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U.S. Wheat Associates

March 29, 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. U.S. Wheat Crop Looks Good with an Early Spring and Improving Conditions
2. U.S. Wheat Supply Chain Prepares for Growing Demand
3. Research Will Bring Producer and Consumer Benefits
4. Research Investment Crucial to a Reliable Supply of Quality Wheat
5. Wheat Industry News

Online Edition: Wheat Letter – March 29, 2012 (http://bit.ly/HlW05d)

PDF Edition: (See attached file: Wheat Letter – March 29, 2012.pdf)

1. U.S. Wheat Crop Looks Good with an Early Spring and Improving Conditions
By Casey Chumrau, USW Market Analyst

There is a reason the world’s most famous weather publication is called the Farmer’s Almanac. Weather is a major influence on a farmer’s livelihood and unseasonable warmth already has made this an interesting crop year for wheat. A lot of hard red winter (HRW) wheat pushed out of dormancy early and some hard red spring (HRS) growers are already planting their fields many weeks ahead of normal. Overall, crop conditions look good, but a shift in weather or a late freeze could quickly change the outlook.

Compared to last year, the Texas, Oklahoma and Kansas HRW crops are in better shape after much needed rain improved crop conditions last week. According to the U.S. Department of Agriculture (USDA), only 8 percent of Kansas HRW is in poor or very poor condition compared with 35 percent last year at this time. Much more of the crop, 48 percent, is in good condition, compared to 27 percent last year. In Texas, 70 percent of the state crop is reported fair to excellent compared to only 38 percent last year at this time. Current USDA estimates show Oklahoma’s HRW is in the best shape with only 6 percent rated poor, 19 percent rated fair, 56 percent good and 19 percent excellent. Former USW Chairman Don Schieber, who farms in north-central Oklahoma, said his wheat looks great and he expects it to begin heading in about two weeks. Concern about wheat in the panhandle and the southwestern regions of Oklahoma remains because subsoil moisture is well below normal.

Farther north, lack of snow cover and inadequate subsoil moisture left HRW more vulnerable to winterkill, but any impact should be light. In South Dakota, for example, there appears to be very little winterkill but USDA currently rates the winter wheat crop at 31 percent poor, 40 percent fair and 28 percent good. In Montana, recent snowfall extended dormancy for now. According to California Wheat Commission’s Executive Director Janice Cooper, the main challenge for non-irrigated HRW in California has been a lack of rain that will likely cut into yield potential. Irrigated wheat conditions there are normal.

Soft red winter (SRW) country has also been very warm, which is helping improve crop conditions and soil moisture following an extremely wet fall. Doug Goyings, chairman of the Ohio Small Grains Marketing Program, said farmers only planted about 60 percent of the area that was expected in Ohio, but the crop is generally in good condition.

Fall and winter were very dry in the Pacific Northwest, but rain in the last two weeks has helped improve soil moisture significantly. Preliminary indications show white wheat in Washington, Idaho and Oregon is on track for normal production. However, Washington Grain Alliance Chief Executive Officer Tom Mick pointed out that precipitation will be needed in May and June to realize the crop’s current potential. Fields in Idaho, where two-thirds of the wheat crop is irrigated, is in a good position with reservoirs nearly full and substantial spring rain greatly improving dryland farm prospects.

In the northern plains, some HRS growers are already planting. Field conditions in parts of South Dakota and Minnesota are ahead of schedule and planting should be in full swing in the next two weeks. According to Executive Director Dave Torgerson of the Minnesota Wheat Research and Promotion Council, an early planting season is typically good for spring wheat yields, barring a late freeze.

Poor weather and flood conditions significantly affected northern durum acres last year, resulting in more than a 50 percent decline in production. Drier conditions this spring should help acreage rebound to more normal levels.

Some HRW acres lost to winterkill in the Northern Plains could be replanted with spring wheat or durum, but many producers are weighing their options. Wheat faces strong competition for acres from a multitude of other crops. In Idaho, for example, wheat acres must compete with the high price of potatoes, sugar beets, alfalfa and barley, according to Executive Director Blaine Jacobson of the Idaho Wheat Commission.

In addition to economic and management factors, weather will play a critical role in producers’ decisions about what to plant and when as the season progresses. The first official nationwide acreage projections for 2012/13 crops will be available when USDA releases its Prospective Plantings report on March 30.








An early spring is accelerating wheat development in the United States this growing season, especially in the main HRW and SRW production areas. Farmers and industry experts believe harvest may begin up to two weeks earlier than the typical start dates indicated above.

2. U.S. Wheat Supply Chain Prepares for Growing Demand

Uncertainty in a supply chain is one of the most challenging situations for any enterprise. No doubt the changes taking place in the global grain supply industry inject some uncertainty for the world’s wheat buyers. That is why it is important to note a very positive trend: grain handlers operating in the United States are substantially expanding their capacity.

For example, the first new U.S. grain export terminal in 25 years has been busy ever since it opened in mid-February. EGT, in Longview, WA, on the Columbia River, has already loaded seven bulk grain ships bound for Asia, including more than 270,000 metric tons of U.S. wheat. EGT’s three partners — Bunge, Itochu and Pan-Ocean — and other exporters recognize the growing demand for high-quality U.S. grain in the Pacific Rim. Expansion projects are also well underway at Kalama Export Company and United Grain. Louis Dreyfus and Temco will soon start their own expansion projects.  

Wheat will be a key export commodity for EGT, which now operates two new shuttle train loading facilities in Montana’s wheat country and a third expected later this year. Other grain companies built four new shuttle loading stations in Montana and North Dakota in the past year and have broken ground for an additional nine stations.

Last year, U.S. Wheat Associates (USW) President Alan Tracy noted that world wheat trade is expected to grow substantially in coming years. The six U.S. wheat classes can fill virtually any specific milling and end product quality need, and an expanding export system provides quality assurance, guaranteed delivery and price transparency. As a result, the United States is positioned to remain the largest and most reliable wheat exporter in the world.

“As increasingly sophisticated wheat buyers compete to supply their customers with the specific qualities for the flour that they need,” Tracy said, “the farmers and wheat export industry of the United States have a unique opportunity to build on our existing reputation and customer base.”

Shawn Campbell, USW Assistant Director, West Coast Office, contributed to this story.

3. Research Will Bring Producer and Consumer Benefits

Farmers, flour millers, bakers and wheat food processors understand that the people who eat the food we grow and produce want to know we are maintaining quality and safety. Luckily, U.S. agriculture has a remarkable record of growing more and better crops with less. In fact, today U.S. farmers grow the same amount of food on half as much land as they did 50 years ago.

In wheat, conventional cross-breeding techniques have resulted in varieties with greater yields and improved functional quality that tolerate harmful diseases and other pest challenges.

“We have made huge progress in increasing the productivity of crops,” said Dr. Robert Thompson, a senior fellow of global agricultural development and food security at the Chicago Council on Global Affairs. Thompson is currently serving as a visiting scholar at The Paul H. Nitze School of Advanced International Studies at Johns Hopkins University.

Dr. Brett Carver, Oklahoma State University wheat breeder and chairman of the National Wheat Improvement Committee, this week told farm broadcaster Ron Hays that the advent of molecular genetics is helping develop new wheat varieties in less time than traditional cross-breeding.

“We’re now using DNA information instead of field information to make selections that I would have never even dreamed of,” he said. “We still have a long way to go, but I think that translates into better varieties, just as much as [biotechnology] solutions will five to 10 years down the road.”

As we look to that future, productivity must advance at an even faster pace to meet increasing global wheat demand, while using less land, water and other inputs. Yet, wheat farmers face a number of challenges each year the can negatively impact productivity, including too little or too much moisture, high salinity and pressure from insects, disease and weeds.

Research will help our farmers succeed, as it has in the past, using both conventional and advanced tools.

Since 1996, biotechnology traits like herbicide tolerance and insect pest resistance have benefited crops like corn and soybeans after rigorous testing, regulatory approval processes. New research in biotechnology is exploring how to overcome an even broader array of food production challenges.  

To date, wheat with biotechnology traits is not commercially available, but research is underway. Publicly funded research has dominated wheat breeding but private investment is increasing, often in collaboration with public programs. Combined with continued adequate support from the federal government (see Research Investment Crucial to a Reliable Supply of Quality Wheat, below), their work offers new hope for addressing agronomic challenges and, eventually, providing additional consumer benefits in wheat. The early work will focus on improving wheat’s ability to use water and fertilizer more efficiently, resist herbicides, tolerate salty soil conditions, resist disease and repel insects.

Researchers are also exploring methods to improve wheat’s nutritional profile. Public research in Australia on wheat altered for high amylose starch content could provide increased fiber and slower starch uptake during digestion. Additional enhanced nutritional benefits are a possibility, including work that could help people with wheat allergies.

Farmers, overseas customers and consumers all need the results of this research for today and especially for tomorrow. As the U.S. wheat industry explores these innovations, protecting the quality, safety and affordability of the wheat supply will remain our first priority.

To read more about U.S. wheat industry positions on biotechnology research, visit our website at http://www.uswheat.org/whatWeDo/tradePolicy/biotech or the National Association of Wheat Growers (NAWG) website at http://www.wheatworld.org/issues/biotech/.

4. Research Investment Crucial to a Reliable Supply of Quality Wheat
By Julia Debes, USW Communications Specialist

Publicly funded agricultural research programs in the United States provide a knowledge base for public and private scientists to target specific traits, develop varieties that address specific, localized challenges for farmers and lay the foundation for an ample, reliable supply of food for Americans and the world.

The collaboration between public and private wheat researchers provides solutions that work to increase the productivity and quality of the six classes of wheat grown in 42 states, maintaining a reliable supply of the wheat that our overseas customers need and expect. In fact, U.S. farmers plant varieties traced back to a public wheat research program on 76 percent of the 50 million acres they plant every year.

USW utilizes research partners to collect and test samples for both the annual Crop Quality report and the Overseas Varietal Analysis (OVA) program. To produce our Crop Quality reports, these organizations analyze crop samples at harvest and at export elevators. In the OVA program, public wheat researchers also mill and test samples of newly released varieties before they are extensively tested for use in specific end products by international millers and bakers.

If you aren’t convinced, crunch the numbers. USDA has invested about $50 million per year in wheat research at its own labs and universities across the country. Through their state wheat checkoff programs, farmers give about $12 million per year and state governments provide some additional support.

Even with these significant commitments, the American Association for the Advancement of Science (AAAS) reports that just 1.6 percent of federal research dollars goes to agriculture research, but that work yields a return of up to $32 for every $1 invested.

Despite this success, stiff budget cuts now threaten public wheat research dollars. For example, the U.S. Congress mandated that USDA’s Agricultural Research Service (ARS) must close 12 labs in fiscal year 2012. Closing the labs cost $40 million, which forced the agency to slash budgets 30 percent across the board for all its other cooperative research agreements with universities and public partners.

This week, members of NAWG, the North American Millers’ Association and the American Bakers Association delivered the message to Congress that there is no more room to cut federal funding for agricultural research in general and for wheat research specifically.

Cuts threaten to slow the increases in productivity needed to meet growing wheat demand around the world. Increasing the gap between production and demand will only intensify supply and price volatility for wheat farmers and buyers. Farmers need access to varieties that help them grow more wheat with less land, water and other resources if the world’s wheat buyers are to continue having their choice of six classes from the world’s most reliable supplier of high quality wheat.

USW and the wheat farmers it represents thank the public and private research partners that support crop quality testing and the OVA program, including:
– Wheat Quality Council in Pierre, SD
– Pacific Northwest Wheat Quality Council in Pullman, WA
– Wheat Marketing Center in Portland, OR
– Plains Grains Inc. in Stillwater, OK
– CII Laboratory Services in Kansas City, MO
– California Wheat Commission in Woodland, CA
– USDA/ARS Soft Wheat Quality Laboratory located at the Ohio Agricultural Research and Development Center (OARDC) in Wooster, OH
– North Dakota State University’s Northern Crops Institute, Department of Plant Sciences and the Durum Wheat Quality/Pasta Processing Laboratory, all located in Fargo, ND
– Kansas State University’s Department of Grain Science and Industry and International Grains Program in Manhattan, KS
– USDA/ARS Western Wheat Quality Laboratory located at Washington State University in Pullman, WA

5. Wheat Industry News

  • Colorado Wheat and ConAgra Donate Flour. In honor of National Agriculture Week, March 5 to 9, the Colorado Wheat Administrative Committee and the Colorado Association of Wheat Growers teamed with ConAgra Mills to donate 24 tons (48,000 pounds) of Ultragrain® flour to the Food Bank of the Rockies. The donation, with a retail value of more than $35,000, will provide 9,600 five-pound bags of white whole wheat flour for needy Colorado families. For more information, visit http://bit.ly/HohdK1.
  • IGP Starts Blog. Kansas State University’s International Grains Program in Manhattan, KS, has launched a new blog to provide a web source on flour milling and grain processing, feed manufacturing and grain handling, grain marketing and risk management and international trade and transportation. To check out the blog, visit http://internationalgrainsprogram.wordpress.com/.
  • Limagrain Cereal Seeds Launches Wheat Quality Lab. Limagrain Cereal Seeds has opened a wheat quality laboratory in Fort Collins, CO. The quality laboratory and bakery will test select wheat varieties from across the United States for a multitude of baking characteristics. For more information, visit http://bit.ly/HnFzSI.
  • WMC Opens Flat Bread/Flour Tortilla and Asian Noodle Short Courses. The Wheat Marketing Center in Portland, OR, will hold its Flat Bread and Flour Tortilla Technology Short Course April 17 to 20. WMC will also conduct an Advanced Asian Noodle Technology Short Course June 11 to 15, 2012. For more information or to register, visit http://bit.ly/y3QqZB.
  • NCI Announces Pasta Production and Grain Procurement Short Courses. The Northern Crops Institute at North Dakota State University in Fargo, ND, will conduct a Pasta Production and Technology course April 10 to 12. NCI will also conduct an Advanced Grain Procurement Short Course May 14 to 18. For more information, visit http://bit.ly/wX21Iz.
  • IGP Grain Purchasing Course Approaching. The International Grains Program at Kansas State University in Manhattan, KS, will conduct a Grain Purchasing Short Course April 16 to 27. The course focuses on purchasing raw materials and detailed discussions of cash and futures markets, financing and ocean transportation. The course includes a field trip to an export facility in New Orleans, LA. For more information, visit http://bit.ly/xQmlx7.
  • WFC Helps Sponsor Whole Grains Summit 2012. The Wheat Foods Council and the Grains for Health Foundation are co-sponsors of a “Whole Grains Summit 2012” May 19 to 22 in Minneapolis, MN. The event will convene scientists, industry experts and health professionals from around the world to discuss research on whole grains, dietary fiber and functional grain components. For more information, visit http://bit.ly/yv1lOr.

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