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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. A Look at U.S. Crop Conditions as Winter Wanes
2. Service to the World’s Wheat Buyers
3. Benefits of GE Crops Highlighted in USDA Report
4. Borlaug Granddaughter Calls Agriculture to Action
5. USW Welcomes Trade Policy Intern
6. Wheat Industry News

Online Edition: Wheat Letter – March 6, 2014 (http://bit.ly/1njyLes)

PDF Edition: (See attached file: Wheat Letter - March 6, 2014.pdf)

USW Price Report: www.uswheat.org/prices


1. A Look at U.S. Crop Conditions as Winter Wanes
By Casey Chumrau, USW Market Analyst

The winter wheat crop is dormant, but the U.S. wheat production regions have soldiered through harsh winter conditions the year. As spring approaches and wheat begins to break dormancy, buyers will find value in regular crop condition reports. In fact, USDA’s National Agricultural Statistics Service (NASS) reflected on the potential effect of severe winter weather in its March 2 state crop progress reports. That will be the last monthly report before weekly crop progress reports resume in two weeks.

Experience teaches market watchers that it is still too early to know the specific impact of weather on yield potential. Yet, we believe it worthwhile to evaluate crop conditions at this important time for winter wheat. What follows is a summary of crop conditions from state wheat commission members combined with NASS information. Look for updates as the crop pushes into this spring.

For information on states not listed below, find State Crop Progress and Conditions reports at http://1.usa.gov/1gczSXv.

Idaho (HRW, SW, HW, durum): According to Blaine Jacobson, executive director of the Idaho Wheat Commission, nearly two-thirds of Idaho’s wheat crop is irrigated, so snowpack and resulting spring runoff that fill reservoirs are always a major concern. December and January were very dry but a series of storms in February should refill reservoirs to about 80 percent of capacity. That is likely enough to prevent irrigation curtailments later in the growing season. Nearly one-third of the state’s production is not irrigated. This is mainly in northern Idaho, which received sufficient moisture. Dryland farms in eastern Idaho, accounting for less than 5 percent of production, remain extremely dry. Overall, Idaho expects a good wheat crop this year.

Kansas (HRW, HW): Conditions deteriorated significantly between November and January when extremely cold temperatures likely stressed a crop that was unprotected by snow. As a result, crop condition ratings declined in February, but ratings are still significantly better than last year at this time. According to Kansas Wheat Chief Executive Officer Justin Gilpin, conditions and moisture levels are still both below average as the crop is nearing time to break dormancy. The percentage rated poor to very poor increased from January’s ratings from 20 to 22 percent in February, compared to 36 percent in 2013. The percent rated good or excellent fell from 35 to 34, still well above last year’s rating of 23 percent.

Montana (HRW, HRS, durum): Crop conditions overall improved in February and ratings remain considerably higher than last year. The percentage of winter wheat rated good or excellent increased from 46 last month to 53 this month, compared to 38 percent last year at this time. Both topsoil and subsoil moisture levels improved in February and remain above last year. Although it is still very early in the year to assess, the percentage of the crop potentially damaged by wind, freeze or drought conditions increased slightly this month but remains well below last year’s ratings. Overall, the current winter wheat conditions in Montana are very good.

Oklahoma (HRW): It did snow in most of Oklahoma in February but high winds in central and southern Oklahoma evaporated soil moisture and intensified drought conditions. The most recent U.S. Drought Monitor depicted the majority of the state in extreme drought or as abnormally dry, with the panhandle and far southwest districts rated in extreme to exceptional drought. The percentage of the winter wheat crop rated good or excellent dropped from 36 to 31 while the percentage rated poor or very poor increased from 24 to 31. Last year at this time, USDA rated only 9 percent of the crop as good or excellent and 54 percent as poor or very poor. According to Mike Schulte, executive director of the Oklahoma Wheat Commission, the crop in most areas has broken dormancy, but many producers remain concerned about potential yield losses. USDA rated topsoil and subsoil moisture conditions at 87 percent and 83 percent short to very short, respectively.

Oregon (SW, HW): According to Blake Rowe, chief executive officer of the Oregon Wheat Commission, fall seeding conditions were good but the winter was dry until recently. Some frost damage is likely but the extent will not be known until the crop fully emerges from dormancy. He said the wheat crop will largely depend on the amount of rain that comes between now and early May.

South Dakota (HRW, HRS, HW, durum): Although the crop is still dormant, winter wheat condition rated 4 percent very poor, 7 poor, 26 fair, 58 good and 5 excellent. That is a big change from last year at this time when USDA rated 66 percent of the state’s crop as poor or very poor. According to Randy Englund, executive director of the South Dakota Wheat Commission, moisture levels were very good at planting and into dormancy. Moist soil has higher specific heat than dry soil, so it is not as sensitive to temperature fluctuations and plants that are adequately hydrated are better able to withstand low temperatures. Additionally, farmers sow the majority of South Dakota's winter wheat into crop residue (no-till fields) that provides insulation, slows down the wind at the soil surface and traps snow, which is an excellent insulator. Good snow cover over much of the region has protected the crop.

Washington (HRW, HRS, SW, HW): There may be winterkill in some of Washington’s wheat crop due to the limited snow cover, extreme cold and wind in early December. According to Scott Yates, director of communications and producer relations at the Washington Grain Commission, farmers had to replant many fields last fall and moisture levels have been below normal the entire winter. Those replanted fields are in worse condition than those planted earlier. However, recent rains have helped improve moisture levels and more precipitation is expected. Producers remain cautiously optimistic about the crop’s potential in part because, in tests, plants pulled from fields and replanted in greenhouses emerged from dormancy and looked healthy.

Wyoming (HRW, HRS, HW): According to Keith Kennedy, executive director of the Wyoming Wheat Marketing Commission, much of the crop was planted late but also into soils with the best moisture conditions in many years. More moisture should be ahead because March, April and May are the wettest three months in the state on average. Winter wheat conditions are very good with only 2 percent of the crop rated as poor and 76 percent rated good or excellent.

Virginia (SRW): According to Ben Rowe, managing director of the Virginia Grain Producers Association, February was another cold and snowy month in Virginia with parts of the state approaching record-breaking lows. Most of Virginia snow covered during the month and it rained on some of the warm days. The majority of small grains are in good to fair condition with sufficient tillers and growth.


2. Service to the World’s Wheat Buyers

The cornerstone of USW’s customer service approach is sharing trade, market and technical information with the wheat milling industry around the world. An extensive, annual activity reinforces that effort – developing and submitting a “Unified Export Strategy” to USDA’s Foreign Agricultural Service. Since mid-January, each of our offices around the world have shared the results of their work and looked ahead to activities they hope to conduct with our customers in the next marketing year.

Some recent reports from USW colleagues confirm that these activities are helping our customers improve their products and grow their businesses — and in some cases helping improve U.S. wheat quality.

Market information is a critical component in the decision to purchase U.S. wheat. Recently, USW’s country director in Korea, Chang Yoon Kang, had a fruitful round of meetings with importing managers from several flour mills.

“Sharing market information, including current growing conditions in the United States, definitely helps our customers prepare their purchase plans,” Kang said. “They gain the knowledge needed to adjust their purchase specifications to optimize quality at the best price.”

For example, in Italy, USW Marketing Specialist Rutger Koekoek (USW/Rotterdam) recently reviewed world and U.S. wheat supply and demand at a meeting with a durum trader and several potential buyers looking for alternatives to the limited supply of local, high quality durum. These customers were considering a combined purchase of U.S. Desert Durum® because of the knowledge gained about the U.S. wheat crop after visiting the production region last August with additional support from the California Wheat Commission and the Arizona Grain Research Promotion Council. Koekoek reports that the durum trader plans to import Desert Durum® and share samples with his customers to identify its quality and value in future purchases.

USW and its state wheat commission members often provide samples of U.S. wheat to our customers to demonstrate milling and baking quality in new markets or markets where wheat food consumption is increasing. In December, for example, USW and the Washington Grain Commission introduced U.S. soft white (SW) to millers and bakers in the kingdom of Saudi Arabia. USW Assistant Regional Director Ian Flagg and Regional Technical Director Peter Lloyd, both from the USW Casablanca Office, conducted milling demonstrations of the SW sample in December at two extraction levels representing the most common flour types in that country. A large industrial baker who then tested this flour in local breads and sponge cakes immediately saw excellent potential in this product to help his business.

“We have been asking for this type of flour for the past 10 years,” the bakery owner told USW. “This flour is the best we have seen.”

The work of wheat breeders establishes the potential quality of any flour product well before farmers sow their first seed. USW, with the support of the wheat farmers it represents, consistently advocates the importance of meeting minimum quality targets in new wheat varieties. The knowledge USW gains from its ongoing dialogue with overseas customers is an essential part of that effort.

The USW Overseas Varietal Analysis (OVA) program works with select customers to conduct rheological and end-use quality analysis that provides specific feedback about the milling and baking quality characteristics of new U.S. wheat varieties. Later this month, cooperating customers from South Asia will conduct these tests over about a one-week period, but USW staff puts in months of intense preparations before these customers evaluate the first sample. Ultimately, cooperators gain accurate information to indicate whether existing U.S. wheat varieties are improving in quality and whether new varieties have the quality characteristics to meet the end use demands.

“The results from the OVA program are tangible,” said USW Vice President, West Coast Office Director Steve Wirsching. “In the United States, organizations like USW and state wheat commissions play a pivotal role in variety selection. It is important that our overseas customers know that some of the varieties are not recommended for farmers because data from the OVA program and other tests show they cannot produce the milling or baking quality those customers need.”

The staff of USW is proud that USDA and U.S. farm families continue to support export market development. We will continue working, just as hard and long as they do, to actively promote their wheat and serve their customers around the world.


3. Benefits of GE Crops Highlighted in USDA Report
Excerpted from BIOtechNOW, Feb. 26, 2014

Farmer adoption of genetically engineered (GE) crops is associated with time savings, lower insecticide use, and more conservation tillage, according to a new USDA study.

The report, “Genetically Engineered Crops in the United States” by Jorge Fernandez-Cornejo, Seth James Wechsler, Michael Livingston, and Lorraine Mitchell was released by USDA’s Economic Research Service on Feb. 20.

According to USDA: “Genetically engineered (GE) crops (mainly corn, cotton, and soybeans) were planted on 169 million acres in 2013, about half of U.S. land used for crops. Their adoption has saved farmers time, reduced insecticide use, and enabled the use of less toxic herbicides. Research and development of new GE varieties continues to expand farmer choices.”

An unfortunate article by Reuters claims, “GMO crops are under intense scrutiny” despite the latest ISAAA report released two week ago affirming that biotech crops are the fastest adopted crop technology in recent history. “This adoption rate speaks for itself in terms of its resilience and the benefits it delivers to farmers and consumers,” says ISAAA.

What is regrettably lacking in media coverage of this report is a summary of most of the report’s key findings, such as:

The adoption of Bt (insect resistant) crops increases yields by mitigating yield losses from insects. The yield advantage of Bt corn and Bt cotton over conventional seed has become larger in recent years as new Bt traits have been incorporated and stacked traits have become available. Planting Bt cotton and Bt corn continues to be more profitable, as measured by net returns, than planting conventional seeds.

Farmers generally use less insecticide when they plant Bt corn and Bt cotton. Corn insecticide use by both GE seed adopters and nonadopters has decreased — only 9 percent of all U.S. corn farmers used insecticides in 2010. Insecticide use on corn farms declined from 0.21 pound per planted acre in 1995 to 0.02 pound in 2010. This is consistent with the steady decline in European corn borer populations over the last decade that has been shown to be a direct result of Bt adoption.

HT (herbicide-tolerant) soybean adoption is associated with an increase in total household income because HT soybeans require less management and enable farmers to generate income via off-farm activities or by expanding their operations. The adoption of HT crops has enabled farmers to substitute glyphosate for more toxic and persistent herbicides.

It is important to note that the ERS report does look at trends in glyphosate use and concludes: “An overreliance on glyphosate and a reduction in the diversity of weed management practices adopted by crop producers have contributed to the evolution of glyphosate resistance in 14 weed species and biotypes in the United States.”

Weed resistance is indeed a concern for all of agriculture – not just for biotech crops – but can be mitigated through the use of best management practices (BMPs). BMPs include applying multiple herbicides with different modes of action, rotating crops, planting weed-free seed, scouting fields routinely, cleaning equipment to reduce the transmission of weeds to other fields, and maintaining field borders.


4. Borlaug Granddaughter Calls Agriculture to Action

“The debate on GMOs is over,” Julie Borlaug, granddaughter of the late wheat scientist Norman Borlaug, told an audience of agricultural media and industry members last week. She continued that although the scientific community has repeatedly demonstrated the safety and value of biotech crops, “advocates of biotech need to do a better job of explaining to the public why biotech is vital to our future.”

At the Bayer CropScience Ag Issues Forum on Tuesday, Feb. 25, Borlaug instructed scientists and agriculturalists alike to “dumb down and shorten our message.” Borlaug further explained that the scientific explanations of the why and how agricultural research works is much more difficult to explain than the emotional misconceptions perpetuated by biotech opponents.

And she would know. Borlaug’s grandfather, the father of the Green Revolution, was an active influence on her life literally since the day she was born. Norman Borlaug earned a Nobel Peace Prize for his work developing semi-dwarf, high-yield, disease resistant wheat varieties, which have saved more than a billion people worldwide from starvation. Julie Borlaug now continues his legacy as the associate director for external relations for the Norman Borlaug Institute for International Agriculture at Texas A&M University.

Borlaug breaks down the science behind biotech in more than just her professional life. She detailed her experience in emotionally connecting the science to the food we eat at a garden party that one of her friends held for their children – at which the host detailed the lack of flavor, poor appearance and diminishing supply of her attempted GMO-free garden.

Borlaug reiterated, “We desperately need to tell the world about biotech” and encouraged those working in agriculture to do so in a way that consumers around the globe can understand. She even gave a shout out to the importance of wheat research in her speech, saying without disease resistance and other attributes there would be “no more pasta dinners, no more birthday cakes.”

Norman Borlaug’s legacy, familial and vocational, illustrates that advances like biotechnology and associated technologies (marker-assisted selection, double haploid breeding, etc.) will help the world grow more and better wheat with less impact on the environment. And that is a message worth sharing.

To listen to Julie Borlaug’s full comments, visit http://bit.ly/1ndI1AW.


5. USW Welcomes Trade Policy Intern

USW is pleased to welcome Kamile Bougdira as a trade policy intern in its Arlington, VA, headquarters office. Bougdira will assist USW staff to develop and advocate for policies that creates an open and competitive trade environment to support the organization’s export market development mission. He will conduct research and complete a specific trade policy project.

Bougdira is a French citizen studying law and economics at the Institute of Political Studies in Strasbourg, France. To fulfill a requirement to spend one year abroad, he recently completed a term of study at Charles University in Prague, Czech Republic, and will work with USW for the next four months.

“I think this internship will be a great way to gain a better understanding of U.S. and international trade policy and trade rules,” Bougdira said. “I am very excited to gain that experience here in the Washington, DC, environment. It will give me a good overview of how policy is developed and applied in agriculture and specifically in the world wheat trade.”


6. Wheat Industry News
  • Bon Chance to Bakery Masters Contestants. From March 8 to 12, 24 bakers representing 18 countries will compete in the 2014 Bakery Masters, sponsored by Coupe Louis Lesaffre, in France. Promoted as “a competition requiring the highest level of skill and personal dedication,” Masters de la Boulangerie contestants compete in specialist categories including bread, Viennese pastry or Artistic. You can follow the competition online at http://www.coupelouislesaffre.com/, on Facebook at https://www.facebook.com/CoupeLouisLesaffre?fref=ts and on Twitter at #Bakerymasters.
  • NAWG Elects New Officers. The National Association of Wheat Growers (NAWG) board of directors elected Paul Penner (Hillsboro, KS) as its president last week. NAWG also elected Brett Blankenship (Washtucna, WA) as first vice president, Gordon Stoner (Outlook, MT) as second vice president, David Schemm (Sharon Springs, KS) as secretary-treasurer. Bing Von Bergen (Moccasin, MT) serves as immediate past president. For more information, visit http://bit.ly/1cuVaV7.
  • AIB International Announces New Leaders. AIB International in Manhattan, KS, named Philip Kastle as senior director of customer service and business processes, William Gambel as vice-president of client development and target marketing and Brian Strouts as vice-president of baking and food technology. For more information, visit http://bit.ly/1dsblQZ.
  • IGP Adds Lab Director. The International Grains Program (IGP) in Manhattan, KS, announced that Polamreddy Reddy as the new managing director of the Feed the Future Innovation Lab for the Reduction of Post-harvest Loss, based at IGP. Kansas State University appointed Reddy as an adjunct professor in the College of Agriculture’s Department of Grain Science and Industry earlier this year. For more information, visit http://bit.ly/NwON84.
  • WMC Asian Noodle Technology and Ingredient Application Short Course. The Wheat Marketing Center (WMC) in Portland, OR, will hold its Asian Noodle Technology and Ingredient Application Short Course March 10 to 14, 2014. For more information or to register, visit http://www.wmcinc.org.
  • IGP Flour Milling Short Courses. IGP will lead its Buhler-KSU Expert Milling Course in English March 17 to 21, 2014. The Spanish version of the course will be March 24 to 28, 2014. IGP will also kick off its online Grain Receiving, Conditioning and Cleaning Distance Course on April 7; course continues until May 9. For more information or to register, visit http://www.grains.ksu.edu/igp/.
  • IGP/NCI Durum Wheat Milling, Pasta Production Courses. IGP and The Northern Crops Institute (NCI) in Fargo, ND will hold a Durum Wheat Milling short course at NCI April 7 to 9, 2014. An NCI Pasta Production and Technology Short Course will follow from April 9 to 11. For more information or to register, visit http://www.northern-crops.com/.

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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.
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