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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. Harvest Reveals Better HRW Yields, Quality; USDA Sees Bigger Total Supply
2. U.S. Wheat Growers See TPA as First Step to Increased Export Opportunity
3. Wheat Quality Improvement Team Applies Customer Input in Their Research
4. Introducing Europe’s Next Generation of Millers to U.S. Wheat
5. Wheat Commissions Host Japanese Millers to Build Confidence in U.S. Supplies
6. Wheat Industry News

Online Edition: Wheat Letter – July 2, 2015 (http://bit.ly/1G8tvCq)

PDF Edition: (See Attached) (See attached file: Wheat Letter - July 2, 2015.pdf)

USW Harvest Report: Published every Friday online at http://www.uswheat.org/harvest


1. Harvest Reveals Better HRW Yields, Quality; USDA Sees Bigger Total Supply
By Casey Chumrau, USW Market Analyst

The latest harvest reports for the 2015 U.S. hard red winter (HRW) wheat crop indicate better than expected results despite the challenging weather events farmers faced earlier this year. Areas of extreme drought and excessive rain still threaten overall yield and quality potential of this year’s crop but so far harvested area to date shows yields and initial test weight, protein, damage and other quality results that are somewhat better than anticipated.

In its June 30 Acreage Report, USDA estimated total wheat area will reach 56.1 million acres, up from a March estimate of 55.4 million and 2 percent greater than the five-year average.

USDA estimates farmers planted 40.6 million acres of winter wheat for the 2015/16 harvest, down slightly from a March estimate of 40.8 million or nearly even with the five-year average. The crop went into dormancy in good or above average condition but limited snow cover left it exposed to extreme cold. Spring came early in many regions and the break from dormancy showed worsened wheat conditions. Damaging dry conditions eventually gave way to excessive rain in the southern plains and Midwest, but condition ratings remain better than last year. As of June 28, the percentage of the crop USDA rated good or excellent was 41 percent, up from 30 percent last year at this time. USDA rated 23 percent of the winter crop as poor or very poor, down from 44 percent in 2014.

Significant weather events in the first half of the calendar year hit many HRW wheat-growing areas hard. After multiple years of drought, extreme flooding hit parts of Texas, Oklahoma and Kansas. The excessive moisture gave rise to quality and disease concerns, but with perhaps half the wheat harvested in Kansas, protein and quality are better than expected. USDA forecasts harvested area in those three states, the top HRW producers, will increase 16 percent from 2014/15 to 16.1 million acres. In the northern plains, HRW crop ratings are significantly better heading into harvest. USDA will release its first by-class production estimates on July 10.

Heavy rains have really slowed soft red winter (SRW) wheat harvest and may affect quality, especially in Illinois, Indiana and Ohio. The production complications could further reduce supplies from a crop that has 10 percent fewer planted acres in for 2015/16. USDA’s estimate of 7.61 million acres — the lowest SRW planted area since 2010/11 — as lower prices last fall convinced farmers to plant more soybeans and corn.

However, farmers planted 4.34 million white wheat acres this year, the most since 2011/12 according to USDA. Each of the three predominant soft white (SW) wheat states, Washington, Oregon and Idaho, planted more acres than last year. However, the Pacific Northwest is suffering from severe drought conditions and unseasonably hot weather.

Some SW in higher elevations is already being harvested — a very early start. Joe Carlton with Mid-Columbia Growers in Oregon reported this week in the “Dalles Chronicle” that hot, dry conditions tend to depress yield potential and increase protein. He also emphasized that it is too early to assess the current crop quality.

Hard red spring (HRS) planting finished well ahead of normal this year due to the early spring. USDA estimates farmers planted 12.6 million acres of HRS, up from a March estimate of 12.1 million and 6 percent greater than the five-year average. Thanks to excellent growing conditions, USDA’s spring wheat crop ratings have actually improved since mid-March, which is a rare feat. As of June 28, 72 percent of the spring crop was rated good or excellent and just 5 percent was poor or very poor. In North Dakota, the largest HRS producing state, 80 percent of the crop is in good or excellent condition. According to USDA’s weekly crop progress report, 49 percent of spring wheat was headed as of June 28, compared to the five-year average of 29 percent, indicating that the HRS crop is developing faster than normal.

Durum acreage increased sharply this year as farmers responded to higher prices. USDA estimates 1.95 million acres were planted to durum, up 40 percent from 2014/15 and above the five-year average of 1.76 million acres. Nearly ideal growing conditions for northern durum have the crop in excellent shape. In North Dakota, which accounts for 56 percent of total durum acres this year, the crop is rated as 91 percent good or excellent and just 1 percent poor. Unusual rain during harvest in California and Arizona caused some bleaching of Desert Durum, but traders are not having any problems meeting contract specifications. USDA expects farmers will harvest an astounding 98 percent of the durum acres planted in 2015/16.

While final chapter on the entire 2015/16 U.S. wheat crop is unwritten, U.S. farmers and the supply chain will continue working hard to provide high quality wheat for the world’s customers.


2. U.S. Wheat Growers See TPA as First Step to Increased Export Opportunity
The following is a joint statement from the National Association of Wheat Growers (NAWG) and USW.

Today marks the end of a successful bipartisan effort and the beginning of better prospects for agricultural trade as President Obama signs Trade Promotion Authority (TPA) into law.

“With reauthorization of TPA, the President has a prime opportunity to help level the playing field for wheat growers and American agriculture,” said Brett Blankenship, NAWG President and a wheat grower from Washtucna, WA. "It is now up to the Administration to use that authority to negotiate new wheat market access commitments in the Trans-Pacific Partnership (TPP) and future trade agreements."


“Putting TPA in place is a step forward for American wheat growers,” said Roy Motter, USW Chairman and a Desert Durum® grower from Brawley, CA. “Now we need a TPP agreement that
will help growers overcome the tariff advantages a lot of our competitors get through free trade agreements with importing countries. That is important because wheat demand in many of those countries is growing rapidly and we can’t afford to lose out.”

NAWG and USW applaud the tireless work of Congress and the President to get to this point, and look forward to continuing to work with the Administration to finalize strong trade deals for America’s wheat farmers.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, D.C., NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by FAS.



3. Wheat Quality Improvement Team Applies Customer Input in Their Research
By Amanda J. Spoo, USW Communications Specialist

The balance of cause and effect is something that Dr. Arron Carter, assistant professor of plant breeding and genetics at Washington State University, understands well. His work in wheat breeding is two-fold, focused on yield and quality.

“Growers will select a specific line mainly based on yield potential, but they need to realize that growing high quality wheat maintains and expands market share,” said Carter. “Breeders have to figure out how to simultaneously select for characteristics that are important to both the growers and end-users.”

To demonstrate that importance, a Wheat Quality Improvement Team (WQIT) of four university wheat breeders traveled with USW to Japan, Korea and Thailand April 18 to 26, 2015. State commissions in Oregon, Washington, North Dakota and Minnesota identified and sponsored top wheat breeders from their land grant universities to join, including Dr. Carter, Dr. Michael Flowers, Oregon State University; Dr. Mohamed Mergoum, North Dakota State University; and Dr. James Anderson, University of Minnesota.

The team’s trip included meetings with key wheat buyers, flour millers and wheat food end-users. The breeders learned about overseas customers’ opinions of U.S. SW and HRS wheat quality and shared the successful efforts that the U.S. wheat industry is currently making to improve the quality of newly released varieties. The team also took part in an Overseas Variety Analysis (OVA) program event at the UFM Baking School in Bangkok, Thailand. Through this 17-year-old program, USW sends new wheat varieties to millers and bakers in top markets each year, asking them to rank varieties based on their country standards and provide feedback. Not only was it beneficial for the breeders to hear from Asian cooperators, but it is a connection that helps the overseas quality control managers understand why their participation in the OVA program is so important.

“The end-goal is having overseas customers return as buyers year after year because they are confident in U.S. wheat quality and performance,” said USW Vice President and West Coast Office Director Steve Wirsching, who accompanied the team. “To complete that cycle from producers to buyers and ultimately to the end-user, wheat breeding programs need opportunities to communicate with customers and listen to their needs.”

The next step for the WQIT is where the trip’s value becomes measurable.

“Criteria for designing and developing new wheat varieties are based on the product preference of consumers, so listening to our end-users’ concerns and needs was the heart of our mission,” said Mergoum. “These customers have some concerns about U.S. spring wheat, including a decline in dark hard and vitreous (DHV) counts, flour extraction, water absorption and dough mixing ability. Growing conditions contribute to these concerns, but this update on emerging trends will be critical when we set up our research objectives. It will help me better position our breeding program to address the actual and future concerns of customers.”

“The experience helped me identify how our export market customers evaluate wheat quality so I can do the same in my breeding and selection program,” said Carter. “It also helped me better understand soft white wheat end-products and where we can improve. For example, some of those end users are blending soft white with hard white wheat from Australia in noodle recipes. To do this effectively, they want to see us lower our polyphenol oxidase (PPO) numbers, which control wheat color stability, which would possibly increase the percent blend of soft white they add. Therefore, in order to increase market share, we are going to put more emphasis on PPO in our soft white selections.”

The breeders also understand the responsibility they have in relaying what they have learned to producers and other wheat breeding programs.

“I have a better idea of the quality parameters and end-uses of the classes of wheat grown in my region, which I can use to assist growers in selecting high-yielding and high-quality varieties,” said Flowers. “I have passed along to breeders in my region that soft white wheat customers would like to see more emphasis on sponge cake quality and less on cookie quality.”

“We heard multiple requests to continue to prioritize quality standards by putting emphasis on end-use quality needs in lines on the market and in new varieties,” said Carter. “I plan on presenting that insight at the Pacific Northwest (PNW) Wheat Quality Council.”

“Growers support export market development by contributing part of their checkoff funds to U.S. Wheat Associates,” said Wirsching. “Sponsoring team events like this and other programs help keep our breeders and growers informed about why it is important to do what we can to develop and plant high quality varieties that overseas customers want.”

This was the fourth WQIT led by USW. In 2004, a similar trip was made to Asia, followed by Latin America in 2009, and Europe and North Africa in 2010. You can read previous coverage of the trip here from USW, the North Dakota Wheat Commission and AgWeek.


4. Introducing Europe’s Next Generation of Millers to U.S. Wheat

The link between food and family transcends cultures and, in some cases, industries. European millers had the chance to witness this in action while learning about the quality of U.S. wheat and the reliability of the U.S. supply system June 21 to 27, 2015, on their trade team visits to North Dakota, Minnesota and Ohio. The team of six participants from Italy, Spain and Malta included millers from companies of varying sizes and an Italian wheat trader who does business with the mills. USW worked with the North Dakota Wheat Commission, the Minnesota Wheat Research and Promotion Council and the Ohio Small Grains Marketing Program to organize this team.

“Some of these millers are owners or someday will take over the family business,” said Rutger Koekoek, USW Rotterdam Office marketing specialist, who traveled with the team. “They have responsibilities spanning procurement, production, quality control and so this visit gave the U.S. wheat industry the opportunity to develop a relationship with the next generation of decision makers.”

Based on a five-year average, the USW European Union (EU) region, which includes Israel, annually imports about 400,000 metric tons (MT) of HRS wheat. Italy is the largest European importer of HRS wheat, averaging 70 percent of total European imports of HRS over the past three years. “These countries look to U.S. wheat for quality in HRS wheat that is ideal for use in high quality flour mixes and soft red winter wheat that is suited for biscuits, crackers and pastries,” said Koekoek. “It is important that customers feel confident about both the product and the system.”

Members of the trade team saw each step of the grain supply chain for HRS in North Dakota and Minnesota, and for SRW wheat in Ohio. The schedule included farm tours and discussions with university wheat breeders about how they are improving U.S. wheat qualities in ways that are important to overseas customers. The trip also gave participants an in depth look at the U.S. wheat grading, marketing and transportation systems.


5. Wheat Commissions Host Japanese Millers to Build Confidence in U.S. Supplies

Japanese consumers demand the highest quality and safety in their food. To help maintain a preference for U.S. wheat to produce the best wheat foods, USW is working with the Washington Grain Commission, Oregon Wheat Commission and Idaho Wheat Commission to arrange a visit to those states for four milling executives July 5 to 12, 2015. The trip will introduce the executives to the effective U.S. wheat export supply chain from breeding to inspection and port logistics. Funding for this team is provided by the contributions of wheat farmers to USW through their state commissions.

Millers on this team are executives from mid-sized milling companies representing Japan’s National Cooperative of Millers. This first trade team from this group of millers visited the United States in 2014.

“This will be the first opportunity for some of these managers to personally observe all sectors of the Pacific Northwest wheat trade,” said Steve Wirsching, USW vice president and director of the West Coast office. “That is important because they can influence Japan’s government grain buying decisions.”

“Our market share remains strong because U.S. farmers continue to grow top quality wheat, and because we keep all of our Japanese customers fully informed about quality, supply and prices,” said Wataru “Charlie” Utsunomiya, USW Country Manager for Japan, who will lead this team. “However, we do compete with Canadian spring wheat and Australian white wheat. That is why we give milling executives the chance to discuss our logistical and quality assurance systems face-to-face with U.S. wheat farmers, breeders and exporters.”

Given the advanced state of crop development in the PNW, the team will likely be able to see and experience SW wheat harvest. Starting their trip in Lewiston, ID, the team will tour a country elevator and a terminal elevator on the Snake River, followed by a tour and dinner at Idaho wheat commissioner Joe Anderson’s farm in Genesee.

The team will continue their trip in eastern Washington for two days. They will start in Pullman to hear from Washington State University wheat breeders about the potential for new varieties, developed with public funds, to improve quality as well as yield. A visit to the USDA Agricultural Research Service Wheat Quality Laboratory will offer assurance that the industry’s commitment to quality remains well established and supported by the U.S. federal government. As they travel south toward the Columbia River, the millers will observe wheat harvest and meet with commercial grain handlers, with a final stop to see how wheat seed production incorporates technology to minimize environmental impact and improve safety.

In their final leg of the trip, the team has much to see in Oregon. Their day in eastern Oregon starts at the Pendleton Flour Mill, and includes a visit to the Bob Johns farm in Athena and a tour of the Oregon State University Pendleton-Ruggs Wheat Research Station. The millers will complete their observations the next day with a broad overview of the Portland area export system. Following a meeting with USW West Coast Office staff, regional managers with the Federal Grain Inspection Service (FGIS) will detail their inspection system, which the team will see in action later in the day at Columbia Grain’s export elevator. The Wheat Marketing Center (WMC) will also emphasize the quality of end products that include flour from PNW wheat.


6. Wheat Industry News
  • Oklahoma State University (OSU) names Jeff Edwards as head of its plant and soil sciences department on June 19. Edwards has had a long-term role with OSU Cooperative Extension working as a small grains specialist. He began serving as interim head on June 1 and his effective appointment date as department head begins August 3. To read more on this story visit www.dasnr.okstate.edu.
  • OSU Wheat Researcher Brett Carver honored by the Wheat Quality Council with the 2015 Millers Award. The honor annually recognizes the wheat breeder of the variety voted best by millers participating in the Council’s voluntary evaluation program. Carver earned the award after two OSU candidate varieties – OK09125 and OK10126 – rose to the top of a pool of approximately 30 new varieties entered. Millers from across the nation tested the varieties to determine the winner. To read the full announcement visit www.dasnr.okstate.edu.
  • Dupont Pioneer Gains Exclusive License for Genome-Editing Technology. The company announced a technology license and research collaboration agreement on Tuesday, June 23 with Vilnius University to further the technical and commercial utility of guided Cas9 genome editing technology. Under the agreement, DuPont receives an exclusive license to Vilnius University intellectual property for all commercial uses, including in agriculture. In addition, Vilnius University and DuPont have entered into a multi-year research collaboration to advance the development of the technology. Read the full story on the announcement here.
  • Michigan Wheat Program Updates, Expands Website. The site at www.miwheat.org includes program event registration and tabs for news, consumer and farmer resources, research, social media, marketing and more. Visit the site at www.miwheat.org.
  • Best Wishes to Dr. David Shelton, who has resigned as executive director of the Wheat Marketing Center, Portland, OR, after 16 years of distinguished service. WMC is one of the premier wheat industry educational organizations in the United States and owes much of its success to Dr. Shelton. A search for the next WMC executive director is underway.
  • Congratulations to Domenique de Oliveira Opperman and Her Family on their newest addition. A baby boy, Javier Cruz, was born June 18, 2015. Domenique represents USW as a programs coordinator for the Sub-Saharan Africa Region in the USW Cape Town office.
  • Members Named to Seven Agricultural Trade Advisory Committees. USDA Secretary Tom Vilsack and United States Trade Representative Michael Froman announced on June 29 the appointment of 130 private-sector members to the Agricultural Policy Advisory Committee (APAC) and six Agricultural Technical Advisory Committees (ATACs). USW President Alan Tracy was appointed to APAC while Ron Suppes, Kansas wheat farmer, and Neal Fisher, North Dakota Wheat Commission, were appointed to the ATAC for Trade in Grains, Feed, Oilseeds and Planting Seeds. These groups of committee members will serve until June 15, 2019. View the full list and story here.
  • IGP Institute Grain Drying Distance Education Course. This Grain Elevator and Processing Society (GEAPS) professional development course gives an overview of grain drying and effects on end-use quality, capacity and energy efficiency, and familiarizes students with available grain dryer types and their utilization for drying specific grains. The course is September 14 to October 16. Registration closes on September 1. For more information or to register, visit www.grains.ksu.edu/igp.


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