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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. Large World Wheat Supply is Certain; Quality is the Question
2. Variable Quality in the 2014 U.S. SRW Crop Is Manageable
3. Vessels Loading Again at United Grain; U.S. Wheat Industry Remains Vigilant
4. U.S. Farmer Organizations Discuss Regulatory Environment for Biotechnology
5. Wheat Foods Council Wheat Safari Takes National Media on Tour of ND Wheat Industry
6. Wheat Industry News


Online Edition: Wheat Letter – August 21, 2014 (http://bit.ly/WL082114)

PDF Edition: (See attached file: Wheat Letter - August 21, 2014.pdf)

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


1. Large World Wheat Supply is Certain; Quality is the Question
By Casey Chumrau, USW Market Analyst

Northern Hemisphere farmers are close to finishing their winter wheat harvest and beginning to cut spring wheat. While persistent drought reduced hard red winter (HRW) production in the southern plains, it is evident that better-than-expected yields around the world so far will likely lead to a record wheat crop. USDA significantly increased its 2014/15 world production projection by 10.9 million metric tons (MMT) to 716 MMT in its August World Agricultural Supply and Demand Estimates (WASDE) report. If realized, it would be the fifth record-breaking crop in seven years. While there is little doubt that world supplies will be plentiful, the quality of the world crop has been variable.

The Black Sea region accounts for most of the increased world production forecast. Reports of very high winter wheat yields led USDA to push the 2014/15 Russian production forecast up 6.0 MMT to 59.0 MMT and boost expected Ukrainian output 1.0 MMT higher to 22.0 MMT. If realized, it would be the second bumper crop in a row for both countries. While Russian quality is mostly good, excessive rain considerably diminished wheat quality in Ukraine. Analyst group ProAgro estimates about 35 percent of the total wheat harvest in Ukraine will not meet food quality levels, up from 25 to 30 percent last year. However, a local flour milling association estimates the percentage of feed wheat will be much higher, going as far as sending a letter on Aug. 14 to Ukrainian President Petro Poroshenko asking him to stop wheat exports temporarily to protect the domestic market. USDA projected Ukrainian exports will reach 9.0 MMT. That would be down from 9.65 MMT last year but well above the five-year average of 7.18 MMT.

Concerns regarding wheat quality are also high in France, the EU’s largest wheat producer and exporter. In July, frequent and abundant rain just before harvest resulted in sprouting and reduced test weight. Reports suggest the country’s overall protein content will average around 11.0 percent, which would be the lowest since 2001. Higher than average protein levels in the northern regions helped to offset very low protein in the south. It is still unclear what percentage of the estimated 37.3 MMT crop was affected, but fears that less exportable milling quality wheat will be available has weighed heavily on European markets. In its August report, the group estimated France's milling wheat at 62 percent, down from 88 percent in July. Strategie Grains also cut its French wheat export projection by nearly 3.0 MMT to 8.81 MMT, citing an inability to meet minimum quality requirements of many of its regular customers.

Worries about the Canadian crop quality have diminished with favorable late summer weather. Considerable rain in June and July put crop development behind schedule and looked to hurt quality potential. Warm, dry August weather seems to be putting Canada back on track to harvest its second-largest crop in six years. USDA estimated 2014/15 Canadian production will hit its five-year average of 28.0 MMT, down from the record-breaking 37.5 MMT last year. Analysts expect some crops will need an extended growing season to fully mature, so the race is on to beat the first frost, which usually occurs mid-September.

Reports concerning U.S. crop quality have been as diverse as the growing regions. In many parts of the southern plains, severe drought conditions stunted HRW development, but resulted in high protein, and untimely harvest rains added to the woes by affecting quality in some cases. The northern plains HRW crop improved the average quality for the class, despite suffering some late disease pressure. White wheat protein levels are also running higher this year — not ideal for low-protein uses. Drought conditions and hot weather stressed winter white wheat, which accounts for 83 percent of all white wheat acres this year. In the early stages of spring wheat harvest, USDA rated 68 percent of the crop in good or excellent condition and just 6 percent poor or very poor. Hard red spring (HRS) protein levels have been lower than normal in early tests, likely due to summer rains and mild temperatures.

Wheat quality variations can have a serious impact on the milling and baking qualities of the commodity, but the geographic diversity of U.S. wheat growing regions helps to balance out regional fluctuations. USW strives to keep customers informed and updated on U.S. wheat crop developments. Read the most current data in the USW Harvest Report released each Friday during the harvest season. As the harvest season ends, final crop quality data will be available for each class, including the following story on the 2014/15 U.S. soft red winter (SRW) quality.


2. Variable Quality in the 2014 U.S. SRW Crop Is Manageable

USW’s quality survey of the 2014/15 U.S. SRW wheat crop is complete and the full report is available at http://www.uswheat.org/cropQuality. Great Plains Analytical Laboratory in Kansas City, MO, collected and analyzed 527 samples from 18 reporting areas in the nine states that typically account for 60 to 70 percent of total SRW production. USW and USDA Foreign Agricultural Service fund the annual survey.

USW will also soon share this data with hundreds of overseas customers at several events, including USW's annual crop quality seminars. Buyers are encouraged to construct specifications carefully to be sure that they receive qualities that meet their needs either for traditional soft wheat products or for blending with higher protein wheat.

The 2014 SRW production, estimated at 12.5 MMT, is down nearly 3 MMT from the large 2013 crop but is about 1 MMT larger than the previous five-year average. If there is a defining factor for SRW quality this year, it is the timing of rainfall. Moisture was ample, or even excessive, for most of the SRW area throughout the growing season, but regional differences are striking. While USW did not sample wheat from far southern Gulf tributary states, there is evidence that SRW grown from Arkansas south avoided moisture at flowering but had rain at harvest, which affected soundness. In contrast, wheat farmers in Illinois, Indiana and Kentucky experienced more rain at flowering than they did at harvest so DON levels in that wheat is higher. Ohio and East Coast tributary states including Virginia, Maryland and North Carolina had adequate moisture throughout the growing season and good harvest conditions.

The overall average SRW grade for 2014/15 is U.S. No. 2, though the overall average test weight just barely meets the No. 2 grade requirement. Average protein is slightly lower than last year and the five-year average. Average dockage and total defects are both below last year and the five-year averages, indicating that the crop has relatively few visual defects. Falling number values are again below the five-year average, though somewhat better than the very low values of the 2013 crop. The samples from Gulf Port states show the adverse effects of excessive moisture during growing and harvest while the East Coast states largely avoided these conditions.

The overall average test weight of 58.0 lb/bu (76.3 kg/hl) is 0.4 lb/bu (0.5 kg/hl) below 2013 and 0.6 lb/bu
(0.8 kg/hl) below the five-year average. The Gulf Port average test weight of 57.8 lb/bu (76.1 kg/hl) is below the five-year average for these states, while the East Coast average of 58.7 lb/bu (77.3 kg/hl) is 1.5 lb/bu (2.0kg/hl) above last year and similar to the five-year average. The average total defects value of 1.8% is 1.0 percentage point lower than last year and 0.4 percentage point below the five-year average. Both the Gulf Ports (2.0%) and East Coast (1.1%) have average total defects below the respective five-year averages.

While wheat protein content of 9.8% on a 12% moisture basis is slightly below the five-year average of 10.1%, overall sedimentation and wet gluten averages are similar to the respective five-year averages. Wheat falling number of 304 seconds for the Gulf Ports is similar to the low value of 2013 and well below the five-year average. Grain handlers and others are reporting very low falling numbers in wheat from far southern Gulf Port states. In contrast, the average falling number of 340 seconds for the East Coast states is well above the five-year average. The overall DON average of 2.2 ppm is higher than 2013 and the five-year average. The DON average for the six Gulf Port states is 2.5 ppm, well above 2013 and the five-year average. DON levels are highest in wheat from southern Illinois and Indiana and eastern Kentucky. However, industry sources indicated last week that buyers should be able to source SRW with less than 2.0 ppm DON. The DON levels are completely different in the three East Coast states with an average of 0.6 ppm, which is below 2013 and the five-year average.

Flour and Baking Data. Buhler laboratory mill flour extraction and flour ash are similar to the five-year averages overall for both East Coast and Gulf Port states, suggesting that the crop has typical SRW milling characteristics. The dough properties suggest the crop is somewhat weaker than recent crops. Farinograph peak, stability and absorption values, especially for the Gulf Ports states are somewhat lower than the five-year averages. Alveograph P, L and W values for Gulf Ports and East Coast are somewhat lower than five-year averages. However, cookie spread ratios and loaf volumes are all higher than last year and the respective five-year averages.

The data showed that excessive moisture in many areas during flowering or during harvest adversely affected DON levels or falling numbers, primarily in the six Gulf Port states. SRW importers should pay close attention to their specifications to receive the wheat they need. As always, local USW representatives are ready to assist.


3. Vessels Loading Again at United Grain; U.S. Wheat Industry Remains Vigilant
By Shawn Campbell, USW Assistant Director, West Coast Office

On Aug. 12, Washington State Department of Agriculture (WSDA) grain inspectors reported to work for the first time in 37 days at the United Grain export terminal in Vancouver, WA. The elevator is once again loading vessels with official inspection services. USW will continue to push for the free flow of grain to our overseas customers.

Early last month, WSDA pulled its inspectors from the elevator, citing safety concerns after state police stopped escorting the inspectors across International Longshore and Warehouse Union (ILWU) picket lines under orders from Washington’s governor Jay Inslee. USDA’s Grain Inspection Packers & Stockyards Administration decided not to provide Federal Grain Inspection Service (FGIS) inspectors to the facility as replacements, citing the same safety concerns. As a result, United Grain did not have official inspection services and was unable to load grain for export, except in a few specialized cases, sparking concerns across the U.S. grain sector and from traditional PNW customers.

The struggle over official inspection services should prove to be the final issue in a 23-month conflict between the ILWU and the Pacific Northwest Grain Handlers Association (PNGHA), whose members include United Grain, Columbia Grain and Louis Dreyfus. The union and PNGHA finally reached a tentative labor agreement near midnight Aug. 11. ILWU members must still ratify the contract, with voting results expected as soon as Aug. 25. With the tentative agreement in place, WSDA grain inspectors returned to the United Grain facility to provide official inspection services and resume normal grain export loading operations.

U.S. federal law requires that FGIS or a delegated state agency inspect all grain for export. This has been a major benefit of the U.S. wheat export system. Having a neutral third party certify that contract specifications are met is a critical component of U.S. wheat quality and value. However, the unusual circumstances at the Port of Vancouver demonstrates a need to remain vigilant and ensure official mandated services are followed to provide for the free flow of grain.

Thankfully, the dispute likely did not last long enough to cause severe harm to farmers or the overseas customers who depend on them.

USW and the National Association of Wheat Growers (NAWG) worked closely throughout this situation with other stakeholders to advocate the importance of official inspection services and exports for farmers and their customers. Both organizations will continue doing all they can to avoid similar disruptions into the future.


4. U.S. Farmer Organizations Discuss Regulatory Environment for Biotechnology

Several organizations teamed up in Washington, DC, last week to bring together more than 100 farmers, researchers, agricultural organization leaders and federal officials to discuss the worldwide benefits of agricultural biotechnology, with a focus on discussing how to accelerate government approval of biotech seed.

The D.C. Biotechnology Roundtable was organized to help advance a more science-based biotech approval process and to reinforce the proven safety of agricultural biotechnology, which farmers around the world use to enhance the yields and quality of soybeans, corn and other crops.

While there is no biotech wheat planted commercially, Washington wheat farmer Brett Blankenship said at the event that he needs innovation to produce more and better wheat with less impact on the environment. Precision farming, minimum tillage systems and improved varieties are already helping achieve that goal, but he said new technologies, including biotechnology, hold promise to help farmers meet the growing demand for wheat in more sustainable ways. Blankenship, NAWG first vice-president, agreed with other farmers saying biotechnology should be viewed as a viable choice for those who see its benefits, including consumers and farmers. NAWG helped sponsor the event.

“It is critical that agriculture lets policymakers and regulators in Washington know how much farmers need biotechnology to sustainably produce food for the world’s population,” said Bill Raben, a soybean farmer from Ridgway, IL. “Scientists and regulatory agencies have established that agricultural biotechnology is safe for humans, animals and the environment. It is a crucial science that helps farmers use fewer resources to produce more food.”

Robert Paarlberg, renowned author and advisor to numerous food and agricultural organizations worldwide, reiterated the proven safety of biotechnology. A professor of political science at Wellesley College and public policy at Harvard University’s Weatherhead Center for International Affairs, Paarlberg observed that opposition to biotechnology comes from environmental and anti-globalization groups in more affluent countries, particularly the European Union. He said the current state of worldwide regulation deprives people of food by preventing use of biotechnology by farmers in poorer countries who are growing food crops such as wheat, rice and potatoes. Additionally, he observed, regulatory hurdles limit the technology to farmers in affluent countries, such as the United States, who raise biotech crops primarily for livestock feed.

NAWG and USW have established a joint position on biotechnology and published “Principles for Commercialization” of biotech traits in wheat. Read more at http://www.wheatworld.org/issues/biotech/ or http://www.uswheat.org/biotechnology.



5. Wheat Foods Council Wheat Safari Takes National Media on Tour of ND Wheat Industry

Twenty-six of the most influential food and nutrition professionals in the United States visited the Fargo, ND, area this past week as part of the second Wheat Safari, hosted by the Wheat Foods Council (WFC). Safari tour guests included prominent food and nutrition bloggers, academics from major universities across the country, newspaper editors and broadcast journalists.

“It was a pleasure hosting this prominent group in North Dakota,” said WFC President Judi Adams. “They are important influencers of consumer opinion and take public nutrition education very seriously. We as an industry have much to gain by working with them to ensure that U.S. consumers have the facts about wheat production, harvesting, milling and producing a table food.”

Program speakers included noted carbohydrate expert and nutrition educator Dr. Julie Miller Jones, distinguished scholar and professor emerita of nutrition in the Department of Family, Consumer and Nutritional Sciences at the St. Catherine University in St. Paul, MN. Jones addressed the group on nutrition issues, including how to help consumers identify whole grains in their grocery stores and why gluten-free diets only make sense for those diagnosed with celiac disease, wheat allergy or non-celiac gluten sensitivity.

“People are going on gluten-free diets without a real diagnosis of celiac disease or non-celiac gluten sensitivity, and that concerns me, because the gluten-free diet is expensive and most important, can be too low in dietary fiber and whole grains, and high in calories and glycemic carbohydrates,” Jones said in her remarks. “It’s very hard to consume enough fiber on a gluten-free diet. The 2010 Dietary Guidelines Committee lists fiber as a nutrient of concern, because low intake of dietary fiber is associated with a number of chronic health issues. In addition, there is evidence that diets that include grains such as wheat and adequate dietary fiber support healthy gut bacteria. Further, they are associated with improved markers of health. Diets that eliminate grains and gluten are not a proven way to lose weight; in fact, such diets may contribute to weight gain. The only proven weight loss occurs by eating fewer calories.”

Dr. Brett Carver, wheat genetics chair in agriculture at Oklahoma State University, covered agriculture-related issues, including wheat quality characteristics.

“Food begins with the seed. My research specialty is developing new and improved seed of wheat that consumers will continue to eat and enjoy,” said Carver. “Spending time with these journalists and health professionals gave us a chance to meet on common ground and learn from each other. Consumers are often misinformed about wheat and wheat foods, and now these influencers are in a position to correct that.”

During their time in North Dakota, the group toured a farm in Portland, ND, to learn firsthand about the harvesting of the wheat crop. They also visited the North Dakota Mill in Grand Forks, the Conte Luna Foods pasta plant in Grand Forks and the Northern Crops Institute and Wheat Quality Labs at North Dakota State University.

WFC is a nonprofit organization formed in 1972 to help increase public awareness of grains, complex carbohydrates and fiber as essential components of a healthful diet. The Council is supported voluntarily by wheat producers, millers, bakers and related industries. For more information, visit http://www.wheatfoods.org/.


6. Wheat Industry News
  • WMC Frozen Dough Workshop. The Wheat Marketing Center in Portland, OR, will hold its Frozen Dough Workshop Dec. 8 to 17, 2014. For more information or to register, visit http://www.wmcinc.org.
  • IGP Milling Courses. The International Grains Program in Manhattan, KS, will have its Buhler-KSU Executive Milling Course in Nov. 10 to 14, 2014. For more information or to register, visit http://www.grains.ksu.edu/igp/.
  • NCI Grain Procurement Management for Importers Course. The Northern Crops Institute in Fargo, ND will hold its Grain Procurement Management for Importers short course Sept. 15 to 24, 2014. For more information or to register, visit http://www.northern-crops.com/.
  • Condolences to the family of Stan Timmermann on his passing on Aug. 11. Timmermann was a long-time farmer and agricultural leader in Oregon and served as USW Chairman in 1993/94. For more information, visit http://bit.ly/timmermann.


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