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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.” USW activities are funded by producer checkoff dollars managed by 18 state wheat commissions and USDA Foreign Agricultural Service cost-share programs. For more information, visit or contact your state wheat commission. Stakeholders may reprint original articles from Wheat Letter with source attribution. Click here to subscribe or unsubscribe to Wheat Letter.

In This Issue:
1. U.S. Spring Wheat Yields Excellent Quality at Substantially Lower Cost
2. Excessive Foreign Farm Support Disrupts World Wheat Trade
3. Victories for Science in Africa
4. Thanks to Taiwan Flour Millers for Their Commitment to U.S. Wheat
5. Japanese Millers Trade Team Visit Three States
6. Wheat Industry News

Online Edition: Wheat Letter – September 24, 2015

PDF Edition: (See Attached) (See attached file: Wheat Letter - September 24, 2015.pdf)

USW Crop Quality Report:

1. U.S. Spring Wheat Yields Excellent Quality at Substantially Lower Cost
By Stephanie Bryant-Erdmann, USW Market Analyst

In its September World Agricultural Supply and Demand Estimates (WASDE) report, USDA predicted world wheat production for marketing year 2015/16 would reach 732 million metric tons (MMT). As they wrap up their harvests, farmers across the northern hemisphere will likely put about 681 MMT of that total into the bins. Southern hemisphere farmers will produce only about seven percent of world wheat production, with much of that grown in Australia and Argentina, which, on average, export 75 percent and 50 percent of their total production, respectively. Consequently, while the southern hemisphere harvest plays an important role in export markets, the quantity and quality of northern hemisphere wheat looms quite large for the world’s millers and wheat food processors.

This year, U.S. farmers will produce an anticipated 58.1 MMT of wheat after slightly higher yields and a five percent increase in harvested acres offset a one percent decline in planted acres. In particular, U.S. hard red spring (HRS) production, which accounts for 27 percent of total U.S. wheat production, will reach an estimated 15.7 MMT, the largest crop since 1996/97. In addition, favorable weather, efficient agronomics and the use of high potential, certified seed combined to produce a big crop with excellent quality for end use customers. As of Sept. 18, with only three percent of the HRS crop still to be harvested, USW reported average protein at 14.2 percent (12 percent moisture), up from 2014’s final of 13.6 percent, and average test weight at 61.4 lb/bu (80.7 kg/hl) up from 60.8 lb/bu (80.0 kg/hl) last year. The preliminary data also shows the average grade is No. 1 dark northern spring (DNS) with an average vitreous kernel content (DHV) of 77 percent compared to an average of 60 percent in 2014.

Here is more good HRS news for buyers: at FOB $234 per MT as of last week, DNS 13.5 percent protein, December delivery PNW is $116 per MT less than it was last year on about the same date. While acknowledging that the strong U.S. dollar has diminished the impact of lower prices, this is still a very good price for very good HRS wheat.

As they do every year, buyers and end-users have the opportunity to follow the U.S. wheat harvest and quality because USW works closely with state wheat commission members and several partners to analyze representative samples and report progress each Friday ( USW and its partners will complete flour and dough analysis and provide complete summaries of quality data for HRS, as well as for five other U.S. wheat classes, in its annual Crop Quality report. USW has already posted a preliminary soft red winter (SRW) report on its website ( USW will continue its tradition of sharing the data publicly and with its customers around the world through Crop Quality Seminars or personal visits.

Sharing such information with complete transparency is critical for end-use customers and USW’s record of reporting it is decades old. U.S. wheat is, in part, the world’s most reliable supply because it always comes with the information customers need to get the best value possible.

2. Excessive Foreign Farm Support Disrupts World Wheat Trade

Over the past few years, USW has publicly shown evidence that governments in several advanced developing countries have dramatically increased subsidies for domestic wheat production to levels that far exceed their World Trade Organization (WTO) agreements. Last week, USW and the National Association of Wheat Growers (NAWG) unveiled the results of an econometric study confirming that such policies have a detrimental effect on U.S. and world wheat farmers and global wheat trade.

“I believe we have shown through these studies that the old perceptions about farm support and trade are clearly wrong,” said USW President Alan Tracy. “Today, it is the farm subsidies in a few advanced developing countries, not developed country policies, which disrupt normal trade flows and distort world wheat prices. These rapidly growing subsidies cause direct, serious and now measurable impacts on the prices that U.S. farmers receive for their grain.”

Noted agricultural economist Dr. Dermot Hayes and two of his colleagues at Iowa State University conducted the study. The goal was to determine what would happen to U.S. and global wheat production, trade and prices if domestic support in China, India, Turkey and Brazil were removed.

The study indicated that with no domestic support in those countries, wheat trade flows would shift and the four countries would increase net imports by nearly 10 MMT. Hayes said the model estimated the United States would capture more than 20 percent of such an increase to export an additional 2.2 MMT compared to the model’s baseline if there were no changes in domestic support in those countries.

Hayes’ team also used the model to predict the net effect that eliminating support in individual countries would have. For example, a DTB Associates study in 2014 showed that in addition to government input subsidies coupled to wheat production, Chinese farmers have government minimum support prices of about $10.45 per bushel, or about $384 per MT. The Hayes study indicated that if support in China ended, Chinese imports would grow from nearly 2.0 MMT per year to more than 7.5 MMT per year. This would still be less than the 9.6 MMT annual tariff rate quota that China agreed to in its WTO accession commitments. Hayes said the model showed that even with the predicted changes, China, India, and Turkey would continue to be at least 90 percent self-sufficient in wheat production. Eliminating domestic support would have the least effect in Brazil where support levels are lower than the other countries.

WTO records show that the United States has consistently met its commitments, never exceeding its Aggregate Measure of Support (AMS) limit of $19.1 billion. Nevertheless, other proposals made as part of the Doha round would require the United States to cut its limit drastically, while members with growing support programs would offer no meaningful contributions. Deputy U.S. Trade Representative Amb. Michael Punke has called this a “mind-boggling imbalance” that firmly underpins the U.S. position that it is critical to put facts on the table for a frank discussion about the real dynamic of world agricultural production and trade.

In reference to current negotiations in the Doha round, Brett Blankenship, who grows soft white wheat near Washtucna, WA, and current NAWG president, said, “It is totally unacceptable to tolerate demands from countries who are in violation of their WTO commitments, who continue with these huge levels of support while demanding concessions from the United States.”

"Since these subsidies are the acts of sovereign governments, our farmers cannot battle them alone. We are working with USTR and USDA to determine our next steps, including a possible WTO challenge," Tracy concluded.

USW and NAWG have posted the study results online at and To see results of the two DTB Associates studies measuring domestic support in advanced developing countries, visit and

For a third party analysis of individual policy measures by country, visit

3. Victories for Science in Africa
By Elizabeth Westendorf, USW Policy Specialist

Changes in crop biotechnology policies around the world are often arduously slow and rarely make headlines. However, one country in Sub-Saharan Africa broke out of that mold in early August 2015.

In a landmark announcement by Deputy President William Ruto, Kenya committed to lifting its ban on genetically modified (GM) foods. According to multiple news reports, the country is also heading toward commercial release of Bt maize and possibly Bt cotton. This represents a milestone in Kenya’s agricultural biotechnology development, though it may still require a strong test of political will to see the changes implemented.

Kenya has had a strong domestic agriculture research program for years that includes wheat research and biotechnology (read more online at “Kenya Wheat Team Wins Prestigious 2015 Gene Stewardship Award”). Lifting the ban on GM crops may allow Kenya to become a regional leader for agricultural innovation and serve as a catalyst for GM adoption. In a recent “Truth About Trade and Technology” article, Kenyan farmer and university lecturer Gilbert arap Bor wrote, “Many other countries — and not merely those in eastern Africa — look to [Kenya] for leadership. Our acceptance of biotechnology bodes well for farmers in Cameroon, Ghana, Malawi, Mali, Nigeria, Rwanda, Tanzania and Uganda.”

These farmers could use GM traits to improve food security through crops well suited to Africa, such as bananas, cassava, sorghum, corn and sweet potatoes. According to Charles Waturu, the director of the Horticultural Institute in Kenya, Bt cotton could save farmers up to $700 per hectare by reducing the need for pesticides.

USDA’s Foreign Agricultural Service (FAS) attachés monitor biotechnology developments in their country posts. FAS summarizes these valuable insights in an Agricultural Biotechnology Annual and highlights any changes in each of these country’s regulations, plantings, imports or general market acceptance. Recently published reports for a number of countries, including Kenya, Thailand, Ethiopia, Ghana, India, Pakistan, South Africa, Canada, United Kingdom, Chile, Brazil, Japan, Mexico, Korea, Taiwan, Philippines and Australia, are available here.

The reports show other African countries also moving forward with biotechnology research and regulation. Ethiopia had a de facto ban on planting and research for biotech crops and struggled for years to gain consensus on the technology. In 2015, they adopted changes to allow for commercialization, allowing farmers to plant biotech cotton and take advantage of the benefits other countries were seeing from the crop. In Burkina Faso for example yields increased 20 percent, pesticide use fell 67 percent and profits increased 51 percent. Ghana may also commercialize Bt cowpea or GM cotton within the next three years with similar economic benefits possible. This year, Côte d’Ivoire adopted the Cartagena Protocol, an international agreement on biosafety, and is now drafting a biosafety law, while Senegal is revising its biosafety law. The West African Economic and Monetary Union adopted a regional biosafety law earlier this year. Its members include Benin, Burkina Faso, Cote d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

Africa will be a bellwether for future biotechnology acceptance worldwide, and the stakes are high. The continent is often highly influenced by European opinions, so positive changes in biotechnology are uncommon. As more countries embrace science-based policies and regulations, there is hope for wider acceptance of innovations.

On a continent having trouble keeping up with booming population growth, biotechnology is a vital tool in food security. Changes in Sub-Saharan Africa are especially interesting because of the high prevalence of food insecurity in the region and the need for new, innovative technology to feed those populations. Acceptance of biotechnology as one of the tools for seed improvement would give farmers new options for growing food as well as increasing both yields and yield consistency.

The stakes are specifically high for world wheat production, too. As demand for the crop increases, farmers everywhere must respond by growing more wheat while using fewer resources.

4. Thanks to Taiwan Flour Millers for Their Commitment to U.S. Wheat

Representatives of the Taiwan Flour Millers Association (TFMA) visited Washington, DC, the week of Sept. 14 as part of a biennial Agricultural Trade Goodwill Mission to the United States. TFMA imports wheat on behalf of all 20 Taiwanese flour mills and has been a loyal customer of U.S. wheat producers for many years.

At a signing ceremony in the U.S. Capitol, USW President Alan Tracy and Shin-Yao Lin, chief executive officer of Top Food Flour Mill in Taipei, Taiwan, and current TFMA Executive Director, co-signed a letter of intent committing TFMA to purchase U.S. wheat (see photo in the online edition of “Wheat Letter.”) Representatives of the U.S. Grains Council and the American Soybean Association co-signed separate letters with other Taiwanese buyers. The letters committed Taiwanese buyers to purchase approximately $3.03 billion worth of U.S. wheat, corn and co-products, and soybeans by 2017.

Delegates from TFMA started their visit to the United States as honored guests of the Idaho Wheat Commission at the Lewiston Roundup Rodeo Sept. 12 (see photo in the online edition). After the events in Washington, DC, the flour millers continued their part of the mission Sept. 17 with visits to Kansas, Montana and Washington to meet with state wheat commission and government representatives before returning to Taiwan Sept. 23.

“U.S. wheat farmers have maintained a trade office in Taipei since 1966,” Tracy said. “We are proud of that and also quite proud that USW Country Director Ron Lu has been a faithful part of that service for more than 33 years. We want to thank our customers at TFMA for importing significantly more U.S. wheat than the 1.7 MMT in the agreement signed in 2013.”

More photos from the signing event are available at

5. Japanese Millers Trade Team Visit Three States

In 2016, the USW will mark 60 years with a marketing office in Japan, so it comes as no surprise that in marketing year 2014/15, Japan was the single largest buyer of wheat from the United States. In the same year, Japan was also the biggest market for U.S. HRS and SW wheat. To learn more about the high quality wheat to which their customers have become accustomed, a team of mid-level managers from Japanese flour mills have been visiting Oregon, Idaho and Montana since Sept. 20, 2015.

Millers on this team are executives from milling companies representing Japan’s National Cooperative of Millers. The first trade team from this group of millers visited the United States in 2014. USW collaborated with the Montana Wheat and Barley Committee, Oregon Wheat Commission and Idaho Wheat Commission to organize and host this year’s visit.

“These mid-level managers will eventually ascend to senior management positions and hopefully take with them an understanding that the United States produces the highest quality wheat for Japan,” said Steve Wirsching, USW vice president and director of the West Coast Office in Portland, OR. “This trade team visit creates an opportunity for us to increase their positive view of U.S. wheat and ensure we can continue to compete in Japan in the future.”

The milling managers began their trip in Portland, hosted by the USW West Coast Office, for briefings with the Federal Grain Inspection Service (FGIS) and Wheat Marketing Center. While in Oregon, the team also toured the Columbia Grain export terminal and visited OMIC USA. Continuing their trip in Boise, ID, the team met with Scoular Grain and the Idaho State Department of Agriculture and toured the Swan Falls Dam and lock system on the Snake River. To complete their tour of the Pacific Northwest, the team traveled to Montana to tour shuttle train loading facilities operated by Gavilon Grain in Chester and United Grain in Moccasin. Other stops include the Central Ag Research Center near Moccasin and Myllymaki Farms outside of Livingston. Throughout their trip, the team members have met with wheat farmers the sponsoring state wheat commissions and others who manage the U.S. wheat supply chain.

6. Wheat Industry News
  • A Kansas State University Wheat Geneticist is Part of a Breakthrough Study, identifying one of the wheat genes that controls response to low temperature exposure, a process called vernalization. Natural variation in vernalization genes defines when the plant begins to flower and is critical for adaptation to different environments. Eduard Akhunov, associate professor in the plant pathology department, collaborated with Jorge Dubcovsky at the University of California, Davis on what researchers anticipate will help wheat breeders design wheat varieties that can adapt and thrive in changing environments around the world. Read the full story here.
  • 2015 World Food Prize Winner, Sanjaya Rajaram, Says GM Technology is Needed to feed the world into the future. Participating in a panel discussion on a radio network in Australia recently, the renowned wheat breeder said hybrid breeding may increase production by 20 to 25 percent, but that will not be enough to leave genetic modification out of the mix. Listen to or read his comments here.
  • Bayer CropScience Seeds Innovation Center Opened on campus at Texas Tech University Sept. 2. The center features state-of-the-art laboratories and research facilities, including a new greenhouse. The center will host the company’s global cotton business operations while also supporting wheat and soybean seed improvement research. Read the full announcement here.
  • DuPont Pioneer Expands Multi-Crop Research Center in Windfall, IN. The expansion, announced Aug. 16, will better serve local growers and support global breeding and testing programs in wheat, corn and soybeans. For additional information visit
  • Best Wishes to Travis Jones, past executive director of the Idaho Grain Producers Association, as he joins Congressman Mike Simpson’s staff as State Policy Director.
  • WTO Members Elect a New Ag Chair. On Sept. 8, WTO agriculture negotiators elected New Zealand Ambassador Vangelis Vitalis as its new chairperson. Previously he served as his country’s Head of Mission to the European Union and NATO, as well as Ambassador to Sweden. Read the full announcement here.
  • “The Truth about Wheat Program” is Now Available Online. Focusing on current questions about wheat nutrition and trends, the program features discussions with a variety of experts in plant science, wheat breeding, dietetics and farming. A project of the Oklahoma Wheat Commission, you can view the program on the Oklahoma Educational Television Authority (OETA) online network. Read the full announcement here and watch the video here.
  • Kansas State University Welcomes Flour Milling Specialist. Jason Watt recently joined the grain science and industry department and the IGP Institute as the Buhler instructor of milling. A graduate of the KSU milling science and management program, Watt had been with Ardent Mills. Read the full announcement here.
  • New Study on International Wheat Improvement Released. New research conducted by the CGIAR Wheat Research Program from 1994 to 2014 shows that improved wheat varieties developed using CGIAR breeding lines, either in cross-pollinations or as direct releases, cover more than 100 million hectares — nearly two-thirds of the area sown to improved wheat worldwide. According to the study, the impacts derive largely from research and development activities conducted by the International Maize and Wheat Improvement Center (CIMMYT) and the International Center for Agricultural Research in the Dry Areas (ICARDA). Read the full story at
  • Registration Open for IGP-KSU Introduction to Flour Milling Course. The IGP Institute will once again host this course giving an overview of U.S. wheat production; the general milling process and major milling equipment; principles of mill flow sheets; milling math (extraction, tempering and blending); flour functionality, flour and dough testing practices and methods. The course will run from Jan. 11 to 15, 2016, and registration closes Dec. 18, 2015. Register and learn more here.

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