Wheat Letter - April 26, 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. Spring Wheat Seeding Sets Record Pace; Winter Wheat Speeding to Maturity
2. Changes to the U.S. Grain Standards Proposed
3. U.S. Wheat Industry Welcomes U.S-Colombia FTA Implementation Date
4. Farm Bill Process Begins Again
5. NCI Holds Increasingly Popular Pasta Manufacturing Course
6. Wheat Industry News
Online Edition: Wheat Letter – April 26, 2012 (http://bit.ly/I8D8Tr)
PDF Edition:  Wheat Letter – April 26, 2012.pdf
1. Spring Wheat Seeding Sets Record Pace; Winter Wheat Speeding to Maturity
On Tuesday, April 24, the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service issued a summary of crop conditions and planting progress for April 16 to 22. Here are highlights for the 2012/13 U.S. wheat crop.
Spring Wheat:
By week’s end, farmers had seeded 57 percent of the spring wheat crop. This is the quickest planting pace on record, 51 percentage points ahead of last year and 38 points ahead of the five-year average. In Minnesota and the Dakotas, seeding was at least 45 percentage points ahead of last year and at least 37 points ahead of normal. As of April 22, 18 percent of the crop had emerged, compared to only 2 percent last year and the five-year average of 4 percent.
Spring Wheat Percent Planted |
| State | Prev Year | Prev Week | Apr. 22, 2012 | 5 year avg. |
| ID | 45 | 48 | 70 | 49 |
| MN | 0 | 56 | 84 | 17 |
| MT | 3 | 23 | 49 | 19 |
| ND | 0 | 27 | 45 | 8 |
| SD | 9 | 83 | 91 | 30 |
| WA | 44 | 30 | 47 | 62 |
| 6 States | 6 | 37 | 57 | 19 |
| These six states planted 98% of last year’s spring wheat acreage. |
Spring Wheat Percentage Emerged |
| State | Prev Year | Prev Week | Apr. 22, 2012 | 5 year avg. |
| ID | 14 | 15 | 27 | 20 |
| MN | 0 | 8 | 20 | 3 |
| MT | 0 | 2 | 5 | 0 |
| ND | 0 | 5 | 12 | 0 |
| SD | 1 | 48 | 64 | 7 |
| WA | 14 | 14 | 19 | 28 |
| 6 States | 2 | 10 | 18 | 4 |
| These six states planted 98% of last year’s spring wheat acreage. |
Winter Wheat:
Heading advanced 13 percentage points during the week as favorable weather promoted rapid crop development in many of the major producing regions. By April 22, 42 percent of the winter wheat was at or beyond the heading stage, 22 percentage points ahead of last year and 27 points ahead of the five-year average. USDA says 63 percent of the winter wheat crop is in good to excellent condition, down slightly from last week but 28 percentage points better than the same time last year.
Winter Wheat Percent Headed |
| State | Prev Year | Prev Week | Apr. 22, 2012 | 5 year avg. |
| AR | 68 | 93 | 100 | 51 |
| CA | 84 | 65 | 85 | 89 |
| CO | 0 | 0 | 0 | 1 |
| ID | 0 | 0 | 0 | 0 |
| IL | 0 | 40 | 55 | 1 |
| IN | 0 | 9 | 19 | 0 |
| KS | 5 | 19 | 45 | 2 |
| MI | 0 | 0 | 0 | 0 |
| MO | 7 | 52 | 69 | 4 |
| MT | 0 | 0 | 0 | 0 |
| NE | 0 | 0 | 0 | 0 |
| NC | 48 | 76 | 92 | 33 |
| OH | 0 | 0 | 0 | 1 |
| OK | 59 | 72 | 89 | 38 |
| OR | 0 | 0 | 0 | 0 |
| SD | 0 | 0 | 0 | 0 |
| TX | 44 | 51 | 67 | 38 |
| WA | 0 | 0 | 0 | 0 |
| 18 states | 20 | 29 | 42 | 15 |
| These 18 states planted 88% of last year’s winter wheat acreage. |
Winter Wheat Condition by Percent |  |
| State | VP | P | F | G | EX |
| AR | 1 | 7 | 40 | 41 | 11 |
| CA | 0 | 0 | 10 | 45 | 45 |
| CO | 2 | 13 | 41 | 38 | 6 |
| ID | 1 | 1 | 18 | 64 | 16 |
| IL | 0 | 1 | 15 | 56 | 28 |
| IN | 1 | 2 | 21 | 61 | 15 |
| KS | 2 | 5 | 25 | 51 | 17 |
| MI | 2 | 7 | 26 | 52 | 13 |
| MO | 1 | 4 | 25 | 52 | 18 |
| MT | 2 | 11 | 36 | 44 | 7 |
| NE | 1 | 5 | 30 | 53 | 11 |
| NC | 0 | 1 | 11 | 67 | 21 |
| OH | 2 | 11 | 36 | 41 | 10 |
| OK | 1 | 3 | 19 | 53 | 24 |
| OR | 0 | 8 | 22 | 53 | 17 |
| SD | 0 | 5 | 35 | 48 | 12 |
| TX | 15 | 17 | 32 | 28 | 8 |
| WA | 0 | 2 | 14 | 65 | 19 |
| 18 States | 3 | 7 | 27 | 48 | 15 |
| Prev Wk | 4 | 7 | 25 | 50 | 14 |
| Prev Yr | 19 | 21 | 25 | 29 | 6 |
| VP-Very Poor; P-Poor; F-Fair; G-Good; EX-Excellent | |
For more information, visit http://bit.ly/If9hN0.
2. Changes to the U.S. Grain Standards Proposed
USDA’s Federal Grain Inspection Service (FGIS) proposed changes to the U.S. Grain Standards, specifically to the definitions of “Contrasting Classes” and “Shrunken and Broken Kernels in a Federal Register announcement April 11, 2012. USW and other industry stakeholders submitted comments on the standards during FGIS’s periodic review beginning in November 2009.
Growers and country elevator operators likely will welcome the proposed definition for contrasting classes in hard white (HW) wheat. For grading HW, the current system considers all red wheat as contrasting classes. The revision would instead treat hard red spring (HRS) and hard red winter (HRW) wheat as “Wheat of Other Classes.” By changing the definition, the proposed standard would allow U.S. No. 1 HW to contain up to 3 percent HRS or HRW and U.S. No. 2 HW up to 5 percent. This would be considerably less stringent the than the current standard, in which U.S. No. 1 and U.S. No. 2 HW may contain no more than 1 percent and 2 percent, respectively, of red wheat. Because HRW and HRS are similar to HW in milling and end-use properties, small admixtures of these classes do not affect HW functionality.
Many country elevators have been reluctant to handle HW because of the risk that red wheat admixtures, which are very difficult to avoid entirely when handling both red and white wheat classes, would downgrade HW. Many HW varieties also produce a small percentage of red kernels due to backcrossing with red parents to improve disease and sprout resistance.
These concerns likely restricted HW production because many growers did not want to risk downgrading of their crop and had difficulty finding elevators willing to handle HW. The proposed standards should help expand HW by reducing the grade risks for both growers and handlers. Growers could then better respond to domestic and international market demand for high quality, whole-grain products made from HW wheat.
FGIS is also proposing that the shrunken and broken kernel limits for U.S. No. 1 and U.S. No. 2 grades be revised to reduce the current limits of 3 percent and 5 percent to 2 and 4 percent, respectively. USW suggested this revision in response to customer concerns that some U.S. cargoes had higher shrunken and broken kernel levels compared to Australian and Canadian cargoes.
Shrunken and broken kernels, defined as any wheat kernel or part of a kernel that passes through a 1.626 mm by 9.545 mm oblong hole sieve, negatively influence flour yield in the milling process. For several years, domestic millers and overseas buyers have recommended limiting amounts for the top two grades. FGIS reviewed shrunken and broken kernel levels in more than 100,000 samples of export cargoes from 2005 to 2009 to evaluate the potential impact of tighter standards. The review showed that under the proposed standard only 5 percent of the samples grading U.S. No. 1 would have been assigned a lower grade and there would be no impact on samples grading U.S. No. 2. Thus FGIS concluded that the revision would have limited impact on the grades wheat growers would receive (although the effect may be greater for individual crop years or growing areas).
Under federal law, FGIS must solicit final public comment on the proposed changes. Read more at http://1.usa.gov/Jq5IDw. Comments may be submitted on or before June 11, 2012.
USW thanks FGIS for their thoughtful consideration of the proposals submitted for revision of the U.S. Grain Standards.
3. U.S. Wheat Industry Welcomes U.S-Colombia FTA Implementation Date
The U.S. wheat industry welcomed the announcement by U.S. President Barack Obama and Colombian President Juan Manuel Santos that the countries will implement the U.S.-Colombia free trade agreement (FTA) on May 15, 2012. The U.S.-Colombia FTA will provide Colombian millers with the ability to purchase the high quality U.S. wheat they prefer without unnecessary financial cost.
Implementation of the FTA will eliminate all tariffs on U.S. wheat imports into Colombia. The agreement creates a level playing field for U.S. wheat farmers, as export competitors Canada and Argentina already enjoy duty-free access to the market.
“We are extremely pleased to see this FTA set for implementation,” said Alvaro de la Fuente, USW regional vice president for South America. “Our extensive efforts over the nearly six years since the agreement was first signed have finally become a reality and U.S. wheat exports will now compete on an equal basis with other major exporters.”
Colombia is currently the second largest destination for U.S. wheat in South America. In marketing year 2010/11, Colombia imported about 800,000 metric tons of U.S. wheat from five of the six U.S. wheat classes. However, U.S. wheat sales for this marketing year are down, particularly after the Canada-Colombia FTA went into effect on Aug. 15, 2011. Through April 12, total U.S. wheat sales to Colombia are down 45 percent to 446,800 metric tons. In contrast, Canadian sales through February 2012 have more than doubled to over 520,000 metric tons.
USW Chairman Randy Suess, a wheat farmer from Colfax, WA, explained that the implementation of the FTA would help the United States regain the market share lost this year.
“We have already started the push to win back the wheat export business we lost without this FTA in effect,” he said. “Based on our work, we know this agreement, and others like them, will help us rebuild and expand markets, grow our economy here at home and remain the most reliable supplier of wheat in the world.”
The U.S. wheat industry has been supportive of the FTAs with Colombia, South Korea and Panama and other free trade measures.
“All three of these pacts are important to wheat farmers, who depend on exports to sell about half of the wheat we grow every year,” said National Association of Wheat Growers (NAWG) President Erik Younggren, a wheat farmer from Hallock, MN. “The implementation of both the U.S.-Colombia and the U.S.-Korea FTAs gives us encouragement that we will soon see the agreement with Panama complete in the very near future.”
4. Farm Bill Process Begins with Implications for U.S. Agricultural Product Importers
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. That process formally began last Friday afternoon when the leaders of the U.S. Senate Committee on Agriculture, Nutrition and Forestry released draft legislative language for a 2012 Farm Bill.
Although final approval may be months away, and many changes will be made along the way, the process bears watching as the Farm Bill includes many programs that impact our international wheat-buying customers.
For example, the current draft would re-authorize the GSM-102 Export Credit Guarantee Program for another five years. GSM-102 gives importers of U.S. wheat and other agricultural products access to alternative and competitive credit terms. In 2011, U.S. wheat importers made record use of GSM-102, including countries from almost every region USW serves.
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. USW and the wheat farmers it represents are very pleased to see continued support for MAP and FMD, which make possible the trade service and technical support we offer to our customers. USW receives funding from these programs because U.S. wheat farmers invest their own money through our 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.
Overall, U.S. food aid program funding authorization is unchanged in the proposal, but a number of programmatic changes were proposed. USW and U.S. wheat farmers strongly support the continued operations and funding of the U.S. food aid programs to ensure that those in need around the world receive food during crisis as well as important developmental assistance.
USW is encouraged that the bipartisan Farm Bill draft recognizes the effectiveness of the programs that help build a preference for U.S. agricultural products and commodities like wheat.
5. NCI Holds Increasingly Popular Pasta Manufacturing Course
A near record enrollment of 36 participants from 21 pasta manufacturers in Brazil, Nigeria, South Africa and the United States attended the Northern Crops Institute (NCI) Pasta Production and Technology Short Course April 10 to 12 in Fargo, ND. This year, USW sponsored eight participants from outside the United States.
NCI Assistant Director John Crabtree said many companies have sent staff to the annual course every year it was first offered in 1984.
“Almost all of the major U.S. companies were represented this year,” Crabtree said. “This says a lot about what the NCI staff has done with the program over the years.”
Noting the participation of Nigeria, Crabtree said pasta production there has grown steadily to the point that Nigeria is currently the fourth largest U.S. durum importer in the world in 2011/12.
The NCI pasta course highlights the versatility of the high quality durum wheat grown in the northern U.S. plains. Short course lectures included reviews of durum varieties and milling, quality and functionality testing, commercial pasta production and end-product quality assurance. Participants also gained hands-on experience processing traditional semolina pasta, ravioli and gluten-free pasta.
NCI is one of several excellent partners USW works with to offer our overseas customers excellent educational services. NCI recently received the 2011 Service to Exporters Award at the 2012 Global Business Connections Conference in Fargo. For more information, visit http://bit.ly/I3u3va.
6. Wheat Industry News
- Peterson Presents Webinar. USW Vice President of Overseas Operations Vince Peterson discussed global factors behind this year’s exports, reviewed world stock supplies and gave his perspective on world plantings, production and prices in a webinar April 26 sponsored by the Idaho Wheat Commission, the Oregon Wheat Commission and the Washington Grain Commission. To watch the webinar, visit http://bit.ly/ItgpEz.
- AgWeb Online Map Tracks Spring Wheat Planting. See how spring wheat planting is moving along courtesy of a new online resource from AgWeb. The map shows USDA's weekly crop progress estimates updated every Monday afternoon. To view the map, visit http://bit.ly/JmmuU0.
- CII Lab Now Great Plains Analytical Laboratory. CII Laboratory Services in Kansas City, MO, has changed its name to Great Plains Analytical Laboratory (GPAL). GPAL explained it felt the new name reflects its location and roots in the industry. For more information, visit http://www.ciilab.com/.
- WMC Advanced Asian Noodle Short Course. The Wheat Marketing Center (WMC) in Portland, OR, will hold its Advanced Asian Noodle Short Course June 11 to 15. For more information, visit http://www.wmcinc.org.
- NCI Rheology of Wheat and Flour Quality Short Course. NCI in Fargo, ND, will hold its Rheology of Wheat and Flour Quality Short Course from June 12 to 14. For more information, visit http://www.northern-crops.com.
- IGP Online Flour Milling Course. The International Grains Program in Manhattan, KS, will hold its Introduction to Flour Milling Course entirely online June 18 to July 27. For more information, visit http://www.grains.ksu.edu/igp/.
- CME Group Announces the Launch of Black Sea Wheat Futures Contract. CME Group announced the launch of CBOT Black Sea Wheat Futures to begin trading on June 6, subject to regulatory approval. For more information, visit http://bit.ly/JG9r0P.
- Port Allen, LA Elevator to Remain Closed For Renovations During 2012 Harvest. The state-owned Port Allen grain elevator on the Mississippi River near Baton Rouge, LA, will not accept grain in 2012. Louis Dreyfus Commodities LLC, the new tenant who took over the lease in February 2011, closed the facility for major infrastructure upgrades. For more information, visit http://bit.ly/JwgI4L.
- Filmmaker Collaborates with Montana Consultants to Promote National Wheat Harvest Movie. Independent filmmaker, Conrad Weaver of ConjoStudios, LLC, named Melody Dobson of Baseline Communications and Jody Lamp of Lamp Public Relations & Marketing, both of Billings, MT, to serve as its national executive co-coordinators for the Wheat Harvest Movie, a film project to tell the story of where wheat foods come from and how they are produced. For more information, visit http://bit.ly/Idjaf0.
- Welcome to Brooke Shupe, who has joined the NAWG staff to focus on risk management programs. For more information, visit http://bit.ly/IeJYfO.
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. |