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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. Inconsistent Weather Conditions Generate Crop Quality Concerns
2. Trade Promotion Authority: Small Victory, But the Debate Continues
3. Brazilian Wheat Importers See SRW, HRW Crops
4. Farm and Industry Visits Help Protect Demand for U.S. Wheat in Nigeria
5. Breaking Bread Together: National Festival of Breads Highlights Kansas Wheat Production
6. Wheat Industry News


Online Edition: Wheat Letter – June 18, 2015 (http://bit.ly/1G8tvCq)

PDF Edition: (See Attached) (See attached file: Wheat Letter - June 18, 2015.pdf)

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


1. Inconsistent Weather Conditions Generate Crop Quality Concerns
By Casey Chumrau, USW Market Analyst

In the May 7 edition of “Wheat Letter,” I discussed how timely rain in the United States and abroad could boost global production potential. Some said that April rain showers in Texas, Oklahoma and Kansas saved the winter wheat crop from drought disaster, but sometimes you must be careful about your wishes. In the past 30 days, vast parts of those states received between 6 and 15 inches of precipitation, causing serious and widespread flooding. Weather is always a major, unpredictable factor in grain production and so far this year, it has challenged wheat farmers. In the coming weeks and months, persisting or additional weather events could affect wheat prices.

Most of the Central and Southern U.S. Plains received above-average rainfall in the last month, eliminating drought conditions that plagued the region the last three years. Nevertheless, excessive moisture and flooded fields could diminish yield potential. Winter wheat crop condition ratings slightly declined the last two months but avoided a major downgrade thus far. As of June 14, USDA rated 43 percent of the winter crop as in good or excellent condition, down just 1 percent from the April 6 rating. The percentage rated poor or very poor increased from 6 percent to 22 percent. In Texas and Oklahoma, the ratings fell slightly more, leaving farmers in need of a turn in the weather.

The wet conditions have already delayed the start of soft red winter (SRW) and hard red winter (HRW) harvest, with significant delays reported in Arkansas, Illinois, Kansas Missouri, North Carolina and Oklahoma. As of June 14, USDA reported that farmers have cut 11 percent of the crop, below the five-year average of 20 percent. The concern is that the longer mature wheat stays in the field the more risk to the soundness of the crop, helping push prices higher. Additional delays could make U.S. supplies less competitive, but current weather forecasts are better and farmers are hopeful they will be back in their fields soon.

Some climate experts blame the atmospheric phenomenon known as El Nino for the excessive U.S. rain. El Nino affects regions differently, causing rain in one area such as the U.S. central plains and drought in another like in Australia, where it normally dries out farmland. This week, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) lowered its 2015/16 wheat production forecast by 800,000 metric tons (MT) to 23.6 million metric tons (MMT), citing El Nino’s drought effects.

Similarly, crop conditions in Europe and Russia began to slip slightly the past few weeks amid dry conditions. Following a low quality year, it is expected that with additional rain, overall crop quality will rebound in 2015/16 in France — the EU’s top wheat producer and exporter. Russia’s agricultural consultancy IKAR downgraded its production forecast by 1.0 MMT this week due to dry weather in several regions. The group now expects Russian output to reach 55.0 to 59.0 MMT, compared to 59.1 MMT in 2014/15.

It appears the global wheat crop is at a tipping point and the weather is seriously threatening its quality potential. It seems likely that at least one, if not several, major wheat suppliers will have some quality concerns this year and customers will have to pay more to secure the wheat they want. The U.S. has the distinct advantage of geographical diversity, allowing high quality wheat production in one area despite concerns in others. Customers are wise to pay close attention to the weather forecast this year, as it will certainly affect buying decisions. Your local USW representative is always available to answer questions.


2. Trade Promotion Authority: Small Victory, But the Debate Continues
By National Association of Wheat Growers

When the U.S. House of Representatives voted on Trade Promotion Authority (TPA) legislation last Friday, we were hoping it would be the last bout in an eight-year struggle to renew the President’s ability to finalize trade agreements. It was encouraging when TPA actually received enough votes for passage, even though it was a slim margin (219 to 211). However, the rule for considering TPA required that the House also pass a bill to reauthorize a worker-retraining program, called Trade Adjustment Assistance (TAA), which was voted down 126 to 302. This vote stalled the whole package.

The United States’ global leadership hinges in part upon TPA. There have been about 100 trade agreements implemented since TPA expired but the United States has not been party to any of them. With TPA, the United States can join so many other countries aggressively negotiating new trade pacts. Additionally, since Congress must approve trade agreements, our negotiating partners need reasonable assurance that Congress will consider a whole agreement without picking apart carefully negotiated tradeoffs.

Geographic and climactic advantages help make the U.S. wheat industry internationally competitive. We usually become more competitive with freer trade.

Of course, trade also benefits wheat users and consumers in importing countries by giving them better access to wheat with the quality and price they are seeking.

Which brings us back to the House of Representatives. Even though the overall trade package did not get enough support, it is good news that the TPA portion of the package received a majority of votes. That means that majorities in both the House and the Senate have supported renewal of TPA. Now the trade supporters in both the White House and Congress need to find a procedural way forward.

This week, the House passed a separate, TPA-only bill on a vote of 218-208. The Senate is expected to take up the bill next week. As part of this strategy, it appears that the Senate may attempt to attach TAA to a separate trade preferences bill. If that strategy does not work there are other possible ways forward, and both the White House and leadership in Congress are committed to getting this done. The National Association of Wheat Growers also continues to engage with our congressional representatives to tell the story of how important expanding international markets are to U.S. agriculture and to our customers at home and abroad.


3. Brazilian Wheat Importers See SRW, HRW Crops

A team of five executives representing large flour mills in Brazil are in the United States this week to learn more about the 2015/16 crop and the U.S. wheat supply chain. Together, they purchase about 60 percent of Brazil’s annual wheat imports. Wheat farmers are pleased to see these buyers return to the United States.

“Brazil turned to the United States the last two years because its usual trading partners in Argentina could not meet demand,” said Osvaldo Seco, USW assistant regional director for South America, who is travelling with the team. “They were able to do that because we kept Brazilian millers informed about the quality, variety and value — and U.S. farmers had the wheat they needed.”

The potential for an on-going increase in U.S. wheat exports to Brazil will not be taken for granted, even though Argentina’s 2014/15 production provided exportable supplies again. USW, the Ohio Small Grains Marketing Program, the Nebraska Wheat Board and the Texas Wheat Producers Board hosted this team’s visit as a pivotal part of building buyers’ confidence in U.S. HRW and SRW wheat compared to supplies from Argentina, Uruguay, Paraguay, the EU or Canada.

After visiting farms in Ohio and Nebraska and meeting with export elevator managers in Texas’ western Gulf ports, Seco said these executives would go back to their mills with a greater knowledge of how to specify for the best quality and value from the U.S. supply. These flour millers will also get a chance to meet with their peers during a visit to a Mennel Milling Company flour mill and a tour of a Mondelez snack food plant in Ohio.

“We will also meet with export grain traders and review the federal grain inspection system in Nebraska,” Seco said. “Relationships are very important to these buyers and there is no more powerful marketing tool than sitting face-to-face with the people who develop, grow and handle U.S. wheat.”


4. Farm and Industry Visits Help Protect Demand for U.S. Wheat in Nigeria

Eight senior managers from Nigeria’s milling and noodle/pasta manufacturing industries will visit South Dakota and Kansas June 21 to 27, 2015, to examine the current HRW crop as part of a USW trade team. USW believes this annual event helps maintain a loyal customer base in a traditionally large market.

“USW and our state wheat commission member organizations built long-term demand for U.S. wheat in Nigeria by providing information and technical support,” said Muyiwa Talabi, USW marketing consultant based in Lagos, Nigeria. “This will be our fifteenth annual trade team from Nigeria since 2001 and it is still a key part of our work in an important market where we face new challenges.”

“In an increasingly competitive market, those customers still benefit from, and appreciate, the support USW provides, including the chance to see the new U.S. wheat crop and learn about its supply chain from the people who manage it,” said Gerald Theus, USW assistant regional manager for Sub-Saharan Africa who is based in Cape Town, South Africa. Theus and Talabi will lead this trade team visit.

USW collaborated with the South Dakota Wheat Commission, the Kansas Wheat Commission and USDA’s Foreign Agricultural Service to organize this trade team. In South Dakota, the team will meet with grain merchandisers and visit several farms. The team’s Kansas visit includes stops at the Kansas Wheat Innovation Center, USDA’s Center for Grain and Animal Health Research and the Kansas State IGP Institute as well as time with grain merchandisers.


5. Breaking Bread Together: National Festival of Breads Highlights Kansas Wheat Production
By Julia Debes, USW Communications Consultant

Mr. and Mrs. Slice. Eight colorful kitchens. A bake truck with a giant spatula on top. Thanks to these attractions and others, more than 1,000 visitors attended the National Festival of Breads in Manhattan, Kansas, on Saturday, June 13. While many people came for the free bread and barbeque samples, or to listen to a best-selling cookbook author, they also left with information on the role of wheat in the diet. Visitors learned how to make recipes healthy and tasty and why U.S. wheat is such an important part of all of it.

Eight finalists from across the United States qualified for the biennial event, hosted by the Kansas Wheat Commission and sponsored by King Arthur Flour and Red Star Yeast. Each original recipe was judged on creativity, healthfulness and taste. After a full day of baking bread, a food contest regular and blogger from Pennsylvania, Lisa Keys, won the grand prize with her Smokehouse Cranberry Cheese Bread.

Before the contestants ever stepped in the kitchens, however, the staff at Kansas Wheat provided a farm-to-fork tour of central Kansas. The finalists visited a wheat farm, many of them for the first time, and toured the largest grain elevator in Kansas as well as a stone ground flour mill. At each of these stops, the finalists were not just tourists, but avid students of how the principal product in their recipe is grown, transported and processed. As these bakers leave Kansas, they do so with a greater understanding of how to answer that consumer favorite question: “Where does my food come from?”

Festival attendees also learned not only how to bake great bread, but also how to make recipes healthier, why bread is so important in many cultures and what they can do to contribute to the hungry in their community and around the world. With 50 percent of Kansas wheat headed to export markets each year, these lessons are especially relevant.

Activities like the National Festival of Breads require more than a few details, but the lessons included mean participants leave with much more than a few samples and some great recipes. Combatting myths about wheat consumption discourages fad dieting and encouraging consumers to try their own hand at baking increases flour consumption, while promoting the sharing of bread highlights hunger issues. These are the true benefits of events like the National Festival of Breads.


6. Wheat Industry News
  • The International Wheat Genome Sequencing Consortium (IWGSC) and the Wheat Initiative announced on June 16 that reference sequencing of wheat chromosome 4B would start soon in France. This complements the reference sequencing projects already underway on 11 other wheat chromosomes and adds momentum to the goal of achieving a high quality reference sequence of the bread wheat genome to speed up gene discovery and breeding of new wheat varieties. To read more on this story visit www.wheatinitiative.org.
  • AIB International Adds Courses For BRC Training Academy. As a BRC Approved Training Provider, AIB recently added five new official courses to its catalog of in-plant training. The British Retail Consortium (BRC) is the leading trade association for UK retailing, whose food safety standard is recognized worldwide. AIB International located in Manhattan, KS, works with food-processing, distribution, foodservice and retail industries to elevate their food safety and production process capabilities by developing and delivering application-oriented learning, consulting and value-added services. Find information on the courses online.
  • The Wheat Foods Council Announced its New President on June 10, 2015. The Wheat Foods Council board of directors named Tim O’Connor as CEO, effective June 15, 2015. O’Connor replaces Judi Adams, MS, RDN, who is retiring at the end of the month. O’Connor’s background is firmly grounded in agriculture and marketing. Prior to launching his own consulting firm, he worked as CEO of Avocados from Mexico. From 1999 to 2013, he served as president and CEO of the United States Potato Board, a leading produce marketing organization. He also is a past executive vice president and CEO of the Illinois Beef Association. For more information, visit http://www.wheatfoods.org/.
  • Congratulations to USW Colleagues Mina El Hachimi and Vince Peterson on 30 Years of Service. Mina is North Africa Administration & Programs Manager in the USW/Casablanca office. Vince is Vice President of Overseas Operations in the Headquarters office. We are so fortunate that it is not rare to have such devoted, loyal colleagues at USW. Thank you Mina and Vince for your years of dedicated service to our organization, to U.S. wheat farmers and to our customers around the world!
  • Congratulations to Dr. Senay Simsek and her family on their newest addition. Baby boy, “Mert,” which means “brave,” was born June 4, 2015; 7lb, 14 oz. Dr. Simsek is a professor in the Department of Plant Sciences at North Dakota State University and works with USW as a consulting university specialist in spring wheat quality.
  • Expansion Planned for the Saginaw Valley Research Extension Center. The Michigan State University research center will be expanding this summer thanks to support from community partners. Agricultural groups and businesses contributed more than $1 million to erect a new educational facility. The building will serve as a meeting space for Extension activities and will open before Sept. 1, 2015. Research on the 310-acre center focuses on wheat, black beans, sugar beets, corn and soybeans.
  • Registration for IGP Institute Risk Management Course Closes July 2. Understanding the importance of risk management within trading markets is crucial to the security of a company's financial future. Individuals interested in expanding their knowledge of marketplace challenges are encouraged to take advantage of this two-part course, held August 2 to 7 in Manhattan, KS. Registration closes on July 2. For more information or to register, visit www.grains.ksu.edu/igp.
  • NCI Rheology of Wheat and Flour Quality Course. Registration closes July 1, 2015, for this short course at the Northern Crops Institute July 21 to 23 in Fargo, ND. The course will focus on wheat and flour quality, and effective analysis of rheological results. For more information or to register, visit www.northern-crops.com/courses2/.
  • Wheat Marketing Center Whole Grain Summit Pre-Meeting Workshop. This whole grain product workshop June 22 to 23 at WMC in Portland, OR, offers a hands-on experience producing different types of popular products with whole-grain raw materials and functional ingredients. For more information or to register, visit http://wholegrainsummit2015.com/pre-meeting-workshop/.
  • Follow USW Online. Visit 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 www.youtube.com/uswheatassociates.


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