnosed with celiac disease or gluten sensitivity, there is no reason to go “gluten free.” If you suspect you might have trouble digesting gluten-containing grains, a visit to a physician for testing is recommended. If the diagnosis is celiac disease, a gluten-free diet is the only treatment available. If gluten sensitivity is suspected, there is no definitive test currently available to diagnose this condition. But it is important to rule out the more serious condition (celiac disease) and possibly other conditions. There has been an increase in celiac disease in the past 50 years. There are many theories as to why, and research is ongoing, but none have been proven. What we do know is that a vast majority of people can consume gluten without any adverse effects.
Unfortunately, this medically necessary diet for those afflicted with celiac disease or gluten sensitivity has become a fad diet for many celebrities and other looking to lose weight, “cleanse their system,” “feel better,” etc. There is no research showing any of these benefits and there are actually many downsides to eating gluten-free if you don’t have to. It is expensive, inconvenient and usually less nutritious because the substitutes for wheat, barley and rye are often not whole grains and rarely enriched with the B vitamins and iron found in wheat products. Naturally occurring resistant starches found in wheat are known to promote a favorable mix of colon bacteria5, and these interactions in the colon may protect the gut from some cancers, inflammatory conditions, and cardiovascular disease6,7.
Many people may also think they are “allergic” to wheat. In fact, less than one percent of Americans have diagnosed wheat allergies. They are primarily children8, but most out-grow their allergies by the teenage years.
Grains, and wheat in particular, are a major source of fiber in the U.S. diet. Some fiber components found in wheat, corn, millet and rice as well as barley and oats have been shown to improve glucose tolerance, which can lead to preventing insulin resistance and diabetes9. Higher fiber intake has also been associated with lower rates of colon cancer and diverticular disease in large cohort studies. Fiber is recommended both to prevent and to treat diverticular disease10, 11,12.
Refined/enriched grains are often blamed for causing diseases or being nutritionally inferior. However, a recent Nutrition Reviews article looked at 135 relevant studies that were published between 2000 and 201013. The author concluded, “The totality of evidence shows that consumption of up to 50 percent of all grain foods as refined-grain foods (without high levels of added fat, sugar or sodium) is not associated with any increased disease risk.” This 50 percent recommendation mimics the 2010 Dietary Guidelines for Americans.
Last year the Centers for Disease Control and Prevention credited enriched grains, fortified in the United States with folic acid since 1998, with preventing 36 percent of neural tube birth defects (spina bifida) in America. They listed this accomplishment as one of the top 10 most significant health initiatives in the 21st century14. To learn more about the global effort to enrich grains to prevent birth defects, visit the Flour Fortification Initiative on the Web at http://www.sph.emory.edu/wheatflour/index.php.
The science shows wheat and grains are important carriers of nutrients in the American diet. Old wives’ tales, myths and internet spam are not credible sources for nutrition information.
1. USDA CNPP Nutrient Content of the US Food Supply, July 2011
2. Salmeron et al. Dietary fiber, glycemic load, and risk of NIDDM in men. Diabetes Care 1997; 20: 545-550.
3. J Am Diet Assoc. 2009;109:1165-1172.
5. Gibson GR. Prebiotics as gut microflora management tools. J Clin Gastroenterol 2008; 42(suppl 2):S75-S79.
6. Fava F, Gitau R, Lovegrove J, Tuohy KM. The gut microflora and lipid metabolism: implications for human health. Curr Med Chem 2006;13:3005–3021.
7. Rastall RA, Gibson GR, Gill HS, et al. Modulation of the microbial ecology of the human colon by probiotics, prebiotics and synbiotics to enhance human health: an overview of enabling science and potential applications. FEMS 2005;52:145–152.
8. Inomata N. Wheat allergy. Curr Opin Allergy Clin Immunol 2009;9:238-243.
9. Lopez HW, Levrat MA, Guy C, Messager A, Demigne C, Remesy C. Effects of soluble corn bran arabinoxylans on cecal digestion, lipid metabolism, and mineral balance (Ca, Mg) in rats. Journal of Nutritional Biochemistry 10:500-509,1999.
10. Bingham SA, Day NE, Luben R, Ferrari P, Slimani N, Norat T, Clavel-Chapelon F, Kesse E, Nieters A, Boeing H, Tjønneland A, Overvad K, Martinez C, Dorronsoro M, Gonzalez CA, Key TJ, Trichopoulou A, Naska A, Vineis P, Tumino R, Krogh V, Bueno-de-Mesquita HB, Peeters PH, Berglund G, Hallmans G, Lund E, Skeie G, Kaaks R, Riboli E; European Prospective Investigation into Cancer and Nutrition. Lancet (9368):1496-501,2003.
11. Crowe FL, Appleby PN, Allen NE, Key TJ. Diet and risk of diverticular disease in Oxford cohort of European Prospective Investigation into Cancer and Nutrition (EPIC): prospective study of British vegetarians and non-vegetarians. BMJ. 343:d4131, 2011.
12. Sansbury LB, Wanke K, Albert PS, Kahle L, Schatzkin A, Lanza E; Polyp Prevention Trial Study Group. The effect of strict adherence to a high-fibre, high-fruit and -vegetable, and low-fat eating pattern on adenoma recurrence. Am J Epidemiol. 2009 Sep 1;170(5):576-84. Epub 2009 Jul 30.
13. Williams, PG. Evaluation of the evidence between consumption of refined grains and health outcomes. Nut Reviews, 70 (2) 80-99. Feb. 2011.
14. CDC. Ten Great Public Health Achievements – U. S. 2001-2010. CDC MMWR. (19) 619-613, May 2011
4. Wheat Industry News
- USDA Opens Public Comment on Reports. USDA is accepting public comment now through July 9 as part of its review of release times and procedures for several of its major statistical reports, including the WASDE, Crop Production, Grain Stocks, Prospective Plantings and Small Grains Summary reports. For information, visit http://1.usa.gov/MnwABt.
- Bayer Opens Wheat Breeding Center in Germany. Bayer CropScience has opened its new European Wheat Breeding Center in Gatersleben, Germany. The center will coordinate all of Bayer’s wheat-breeding activities in Europe. For more information, visit http://bit.ly/KXJZjt.
- Syngenta Names New Cereals Seed Breeding Lead. Syngenta named Simon Phillips as the new head of the North American cereal seeds portfolio, following the retirement of Rob Bruns on June 1. For more information, visit http://bit.ly/LA5Qi2.
- WMC Artisan Bread Short Course. The Wheat Marketing Center (WMC) in Portland, OR, will hold its Artisan Bread Baking Technology Short Course July 23 to 27. For more information or to register, visit http://www.wmcinc.org.
- NCI Grain Procurement Short Course. The Northern Crops Institute (NCI) in Fargo, ND, will hold its Grain Procurement Management for Importers Course September 17 to 26. For more information or to register, visit http://www.northern-crops.com.
- IGP Buhler Milling Courses. The International Grains Program (IGP) in Manhattan, KS, will hold its Buhler-KSU Executive Milling Course in Spanish August 6 to 10. The English version of the course will be August 13 to 17. For more information or to register, visit http://www.grains.ksu.edu/igp/.
- TPP Countries Invite Mexico and Canada. The United States and the eight other countries negotiating the Trans-Pacific Partnership (TPP) agreement have extended invitations to Mexico and Canada to join the talks, pending successful conclusion of their domestic procedures. In addition to the United States, the current TPP countries are Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam. Read more at http://www.ustr.gov/about-us/press-office/press-releases/2012/june/ustr-kirk-welcomes-canada-as-new-tpp-partner.
- Hillel Awarded World Food Prize. American-born Israeli water scientist Daniel Hillel was awarded the World Food Prize June 12 for his work conceiving and implementing “micro-irrigation” to bring water to crops in arid and dry land regions in the Middle East and around the world. For more information, visit http://bit.ly/MJ4GAj.
- USDA Announces Scientist of the Year Awards. USDA’s Agricultural Research Service (ARS) named Edward Buckler the Distinguished Senior Research Scientist of 2011 for his work conducting landmark genetic studies of corn. For more information and for the list of the other recognized senior research scientists, visit http://1.usa.gov/PcndbK.
- Follow USW Online. Check out our page at www.facebook.com/uswheatfor the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter.com/uswheatassoc, additional photos at www.flickr.com/photos/uswheat, plus video stories at http://www.youtube.com/uswheatassociates.
Nondiscrimination and Alternate Means of Communications
USW prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USW at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S., 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, USW, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. USW is an equal opportunity provider and employer.