Wheat Letter - November 8, 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 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. 2012/13 U.S. Wheat Export Sales Update
2. Crop Quality Results Show Sound SW, HW Crops
3. Value of Agricultural Trade Continues to Rise
4. Latin America Board Team Connecting Farmers with Customers
5. Meetings Bring USW and Customers Together
6. Chinese Team Tests Pan Bread and Cakes as Part of End Products Collaborative
7. California Voters Reject Biotech Labeling Initiative
8. Wheat Industry News
Online Edition: Wheat Letter – November 8, 2012 (http://bit.ly/RmvtYq)
PDF Edition: see attached  Wheat Letter - November 8, 2012.pdf
Crop Quality Information: USW Crop Quality Report (http://bit.ly/ACVDIp)
1. 2012/13 U.S. Wheat Export Sales Update
According to the U.S. Department of Agriculture (USDA) weekly Export Sales Report, total known outstanding sales and accumulated exports of all classes of U.S. wheat for the 2012/13 marketing year (June to May), through Oct. 25, were 14.7 million metric tons (MMT), 9 percent lower than last year's year-to-date total of 16.2 MMT.
Commitments to date (of wheat and wheat products) are 47 percent of total projected exports, down from the five-year average of 67 percent of exports committed by this date.
Through Oct. 25, U.S. hard red winter (HRW) sales were 5.72 MMT, soft red winter (SRW) sales were 2.06 MMT, hard red spring (HRS) sales were 3.85 MMT, white wheat (including soft white (SW), club and hard white (HW)) sales were 2.74 MMT and durum sales were 0.34 MMT.
USDA’s outlook for 2012/13 U.S. wheat exports remains bullish, however. Export prices for other origins have increased as exportable supplies tightened and production forecasts expect smaller crops in the southern hemisphere. After U.S. wheat prices ran up with corn in June and July, they have been fairly steady for several weeks. So while U.S. sales are running at a slower pace than last year (when U.S. total sales reached 28.2 MMT), USDA currently predicts that total U.S. wheat sales will reach 31.3 MMT.
USW updates its Commercial Sales Report every Thursday at http://www.uswheat.org/reports/commercialSales and its Price Report every Friday afternoon at http://www.uswheat.org/reports/prices.
2. Crop Quality Results Show Sound SW, HW Crops
Every year, U.S. Wheat Associates (USW) and several of its partner organizations collect and analyze samples of all six classes of U.S. wheat and compile results in a single report. The USW 2012 Crop Quality Report is now available as an important reference for wheat buyers, millers and wheat food manufacturers around the world. USW representatives and many of our partners have started sharing this information with our customers at our annual series of crop quality seminars. The full report is available at www.uswheat.org/reports/cropQuality. You may also order copies of the printed report by email at info@uswheat.org.
For those who cannot attend a crop quality seminar, “Wheat Letter” provides a brief summary of 2012 results for SW and HW crops below. “Wheat Letter” covered SRW results on Aug. 2 and HRW, HRS and durum on Oct. 25.
Soft White (SW) and White Club (WC)
The Pacific Northwest had adequate soil moisture and rainfall for planting and during much of the growing season, but hot and dry conditions occurred at the end of wheat kernel development. The crop is sound, with both SW and white club (WC) composites grading U.S. No. 1.
Grade factors and physical kernel characteristics, especially kernel size and weight, are generally well above five-year averages. The SW composite showed an average test weight of 80.2 kg/hl, similar to last year. Protein of 9.8% is higher than last year, but still lower than the five-year average. WC composites averaged a test weight of 79.3 kg/hl, slightly above last year’s average. WC protein of 10.2% matched the five-year average, but was higher than last year. Falling numbers of 320 seconds for SW and 308 seconds for WC both were similar to the five-year average but higher than last year.
Processing quality is consistent with five-year averages. For both SW and WC, farinograph stability times are longer and water absorptions are higher than last year, but similar to the five-year averages. SW sponge cake volume of 1219 cc is similar to last year and slightly higher than the five-year average. SW and WC cookie spread factors were similar to last year, but higher than the five-year averages. For SW, cookie diameter was slightly lower than last year, but slightly larger than the five-year average. For WC, cookie diameter was slightly larger than both last year and the five-year average.
Both SW and WC were evaluated for use in Chinese southern-type steamed bread with SW scores similar to last year’s average and the five-year average, but lower than the WC average for last year and the five-year average.
Hard White (HW)
USW estimates that U.S. wheat farmers produced 770,100 MT of HW in 2012, down slightly from last year’s production. The majority of production moved into domestic markets. This year’s samples showed very good quality performance in milling, dough rheological properties and end-product use, including for pan breads and steamed breads.
When composited by region and protein, all samples graded as U.S. No. 1 with test weights ranging from 79.3 to 86.2 kg/hl. HW usually has a similar farinograph water absorption to HRW (this year’s samples ranged from 58.1% to 64.3%), but stability time is much longer (ranging from 12.1 to 42.0 min) indicating more tolerance to over-mixing.
All samples also showed very good baking performance relative to their protein content, with bake absorptions ranging from 62.9 to 69.5%, loaf volume from 882 to 1033 cc and crumb grain and texture scores of 6.5 to 7.5 points. Results showed that most samples were acceptable for use in Asian steamed breads. Because high extraction, straight-grade flour was used for Chinese raw and wet noodle evaluations, noodle color was dull compared to the control noodle. As a result, USW recommends using 60 to 65% extraction patent flour for Asian noodle applications to reduce ash content and improve noodle color while maintaining acceptable noodle texture.
3. Value of Agricultural Trade Continues to Rise
According to recently released trade statistics from the World Trade Organization, global agricultural exports reached $1.66 trillion in 2011, accounting for just over 9 percent of total world goods trade. The report also emphasized how fast the agriculture sector is growing, with the value of agricultural trade increase 20 percent from 2010 to 2011.
Roughly 20 years ago, world agricultural exports totaled just $415 billion and rose slowly during the 1990s to $551 billion by 2000. The next decade saw exports jump dramatically to $1.37 trillion in 2010.
With such a substantial rise, what will the future hold for agricultural trade in the next 40 years as population and incomes continue to grow? Specifically for wheat, a 2011 internal USW study conservatively estimated that would world wheat trade would double by 2050 to meet demand as much of the consumption growth will be in countries that are already net importers. For all of agriculture, good trade policies will be even more important to foster exports to meet additional demand and feed a growing world population.
4. Latin America Board Team Connecting Farmers with Customers
Three U.S. wheat farmers and an accompanying USW staff member are traveling in Latin America over the next two weeks to learn more about the customers buying their wheat and USW’s work in the region.
The Latin American Board Team members include USW Market Analyst Casey Chumrau; Chris Kolstad, HRW, HRS and durum farmer from Ledger, MT; Kenneth Failes, HRW wheat farmer and crop consultant from Cherokee, OK; and Eric Wilkey, president of Arizona Grain in Casa Grande, AZ, which merchandises Desert Durum® wheat.
USW Board Teams are intense, regional visits arranged that provide the opportunity for Board members to review the work of local USW offices, learn about local milling wheat needs and thank milling and baking customers for their business. On this trip, the team will make stops in Santiago, Chile; Lima, Peru and Mexico City, Mexico before attending the 2012 the Latin American Assembly of Industrial Millers (ALIM) meeting in Merida, Mexico.
The team is currently in transit from Santiago to Mexico City. During their stay in Santiago, team members had the opportunity some of the country’s largest and most important flour millers and grain purchasers, including the San Cristobal mill. The family-owned San Cristobal mill opened more than 100 years ago, is the largest flour producer in Chile and imports more U.S. wheat than any other Chilean company.
Chumrau is posting regular update on the team’s progress on the USW Facebook page. Follow along at http://www.facebook.com/uswheat.
5. Meetings Bring USW and Customers Together
This is a busy but welcome time of year for the wheat industry and USW is reconnecting with many of its customers at several meetings around the world.
Last month, for example, USW Vice President of Policy Shannon Schlecht and USW Assistant Regional Director for South America Osvaldo Seco traveled to Florianopolis, Brazil, for the annual meeting of ABITRIGO, the national wheat association that includes top Brazilian millers. The meeting offered a chance to discuss export opportunities with the millers as they may need to look beyond Mercosur countries this year to meet its needs.
Just this week, USW and wheat commissions in California, Idaho, Montana, North Dakota, Oklahoma, Oregon and Washington sponsored a wheat marketing conference for customers from Japan, Korea and Taiwan in Honolulu, HI. This first marketing conference for customers in North Asia featured a program based on the theme, “Building Your Business with U.S. Wheat.” The two-day event provided information these customers can use to better understand the key factors driving the world wheat market, get a look at U.S. wheat quality and meet face-to-face with their peers, U.S. wheat farmers and U.S. grain export industry experts.
Many of our USW and grain industry colleagues are now traveling to participate in USW’s annual series of Crop Quality Seminars. These events started last week in Europe and will continue literally around the world until hundreds of our customers have seen and discussed U.S. 2012/13 crop quality based on the abundant data about all six U.S. wheat classes in the 2012 Crop Quality Report. Assistant Director of Policy Tyler Jameson is posting photos and information on the USW Facebook page at www.facebook.com/uswheat as he participates in the European Crop Quality Tour.
Also this week, a USW Board Team left the United States to meet with customers in Chile, Peru and Mexico (see story above). The board team ends in Merida, Mexico, where our U.S. wheat ambassadors will join many of their colleagues and U.S. wheat growers at the annual meeting of ALIM, the Latin American Assembly of Industrial Millers.
USW President Alan Tracy and USW Vice Chairman Dan Hughes, a wheat grower from Venango, NE, will join several regional USW representatives the week of Dec. 4 at the Mideast and Africa District conference of the International Association of Operative Millers (IAOM). Tracy will deliver a keynote address that provides interesting information about how tight global corn stocks affect wheat prices. Hughes will report on U.S. wheat quality at the annual event. USW Casablanca-based Regional Technical Director Peter Lloyd and USW Regional Vice President for the Middle East, East and North Africa Mark Samson will also give presentations.
Safe travels, everyone.
6. Chinese Team Tests Pan Bread and Cakes as Part of End Products Collaborative
From Oct. 15 to 19, a Chinese team attended an End Products Collaborative (EPC) short course focusing on pan bread and cakes at the Wheat Marketing Center (WMC) in Portland, OR. Four representatives of Xinxiang Xinliang (New Land) Flour Milling Co., Ltd, one of the premium flour processors in China’s breadbasket, participated in the course, accompanied by USW Regional Vice President Matt Weimar. Dr. Gary Hou, WMC technical director and wheat foods specialist, directed the course.
For the EPC evaluation, team members sent their own commercial flours to WMC for quality analysis and for use as commercial control products. The team tested U.S. HRS, HRW and SW flour as well as U.S. wheat flour blends in pan breads and cake products and compared them to their standard flours. The team concluded that the U.S. flour and blends with the control flours performed better than the commercial Chinese control flour alone. The team also noted that U.S. HRS and SW could serve as a natural improver for Chinese flour, addressing concerns by the Chinese government about food safety related to current use of additives and improvers.
“This collaborative program demonstrated once again the superior performance of U.S. wheat in a wide range of products from Chinese-style pan breads to sponge cakes,” said Dr. David Shelton, WMC executive director.
The EPC program helps increase understanding of the functional qualities of all six U.S. wheat classes. Since 2009, USW and the WMC have conducted more than 15 EPC courses. The program has helped the U.S. industry better understand key end products from around the world and the versatile characteristics of U.S. wheat to produce superior quality products.
7. California Voters Reject Biotech Labeling Initiative
As part of the U.S. elections on Tuesday, Nov. 6, voters in California rejected Proposition 37, which would have instituted a requirement for labeling of biotech food products in that state. The Grocery Manufacturers Association released the following statement in response to the defeat of Proposition 37 in California:
“GMA and its member companies are pleased that California voters have rejected Proposition 37. Proposition 37 was a deeply flawed measure that would have resulted in higher food costs, frivolous lawsuits, and increased state bureaucracies. This is a big win for California consumers, taxpayers, businesses and farmers. Foods and beverages that contain genetically engineered ingredients have been exhaustively studied and all of the leading scientific and regulatory bodies, including the U.S. Food and Drug Administration (FDA), U.S. Department of Agriculture, the World Health Organization and the American Medical Association, have concluded that these products are safe and are not materially different than their traditional counterparts.”
USW and the National Association of Wheat Growers (NAWG) support voluntary labeling of food products derived from biotech ingredients provided it is consistent with U.S. law and international trade agreements and is truthful and not misleading. We oppose federal or state mandated labeling of products based solely on the method of production, including foods derived from biotech ingredients, if they do not differ materially from their non-biotech counterparts. For more information, visit http://bit.ly/SG1zxm.
8. Wheat Industry News
- Crop Outlook and International Durum Forum. The annual Crop Outlook and International Durum Forum will be held on Tuesday, Nov. 13 in Minot, ND. The program is a cooperative effort of the North Dakota Wheat Commission and U.S. Durum Growers Association and is designed to provide producers with valuable information on production research, demand trends and supply competition to help guide them in their marketing decisions with the current crop and planting options in 2013. For more information, visit http://bit.ly/Re3LwW.
- Gavilon Opens Shuttle Facility in South Dakota. Gavilon Liberty Grain had its grand opening of its new Kimball, SD, facility on Nov. 1. The high-speed shuttle and dry fertilizer facility is the company’s first in South Dakota. For more information, visit http://bit.ly/SWmVaH.
- WMC Whole Grain Products Short Course. The Wheat Marketing Center (WMC) in Portland, OR, will hold its Whole Grain Products Short Course Dec. 10 to 14. For more information or to register, visit http://www.wmcinc.org.
- IGP Intro to Flour Milling Short Course. The International Grains Program (IGP) in Manhattan, KS, will hold its IAOM Introduction to Flour Milling course Jan. 14 to 18, 2013. For more information or to register, visit http://www.grains.ksu.edu/igp/.
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. |