Wheat Letter - January 10, 2013
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.” 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. Astute Buyers Take Advantage of the Marketing Year’s Lowest U.S. Wheat Prices
2. USW at Work Helping Customers Around the World
3. 2012 – A Year That Achieved Some Policy Wins
4. USW Board Team to Visit Customers in Asia
5. Resolve to Defend Sensible Approaches to Diet, Weight and Wheat
6. U.S. Wheat Associates Hires Student Brittney Fund as Communications Intern
7. Wheat Industry News – USDA Reports, Drought Disaster, Farm Bill Extension and More
Online Edition: Wheat Letter – January 10, 2013 (http://bit.ly/TNjTbs)
PDF Edition: See Attached  Wheat Letter - January 10, 2013.pdf
Crop Quality Information: USW Crop Quality Report (http://bit.ly/ACVDIp )
1. Astute Buyers Take Advantage of the Marketing Year’s Lowest U.S. Wheat Prices
by USW Market Analyst Casey Chumrau
U.S. wheat customers are moving aggressively to snap up high-quality U.S. wheat at significantly lower prices than just a few weeks ago.
As of Nov. 29, 2012, U.S. wheat commercial export sales for 2012/13 were 10 percent lower than 2011/12 sales to date with every wheat class running behind last year’s pace. However, competitive U.S. wheat prices prompted the strongest sales numbers so far this marketing year in December. After adding nearly 2.6 million metric tons (MMT) in exports, total 2012/13 U.S. commercial sales of 19.1 MMT are now just 3 percent below last year to date. In addition, soft red winter (SRW) is now 17 percent ahead of last year’s sales pace and durum sales are 3 percent higher.
The world wheat market pays close attention to buying decisions by Egypt and, in December, its government buying agency turned to the United States for the bulk of its imports. In one month, Egypt purchased 707,000 MT of U.S. SRW, hard red winter (HRW) and white wheat. The country had purchased a total of 150,400 MT from the U.S. in the first six months of the marketing year.
Several other countries increased imports from the United States in December. Excellent relative value spurred Turkey to buy 142,500 MT of SRW, HRW and durum. It was the country’s first U.S. wheat purchase in more than 18 months. Germany nearly tripled its 2012/13 purchases in December and doubled last year’s year-to-date sales, going from 10,900 MT to 30,900 MT. Thailand entered December with year-to-date sales running 2 percent over 2011/12. But thanks to 73,500 MT purchased last month, 2012/13 U.S. wheat sales to Thailand are now 20 percent greater than at this point last year.
Traders are reporting that China is also looking to the U.S. to help bolster wheat supplies. Demand for western style wheat foods is growing there and Chinese imports of high protein wheat have increased over the past several months. Indications are the move down in U.S. wheat prices is apparently attracting the attention of China’s buyers once again.
It remains to be seen whether or not increased demand for U.S. wheat and on-going concern about next year’s winter wheat crops (see “Wheat Industry News,” below) encourage a reverse in the month-long futures price slide. For now, more U.S. wheat customers are taking the opportunity to acquire high-quality U.S. wheat at the best values of 2012/13.
2. USW at Work Helping Customers Around the World
At the start of a new year, USW wants to share a glimpse of just a few recent activities with our customers.
Taiwan. USW was invited to participate in a Christmas bakery products promotion held by the Taipei Bakers Association and Taipei city government in the city square. USW Asian Products/Nutrition Technologist Sophia Yang served as a judge to pick the top three bakery products based on flavor, nutritional value and appeal. More than 1,000 consumers watched the event in person.
Korea. USW conducted its annual crop quality seminar in Seoul for 36 customers from the Korean milling industry. In addition to sharing new crop production and quality data, USW led a discussion on misperceptions of wheat nutrition and safety in the face of unsubstantiated health claims designed to sell books.
Japan. USW Country Director Wataru Utsunomiya made a presentation on world and U.S. wheat crop quality and supply and demand to the annual Osaka Flour Millers Association “Wheat Seminar.” The event also provided an opportunity to meet individually with many of the 20 flour millers who attended.
China. USW Country Director Andy Zhao, Beijing, and Dr. Gary Hou, technical director and Asian foods specialist with the Wheat Marketing Center (WMC), Portland, OR, made follow-up visits to bakery processors in several eastern China provinces that participated in an Artisan Bread Production course at WMC in August. The project goal is to help these bakers understand the value of higher protein flour made from U.S. wheat and, in turn, help them meet growing consumer demand for bakery products.
Philippines. USW expressed its thanks to customers including the Davao Bakers Club and the Filipino-Chinese Bakery Association for collaborating with several flour millers to carry out a “Bread Aid” campaign benefitting thousands of families made homeless by Typhoon Pablo in December. Mills donated flour that bakers used to produce and donate 10,000 pieces of monay bread and collected cash donations to supply mineral water to storm victims.
Myanmar. The Myanmar milling industry is slowly expanding to meet increasing demand for a variety of baked goods. USW Bakery Consultant Roy Chung traveled there recently to conduct in-house training for milling employees and teach baking classes to help the millers and bakers address some of the challenges must confront to succeed.
Guadeloupe. USW Regional Vice President Mitch Skalicky and USW Assistant Regional Director Chad Weigand recently attended the 16th Annual General Meeting (AGM) of the Caribbean Millers' Association (CMA) to participate and discuss current U.S. wheat quality and market trends. USW consultant Mike Krueger, President, The Money Farm of Fargo, ND, was on the program covering the global wheat market situation.
Peru. USW Assistant Regional Director Osvaldo Seco and Baking Consultant Didier Rosada conducted seminars to demonstrate sponge-and-dough baking techniques using flour from U.S. HRW and blends with SW or SRW. They demonstrated how bakers can maintain or improve their product quality while reducing cost. The Peruvian Millers Committee supported the seminars, held at The National Industrial Training Institute (SENATI) in Lima.
European Union. USW Marketing Specialist Rutger Koekoek attended the respected “Global Grain 2012” annual conference in Geneva, Switzerland. More than 1,000 delegates from 50 countries participated in the conference to consider such subjects as global commodity price trends, macroeconomic drivers of commodity markets and obstacles to trading in the Black Sea region. Koekoek was able to meet with many of the delegates.
Morocco. USW has long supported the educational mission of IFIM, the Moroccan Milling School, in part by providing samples of U.S. wheat. Since October, USW has delivered samples of SRW, Desert Durum® and hard red spring (HRS) to IFIM. USW staff, including Regional Technical Director Peter Lloyd, will work with IFIM staff and students to mill the wheat and test bake the flour in popular Moroccan bakery products.
South Africa. Representatives of a large South African food company that sent employees to a USW-sponsored tortilla production course at AIB International, Manhattan, KS, in October visited the USW office in Cape Town to share their experience. Tortillas represent an emerging market in South Africa.
3. 2012 – A Year That Achieved Some Policy Wins
by USW Vice President of Policy Shannon Schlecht
Happy New Year and best wishes to all of you for a prosperous 2013. The changing of the calendar year provides a moment to put perspective on the previous 12 months, to see what went well and where improvement is needed. These are just a few examples of the activity that took place in the trade policy arena in 2012. There will be plenty to work on and achieve in the new year, and I look forward to seeing what accomplishments 2013 will bring!
A major change in 2012 for the world’s wheat buyers was the switch to an open market in Canada, ending nearly 70 years of monopoly marketing by the former Canadian Wheat Board. Transparent price discovery and increased competition among sellers is a fundamental benefit to buyers, and U.S. wheat producers welcome the chance to compete with Canadian wheat on the basis of reliability, quality and value.
U.S. wheat customers in Colombia, South Korea and Panama are also realizing gains from the implementation of three new free trade agreements with the United States. Before the U.S.-Colombia free trade agreement entered into force last May, Colombian millers were unable to get the most value from U.S. wheat because of applied tariffs (while Canadian and Argentine wheat enjoyed duty free status). These trade agreements provide assurance to our customers that they will receive the most competitively priced wheat from the U.S. market.
In CY2012 the United States for the first time completely filled its 572,000 metric ton (MT), low- and medium-protein tariff rate quota (TRQ) with the European Union that was negotiated through the World Trade Organization (WTO). The TRQ provided a real incentive to European buyers to purchase competitively priced U.S. SRW because exportable supplies from traditional exporters, mainly in the Black Sea region, were limited. The EU also waived a 12 euro-per-MT ($16/MT) import duty for this TRQ in 2012. The United States competes mainly in the EU’s high-protein wheat and durum markets because local production cannot meet demand. These two premium wheat classes are only assessed an import duty when landed prices do not exceed 155 percent of an EU intervention (reference) price, resulting in duty free imports for these premium wheat classes for several years.
A WTO Committee on Agriculture Secretariat report1 in 2012 shines a light on countries that are not meeting their commitment to provide timely notifications. Research conducted by DTB Associates indicates that advanced developing country domestic support programs appear to exceed their WTO allowances on trade distorting support. While some of these countries have notified domestic support programs through 2008, others have not submitted notifications for more than 10 years. Based on time limits for notifications, all countries should have submitted notifications through 2010. The lack of transparency and effort to provide information on domestic program commitments is a concern as it is a basic WTO membership commitment.
1. World Trade Organization, Committee on Agriculture, “COMPLIANCE WITH NOTIFICATION OBLIGATIONS,” 10 September 2012, G/AG/GEN/86/Rev.11.
4. USW Board Team to Visit Customers in Asia
USW Board Teams are intense, regional visits arranged to give Board members and state wheat commissioners the chance to review the work of overseas USW offices, learn about the local market environments for milling wheat and thank milling and baking customers for their business.
This week, a Board Team starts a trip to Asia in Portland, OR, and will journey on to Taiwan, Singapore, Indonesia and Korea before returning to the United States in about two weeks. This Team includes wheat farmers and state commissioners Tim Anderson of Albin, WY, Robert Newtson of Helix, OR, David Radenberg of Claflin, KS, and Greg Svenningsen of Valley City, ND. Washington Grain Commission Communications Director Scott Yates is also a member of the Team that USW Assistant Director of Policy Tyler Jameson will lead.
The Team will share news and photographs from their travels in a photo album (“USW 2013 Asia Board Team”) on USW’s Facebook page at www.facebook.com/uswheat. Click here to link to the Board Team photo album: http://on.fb.me/ZDsmle.
5. Resolve to Defend Sensible Approaches to Diet, Weight and Wheat
Resolving to change our habits or reach new goals in a new year is only human. And for humans in many countries, one of the most common resolutions is to lose weight. That’s why the health clubs and fad diet promoters are on the prowl. So-called elimination diets seem to be dominant and, unfortunately for many growers, flour millers and bakers, the call to eliminate wheat from the diet is particularly popular this year.
Fortunately, there are sensible, science-based approaches to diet and weight that our customers can share with their customers that offer important, science-based counterpoints to the wheat-free fad.
No single food or food group is responsible for the global obesity epidemic. The human diet is complex and varied. Blaming one food for an epidemic is a gross oversimplification and there is, in fact, no correlation between wheat consumption and obesity rates1, 2. In the United States, for example, per capita wheat consumption has declined, while obesity rates have gone up. In France, per capita wheat consumption is 50 percent greater than in the United States, but the obesity rate is only a third of the U.S. rate. Italians consume at least two times more wheat per capita than Americans, but have one-quarter the obesity rate compared to the United States.
There is no single way to achieve or maintain a healthy weight except a diet that provides a reasonable amount of calories and regular physical activity. Fad diet plans are not grounded in sound science and often rely on anecdotal evidence. A balanced diet with moderate portions that includes all food groups, coupled with daily exercise, is the best solution for long-term health and weight management.
Fad diets do not stick. Eliminating a food group like wheat may result in quick weight loss because it cuts calorie intake but it is very difficult – and not nutritionally sound – to maintain such a diet. Most fad dieters can only stick with a plan for a few weeks or months. That may be lead to worse results because an ongoing, repeated cycle of weight gain and loss is associated with more weight gain over time3. In fact, carbohydrate intake is key for a healthy weight. Research indicates people with moderate- to high-carbohydrate diets tend to weigh less than people who consume fewer carbs4. According to the Institute of Medicine5, people should consume about half (45 to 65 percent) of their daily calories from carbohydrates. Grains like wheat as well as fruits, vegetables, legumes and dairy products are all important sources of carbohydrates.
For more information about sensible approaches to diet, weight and the truly important part wheat plays in human nutrition, USW recommends these resources:
· Washington Grain Alliance “The Best Grains” website, http://www.thebestgrains.com/;
· Wheat Foods Council, www.wheatfoods.org;
· Grain Foods Foundation, www.gowiththegrain.org;
· Flour Fortification Initiative, http://www.ffinetwork.org/;
· Academy of Nutrition and Dietetics, http://www.eatright.org/About/Content.aspx?id=8382.
1. United States Department of Agriculture-Economic Research Service. Wheat Background. Available online at: http://www.ers.usda.gov/topics/crops/wheat/background.aspx#use.
2. http://www.flourmillers.eu/default.asp?structureID=350; http://www.pasta-unafpa.org/ingstatistics4.htm.
3. Pietilainen KH, et al. Does dieting make you fat? A twin study. Intl J of Obesity. 2012; 36: 456-464. Available online at: http://www.nature.com/ijo/journal/v36/n3/full/ijo2011160a.html.
4. Merchant A, et al. Carbohydrate intake and overweight and obesity among healthy adults. J Amer Diet Assoc. 2009; 109: 1165-1172. Available online at: http://www.journals.elsevierhealth.com/periodicals/yjada/article/S0002-8223(09)00451-9/abstract.
5. Dietary Reference Intakes for Energy, Carbohydrate, Fiber, Fat, Fatty Acids, Cholesterol, Protein, and Amino Acids, Institute of Medicine, Sept. 5, 2002.
6. U.S. Wheat Associates Hires Student Brittney Fund as Communications Intern
USW has hired University of Arkansas agriculture communications student Brittney Fund as a Communications Intern starting Jan. 7, 2013, in the USW Headquarters office in Arlington, VA. Her internship will focus on media monitoring and news writing through May 20.
“Keeping our customers, member state wheat commissions and wheat farmers informed about our export market development activities is very important,” said Vice President of Communications Steve Mercer. “We are happy Brittney will be helping us keep the lines of communication strong during this time.”
Fund is both grateful and excited for this new adventure.
“It has been a dream of mine to work for an organization whose goals so closely match my own of promoting agriculture and helping farmers grow their business,” Fund said, “I look forward to all the great experiences this internship has to offer.”
Fund is originally from Sanger, CA, located in the San Joaquin Valley. She attended school at Northeastern Oklahoma A&M College and competed on the equine judging team. Fund transferred to the University of Arkansas in 2012 to earn a bachelor’s degree in agriculture communications.
7. Wheat Industry News
- A Natural Disaster in U.S. Wheat Belt. Reuters reported yesterday that the U.S. government has declared much of the central and southern U.S. Wheat Belt a natural disaster area due to persistent drought that imperils this year's winter wheat harvest. The declaration makes growers in large portions of four major wheat-growing states (Kansas, Colorado, Oklahoma and Texas) eligible for low-interest emergency loans. In all, USDA listed 597 counties in 14 states as natural disaster areas. More than half these counties were in the Wheat Belt from Texas to North Dakota. Read more here. Last week, showers in the southern plains brought only slight relief to drought-parched wheat farms. The U.S. Department of Agriculture shares detailed information about U.S. crop conditions and weather every week at http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1393.
- Farm Bill Extension Includes Export Market Development Funding. Since our last issue, leaders in Washington, DC, extended current U.S. farm legislation through September 2013 as part of an agreement on fiscal and tax policy. As a result, funding for export market development, including for USW activities overseas, will be available in fiscal year 2013. Read a statement on the agreement from the National Association of Wheat Growers here.
- Firing Back at 'Wheat Belly' Claims. The U.S. wheat industry says research shows that an author's claims that wheat is unhealthful are untrue and a "slander" on the industry, “Capital Press” reported this week. The National Wheat Improvement Committee has released a set of scientific facts in response to the book "Wheat Belly," in which the author claims eliminating all wheat from the diet results in weight loss and improved general health. Read the “Capital Press” article here and the Committee report here.
- Congratulations to USW Assistant Regional Director Osvaldo Seco and his partner Carolina Hernandez Montiel of Santiago, Chile, on the birth of their second child, Osvaldo Seco Hernandez, Dec. 20, 2012.
- Congratulations to USW Assistant Director of Communications Julia Debes and her husband Josh of Chantilly, VA, on the birth of their first child, a daughter named Emaline Elizabeth, Jan. 4, 2013.
- A Thought for the New Year. “There’s so much garbage out there in the cloud, in social media, in blogs, on TV, in self-help books – you name it – that your ability to question what’s real and what isn’t, to reason logically and not generalize from a single data point, is more critical today than ever before.” From Inc. magazine, Steve Tobak, “Top 5 Skills Every Leader Must Have,” Dec. 10, 2012.
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. |