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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.” 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. U.S. Wheat Exports Are Weathering This Bearish Market
2. U.S. Wheat Organizations Join Renewed Call for End to Cuban Embargo
3. Plant Biotechnology: Public Fear of Unknown at Odds with Scientific Evidence
4. New Online Resource Offers Tools and Guidance for Agricultural Trade Policy Development
5. Wanted: $13 Million to Unlock the Wheat Genome
6. Wheat Industry News


Online Edition: Wheat Letter – March 12, 2015 (http://bit.ly/1B9wC9p)

PDF Edition: (See Attached) (See attached file: Wheat Letter - March 12, 2015.pdf)

USW Price Report: http://www.uswheat.org/prices


1. U.S. Wheat Exports Are Weathering This Bear Market
By Casey Chumrau, USW Market Analyst

Marketing year 2014/15 has turned into a perfect storm of bearish factors for U.S. wheat exports. Global wheat supplies are even larger than first expected, U.S. prices remain higher than the competition and protein is limited. The abundant supply of corn and soybeans has added price pressure to all grains and, to complicate matters, the U.S. Dollar Index (USDX) hit a 12-year high last week, making U.S. agricultural products even more expensive for overseas customers. Despite the challenging context, the United States will still be the largest single supplier of wheat in the world this year as customers concerned with consistent quality and reliable supply find value in our production.

U.S. wheat futures started to decline in June 2014 due to typical harvest-time pressure and a forecast for record global supplies. In its updated World Agricultural Supply and Demand Estimates (WASDE) report released March 10, USDA estimated global production reached a new record of 725 million metric tons (MMT) this year, well above its initial May 2014 estimate of 697 MMT. Almost every major wheat producing country harvested more wheat than first projected. However higher yields came at the expense of quality in many regions.

In July 2014, the U.S. Dollar Index (USDX) started a steady climb that has not stopped, increasing a bearish outlook that helped push futures down nearly 30 percent since the beginning of the marketing year. The FOB price of hard red winter (HRW) 12.0 protein from the Gulf on March 6 was $82 per metric ton (MT) less than a year earlier. U.S. farmers hoped that the sharp decline in price would help stimulate demand — and many of them have sufficient cash flow to hold some wheat from the market for better prices. Even though U.S. farm gate prices remain relatively low, export prices are still more expensive relative to competing supplies. On March 6, the USDX hit its long-term high when it closed at 97.6. The index has increased 21 percent since July 18, 2014, which is effectively an additional price premium for U.S. wheat.

The bearish factors have held U.S. wheat export sales back to 21.8 MMT as of Feb. 26, compared to average sales at this date over the last five years of 25.6 MMT. Yet global demand for wheat continues to grow at a remarkable pace. That is why USDA has not changed its current U.S. wheat export projection of 24.5 MMT in two months even in the face of these market factors.

There are 10 weeks remaining in marketing year 2014/15. We note for buyers that locking in such excellent value for the quality U.S. wheat they need remains attractive, as it has for much of this marketing year.


2. U.S. Wheat Organizations Join Renewed Call for End to Cuban Embargo
After participating in a “learning journey” to Cuba March 1 to 4, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) have joined members of the U.S. Agriculture Coalition for Cuba (USACC) to renew a call for Congress to end the U.S. trade embargo.

USW Assistant Director of Policy Ben Conner and Kansas wheat farmer Doug Keesling represented the U.S. wheat industry on the trip.

“Our visit was an important first step toward a stronger relationship with Cuba,” Conner said. “We appreciated the opportunity to sit down and personally discuss these issues with representatives of the Cuban government and its people. We left with the distinct impression that lifting the embargo represents a unique chance to benefit people in both countries.”

“We have exported wheat to Cuba in the past and there should be no reason why we can’t do it now or in the future,” Keesling said. “It is the biggest wheat importer in the Caribbean — just a couple days away from our Gulf ports — and our own policies are keeping us from working together again. That’s not good for farmers or for the Cuban people.”

While ongoing travel and financing restrictions negatively affect the export potential for U.S. wheat farmers, competitors in the European Union and Canada freely sell wheat to Cuba. Even if the U.S. government loosens its trade policies, the larger political implications of an ongoing embargo create an unstable business environment for the United States and Cuba.

“Since Cuba can buy almost anything from anywhere except from the United States, the embargo is effectively an embargo against U.S. businesses and citizens, not of Cuba,” said USW President Alan Tracy.

“We will seize every opportunity to expand trade and Cuba is no exception,” said NAWG President Brett Blankenship. “Cuba represents untapped trade potential within our own hemisphere, and an end to the embargo would greatly benefit the U.S. export economy. Our wheat growers stand with America’s farm and business leaders to promote trade with Cuba today, tomorrow and well into the future.”

Last week’s visit included more than 95 U.S. agricultural leaders who met with officials of the Cuban government and learned about initiatives underway in Cuba to boost food production.

“As a result of this week’s learning journey, U.S. agricultural interests are well-positioned to facilitate a strong, two-way relationship when the embargo is lifted,” said USACC Chair Devry Boughner Vorwerk.


3. Plant Biotechnology: Public Fear of Unknown at Odds with Scientific Evidence
By USW Policy Specialist Elizabeth Westendorf

Perhaps it is our relative wealth. Perhaps it is cultural bias for celebrity influence. Perhaps it is just nonchalance. Whatever the reasons, there is a wide gap between scientific reality and public opinion in the United States. Polls on food and genetically modified organisms (GMOs) are particularly revealing.

The Pew Research Center conducts a regular survey comparing how U.S. consumers and scientists view science and society that includes several questions about GMOs in food. The latest poll results, released in January, were striking: 57 percent of the public agreed with the statement that GM foods are “generally unsafe to eat,” with only 37 percent saying GM foods are generally safe. This is in contrast to 88 percent of scientists polled who agreed with the statement that GM foods “are generally safe.” This gap of 51 percentage points was the largest of the survey, which also included questions on animal testing, hydraulic fracturing, vaccinations and nuclear energy. That 67 percent of the public polled agreed that “scientists do not have a clear understanding about the health effects of GM foods” is very troubling.

USW believes that an overwhelming number of studies and reports reaffirm that food ingredients derived from plant biotechnology meet the same safety requirements for food and feed as ingredients from traditionally bred plants. Yet misinformation on the Internet, often circulated by activist groups that profit from fear mongering, seems to gain public acceptance even in the face of basic truths.

Here is another example. A separate survey in January conducted by the Oklahoma State University Department of Agricultural Economics found that 82 percent of respondents supported mandatory labels on GMOs. However, 80 percent of respondents also said they supported mandatory labels on “foods containing DNA.”

Fundamentally, this indicates that people fear technology they do not understand. The use of the scientific acronym DNA apparently put them on the defensive despite the fact that DNA is a natural part of every plant or animal cell and in virtually every bite of food any of us has ever eaten. Looking at the challenge in this light does offer hope that widespread public education efforts might help consumers understand the positive impact plant biotechnology has had and will continue to have on sustainable agriculture and producing more and better food for an increasingly hungry world.

Food and Agricultural Economist Jayson Lusk, who runs the Oklahoma State survey, noted that while people may express high levels of concern about GMOs, it often does not play out in their actions. He pointed out that initial polling strongly supported GMO food labeling initiatives in California, Colorado, Oregon and Washington, yet each ballot initiative failed (and in some cases with a strong majority).

The result of a December 2014 Intelligence Squared debate on GMOs is another sign that education could make a difference. At the beginning of this televised debate, the audience was evenly split — one third opposed GMOs, one third approved and one third were undecided. After the debate, however, 60 percent approved of GMOs, 31 percent opposed and 9 percent were undecided. Bill Nye, a well-known U.S. pop culture science advocate who attended the debate has also expressed concerns about GMO food for years. Perhaps inspired by the debate, he has since taken the time to discuss plant biotechnology with plant geneticists and has reportedly changed his mind.

For those wishing to join Bill Nye and many others who want to learn more, there are excellent resources. We suggest gmoanswers.com, the Genetic Literacy Project, ucbiotech.org and Truth About Trade and Technology. To learn more about the thoughtful positions of the U.S. wheat industry on biotechnology and trade, we invite you to visit http://www.uswheat.org/biotechnology or http://www.wheatworld.org/issues/biotech/.


4. New Online Resource Offers Tools and Guidance for Agricultural Trade Policy Development

On March 10, the Global Alliance for Ag Biotech Trade (GAABT) launched its organizational website, www.gaabt.org. The new site offers a one-stop location for resources including studies, articles, data and industry positions that will help policymakers and regulators create predictable, efficient and achievable trade policies for agricultural biotechnology.

GAABT is a farm-to-fork industry coalition representing grower and producer groups, grain and feed handlers, food and seed industries, and technology providers. Bringing together different parts of the agricultural value chain, GAABT encourages the development of trade policies that facilitate the movement of food, feed, grain and processing ingredients and reduce the potential for trade disruptions.

As a GAABT member, USW supports the organization’s leading role in addressing asynchronous biotech event approvals and low level presence (LLP) policy efforts.

“We are glad to see GAABT become a more public-facing organization offering information that can help reduce trade disruptions,” said Shannon Schlecht, USW vice president of policy. “Wheat is the most traded grain in the world and with biotech research underway in many different countries, it is important for our industry to be involved in GAABT’s efforts.”

The term LLP refers to the unintentional, low level presence of an agricultural biotech product approved in one or more countries, but not yet approved in the importing country. USW supports establishing LLP policies for wheat trade that are predictable, science-based and consistent with international guidelines.

“A workable LLP threshold should incorporate biological and logistical realities,” Schlecht said. “U.S. wheat organizations support a five percent LLP threshold on a trait specific basis to achieve a cost effective approach,” said Schlecht. “We also encourage governments to establish synchronized approval policies to minimize trade disruptions of biotech products.”

GAABT’s mission is to seek practical solutions to agricultural biotech trade challenges by providing users information related to LLP, such as national policy approaches, regulatory approval processes and international support for trade policy solutions.

To learn more about the Global Alliance for Ag Biotech Trade or access resources on agricultural biotech crop trade, visit www.GAABT.org.


5. Wanted: $13 Million to Unlock the Wheat Genome
Reprinted from “Agri-Pulse,” March 11, 2015, with Permission, Copyright © 2015
“Agri-Pulse” offers a four-week free trial at http://www.agri-pulse.com/Free-Trial.asp


According to a group of international researchers in plant genetics, what lies between the current state of wheat breeding and the elusive wheat genome sequence is about $13 million.

Wheat is the last major commodity crop waiting for a blueprint of the many chemical building blocks that make up the DNA of each chromosome. Unlocking the sequence of these building blocks will allow breeders to identify the gene’s underlying traits like yield and stress tolerance. Obstacles include the complicated nature of the bread wheat genome, as well as insufficient funding.

According to the International Wheat Genome Sequencing Consortium (IWGSC), the completion of the wheat genome reference sequence is essential to accelerate wheat breeding.

“It holds the key to the production of a new generation of wheat varieties through genomic selection,” the consortium states.

Kick-started by the Kansas Association of Wheat Growers, the IWGSC, which began its work in 2005 and includes almost 1,500 members in 63 countries, became one of 10 Expert Working Groups of the global Wheat Initiative in 2013.

The bread wheat genome, because of its compound nature, is regarded as five times more complex than the human genome. It is composed of six sets of chromosomes and known as a hexaploid. The human genome, with two sets of chromosomes, is a diploid, as is the rice genome, sequenced in 2000 and recognized as 37 times smaller than the wheat genome. The ease of identifying and cloning important genes in rice increased significantly after researchers sequenced its genome.

Being able to clone certain genes is significant for any agricultural crop, noted Kellye Eversole, the IWGSC’s executive director.

“You cannot do that efficiently without a high quality genome sequence,” she said in an interview with “Agri-Pulse.”

The IWGSC has secured approximately $54 million in funding for the wheat genome project. Eversole estimated that a further $12 to 13 million in dedicated resources is required to complete the map and sequencing assembly.

In the meantime, wheat is facing increasing competition for acres. According to USDA’s Economic Research Service, U.S. wheat harvested area has dropped off nearly 30 million acres, or nearly a third, from its peak in 1981 because of declining returns compared to other crops. Still, wheat ranks third among U.S. field crops in both planted acreage (56.8 million acres this year) and gross farm receipts, behind corn and soybeans. As Bayer CropScience notes, wheat yields have continuously risen in the past decades, but the rate of increase is being outstripped by rising demand.

The fact that wheat provides 20 percent of the global population’s daily protein and calories1 makes increasing the crop’s yield and strength vital for meeting future demands. With a world population of 9 billion in 2050 (up from just over 7 billion now), wheat demand is expected to increase by 70 percent. To meet that demand, annual yield increases must grow from the current level of below 1 percent to at least 1.7 percent, according to the Wheat Initiative.

IWGSC’s goal is to achieve a reference genome — a representative example of a species’ set of genes — by the end of 2017. Of the 21 chromosomes the consortium needs to map and sequence for wheat, one, the 3B chromosome, is fully complete. Last summer, the journal “Science” published IWGSC’s full, high quality, map-based sequence of the 3B chromosome, which is larger than the entire rice genome.

In addition, IWGSC published a draft “whole shotgun” sequence of the entire wheat genome, which is about 53 percent accurate, Eversole said. Whole shotgun sequencing is one of two ways to sequence a genome. It allows the job to be done quickly — in a year or less — but can be highly inaccurate. The “mapbased” approach takes much longer but is more precise. Due to its highly complex genome, researchers need bread wheat to be sequenced through the map-based approach.

“We went through a lot of effort to prove we could actually do it,” Eversole said. “3B was our breakthrough and why it was so important.”

Following the success of 3B, which she said is 94 percent accurate, the map-based sequencing approach is now being applied by groups across the world to other chromosomes. In total, 23 laboratories from 15 different countries are engaged in the project, according to IWSGC.

Catherine Feuillet, the head of trait research at Bayer CropScience and a co-chair of IWGSC, said the sequence could help improve conventional breeding as well as GM wheat. Sequencing the genome will help reveal which course is best for wheat production.

“The basis of the decision is knowledge and we have to build more knowledge,” she said. However, “It’s extremely difficult to find money for funding for the wheat genome…The main reason is because [the wheat genome is] big and difficult.”

In 2013-2014, Bayer Crop Science contributed over $1 million to the wheat genome project. Eversole confirmed that this is the largest contribution from any private industry partner. Beyond contributing to the genome sequence, Bayer has a ten-year plan to invest $1.9 billion in wheat research and development through 2020.

Feuillet said investing in the wheat genome does not seem to be a priority for governments or industry.

“For wheat if you don’t have a long-term vision, you cannot succeed.”

As for the remaining $12-13 million in funding? Eversole says she is hopeful and that the consortium is focused on France and Germany, as well as the EU as a whole.

1 Human nutrition in the developing world, FAO 1997. The world’s most important food crop provides 20 percent of all calories and 20 percent of all protein in developing and developed countries (FAOSTAT 2009).


6. Wheat Industry News
  • Grains Featured in USDA’s MyPlate Campaign. The USDA’s “MyPlate” initiative is celebrating National Nutrition Month throughout March. To promote its dietary guidelines, USDA consumer campaigns this month and next December will feature the key message “make at least half your grains whole grains.” MyPlate is USDA’s new generation icon illustrating the five food groups prompting consumers to think about eating healthy meals. For more information and helpful resources visit http://www.choosemyplate.gov/.
  • NCI Pasta Production and Technology Short Course. Registration closes March 31, 2015 for this short course on April 14 to16 in Fargo, ND, introducing the fundamental and applied aspects of manufacturing extruded pasta products. The course includes raw material quality criteria, specifications, processing variables and the impact on final pasta product quality. For more information and registration, go to http://www.northern-crops.com/courses2/.
  • IGP Institute/KSU Mill Balance and Control Course. The IGP Institute, Manhattan, KS, has scheduled this course for June 2 to 5, 2015. The course focuses on the principles of wheat cleaning, conditioning and milling; understanding the importance of wheat quality and preparation to the milling process; and the advantages of wheat and flour blending. For more information or to register, visit http://www.grains.k-state.edu/igp/IGP_KSU_Managing_Mill_Balance_and_Control.html.
  • WMC Biscuit and Cracker Technology Short Course. The Wheat Marketing Center in Portland, OR, will hold its Biscuit and Cracker Technology Short Course May 12 to 16, 2015. For more information or to register, visit http://wmcinc.org/WMC_03_Cookie_and_Cracker.html.
  • NAWG Elected Brett Blankenship as President at its Board of Directors meeting Feb. 26. “I’m looking forward to a very productive year for NAWG and America’s wheat growers. I hope to spend every day advancing the wheat industry into the 21st Century,” said Blankenship who farms in eastern Washington. Other NAWG officers elected were Gordon Stoner, Outlook, MT, Vice President, David Schemm, Sharon Springs, KS, Treasurer, Jimmie Musick, Sentinel, OK, Secretary, and Paul Penner, Hillsboro, KS, Immediate Past President Read more at http://bit.ly/1D50quP.
  • Blankenship Calls for Trade Promotion Authority for TPP. “Capital Press” reported this week that the new NAWG president attended a White House briefing for commodity leaders to promote trade promotion authority (TPA). Blankenship said it is critical for this president to have TPA to reach a successful agreement on the pending Trans Pacific Partnership (TPP). Read more at http://bit.ly/1E90Q0N.
  • Congratulations to Ann Murchison, office manager at USW/Portland, for 20 years of service to U.S. wheat farmers and their customers. Thank you, Ann, for adding so much value to our work, for your commitment and for your contributions to our industry.
  • Just the Facts. U.S. farmers seed enough wheat each year to cover about 29 million soccer pitches (that is about 44 million American football fields). USDA estimates U.S. wheat production for marketing year 2014/15 was 55.17 MMT.


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