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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 and their customers.” USW activities are funded by producer checkoff dollars managed by 19 state wheat commissions and USDA Foreign Agricultural Service cost-share programs. For more information, visit www.uswheat.org or contact your state wheat commission. Stakeholders may reprint original articles from Wheat Letter with source attribution. Click here to subscribe or unsubscribe to Wheat Letter.

In This Issue:
1. Central and Southern Plains HRW is Generally Dry and Vulnerable to Frost Damage
2. U.S. Wheat Farmers Get the Chance to See How Overseas Customers Value Their Crop
3. WTO Adds Efficiency, Cost Savings Through Trade Facilitation Agreement
4. New Educational Website Explores Plant Breeding Innovation, Gene Editing
5. Dave Green Replaces Ben Handcock at Wheat Quality Council
6. Wheat Industry News

Online Edition: http://bit.ly/wheatletter22317

PDF Edition: (See attached file: Wheat Letter - Febuary 23, 2017.pdf)

USW Supply & Demand Report: http://www.uswheat.org/supplyDemand


1. Central and Southern Plains HRW is Generally Dry and Vulnerable to Frost Damage
By Stephanie Bryant-Erdmann, USW Market Analyst

USDA reported state planted area statistics for hard red winter (HRW), soft red winter (SRW) and soft white (SW) winter wheat in its Jan. 12 Winter Wheat and Canola Seeding Report. At this week’s Wheat Quality Council and Plains Grains Inc. board meetings in Kansas City, MO, however, HRW producers shared state updates of crop conditions, soil moisture conditions and planted area. A summary of what we learned from the producers supplemented with current USDA data by state follows.

Colorado. Colorado farmers planted 891,000 hectares (2.20 million acres) of wheat in the fall of 2016, down 6 percent from 2015. Farmers reported that southeast Colorado planting conditions were very dry, but the rest of the state had ample moisture. According to USDA data, topsoil moisture is short or very short for 35 percent of the state, compared to just 22 percent short or very short at the same time last year. Subsoil moisture is 42 percent short or very short across the state compared to 23 percent last year. Farmers noted warm weather has pushed the crop 7 to 10 days ahead of normal across the state, which makes it more vulnerable to late frost damage. On Jan. 30, USDA rated 36 percent of Colorado winter wheat in good to excellent condition compared to 47 percent good to excellent when the wheat went into dormancy last fall.

Kansas. Farmers reported western Kansas is very dry. Subsoil moisture is rated at 41 percent short or very short, compared to 22 percent last year. USDA rated 37 percent of topsoil moisture as short or very short, compared to 19 percent in 2016. Early planted wheat established good stands last fall, but later planted wheat condition is more uncertain. On Jan. 30, USDA rated 45 percent of winter wheat as good to excellent compared to 52 percent good to excellent reported on Nov. 28. 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.

Montana. Last fall, wet field conditions prevented some wheat planting in Montana. With a poor outlook for winter wheat prices, strong competition from peas and lentils shifted more acres in Montana. They planted 770,000 hectares (1.90 million acres) of wheat in 2016, down 16 percent from 2015. Farmers noted normal crop development and sufficient soil moisture, though some areas had below normal snow cover that increased the risk of winterkill. USDA rated topsoil moisture supplies at 13 percent short or very short, 77 percent adequate and 10 percent surplus, compared to 17 percent short or very short, 79 percent adequate and 4 percent surplus last year on the same date. On Jan. 30, USDA rated 70 percent of Montana winter wheat in good to excellent condition compared to 77 percent good to excellent when the wheat went into dormancy last fall.

Nebraska. Farmers reported good stands last fall, but western Nebraska is dry. The last measurable precipitation for that region occurred on Christmas day. USDA rated subsoil moisture supplies at 31 percent short or very short, compared to 19 percent on the same date last year. Topsoil moisture supplies are 23 percent short or very short, compared to 14 percent last year. With wheat now 5 to 7 days ahead of normal, the Nebraska crop is also more vulnerable to late frost damage. USDA rated 47 percent of Nebraska winter wheat in good to excellent condition on Jan. 30, compared to 53 percent good to excellent last November prior to dormancy. 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.

Oklahoma. Most of Oklahoma received precipitation over the last few weeks that prevented further depletion of soil moisture, but it was insufficient to alleviate drought conditions. USDA rated topsoil moisture supplies at 38 percent short or very short compared to 60 percent short or very short last year. Subsoil moisture supplies are 56 percent short or very short, compared to 70 percent one year prior. Farmers noted wheat development is 12 days ahead of normal making it more vulnerable to late frost damage. Oklahoma farmers planted 1.82 million hectares (4.50 million acres) of wheat in 2016, down 10 percent from the prior year because late-season rain prevented some wheat planting. USDA rated 33 percent of Oklahoma winter wheat in good to excellent condition on Jan. 30, compared to 53 percent good to excellent when the wheat went into dormancy last fall.

South Dakota. Beneficial moisture last fall allowed for good stand establishment in South Dakota. Abundant snow cover is protecting the wheat and limiting winterkill risk. Topsoil moisture supplies rated 84 percent adequate, compared to 79 percent adequate last year. Subsoil moisture supplies rated 23 percent short to very short, 76 percent adequate and 1 percent surplus compared to 26 percent short or very short, 72 percent adequate and 2 percent surplus in 2016. USDA rated 62 percent of South Dakota winter wheat in good to excellent condition compared to 51 percent good to excellent when the wheat went into dormancy last fall. South Dakota farmers planted 364,000 hectares (900,000 acres) of winter wheat, down 24 percent year over year.

Texas. Last fall, Texas farmers planted 1.82 million hectares (4.50 million acres) of wheat, down 10 percent from the prior year in very dry field conditions. In the past two years, Texas planted wheat area has dropped by 20 percent. Early planted wheat emerged last fall, but the later planted wheat did not emerge until after beneficial precipitation fell in December. Farmers estimate the earlier planted wheat is 7 days ahead of normal development, while the later planted wheat is still emerging. USDA reported 93 percent of winter wheat had emerged by Jan. 30. On Jan. 30, USDA rated 29 percent of Texas winter wheat in good to excellent condition compared to 41 percent good to excellent when the wheat went into dormancy last fall.

USDA will release its next crop progress update Feb. 28 and will resume weekly crop condition reporting April 3.


2. U.S. Wheat Farmers Get the Chance to See How Overseas Customers Value Their Crop
By Amanda J. Spoo, USW Communications Specialist

Montana farmer Denise Conover knows her wheat. She watches the markets, takes care of her land and stays up-to-date on current research to select the HRW varieties that will perform best on her farm. Once her wheat leaves the farm, she understands the valuable role everyone in the grain chain plays from the country elevator to the traders. But like many U.S. wheat farmers, once Conover’s wheat is loaded on a vessel and leaves the port, she knows much less about what happens to it next.

Every year, USW invites farmers (selected by state wheat commissions) to participate in teams that travel overseas to follow their wheat and offer the opportunity to learn from customers about the wheat quality characteristics needed in those markets. Earlier this month, Conover, a director on the Montana Wheat and Barley Committee from Broadview, MT, traveled to Thailand and the Philippines on the 2017 South Asia Board Team with Clint Vanneman, a wheat farmer from Ideal, SD, and a current USW director representing the South Dakota Wheat Commission, and Dustin Johnsrud, a wheat farmer from Epping, ND, serving his first four-year term on the North Dakota Wheat Commission. USW Communications Specialist Amanda Spoo led the team.

“Going on this trip was an opportunity for me to gain a better understanding of what our customers expect us to produce for them,” said Vanneman. “Exports are such an important part of the demand for U.S. wheat so it is important that we understand where we need to take our product and the value that USW has in marketing our grain.”

Conover added, “Now I see that so much of what we learned from overseas customers reflects back on the farm. It is amazing that the decisions we make on the farm carry forward to the end-users in other countries.”

The team visited customers and end users in Thailand and the Philippines, allowing them to observe the differences in wheat food production facilities and milling between the two countries, while also discussing U.S. wheat use in everyday products.

One of the highlights in Thailand was visiting the baking school run by United Flour Mill (UFM) Co., Ltd. USW has developed a very collaborative and productive relationship with the school since 1982, specifically to host preeminent bakery training courses led by USW Baking Consultant Roy Chung. The team also visited the UFM flour mill to see how integrated education has enhanced the return from its milling business.

“This is a resource for a huge area and multiple markets. The school brings in industry allies, bakers and millers to learn how to better utilize wheat. The fact that they are learning those skills using U.S. wheat makes this an essential part of our role in the market,” said Vanneman.

Another stop at a cookie and cracker company showed the team how generational changes and eating habits are shifting market preference and increasing the development of new wheat products in Thailand — and how USW activities help customers navigate new challenges and opportunities.

“Back in the United States we hear about the relationships USW has in overseas markets, but here we saw it on every level here. As farmers we can see the respect customers have for the trade service and technical support USW offers with USDA program funding,” said Conover. “We can go back and tell other U.S. wheat producers what we saw and heard, and that is going to carry more value.”

In the Republic of the Philippines, the team members were guests of honor at the 9th International Exhibition on Bakery, Confectionary and Foodservice Equipment and Supplies, known as “Bakery Fair 2017,” hosted by the Filipino-Chinese Bakery Association Inc. Vanneman was asked to give remarks on behalf of the team and all U.S. wheat farmers at a luncheon during the event.

It was one of many opportunities for the team to talk about the HRW, hard red spring (HRS) and durum they grow and answer questions about their farms from customers. When Johnsrud spoke about the size and diversity of the farm he owns and manages with his dad and just one hired hand, many of the customers were shocked. All three farmers shared how weather, disease, transportation and other challenges can affect their farm from year to year and in turn affect the crops available for export — but they also highlighted how their commissions are working together to direct and fund public wheat breeding and research aimed at solving those challenges and improving both wheat quality and yield.


“We want them to know that we are listening. If we take anything home with us, I think it needs to be that we have to strive to show our breeders and other farmers that we need to keep our quality up as best we can,” said Conover. “If there is a variety out there that is not working, we need to get it out of the system.”

“Meeting with our customers shined a light on how strong the collaboration with USW is, and how essential it is to create greater preference for U.S. wheat,” said Vanneman. “Quality wheat and customer service lead to customer loyalty. The end-product user is loyal to our customers, which leads to stronger loyalty to U.S. wheat as a competitive supplier,” said Vanneman.

The team will report to the USW board of directors later this year. To see pictures from this and other Board Team trips, please visit the USW Facebook page at
www.facebook/uswheat.


3. WTO Adds Efficiency, Cost Savings Through Trade Facilitation Agreement
By Ben Conner, USW Director of Policy

Members of the World Trade Organization (WTO) have taken a major step toward making trade procedures more efficient and less costly for importers and exporters. On Feb. 22, WTO announced that its new Trade Facilitation Agreement (TFA) entered into force. So far 112 of 164 member countries have ratified the agreement, which meets the two-thirds majority required for implementation.

TFA is the first multilateral agreement reached by WTO members since the organization’s founding in 1995. The World Economic Forum estimates that $1.6 trillion in additional annual global trade could result from this agreement. Overall, the WTO estimates a 14.5 percent reduction in trade costs through TFA implementation, while the average applied tariff is less than 10 percent.

The WTO traditionally dealt with tariffs and discriminatory measures at borders, but it was mostly silent on a major impediment to trade – inefficient trade procedures that can often be worse than tariffs in terms of their opacity and cost.

The purpose of TFA, as its name suggests, is to facilitate the movement, release and clearance of goods across borders. Red tape, delays and other regulatory measures can be a significant cost in today’s fast-paced supply chains. Demurrage can be very expensive and the risk of delay or rejection can inflate exporter bids in certain markets.

Some of the key TFA provisions will apply to all WTO member governments once the agreement is fully implemented and can help reduce the port costs of wheat trade. Under TFA, member governments must:
  • Publish all fees, laws, and regulations in an easily accessible manner;
  • Provide the right to appeal any administrative decision issued by customs;
  • Allow for additional testing in the event of an adverse first test;
  • Make transparent all fees and charges connected with imports and exports ;
  • Allow for release of goods prior to final determination of duties, taxes, fees, or other charges;
  • Coordinate border agencies to improve clearance and simplify procedures;
  • Review formalities and documentation requirements to expedite clearance periodically;
  • Encourage use of a single window to avoid having to interact with multiple agencies to clear imports;
  • Return or allow re-consignment of goods rejected for sanitary, phytosanitary, or technical reasons.

Not everything in TFA applies to all countries at the same time. “Developing” and “Least Developed Countries” as defined by the WTO are allowed some flexibility to customize their implementation process.

Still, wheat buyers in all WTO member countries should be aware that their governments have certain obligations under the TFA. It is important to ensure that each country complies with its TFA obligations to avoid major trade issues that may escalate later on.

The WTO has had a difficult time reaching new agreements that benefit world trade. TFA is a reminder that it can still be done and provides hope that the WTO will become a more vigorous institution in the future.


4. New Educational Website Explores Plant Breeding Innovation, Gene Editing

What is plant breeding innovation? What do plant breeders do? And what could the latest breeding techniques like gene editing mean for the future of agriculture and society? Find answers to these questions and more at seedinginnovation.org, a new educational resource developed by the American Seed Trade Association.

The plant breeding innovation website is a multimedia platform that houses “Frequently Asked Questions, a blog, plant breeder profiles, videos, one-page summaries and other resources about the evolution and future of plant breeding. Visit www.seedinginnovation.org and follow @Better_Seed on Facebook, Twitter and Instagram to learn more.


5. Dave Green Replaces Ben Handcock at Wheat Quality Council

Dave Green, a familiar face to many who have participated in the Wheat Quality Council (WQC) Hard Red Winter Wheat Tour and Hard Spring Wheat Tour over the years, took the reins of the organization from the incomparable Ben Handcock at the conclusion of the WQC annual meeting this week in Kansas City, MO.

Everyone who has ever met Ben Hancock, who ran WQC for 25 years, will miss working with him. His gruff, pointed manner belied his dedication and love for the work and the people associated with the organization. When Handcock’s retirement was announced last year, Ag Journal reported that “he has spent a lifetime following the highs and lows of the annual wheat crop. He grew up on a 15,000-acre wheat farm in South Dakota, and farmed and ran cows for 15 years following his college graduation. He then ran the South Dakota Wheat Commission for 10 years before moving on to head the WQC in 1992.”

His colleages at USW send hearty thanks to Ben for everything he has done for the wheat farmers we represent and the experiences almost everyone at USW has had on WQC tours. We wish him a long, happy and healthy retirement.

Dave Green has been at Ben’s side organizing the WQC wheat tours in recent years. He is retired from his most recent position at ADM Milling Co. as director of quality control and laboratory services, where his responsibilities included crop surveys, wheat blends, customer correspondence and specifications. Before joining ADM, Green was a crop scout flour miller and mill technician with International Multifoods Corp. He is a past chairman of the Kansas City section of the American Association of Cereal Chemists International (AACCI), former chairman of the board of directors for the Wheat Foods Council and a 25-year member of the American Society of Baking. He also served as WQC past chairman and on several of its technical committees. A native of Akron, Ohio, he holds a bachelor’s degree from The Ohio State University.

The new WQC executive director may be reached at PO Box 19539, Lenexa KS 66285, +1-913-634-0248, and via email at dave.green.wqc@gmail.com.

WQC’s 2017 Hard Red Winter Wheat Tour is scheduled for May 1 to 4, and its Hard Spring Wheat Tour is scheduled for July 4 to 27. A registration form is posted online at www.wheatqualitycouncil.org, or click here.


6. Wheat Industry News
  • Quote of the Week: "I'm going to miss the tours the most. That's been a lot of fun. You get to meet so many people. It's just incredible." – Ben Handcock, now retired Executive Director of the Wheat Quality Council.
  • New Online Home for Ag Export Education. A new website, www.AgExportsCount.org provides information about U.S. agricultural export market development and is the foundation of a unified public presence for the multiple coalitions and individual organizations that support USDA’s Market Access Program (MAP) and Foreign Market Development (FMD) program.
  • USW Sends Sympathy to Director John Hoffman and his family on the passing of John’s father and farm partner, William A. (Bill) Hoffman Jr., Feb. 20 in Circleville, OH. John is carrying on Bill’s legacy of leadership in his community and farming industry.


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