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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. USDA Report Confirms U.S. Farmers Seeding Less Wheat for 2015/16
2. New Reports Look at Crop Conditions, Winter Damage
3. Flour Dumping, Trade Commitments at Issue in USTR Report
4. Wheat Breeders Traveling to Asia to Listen and Share with Milling and Baking Customers
5. USW Colleagues Remember Jim Mckenna
6. Wheat Industry News

PDF Edition: (See Attached) (See attached file: Wheat Letter - April 9, 2015.pdf)

USW Supply & Demand Report: www.uswheat.org/supplyDemand


1. USDA Report Confirms U.S. Farmers Seeding Less Wheat for 2015/16
By Casey Chumrau, USW Market Analyst

As the spring weather emerges and farmers are getting back in their fields, the prospects for the new U.S. wheat crop become clearer. The USDA provided a key piece to the puzzle on March 31 with its first Prospective Plantings report for 2015/16. The agency estimated total U.S. acreage for the 2015/16 harvest at 55.4 million acres, down 3 percent from 2014 but on par with the five-year average.

The report gives the industry its first look at expected spring wheat and durum acres. Based on a farmer survey, USDA projects hard red spring (HRS) planted area will fall 1 percent from last year to 12.1 million acres, slightly higher than the five-year average of 11.9 million acres. According to Reid Christopherson, executive director of the South Dakota Wheat Commission, the report likely reflects price uncertainty moving into the next marketing year.

Following two years of near record low-planted area, durum acreage should increase 18 percent year-over-year to the 1.65 million acres USDA expects. If realized, it would still fall below the five-year average of 1.78 million acres. Plantings will increase in every durum producing state except Idaho, according to the survey. However, if farmers see more favorable weather conditions at planting time, durum acreage could be higher than this initial estimate.

The Prospective Plantings report also provides an updated look at winter wheat seedings. USDA estimates total winter wheat plantings reached 40.8 million acres, down from 42.4 million last year but 1 percent higher than its previous estimate. Of the total area, farmers planted an estimated 29.6 million acres to hard red winter (HRW), the largest U.S. wheat class by production volume. That estimate is down slightly from last year’s 30.2 million acres but 1 percent greater than the five-year average. USDA showed decreased winter wheat acreage in Kansas, the top HRW producing state and a 70 percent drop in North Dakota. USDA reported increased HRW acres in Nebraska, Oklahoma, South Dakota and Wyoming compared to 2014, plus a notable increase in Montana since the last estimate.

Soft red winter (SRW) planted area is less than it has been since 2010/11, according to the survey. Plantings fell to 7.75 million acres, down from 8.50 million last year and 4 percent below the five-year average. Acreage is down in nearly every SRW producing state, including large drops in Ohio, Illinois and North Carolina.

USDA expects white wheat acres, which includes both winter and spring varieties, to reach 4.33 million in 2015, up 7 percent from last year and higher than the five-year average of 4.16 million. Farmers in the Pacific Northwest grow most U.S. white wheat and winter wheat area there did not change much from last year. A 17 percent increase in Idaho’s spring acreage did help push total planted area higher. Dry conditions are of concern for white wheat farmers but very little of the crop was rated poor by USDA as of April 6.

As always, the weather is the single largest factor in determining a crops potential. There is still a lot of time between now and harvest and farmers need Mother Nature’s help to turn planted acres into harvested acres.


2. New Reports Look at Crop Conditions, Winter Damage
By Amanda J. Spoo, USW Communications Specialist

This week, USDA released its first official crop progress report for the year, giving better insight into the 2015/16 U.S. winter wheat crop as it emerges from dormancy. The April 5 report rated the national winter wheat crop as 44 percent good or excellent and 16 percent poor or very poor. Last year at this time, USDA rated the national crop as 35 good or excellent and 29 percent poor or very poor. For individual farmers and some regions, of course, the picture may not be quite so encouraging.

It is interesting to note that springtime historically is often not kind to wheat. USDA’s “Weekly Weather and Crop Bulletin” notes this week that a decline in winter wheat conditions is normal between the last autumn report from USDA’s National Agricultural Statistics Service (NASS) and its first spring report. Over the last 20 years, “substantial improvement in U.S. wheat condition was noted only four times,” according to the bulletin. The last time that wheat condition appreciably rose during the spring was 1996, when May rainfall on the central and southern Plains helped to revive a drought-ravaged crop. In contrast, an April cold snap severely damaged the wheat crop in 2007. (To view the whole bulletin, visit http://bit.ly/1ydcngC.)

As for this spring, early-April winter wheat conditions have significantly improved in Texas and Oklahoma, but South Dakota and Nebraska report the opposite. USW Market Analyst Casey Chumrau reported on March 26 that the following two weeks would be critical to plant development. That period is now past and, in general, the crop still needs a good boost of moisture in most areas.

In Nebraska, there is much concern over what the lack of moisture has done to HRW in the past month. As of April 6, USDA rated Nebraska’s winter wheat as 34 good or excellent and 30 percent poor or very poor. The previous official USDA rating on March 2 estimated 62 percent of the crop was good or excellent and just 3 percent poor.

The spring thaw also revealed a new, regional concern for HRW and hard white (HW) wheat farmers in Nebraska and other central plains states — winterkill.

Larry Flohr, who grows HRW and some HW just north of the Colorado border in the southeastern area of the Nebraskan panhandle, saw good vegetative growth last fall, but he and other farmers to his south and east experienced a rapid temperature drop followed by a dry winter with very little snow. Now Flohr says he sees winterkill on what he estimates to be 10 percent of his HRW crop with damages ranging from complete loss up to 30 percent loss in yield potential. He says loss of yield potential in the NE panhandle could be up to 15 percent but that potential for losses increases to 25 percent in central and southern Nebraska. In contrast, Bob Delsing, who grows HRW in northwest Nebraska, says that he is experiencing average winterkill damage. He has heard of other producers with 100 percent loss in some fields, but that thus far he has had “very little to none, the conditions are pretty normal this year. We just need some moisture.” Read additional new coverage on winterkill damage in the Midwest here and here.

The April 2 Nebraska Crop Report shares more information broken down by region on crop conditions.


3. Flour Dumping, Trade Commitments at Issue in USTR Report
By Dalton Henry, USW Director of Policy

Last month the Office of the U.S. Trade Representative (USTR) released its annual National Trade Estimates report, a 444-page long summary of trade barriers that U.S. companies and producers face around the world. USW provided input into this report on behalf of wheat producers and their customers in other countries. Here is a link to the full text of the USW submission: http://bit.ly/uswtradebarriers.

The NTE continues to highlight unfairly priced Turkish flour exports as a priority. This is also a major focus for USW. The report states, “…the Turkish Grain Board generally purchases domestic wheat at intervention prices (above world prices) and then sells domestic wheat at world prices to Turkish flour, biscuit and pasta manufacturers. U.S. exporters have expressed serious concerns about the adverse impact subsidized Turkish wheat flour exports have had on their sales in certain third country markets.” USW has demonstrated that this complex scheme serves as an export subsidy, illegal under World Trade Organization (WTO) rules, which harms millers in countries where Turkey has dumped flour and offsets thousands of tons of U.S. wheat exports.

Another too familiar barrier highlighted in this year’s NTE is Brazil’s failure to implement a duty-free tariff rate quota (TRQ) of 750,000 MT wheat sourced from non-Mercosur countries. While the commitment dates back to the 1994 Uruguay Agreement schedule, Brazil has never officially implemented it. Instead, Brazil has provided duty-free access in each of the last three years when its traditional supplier, Argentina, faces production shortfalls and export restrictions that are likely to end this year. USW maintains a strong relationship with Brazil’s millers and appreciates the opportunity to compete on a level playing field when possible. USW also supports the USTR’s commitment to continue engaging Brazil on the issue.

One trade barrier that cuts across multiple countries in USTR’s report is the rise in domestic support spending by advanced developing countries. Support in Brazil, India, Turkey and China is increasing in multiple agricultural commodities, including wheat, and the 2015 NTE report called these programs out. A recent study commissioned by several U.S. agricultural organizations, including USW, confirmed there is these countries are violating their WTO commitments on domestic support. The study found these advanced developing countries use a variety of support programs to encourage production, and often subsidize exports or restrict imports to the detriment of the rest of the world’s wheat producers. Read more at http://reut.rs/1HRfOcM.

USW is committed to working with the USTR and USDA to monitor trade barriers that U.S. wheat producers face in world markets and to advancing policies that will allow freer trade of wheat and increased food security. The key to accomplishing these goals is the identification of barriers affecting our customers and exporters, and applying constant pressure on U.S. government officials to resolve trade barriers that harm our customers and producers.


4. Wheat Breeders Traveling to Asia to Listen and Share with Milling and Baking Customers
By Amanda J. Spoo, USW Communications Specialist

Each year the United States exports, 25 to 35 million metric tons (MMT) of wheat, which accounts for roughly 50 percent of the annual crop. This makes the voice of overseas customers important to U.S. wheat research. To demonstrate that importance, four wheat breeders will travel with U.S. Wheat Associates (USW) to Asia, April 18 to 26, 2015, on a Wheat Quality Improvement Team (WQIT).

The team will visit with buyers and end-users in Japan, Korea and Thailand to listen and exchange ideas. Their primary goal will be to gather input on wheat quality from key customers to inform their own research and to share what they learn with other U.S. wheat breeders upon their return. They will also share the successful efforts of the U.S. wheat industry to improve the quality of newly released varieties.

“It is vital that we actively listen to and respect the needs of our overseas customers,” said USW Vice President and West Coast Office Director Steve Wirsching, who will lead the team. “The impact breeders have on the industry and the livelihood of farmers is huge. Ultimately, if a variety offers higher yield potential but does not have strong milling or baking qualities that domestic and overseas customers need, farmers will feel that impact.”

This is the fourth WQIT led by USW. In 2004, USW sponsored a similar trip to Asia, followed by Latin America in 2009, and Europe and Northern Africa in 2010. State commissions in Oregon, Washington, North Dakota and Minnesota identified and sponsored top wheat breeders from their land grant universities to join this team.

Dr. Arron H. Carter leads the winter wheat breeding and genetics program at Washington State University where his research focuses on breeding improved wheat varieties for cropping systems in Washington state that incorporate diverse rotations and environments.

Dr. Michael Flowers is an assistant professor and extension cereals specialist at Oregon State University where his research areas include variety trials, nitrogen management in hard wheat and management practices for new Oregon winter wheat varieties.

Dr. Mohamed Mergoum represents North Dakota State University as the Richard C. Frohberg Spring Wheat Breeding/Genetics Endowed Professor. His program’s main objectives are to develop modern and improved cultivars adapted to the spring wheat region and generate wheat germplasm with valuable economic traits required in cultivar development.

Dr. James Anderson is a professor in wheat breeding and genetics at the University of Minnesota where the program he leads investigates complexly inherited traits, including disease resistance and grain quality, and incorporating disease and pest resistance into new cultivars using marker-assisted selection.

The WQIT is a part of a larger USW effort to address the quality of exported wheat and the needs of importing countries. It is a logical next step to a 17-year-old program called the “Overseas Variety Analysis” or OVA program. Through OVA, USW cooperates with millers and bakers to compare the performance of flour from newly or soon-to-be released U.S. wheat varieties to the local country’s standards. USW shares these results — both good and not so good — with breeders and with state wheat commissions who develop recommended variety lists for wheat farmers. USW currently works with 22 OVA cooperators around the world. During the upcoming trip, the team will participate in an OVA workshop at the UFM Baking School in Bangkok, Thailand, to hear directly from several Asian cooperators. To learn more about the success of OVA programming visit http://bit.ly/1MynGmr.

USW will post photos and other information from the 2015 WQIT on its Facebook page at www.facebook.com/uswheat.


5. USW Colleagues Remember Jim Mckenna

On April 4, USW and our customers in Sub-Saharan Africa lost a dear friend and colleague with the death of Jim Mckenna, who retired last year after 21 years of service as a milling and baking consultant. Regional Vice President Ed Wiese reports that phone calls and emails from members of the region’s milling and baking industries paying tribute to Jim have been pouring into the USW/Cape Town Office.


Jim Mckenna (front left in blue) with colleagues Pamela Leckie-Wiese, Ed Wiese, Cathy Marais, Muyiwa Talabi, the late Bennie Beretta and Gerald Theus, circa 1998.

How Jim’s colleagues remember him echoes his commitment and dedication, as well as his sincere interest in other people that made him so successful. May his example be an inspiration for all of us as we carry on the reputation of quality, value and reliability for U.S. wheat and the farmers who grow it.

The late USW baking consultant Bennie Beretta introduced Jim to Ed Wiese and Assistant Regional Director Gerald Theus in 1993.

“Jim and Bennie went on to open doors to everyone who is anyone in the South African industry,” Ed remembers. “Their experience and knowledge of Africa helped pave the way for USW's market development efforts, and the success of U.S. wheat exports, throughout the region – especially in Nigeria.”

“His astute and in-depth knowledge of all U.S. and competing wheat classes always amazed me,” Theus says. “Jim’s recommendations for a specific U.S. class targeting a specific market was always spot-on and helped open up new and exciting markets.”

“Jim's name will be written boldly when the history of USW’s legacy with the Nigerian wheat milling industry is written,” says USW Marketing Consultant Muyiwa Talabi. “He helped establish professional relationships with business giants and CEOs in the milling industry. Then he encouraged USW to train Nigerians for jobs in milling and baking that has endeared USW to the hearts of so many Nigerian people and organizations. Yet in his own right, he was a technical genius.”


Jim and Muyiwa at work sharing a laugh with flour milling customers in Accra, Ghana.

Peter Lloyd, Regional Technical Manager, USW/Casablanca, remembers Jim as a colleague who “was admired, respected and loved by many from the Cape to Cairo. He had an ability to get the best from people, especially those on the shop floor, by leading from the front with a ready smile and gentle guidance. He will inspire me always.”

Jim Mckenna’s influence extended around the world, particularly to many people in the hard red winter wheat production region of the central and southern U.S. plains.

“His committed and diligent work did so much for Kansas wheat farmers,” says Justin Gilpin, CEO of Kansas Wheat. “I learned a lot from Jim about the wheat industry and most importantly, how to value relationships and the importance of treating people the right way. He was one of a kind and it is hard to express what he meant to me.”

“Jim touched so many lives in such a positive way and always had a relaxed way of conveying his message,” Wiese notes. “Work was always important to him, but Jim had life's priorities straight. His number one priority was his family and our thoughts and prayers are with them now. And so for Jim, from South Africa, Nigeria, Ghana, Cote d'Ivoire, Senegal, Cameroon, Angola, Mozambique and many other countries, African drums are beating and wishing him farewell.”




6. Wheat Industry News
  • Benson Hill Biosystems and Limagrain Announce Research Agreement. Benson Hill Biosystems and Limagrain, through its affiliates Vilmorin & Cie and Biogemma, announced a partnership on April 3 to develop and commercialize traits to increase yields in wheat and corn. Read the full announcement at http://bit.ly/1y1BIK0.
  • The American Society of Baking inducted the late Donald K. Dubois as a member of its 2015 Baking Hall of Fame class. Dubois was a trusted ally of bakers starting at Doty Laboratories in 1944 and joining AIB International in 1978. Read more here http://bit.ly/1IGT1k5.
  • Condolences. We recently learned that the mother of our friend, North Dakota Wheat Commission Marketing Director Jim Peterson, died last week. Our condolences to Jim and his family on her passing.
  • IGP Course Will Cover the Importance of Risk Management Within Trading Markets. The IGP Institute in Manhattan, KS, is hosting the IGP-KSU Risk Management course Aug. 2 to 7, 2015. "Our program is not focused on the use of grain futures and options for speculation; instead, we concentrate on the proper use of futures and options as a risk management tool to control price volatility and market risk," said Jay O'Neil, senior agricultural economist and course instructor. Registration closes 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 on how to analyze, interpret and apply rheological results effectively. For more information or to register, visit www.northern-crops.com/courses2/.
  • 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.


Nondiscrimination and Alternate Means of Communications
USW prohibits discrimination in all its programs and activities based on 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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