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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. Growth in Grain Storage Capacity Helps Maintain Reliable U.S. Wheat Supply All Year
2. Canadian and U.S. Grain Collaborators Publish New Commercial Trade Information
3. New Report Confirms Biotechnology Crop Growth
4. U.S. Wheat Associates Elects 2015/16 Officers
5. Dalton Henry Joins U.S. Wheat Associates as Policy Director
6. USW Directors Make Several Important Decisions
7. Wheat Industry News


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

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


1. Growth in Grain Storage Capacity Helps Maintain Reliable U.S. Wheat Supply All Year
By Shawn Campbell, USW Assistant Director, West Coast Office

Over the past decade, the United States has experienced an unprecedented grain boom, with the production of the top five grains (corn, soybeans, wheat, sorghum and barley) increasing by 42 percent. It is a response to increasing global demand and related higher prices that, in turn, boosted farm revenues and spurred a major expansion of the country’s agricultural infrastructure.

That investment has included a storage bin building binge that, when combined with increased export and transportation capacity, helps ensure that the U.S. wheat store remains open year round.

Between 2004 and 2014, U.S. farmers and commercial handlers built more than 117 million metric tons (MMT) of new grain storage capacity, an increase of 18 percent. This total includes 57 MMT of on-farm storage and 60 MMT of off farm-storage. That is about equal to two years of U.S. wheat production.

The production and storage capacity boom has three main drivers. The first is increased yields for all major grain crops. Over the past ten years, average U.S. corn yields increased by 9.0 bushels per acre. Soybean yields increased by 5.1 bushels per acre. Over the same period, wheat yields increased 4.5 bushels per acre — only half as much as corn and the least of the three crops.


The second driver is the fact that U.S. farmers planted more and more corn and soybeans. U.S. and international buyers know how this has affected wheat planted area. Over the past ten years, U.S. corn planted area expanded by 13.6 million acres (19 percent) and soybean area grew by 4.3 million acres (6 percent), largely at the cost of wheat and other small grains. During the same period, wheat area fell by 3.5 million acres (7 percent). Due to the relative difference in yields, an acre of corn requires 3.3 times as much storage space as an acre of wheat, while the space required to store soybeans produced on one acre is relatively the same as for wheat.

For both corn and soybeans, innovations in breeding influenced the run-up in yields and planted area. The broad use of genetic markers and genetic testing during the breeding process helped accelerate the release of new varieties with higher yield potential that are better adapted for production in less ideal environments. In addition, traits derived from biotechnology added plant protection that help these new varieties reach their full yield potential. Innovation in wheat breeding, other than biotechnology, has also helped keep U.S. wheat yields on an upward trend, sufficient to stay just ahead of the drop in planted area. Yet even with today’s much lower cash prices, corn and soybeans still offer more profit potential than wheat.

Third, higher farm gate prices and increased production over the past decade helped increase U.S. farmers’ financial strength. Not only could many farmers pay down debt, they could also leverage their position to hold their crops longer, either on their farm or in commercial storage. Over the past four years, the amount of U.S. wheat in storage on average stayed relatively stable especially compared to other grains (see “Monthly Average Grain in Storage” chart below).

The ability of the U.S. farmer to hold back crops when supplies are high and prices are low, and to sell them when supplies are low and prices are high, not only increases the profitability, it also fosters increased year-to-year stability to the U.S. wheat supply. Even in the face of such a large increase in total grain production, that ability and the increased U.S. export capacity means less risk for the world’s wheat buyers.


Average is 2010 to 2014. Table is estimated using USDA data.


2. Canadian and U.S. Grain Collaborators Publish New Commercial Trade Information

The Canada-US Grain and Seed Trade Task Group has published new information that will help commercial grain handlers and buyers better understand the regulations on cross-border trade. The task group includes several not-for-profit U.S. and Canadian associations working together to provide information that facilitates grain and seed marketing between the two countries.

The information is posted on the group’s website, http://canada-usgrainandseedtrade.info. It includes new options for commercial handlers to obtain a phytosanitary certificate for U.S., Canadian or commingled grain shipments to third countries loaded at elevators in either country. The website now provides four trade modules, covering U.S. producer deliveries, Canadian producer deliveries, seed trade and the new commercial module.

The task group formed after the Canadian Marketing Freedom for Grain Farmers Act of 2012 ended the mandatory marketing requirement for western Canadian farmers and changed several aspects of the commercial trade, including the elimination of end-use certificates. The open-market changes provide new opportunities for U.S. and Canadian producers and traders to move wheat, durum, or barley across the border but that grain is still subject to the respective and applicable customs and import regulations, such as phytosanitary requirements. Some of that grain may also be exported to a third country.

“U.S. and Canadian government agencies in both countries clarified the requirements governing how phytosanitary certificates are issued for commodities transshipped through either country,” said Tyler Bjornson, President of the Canadian Grains Council. “The new rules provide more transparency about the origin of grain, but they can be complex. Now grain handlers and buyers can reference the new commercial module and share their questions and comments on the website.”

"This new information should answer many of the questions that commercial traders had following the open-market transition about cross-border trade opportunities in both countries," said Gary Martin, President and Chief Executive Officer of the North American Export Grain Association. "We are very pleased to provide this kind of support that has only been possible because so many grower and industry stakeholders on both sides of the border have been willing to work together.”

Task Group members will continue their efforts to improve transparency and recommend policies that facilitate cross border agricultural trade that exceeds $40 billion in two-way trade each year.


3. New Report Confirms Biotechnology Crop Growth
By USW Policy Specialist Elizabeth Westendorf

At the end of January, The The International Service for the Acquisition of Agri-Biotech Applications (ISAAA) released its 2014 report on the global status of commercialized crops with traits derived from biotechnology. The report, dedicated to the late Nobel Peace Laureate and renowned wheat breeder Norman Borlaug to honor his birth centennial, outlines global biotech production, areas of growth and the effect of biotech crops on farmers’ livelihoods.

Some of the key points from the report were:
  • Twenty-eight countries produced biotech crops commercially last year, involving 18 million farmers and 181 million hectares of land;
  • Twenty were developing countries and 90 percent of the farmers from these countries were small, risk-averse and poor;
  • Bangladesh was the newest addition, with Bt eggplant commercialized and planted in 2014;
  • Repeat planting among farmers was at virtually 100 percent, indicating that farmers see economic benefits from the technology;
  • Biotech food crops planted in 2014 included white maize, sugar beet, sweet corn, papaya, squash, and eggplant; U.S. regulators also approved the Innate™ potato, which is resistant to bruising and lowers the already low risk of human exposure to acrylamide, a potential carcinogen, traits that directly benefit consumers;
  • Thirty-eight countries granted 3,083 regulatory approvals for 27 biotech crops and 357 biotech events since 1994, while Japan has granted the most approvals at 201 events.

The United States is still the largest producer of biotech crops, with 73.1 million hectares in production and eight different biotech crops commercialized. Last year, there was increased adoption of drought tolerant maize, which increased 5.5 fold from 2013.

Breeders are studying potential biotech traits in wheat in the United States, but also in Australia, the United Kingdom, China, Canada and other countries. A number of African countries are developing biotech varieties for staple crops that will help smallholder farmers, and field trials for drought tolerant and pest resistant wheat have taken place in Africa in the past.

The report also referenced a 2014 meta-analysis conducted by Klumper and Qaim, which analyzed 147 published studies on biotech crops over 20 years and confirmed the benefits of the technology. The study concluded that biotech crops on average reduce pesticide use by 37 percent, increase yields by 22 percent, and increase farmer profits by 68 percent. The authors estimated that the reduction in pesticide use due to biotech crops has kept 500 million kilograms of active ingredient out of the environment.

In addition to the huge successes in biotechnology, non-biotech innovation continues to show excellent results. The report highlights several types of technology developed for biotech research that researchers are applying with excellent results in non-biotech crop breeding.

The efforts by a vocal minority to create unwarranted fear of these innovations among the world’s consumers complicates the daunting task for farmers who must increase food production by 60 percent to feed a population that will top the nine billion mark by 2050. Wheat makes up 20 percent of human calories and farmers will have to produce more and better wheat, more efficiently and more sustainably in the future. We must recognize consumer choice, yet we must also consider all the options available to the people we depend on to feed us every day — and the ISAAA report reflects consistent growth in adoption of biotechnology even in the face of such opposition.

Read more at http://bit.ly/1AhGUJ1.


4. U.S. Wheat Associates Elects 2015/16 Officers

USW farmer directors elected officers for the 2015/16 (July to June) fiscal year at their board meeting in Washington, DC, Saturday, Jan. 31, 2015. Mike Miller of Ritzville, WA, was elected to serve as Secretary-Treasurer. Current Vice Chairman Brian O’Toole of Crystal, ND, was elected Chairman and current Secretary-Treasurer Jason Scott of Stevensville, MD, was elected Vice Chairman. Current Chairman Roy Motter of Brawley, CA, will become Past Chairman. The new USW officers begin their one-year terms in July 2015 at the organization’s annual meeting in San Diego, CA.

“I see the opportunities and challenges ahead for the wheat industry through the eyes of my kids,” Miller said. “What we do over the next few years will affect the next generation the most. I’m excited about working in a leadership position to help meet those needs and to maintain or grow new overseas markets for U.S. wheat.”

Miller is a fourth generation farmer who operates a dryland wheat farm and grows multiple crops on a separate, irrigated farm in east central Washington. He has served on many local, state and national boards, and is in his second term on the Washington Grain Commission and his fourth year as a USW director representing Washington. Miller is also very active in supporting wheat research and development. He and his wife, Marci, have three children.

Brian O’Toole is an experienced agricultural and community leader. He serves on the North Dakota Wheat Commission, on the board of the Wheat Marketing Center in Portland, OR, and is Chairman of SBARE Wheat Granting Committee. He is also past president of the North Dakota Crop Improvement and Seed Association and past president of Crystal Farmers Elevator Co-op. O’Toole has received the Young Outstanding Farmer Award, Master Farmer Award and Friends of 4-H Award.

Jason Scott is at least a sixth-generation wheat farmer from the Eastern Shore of Maryland, where he manages his family’s soft red winter (SRW) wheat, row crop and vegetable operation. He also owns and operates a Pioneer Hi-Bred® seed dealership with his father. Scott has been a member of the Maryland Grain Producers Utilization Board since 2003 and served as president from 2005 to 2007. Scott received the Maryland Young Farmer Achievement Award in 2011. In his six years on the USW Board of Directors, Scott has represented his state and USW on two board team delegations to Africa and Europe.

Roy Motter is managing partner of Spruce Farms, LLC, a diverse operation in California’s Imperial Valley that produces Desert Durum®, lettuce, cabbage, onions, sugar beets, sugar cane, alfalfa seed and hay, sudan grass, melons and tomatoes. He has been a member of the California Wheat Commission since 1998.


5. Dalton Henry Joins U.S. Wheat Associates as Policy Director

International trade policies increasingly influence world wheat market opportunities. Recognizing the need for additional resources, U.S. Wheat Associates (USW) announces that Dalton Henry will join the organization in March 2015 as Director of Policy. Henry is currently Director of Government Affairs for Kansas Wheat, the cooperative agreement between the Kansas Wheat Commission and Kansas Association of Wheat Growers.

“I am very pleased with the talented trade policy team working for U.S. wheat farmers to increase market access and monitor previous trade commitments,” said USW President Alan Tracy. “Dalton’s commitment to our industry and experience managing these and other issues for a major wheat producing state will add a lot of strength to that effort.”

"It is exciting to continue working on behalf of our country’s wheat farmers as part of the USW policy team,” Henry said. “They have a great track record of producing results and I look forward to helping move the trade policy agenda forward.”

Henry joined Kansas Wheat in 2010 and has been responsible for implementing policies for the Kansas Association of Wheat Growers and managing the association’s membership function, including member retention, programming, meetings and communications. He has also been the association’s primary contact for Congressional offices, state agencies and agricultural organizations.

A May 2010 graduate of Kansas State University (K-State), Henry earned a bachelor's degree in agricultural communications and journalism, emphasizing in agricultural economics. He grew up on and is still involved with a diversified crop and livestock operation near Randolph, KS. He was involved in 4-H and FFA, and was elected president of the Kansas FFA Association in 2006. Henry had a distinguished college career, serving on several student government committees and as Student Body President in 2009/10. He was a member of the Alpha Gamma Rho fraternity and served in the College of Agriculture Ambassadors and as a charter member of the Collegiate Farm Bureau chapter.


6. USW Directors Make Several Important Decisions

At their board meeting Jan. 31, 2015, in Washington, DC, USW farmer directors considered and passed several motions presented to them by various committees that met Jan. 29 and 30. Those motions establish USW’s public policy and are summarized here.

Federal Grain Inspection. USW supports requiring the Federal Grain Inspection Service (FGIS) to take whatever actions are necessary to immediately restore official grain inspection and weighing service wherever and whenever it is disrupted, either by immediately replacing absent inspectors with FGIS Official personnel or with inspectors from available qualified providers, including other designated or delegated Official Agencies, as is mandated under the U.S. Grains Standards Act. Read more at http://bit.ly/1A25cYd.

Wheat Food Security Sectoral. USW supports developing a global wheat sectoral initiative that eliminates import tariffs, export restrictions, export and import quotas, export subsidies and state trading enterprises. Such an initiative should include limits on trade distorting domestic support and improved member transparency requirements for agricultural support programs and government policies affecting the wheat sector. This initiative would provide real food security to consumers in participating countries by removing key trade barriers that distort markets and make staple foods more expensive. It will lead to a more market-oriented global wheat production and a trading system that benefits wheat producers, value chain members and the world's consumers, especially in import-dependent countries. Read more at http://bit.ly/1s0iXhL.

Cuba. USW strongly supports ending the Cuba embargo and allowing unrestricted free trade in agricultural products to create opportunities for U.S. agriculture and to ensure food security for the Cuban people. Read more at http://bit.ly/1sDIvXy.

Supporting Specific GM Wheat LLP Level. USW supports establishing low level presence (LLP1) policies for trade of wheat intended for food, feed and processing that are predictable, science-based and consistent with international guidelines. A workable LLP threshold should incorporate biological and logistical realities. We support a 5% LLP threshold on a trait specific basis as a reasonable level to achieve a cost effective approach. We further encourage governments to establish synchronized approval policies of biotech traits to minimize trade disruptions of biotech products. Read more at http://www.uswheat.org/biotechnology#.

Food Aid. USW believes that Farm Bill food aid programs should remain under the Congressional jurisdiction of the agriculture committees, as is written in current law, and encourages the National Association of Wheat Growers to communicate this stance to appropriate policy makers. Removing food aid from the agricultural committees and USDA would be a detriment to maintaining the continued support for U.S. food aid programs that deliver high quality American commodities to those most in need around the world.

1Low Level Presence is the unintentional, low level presence, of an agricultural biotech product approved in one or more countries, but not approved in the importing country.


7. Wheat Industry News
  • IGP Buhler Flour Milling Courses. In conjunction with Buhler Inc., Kansas State (K-State) University’s Department of Grain Science and Industry and the IGP Institute are offering several milling courses in the IGP Executive Conference Center and the Hal Ross Flour Mill on the K- State campus in Manhattan, KS. The courses run from March through November with both English and Spanish language instruction. For more information on the courses and to register, visit http://www.grains.ksu.edu/igp.
  • NCI Pasta Course. The Northern Crops Institute in Fargo, ND will hold its Pasta Production and Technology Short Course April 14 to 16, 2015. For more information or to register, visit http://www.northern-crops.com/.
  • 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.
  • Not for Your Customers, Minister Fyodorov. Reuters reported yesterday that when asked about several vessels loaded with wheat for Egypt stuck in Russian ports due to export restrictions in late January, Russian Agriculture Minister Nikolai Fyodorov said: "It's a technical and small issue."
  • Board Team Heading to Latin America. Colombia, Costa Rica and Mexico are on the itinerary for USW’s second Board Team of 2015 from Feb. 26 to March 10. Starting in Washington, DC, USW Programs and Planning Assistant Stephanie Bryant-Erdmann will lead the team that includes North Dakota wheat commissioner Jim Bahm, Kansas wheat commissioner Scott Van Allen, Wyoming wheat commissioner Ken Tremain and Nebraska USW director Von Johnson. USW Board Teams are intense, regional visits that give USW directors and state wheat commissioners the chance to review the work of overseas USW offices, to learn about local milling wheat needs and to thank milling and baking customers for their business.


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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