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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 www.uswheat.org or contact your state wheat commission.

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In This Issue:
1. World Wheat Production to Decline in 2017/18
2. National Festival of Breads Offers Model for Meeting Food Trends and Consumer Demand
3. Profiling U.S. Wheat Sustainability: John Hoffman, Soft Red Winter Wheat Farmer
4. Taiwan Milling Executives See Opportunity in Visit to the Pacific Northwest
5. USW Supports Doud for USTR Chief Agricultural Negotiator
6. Wheat Industry News

PDF Edition: (Attached)

USW Harvest Report: http://www.uswheat.org/harvest


1. World Wheat Production to Decline in 2017/18
By Stephanie Bryant-Erdmann, USW Market Analyst

With wheat harvest underway in the Northern Hemisphere and wheat planting underway or complete in the Southern Hemisphere, wheat buyers are beginning to see a downward trend in production numbers. As discussed in the June 15 Wheat Letter, the high quality, high protein wheat supply is shrinking and supporting prices. USDA expects global output to decrease for the first time in five years to 739 million metric tons (MMT) (27.2 billion bushels), down 14.6 MMT (535 million bushels) from the 2016/17 record of 754 MMT (27.7 billion bushels). If realized, production would be 3 percent above the five-year average. In this issue, we summarize current expectations and conditions in the world’s major wheat exporting countries, which account for 90 percent of all world wheat exports.




Argentina. In June, Bolsa de Cereales, the Buenos Aires Grain Exchange, reported Argentine farmers will plant 17 percent more wheat acres in 2017/18 as wheat production continues to expand under President Macri’s favorable policies. Bolsa estimated wheat planted area at 13.6 million acres (5.5 million hectares). On June 22, 53 percent was planted, up from 37 percent the prior week. USDA’s July estimate for 2017/18 Argentinian wheat production was 17.5 MMT (643 million bushels), up 3 percent from 2016/17 and 41 percent greater than the five-year average.

Australia. In its June report, the Australian Bureau of Agricultural and Resource Economics and Science (ABARES) forecasted 2017/18 production at 24.2 MMT (889 million bushels). That is 31 percent below 2016/17, due to an expected 25 percent reduction in average yield and a slight decline in planted area from 2016 to 31.4 million acres (12.7 million hectares). Autumn rainfall was below normal in Western Australia and variable across South Australia, states that account for roughly half of Australia’s winter crop planted acres and production. The Australian Bureau of Meteorology expects drier than average conditions across wheat producing regions during the next three months.

Black Sea. Winter wheat harvest is underway and USDA projects combined 2017/18 output from Russia, Ukraine and Kazakhstan will decrease 6 percent to 107 MMT (3.93 billion bushels) based on an expected return to trendline yields. If realized, the combined harvest would still be greater than the five-year average. Russian consultancy SovEcon pegged Russian planted wheat area at 68.9 million acres (27.9 million hectares), down slightly from 2016/17 due to a 4 percent decrease in spring wheat area. Russian wheat production is expected to decline to 70.4 MMT (2.59 billion bushels), down 3 percent from 2016/17 due to the smaller planted area and anticipated lower yields. SovEcon forecast Russian winter wheat yields at 52.1 bu/acre (3.50 MT/ha), down from 55.5 bu/acre (3.73 MT/ha) in 2016/17. Spring wheat yields are expected to fall 7 percent year over year to 21.1 bu/acre (1.42 MT/ha). UkrAgroConsult reported Ukrainian wheat planted area decreased slightly year over year to 15.6 million acres (6.30 million hectares), and expects yields to fall 7 percent year over year to 58.2 bu/acre (3.91 MT/ha). 2017/18 Ukrainian wheat production is forecast at 24.5 MMT (900 million bushels), compared to 26.1 MMT (959 million bushels) in 2016/17. UkrAgroConsult noted yield declines and a 3 percent smaller planted area will lower Kazakhstan wheat production to 13.7 MMT (503 million bushels), down 9 percent from 2016/17, if realized.

Canada. Agriculture and Agri-Food Canada (AAFC) expects wheat production of 29.5 MMT (1.08 billion bushels) in 2017/18. That is down 7 percent year over year because average yield is expected to decline to 47.6 bu/acre (3.20 MT/ha) in 2017/18. Slightly higher planted area will partially offset expected yield declines. StatsCan put planted area at 22.4 million acres (9.07 million hectares) of wheat in 2017/18. Spring wheat planted area rose 2 percent to 15.8 million acres (6.39 million hectares) due to low carry-in stocks and increased price competitiveness with alternative crops. Durum planted area decreased 16 percent year over year to 5.2 million acres (2.11 million hectares) due to high carry-in stocks and lower prices. Canada’s winter wheat seeding decreased 16 percent year over year from a shift to spring wheat. Crop conditions this year are variable with excessive moisture in northern areas while southern areas remain dry. As of June 23, topsoil moisture in Saskatchewan was rated 18 percent short or very short compared to 40 percent short or very short last week. In Alberta, 84 percent of spring wheat is rated in good to excellent condition compared to 83 percent last year. Surface soil moisture is rated 79 percent good to excellent; 14 percent of surface soil moisture is rated excessive. Saskatchewan and Alberta account for roughly 82 percent of 2017/18 planted wheat acres.

European Union. After a challenging 2016/17, Strategie Grains expects EU common wheat production will rebound 4 percent to 142 MMT (5.20 billion bushels) in 2017/18 with a 5 percent increase in yield expected to offset a 1 percent decrease in planted area. French production is expected to increase 7.66 MMT (281 million bushels) year over year to 35.6 MMT (1.31 billion bushels) — a 33 percent improvement in yields. Precipitation across France is 25 percent below normal since March, however. The French crop bureau FranceAgriMer rated 68 percent of French soft wheat in good or excellent condition, down from 74 good to excellent percent the prior week. Dry conditions are also threatening yield potential in Austria, Germany, Italy and Poland. In Spain, drought conditions are expected to cut wheat production by 32 percent year over year to 4.72 MMT (173 million bushels). Additionally, the EU's crop monitoring service MARS reduced its forecasts for wheat yields to 87.2 bu/acre (5.86 MT/ha), from 87.9 bu/acre (5.91 MT/ha) in May, but greater than the five-year average of 86.7 bu/acre (5.84 MT/ha). Weather forecasts for early July provide little relief for EU farmers, which could further threaten yield potential.

United States. USDA forecast U.S. 2017/18 wheat production at 49.6 MMT (1.82 billion bushels), down 21 percent year over year and 15 percent below the five-year average due to an anticipated 10 percent decline in average yield and the lowest number of planted acres since USDA records began in 1919. USDA expects the average yield to be (3.18 MT/ha) compared to the five-year average of (3.14 MT/ha). In the March 31 Prospective Plantings report, USDA reported U.S. farmers intended to plant 46.1 million acres (18.7 million hectares) of wheat for 2017/18.

USDA will update planted area estimates June 30. The first U.S. by-class estimates will be released in the July 12 World Agricultural Supply and Demand Estimates (WASDE) report.

Follow #wheatharvest17 on Twitter for the latest harvest photos and conditions.

Subscribe to USW Weekly Harvest Reports. To read the latest report, click here.


2. National Festival of Breads Offers Model for Meeting Food Trends and Consumer Demand
By Amanda J. Spoo, USW Communications Specialist

Earlier this year, I had the opportunity to travel abroad with some U.S. wheat farmers to learn more about the world wheat market and see how those markets use U.S. wheat. We visited many end-product manufacturers, and as we reviewed their various products, most of our conversations circled back to consumer demand. In the United States, the consumer’s relationship with food is becoming increasingly sophisticated — following new trends and seeking out convenience and information on where it came from. The fuel for this change comes from increasing disposable income, television networks dedicated to food and the growing number of online platforms like food blogs, Pinterest, etc. Although products and taste preferences vary from market to market, the demand for food that is high quality, creative and has a story, is universal.

Here in the United States, I recently had the chance to participate in an event that represents a potentially successful way for the global milling, food ingredient and wheat food industries to tell their stories to consumers. It was the National Festival of Breads, a biennial event held in Manhattan, KS, hosted by the Kansas Wheat Commission and sponsored by King Arthur Flour and Red Star Yeast to showcase bread, U.S. wheat and the art of baking. At the center of the festival on June 17 were eight people selected as finalists in a baking contest, the only U.S. amateur bread-baking competition in the United States. They prepared their original bread recipes live for festival visitors and were judged on creativity, healthfulness and taste to determine a grand prize winner. Judges selected the “Seeded Corn and Onion Bubble Loaf,” made by Ronna Farley of Rockville, MD, as the 2017 National Festival of Breads Champion. The champion recipe and all eight finalists’ recipes are available at http://nationalfestivalofbreads.com.

The festival also featured diverse educational baking demonstrations focused on the versatility of bread, baking tips, convenience and health. The more than 3,000 festival visitors joined in hands-on children’s activities, bread tasting and a trade show featuring the baking industry and a well-rounded look at the U.S. wheat supply chain, including wheat farmers, milling companies, research and extension, and those in product development.

Prior to the festival, the eight finalists also went on a farm-to-fork tour of central Kansas, which included a flour mill, a wheat farm and the Kansas Wheat Innovation Center. On the Kejr family wheat farm, the finalists rode along in the combine to actually participate in the wheat harvest, which one finalist said helped complete the story of the bread into which she put so much of her own care and hard work.

What was advertised as a fun, family-friendly festival for baking really serves as an opportunity to learn about what is important to the consumer and, in return, share information on the role of wheat in their diet — and why bread is so important in so many cultures. My experiences on my trip overseas and at the National Festival of Breads had many parallels, most importantly that listening to the consumer and creating product advantages and stories around their desires is an effective model for success.


3. Profiling U.S. Wheat Sustainability: John Hoffman, Soft Red Winter Wheat Farmer
By Elizabeth Westendorf, USW Policy Specialist

John Hoffman farms some of the same land that four generations of his family have managed since the late 1800s. Today, the farm covers roughly 3,200 acres where he grows corn, soybeans and soft red winter (SRW) wheat. For Hoffman, sustainability is key to preserving his family’s farming tradition for the next generation.

“I think we’re sustainable when every year we are able to plant a crop, harvest a crop, and do it again the next year,” said Hoffman. “If we are not sustainable, that would not happen — we would not stay in business every year.”

Hoffman believes being sustainable means being an early adapter of emerging practices on his farm. He tries to embrace the latest farming technologies to help improve his business, such as no-till and minimum till practices to improve soil health, GPS technology to increase accuracy and use inputs efficiently, and government conservation programs to give back to the environment.

Hoffman is the fourth of six U.S. wheat farmers featured in a USW series on wheat sustainability. These profiles show the differences in wheat production practices across the country and how those farming practices enhance the sustainability of U.S. agriculture.

“Family farming is a way of life, but it is also a large business,” said Hoffman. “Anything we can do to improve on what we do as business people, farmers and human beings to make things better, we are going to attempt to do it.”

A good example is how Hoffman uses a combination of no-till and minimum-till practices depending on crop need. No-till farming does not disturb the soil, which increases the amount of water that penetrates the soil surface and improves organic matter. Minimum-till helps warm the soil or reduce excess moisture. Both techniques reduce erosion compared to traditional tillage. He produces all his wheat and 80 percent of his soybeans with no-till technology, and he uses minimum tillage in corn production.

Access to better seed over the years has allowed Hoffman to improve his farming practices and use innovative techniques so that his farm is constantly improving. This story is true for many farmers, as plant breeding comes up with new varieties that respond to specific agronomic and economic challenges. That innovation is just another facet of the sustainability story.

“With the new genetics available in seed today, we can be more cost-effective and utilize less chemicals. That also made the no-till option a lot more practical,” said Hoffman. “Plus, the soil savings — the conservation aspect of it — we thought it was better for our land. It really helped reduce soil erosion.”

Another issue in Hoffman’s area is how farming affects water quality. By reducing soil erosion, he and other farmers reduce the amount of water that runs off their fields. Hoffman has also tried to reduce his inputs over the years to help with water quality and makes sure to use them intelligently — by not applying fertilizer on frozen ground or before a large rain, he makes sure that those inputs stay in the field instead of being washed away. On some of his land, he has been able to use government conservation programs and plant grass around the natural water runoff areas.

Hoffman’s farm has thrived because he has been able to innovate and adopt new technologies and practices over the years. At its core, that is what sustainability is about — constant improvement. Each of the farmers featured in USW’s Sustainability Profiles embody this idea. They do it in different ways, but with that one idea in common.

Learn more about Hoffman and his farm at www.uswheat.org/factsheets. U.S. farmers, ranchers, fishermen and foresters also share their values, sustainability experiences and conservation practices at the U.S. Sustainability Alliance.


4. Taiwan Milling Executives See Opportunity in Visit to the Pacific Northwest
By Amanda J. Spoo, USW Communications Specialist

From research labs to the field to the grain elevator, each stage of the supply chain contributes to the overall quality and reliability of U.S. wheat. But in the Pacific Northwest, the major link between quality U.S. wheat and the world market is the Columbia Snake River System. When trade teams from overseas visit the United States to learn more about the U.S. wheat market, learning how the river system supports exports is a key part of their experience.

USW welcomed a trade team of four milling executives from Taiwan that spent a lot of time along the river system from June 11 to 18. USW collaborated with the Oregon Wheat Commission (OWC), Washington Grain Commission (WGC) and the Idaho Wheat Commission (IWC) to organize and host this trade team. Funding for this trade team also came from the USDA Foreign Agricultural Service (FAS).

“On average, Taiwan is the sixth largest market for U.S. wheat. The millers on this team were interested in exploring additional options for purchasing U.S. wheat,” said Boyuan Chen, USW Country Director in the Taipei Office. “Our schedule focused on the export system and sourcing practices, as well as programs for wheat breeding and quality assurance.”

The team began its trip in Portland, OR, meeting with the USW West Coast Office and OWC for briefings on supply and demand, and crop conditions for hard red winter (HRW), soft white (SW) and hard white (HW) wheat. They continued their overview of the supply chain with tours of multiple port elevators and meetings with the USDA Federal Grain Inspection Service (FGIS) and the Wheat Marketing Center (WMC).

Next, the team traveled to Washington and Idaho where the two state wheat commissions worked together to focus on the team’s interests. This included a visit to the USDA-ARS Western Wheat Quality Laboratory, and participation in a county field day where the team saw wheat breeding and quality improvement programs in the new wheat varieties across the test plots. The team also learned more about the value of the river system and how the 465-mile river highway is an essential lifeline that provides farmers from as far inland as the Midwest with access to the global market.

“Trade teams that visit this area of the Pacific Northwest have the unique opportunity to see two land grant universities, many wheat related facilities and the river system all in close proximity,” said Blaine Jacobsen, IWC Executive Director. “This is rich farmland where farmers are utilizing the latest technology to plant and care for the wheat that will move down river and on to family tables across Taiwan and all of Asia.”

Always a highlight for visiting customers, the team also had the opportunity to visit with Washington and Idaho wheat growers.

“It’s a wonderful opportunity for wheat growers to rub shoulders with their customers, and it’s a great opportunity for buyers to learn more about the crop and the supply chain in the state of Idaho,” said Bill Flory, Idaho wheat farmer and commissioner.

“Being able to ask questions and discuss wheat quality at each stage of the supply chain with the people that grow and move the crops increased the confidence in U.S. wheat for these milling executives,” said Chen. “That is a great benefit, because they are considering purchasing a larger variety of U.S. wheat, including club wheat and hard white wheat.”


5. USW Supports Doud for USTR Chief Agricultural Negotiator

USW strongly supports President Trump’s nomination of Gregg Doud to become Chief Agricultural Negotiator, with the rank of Ambassador, in the Office of the U.S. Trade Representative (USTR).

"We are thrilled with Gregg’s appointment,” said USW President Alan Tracy. “He has deep ties to U.S. wheat, served as our market analyst and has remained a friend and ally ever since, especially when working for Senator Roberts. He has the background and the energy to excel as USTR's agricultural trade negotiator, a position of great importance to our industry.”

Currently, the important dispute cases against China’s trade distorting domestic wheat support and its tariff rate quota obligations on imported wheat need to move forward, and the renegotiation of the North American Free Trade Agreement is looming. USW joins the National Association of Wheat Growers in urging an expedited review and confirmation so Doud can get to work at USTR as soon as possible.



6. Wheat Industry News
  • Quote of the Week: “It is sort of ironic, the [wheat] acres we had been holding our breath for in April were now gone due to another act of nature. And from what I understand, those acres received 22 inches of wet, heavy snow, stood back up, filled and the farmer was looking at another bumper crop.” — Tracy Zeorian, Zeorian Harvesting & Trucking, describing the effect of a hail storm in the June 26 entry in “All Aboard Harvest.”
  • WTO Constitutes Dispute Panel in China Domestic Subsidy Case: The U.S. case at the World Trade Organization (WTO) against China for allegedly exceeding its allowable subsidy limits on wheat, rice and corn is moving forward with the constitution of a panel this week. The three-person panel will include Gudmundur Helgason, Juan Antonio Dorantes Sanchez and Elaine Feldman, according to a WTO notice posted June 26. For more information, visit http://bit.ly/2cj24n3. The Office of the U.S. Trade Representative also intends to continue an Obama-era challenge of China's use of tariff-rate quotas on imports of U.S. wheat.
  • Best Wishes to NCI Director. Mark Weber recently announced his intention to retire as Director of the Northern Crops Institute (NCI) effective Dec. 31, 2017. "It has been an extreme privilege, joy and honor to represent this world-class organization," said Weber. "The NCI has a dedicated and hard-working team of staff members that I am very proud of." USW thanks the whole team at NCI for their contribution to our export market activity and we wish Mark and his family best wishes for a wonderful retirement.
  • Questions about genetically modified organisms (GMOs)? GMOAnswers.com is a site that attempts to answer even "tough" questions about this lively topic. The resource represents the biotech industry, which stands behind the health and safety of the GM crops on the market today. The newly updated site is "the beginning of a new conversation among everyone who cares about how our food is grown." The site is also published in Spanish, Portuguese, Chinese, Japanese and Vietnamese.
  • 2017 World Food Prize Laureate Named. Dr. Akinwumi Adesina, President of the African Development Bank, was announced as the 2017 World Food Prize Laureate June 26. Awarded by the World Food Prize Foundation, the prize honors Nigerian Dr. Adesina for his leading role over two decades in significantly expanding food production in Nigeria; introducing initiatives to exponentially increase the availability of credit for smallholder farmers across the African continent; and galvanizing the political will to transform African agriculture.
  • IGP-KSU Risk Management Course will be held the IGP Institute in Manhattan, KS, Aug. 7 to 11, 2017. Split into Basic and Advanced sections, the course focuses on principles of risk management and commodity price control through the principles of hedging and various hedging strategies. Registration is due July 31. Click here for more information and to register.
  • KSU-Buhler Spanish Executive Milling Course. The IGP Institute will collaborate with Buhler, Inc., to host this course in Manhattan, KS, Aug. 28 to Sept. 1, 2017. The course is designed for mill owners, directors and managers, and will be an introduction to flour milling and quality, grain cleaning and functionality. Registration is due July 20. Click here for more information and to register.


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