Wheat Letter - May 10, 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. HRW Crop Quality Tour Projects High Yields, But Notes Potential Disease and Moisture Issues
2. As Harvest Begins, Wheat Crops Still Ahead of Schedule
3. WASDE Report Reveals Positive U.S. Outlook for 2012/13 Crop
4. A Reflection on Trade
5. Survey: Consumers Not Avoiding Biotech Foods, Don’t Want Labels
6. Japanese Milling Executives Tour U.S. Wheat Industry
7. Wheat Industry News
Online Edition: Wheat Letter – May 10, 2012 (http://bit.ly/JjQxZO)
PDF Edition:  Wheat Letter – May 10, 2012.pdf
1. HRW Crop Quality Tour Projects High Yields, But Notes Potential Disease and Moisture Issues
By Casey Chumrau, USW Market Analyst
The Wheat Quality Council conducted its annual Hard Winter Wheat crop quality tour last week in Kansas and parts of Nebraska and Oklahoma. I joined a record 98 millers, bakers, traders, industry analysts and reporters in surveying the 2012 crop to get a snapshot of crop conditions and production potential. Our initial impressions suggested a larger crop than last year and early spring weather indicated the wheat is nearly three weeks ahead of schedule in many areas. After surveying more than 600 fields, we forecasted the highest yield since 1998, but we also saw disease pressure that could, together with other variables, affect final yields.
Last year, severe drought hit the southern plains region and significantly reduced production. Concerns about lingering drought remain in some areas, in particularly western Kansas and the Oklahoma panhandle, while the highest producing regions of central and south central Kansas had adequate moisture this year and looked lush.
Our final calculations estimated Kansas’s 2012 wheat production at 404 million bushels (11.0 MMT) with an estimated 49.1 bushels per acre (bpa), equivalent to 3.34 metric tons per hectare (MT/ha). If realized, yields would edge out the previous record of 49.0 bpa set in 1998 and result in the largest crop since 2003. The yield estimate is up considerably from last year’s tour result of 37.4 bpa (2.54 MT/ha) and 21 percent higher than the five-year average of 40.6 bpa (2.76 MT/ha).
The crop is also progressing noticeably faster than previous years with 92 percent of wheat already headed, well above the five-year average of 20 percent, according to U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS). After examining the fields, we predicted Kansas farmers will start harvesting in three to six weeks, well ahead of normal.
Wheat experts on the tour cautioned that our yield forecast could overshoot the actual yield.
“I expect our forecast is a little high considering the disease pressure we saw,” said Ben Handcock, executive vice president of the Wheat Quality Council.
That disease pressure included barley yellow dwarf and stripe rust, leaf diseases that can considerably affect yields, in fields all across the region. Producers in central Kansas have taken aggressive measures to fight leaf rust this year. According to Kansas State University Agronomist Jim Shroyer, 30 percent of fields in the central corridor are treated with fungicide in a normal year, but 65 to 70 percent of the wheat was treated this year.
Of course, weather is always a concern until the crop is in the bin. Rain, wind and hail can all damage a crop and reduce both individual yields and total production. The early spring weather had many concerned that a late freeze would damage the emerging wheat, but most of the region appears to have avoided that situation. However, many fields across the state still need significant precipitation before the crop is harvested. Shroyer stressed, “timely rains are going to be very important from this point forward.”
The large yield estimates have prompted some to question the quality prospects for the Kansas crop. However, Handcock isn’t ready to speculate on quality.
“We won’t begin to see any quality issues until after harvest begins,” he said. “We won’t know anything until the wheat gets to an elevator somewhere and can be checked, it is much too early.”
Historically, the tour yield estimates generally tracks close to both the NASS yield forecast released in May every year and the actual yield results after harvest. Although the tour is just a sample of the region’s hard red winter (HRW) crop, it provides an excellent look at the crop progress and an accurate indication of production potential. For this reason, more participants have joined the tour and industry analysts closely watch estimates.
Handcock said his philosophy is “if we come close to the NASS estimates than we did our job.”
USW provides weekly Harvest Reports as wheat harvest progresses across the country. Reports have not yet started, but will be posted online each week at http://www.uswheat.org/reports/harvest.
2. As Harvest Begins, Wheat Crops Still Ahead of Schedule
On Monday, May 7, USDA’s NASS issued a summary of crop conditions and planting progress for April 30 to May 6. Following are highlights for the 2012/13 U.S. wheat crop.
Winter Wheat:
The winter wheat crop continues to progress, with 63 percent headed by May 6, compared to 39 percent last year at this time and the five-year average of 34 percent. Hot, mostly dry conditions hurt crop conditions in some areas of the Great Plains states this past week, but USDA maintained the crop rating at 48 percent good and 15 percent excellent.
Mark Hodges, executive director of Plains Grains, Inc., reported that wheat harvest did reach as far north as the Oklahoma/Texas border this week, but “rains and cooler weather have slowed harvesting to a near stop.” He said not enough wheat has been harvested to provide a trend, so kernel characteristics and protein levels are highly variable.
Winter Wheat Percent Headed (%) |
State | Prev Year | Prev Week | May 6, 2012 | 5 year avg. |
AR | 98 | 100 | 100 | 92 |
CA | 96 | 90 | 97 | 97 |
CO | 6 | 3 | 25 | 7 |
ID | 0 | 0 | 0 | 0 |
IL | 21 | 80 | 87 | 23 |
IN | 7 | 34 | 58 | 7 |
KS | 29 | 74 | 92 | 20 |
MI | 0 | 0 | 0 | 0 |
MO | 49 | 84 | 94 | 32 |
MT | 0 | 0 | 0 | 0 |
NE | 0 | 5 | 25 | 0 |
NC | 94 | 98 | 100 | 88 |
OH | 0 | 0 | 6 | 1 |
OK | 91 | 97 | 98 | 83 |
OR | 0 | 0 | 1 | 1 |
SD | 0 | 0 | 4 | 0 |
TX | 76 | 82 | 90 | 68 |
WA | 0 | 0 | 0 | 1 |
18 states | 39 | 54 | 63 | 34 |
| These 18 states planted 88% of the 2011 winter wheat acreage. |
Winter Wheat Condition by Percent (%) |
State | Very Poor | Poor | Fair | Good | Excellent |
AR | 1 | 8 | 34 | 44 | 13 |
CA | 0 | 0 | 10 | 45 | 45 |
CO | 2 | 10 | 34 | 46 | 8 |
ID | 1 | 1 | 11 | 66 | 21 |
IL | 1 | 3 | 14 | 62 | 20 |
IN | 1 | 3 | 21 | 58 | 17 |
KS | 3 | 8 | 29 | 47 | 13 |
MI | 1 | 5 | 30 | 51 | 13 |
MO | 1 | 6 | 24 | 52 | 17 |
MT | 1 | 7 | 29 | 49 | 14 |
NE | 1 | 5 | 28 | 55 | 11 |
NC | 0 | 1 | 16 | 65 | 18 |
OH | 3 | 9 | 33 | 41 | 14 |
OK | 1 | 3 | 20 | 56 | 20 |
OR | 0 | 6 | 20 | 54 | 20 |
SD | 0 | 3 | 24 | 58 | 15 |
TX | 17 | 20 | 29 | 27 | 7 |
WA | 1 | 1 | 8 | 69 | 21 |
18 States | 4 | 8 | 25 | 48 | 15 |
Prev Wk | 3 | 7 | 26 | 50 | 14 |
Prev Yr | 22 | 20 | 25 | 27 | 6 |
| National crop conditions for selected states are weighted based on 2011 planted acreage. |
Spring Wheat:
Spring wheat planting continued this week with all states having more spring wheat planted than this time last year and all well above the five-year average. Overall, despite rainfall that delayed fieldwork in some areas, 84 percent of the crop was planted as of May 6, up 10 percentage points from last year at this time and the five-year average of 49 percent. Almost half of the spring wheat crop (47 percent) had also emerged as of May 6, compared to the five-year average of 17 percent.
Spring Wheat Percent Planted (%) |
State | Prev Year | Prev Week | May 6, 2012 | 5 year avg. |
ID | 62 | 82 | 90 | 74 |
MN | 14 | 93 | 99 | 48 |
MT | 15 | 68 | 71 | 50 |
ND | 5 | 66 | 82 | 37 |
SD | 48 | 97 | 100 | 73 |
WA | 69 | 60 | 81 | 84 |
6 States | 19 | 74 | 84 | 49 |
| These six states planted 98% of the 2011 spring wheat acreage. |
Spring Wheat Percentage Emerged (%) |
State | Prev Year | Prev Week | May 6, 2012 | 5 year avg. |
ID | 29 | 38 | 51 | 41 |
MN | 1 | 44 | 64 | 20 |
MT | 2 | 10 | 27 | 10 |
ND | 0 | 24 | 41 | 9 |
SD | 13 | 79 | 89 | 33 |
WA | 39 | 24 | 48 | 56 |
6 States | 5 | 30 | 47 | 17 |
| These six states planted 98% of the 2011 spring wheat acreage. |
For more information, visit http://bit.ly/n45mCU.
3. WASDE Report Reveals Positive U.S. Outlook for 2012/13 Crop
USDA provided its first projections for the 2012/13 wheat crop outlook in its monthly World Agricultural Supply and Demand Estimates (WASDE) report released May 10, revealing higher production, food and feed use and exports for the United States.
USDA also included updated information on the 2011/12 crop in the May report. USDA raised projected world feed wheat use by 9.7 MMT to 147.6 MMT, while U.S. feed wheat use stayed the same. USDA also slightly upped expected U.S. wheat exports from 27.2 MMT to 27.9 MMT based on increased international demand due to more competitive prices.
Global Production Down, U.S. Production Up
Globally, USDA lowered wheat production levels in 2012/13 significantly from 2011/12 by 17.1 MMT to 677.6 MMT. Of the five major wheat exporters, USDA only increased projected production for the United States and Canada.
For the United States, USDA expects 2012/13 production will be up 12 percent from the 2011/12 to 61.1 MMT, the highest since 2008/09, with a rebound in HRW, spring wheat and durum production offset by lower forecasts for soft red winter (SRW) and white wheat. In Canada, USDA projected 2012/13 production up 7 percent to 23.17 MMT.
USDA forecast declines for the other major wheat exporters all in expected production levels for 2012/13, including a 12 percent (3.5 MMT) decrease from 2011/12 for Australia. In the Black Sea region, USDA projected Russia’s production down slightly from this year, but with substantial decreases for Kazakhstan and Ukraine.
Global Trade Lower, U.S. Exports Higher
USDA also expects lower global wheat trade, decreasing world wheat imports from 2011/12 by 6.1 MMT to 135.3 MMT for 2012/13. However, USDA raised export projections for the United States and Canada in 2012/13. USDA expects U.S. wheat exports of 31.3 MMT, attributing the increase to larger wheat supplies, more competitive prices and the expected early start to this year’s harvest. Additionally, USDA raised Canada’s expected wheat exports 4 percent from 2011/12 to 18.5 MMT.
Another Year of High Feed Use
A record amount of wheat was used for feed in 2011/12. USDA expects global wheat feeding to decline 13.9 MMT decline in 2012/13 due to lower expected supplies of feed-quality wheat and record projected corn supplies. In the United States, however, favorable prices, large HRW supplies and tight corn stocks caused USDA to increase domestic feed wheat use from this year to 6.26 MMT.
Overall, USDA still expects to see a lot of wheat in the world in 2012/13. USDA lowered global wheat stocks by only 1 percent from this year to 188.1 MMT. While the 2012/13 marketing year won’t begin until June 1, wheat buyers around the world can be assured that the United States will continue to have a reliable supply of quality wheat available for purchase.
4. A Reflection on Trade
By Shannon Schlecht, USW Director of Policy
World trade week begins May 14, providing an opportunity to recognize the importance of trade and how it affects each of our lives. For producers, consumers, exporters and importers, trade is not a one-way street. It requires the exchange of goods and services for a win-win partnership.
How often have you stopped to think about trade? For most of you, I expect many of the products you eat, wear and use every day were not made in your home country.
But trade is much more than just buying and selling these final products. Global supply chains take many inputs, perhaps some from your country and others not, to put together a finished product. Open trade policies allow end product manufacturers to benefit from materials and expertise located around the world.
For agriculture, trade is especially significant. The World Trade Organization (WTO) estimated world agriculture trade at $1.4 trillion in 2010, representing roughly 10 percent of global goods traded that year. This is of particular important to wheat, as roughly 20 percent of global production is exported each year.
The United States produces reliably abundant wheat crops virtually every year. That wheat is in demand around the world, imported, processed into flour and then either consumed locally or exported as a finished product. U.S. wheat might also be exported to a country for use in aquaculture or feed rations, which, in turn, are used for seafood or meat products, which may be sold to yet another country. Open trade policies allow goods, like wheat, to move as a raw material or as a value-added food product to where in the world it is in demand.
There is no doubt that trade provides benefits for you, me, farmers, consumers, exporters and importers around the world, by providing markets for our products as well as purchasing options at competitive prices. Take a moment during this next week to think about the impact of trade and share the story with others.
5. Survey: Consumers Not Avoiding Biotech Foods, Don’t Want Labels
By Melissa Kessler, NAWG Director of Communications
A new survey of U.S. consumer perceptions of agricultural technology shows a strong majority would be willing to purchase foods made with wheat produced using biotechnology if the innovations delivered nutritional or environmental benefits.
The survey was sponsored by the International Food Information Council (IFIC), which released the results Thursday.
Overall, most consumers surveyed indicated favorable or neutral impressions of plant biotechnology, with no one surveyed saying they are avoiding foods with biotech-derived ingredients.
Asked to describe what additional information they would like about food products, less than 1 percent of the survey respondents said they want to see information about biotech-derived ingredients on product labels.
Comparatively, nearly 9 percent of respondents said they’d like to see more about a food’s nutrition and about 4 percent of respondents said they’d like to see more about food safety. The vast majority, 76 percent, said they could not think of anything they’d like to see added to a food’s label.
The recent survey is IFIC’s 15th food technology survey since 1997, the longest running of its kind.
Compared to the last IFIC technology survey in 2010, the results of this survey show little change in attitudes among consumers with regards to their overall impression of using biotechnology in wheat to produce food products like bread, crackers, cereal and pasta.
Consumers indicated they are supportive of biotechnology when considering its potential benefits. For instance, about 70 percent of consumers surveyed this year indicated they would be willing to buy products made from wheat produced using biotechnology if it provided additional nutritional benefits or was grown using less land, water or pesticides. Because wheat is the most widely grown crop in the world and the source of 20 percent of the world’s calories, these attributes could have tremendous benefits.
Wheat produced using biotechnology is not in commercial production anywhere in the world, and the introduction of biotech wheat is still an estimated seven to 10 years away.
However, scientists at public universities and private companies in the United States and around the world have increased their commitment to wheat improvement in recent years and are working with both conventional and biotech breeding tools to develop new varieties that will improve yield and reduce input needs.
NAWG, which represents U.S. wheat growers domestically, and U.S. Wheat Associates, which represents U.S. wheat growers in overseas markets, are committed to providing wheat farmers with the opportunity to utilize biotechnology to increase productivity while decreasing environmental impacts.
More about the wheat value chain's work toward wheat biotechnology is at www.wheatworld.org/biotech and www.uswheat.org/whatWeDo/tradePolicy/biotech.
More results from the IFIC technology survey are at http://www.foodinsight.org.
6. Japanese Milling Executives Tour U.S. Wheat Industry
Each year, USW brings Japanese milling executives to the United States as part of an educational tour. While in the United States, the team travels coast to coast to learn more about the U.S. grain marketing system, the new year’s crop and issues affecting overall world wheat supply and demand.
This year, USW hosted five Japanese milling executives in the United States April 29 to May 5. The team visited Washington, DC, California and Oregon to learn how the U.S. wheat production, milling and baking industries are managing risk and finding innovation in a challenging economic environment.
“Team visits like this give these executives more access to key contacts and a better understanding of what is happening in the U.S. industry,” said USW Japan Country Director Wataru “Charlie” Utsunomiya who led the team. “Seeing how wheat quality is controlled from the field to storage to market is very helpful when their managers bring up issues about our wheat.”
Building relationships and increasing awareness will be even more important in the future, Utsunomiya said, because Japan is moving steadily toward a wheat importing system that will facilitate direct purchases between the Japanese grain trade and flour millers with less involvement by the Ministry of Agriculture, Forestry and Fisheries.
USW organized this year’s trip in collaboration with the California Wheat Commission, Oregon Wheat Commission, North American Millers’ Association, the North American Export Grain Association and other industry organizations.
Japan was one of the first overseas markets cultivated by U.S. wheat growers and over the years has remained a top customer. Steve Wirsching, director of USW’s West Coast Office in Portland, OR, explained that the team was impressed by the new Export Grain Terminal (EGT) in Longview, WA, and its implications for continued trade between the United States and Japan.
“This new facility is an example of how the U.S. wheat industry is making sizable long-term investments in our infrastructure to supply Japan and other Asian markets now and well into the future,” he said. “U.S. wheat growers have supplied Japan for more than 50 years, and investments like this ensure that they can continue to do so for the next 50 years.”
7. Wheat Industry News
- Bayer Commits to Nebraska Breeding Center. Bayer CropScience announced plans to develop a new North American wheat breeding station near Goehner, NE, 30 miles west of Lincoln. The site will be a focal point for Bayer CropScience’s wheat breeding program in North America. For more information, visit http://bit.ly/JbIKlY.
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- USDA Undersecretary Confirmed. The U.S. Senate confirmed Michael Scuse as Undersecretary of the Farm and Foreign Agricultural Service. Scuse has been serving as Acting Under Secretary prior to his confirmation. Scuse was also named to the board of directors for the Commodity Credit Corporation.
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- New FAS, AMS Administrators. Agriculture Secretary Tom Vilsack named Suzanne Heinen as Administrator of the Foreign Agricultural Service and David Shipman as Administrator of the Agricultural Marketing Service. Heinen will continue to serve as the General Sales Manager, although the positions have traditionally been separate.
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- 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 or to register, visit http://www.wmcinc.org.
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- NCI Rheology of Wheat and Flour Quality Short Course. The Northern Crops Institute (NCI) in Fargo, ND, will hold its Rheology of Wheat and Flour Quality Short Course from June 12 to 14. For more information or to register, visit http://www.northern-crops.com.
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- IGP Online Flour Milling Course. The International Grains Program in Manhattan, KS, will hold its Introduction to Flour Milling Course June 18 to July 27. The course will be based entirely online. For more information or to register, visit http://www.grains.ksu.edu/igp/.
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- CHS, Zen-Noh Form Grain Marketing Joint Venture. CHS Inc. (St. Paul, MN) and Zen-Noh (Tokyo, Japan), two of the world's leading farmer-owned cooperatives, have announced CHS has acquired 51 percent of CZL Ltd., a joint venture company that will supply commodities, primarily wheat and barley, to Japan. The joint venture will be managed from the CZL office in Tokyo. For more information, visit http://bit.ly/IB1G95.
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- Wheat Harvest Movie Gets New Title. The film project formerly known as The Wheat Harvest Movie, which will tell the story of where wheat foods come from and how they are produced, has a new name – the Great American Wheat Harvest. Additionally, Miss America 2011 Teresa Scanlan will help promote the movie. For more information, visit http://bit.ly/K94XQX.
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- Congratulations to Delores “Dee Dee” Darden, past president of the Virginia Grain Producers Association, on being named the “Farm Mom of the Year – Southeast Region.” Darden is now one of five finalists for the National Farm Mom of the Year contest. Vote for Darden at http://bit.ly/IIRZcz.
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- Follow USW Online. Check out our page at www.facebook.com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter.com/uswheatassoc, additional photos at www.flickr.com/photos/uswheat, plus video stories at http://www.youtube.com/uswheatassociates.
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