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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. Stakeholders may reprint original articles from Wheat Letter with source attribution. Click here to subscribe or unsubscribe to Wheat Letter.

In This Issue:
1. First Reports on HRW Damage from Late Season Snow and Freeze Events: “Just Terrible.”
2. Wheat Tour Finds Lower Yield Potential; Snow and Freeze Losses Still Uncertain
3. Profiling U.S. Wheat Sustainability: Roy Motter, Desert Durum® Farmer
4. Wheat Grower Organizations Expressed Concern Over Possible NAFTA Withdrawal
5. USW Reports and Resources Provide Valuable and Timely Information
6. Wheat Industry News

PDF Edition: (See attached file: Wheat Letter - May 4, 2017.pdf)

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


1. First Reports on HRW Damage from Late Season Snow and Freeze Events: “Just Terrible.”
By Steve Mercer, USW Vice President of Communications

Kansas Wheat CEO Justin Gilpin is not a fellow who is prone to hyperbole. So, when @jp_gilp “Tweets” to the world that “we lost the Western Kansas wheat crop,” people notice.

Blizzard conditions and up to 18 inches (45.8 cm) of heavy, wet snow came down hard on the rapidly maturing hard red winter (HRW) wheat crop in northwest Oklahoma, western Kansas, eastern Colorado and southwest Nebraska April 29 and 30. Much of that wheat looked very good before the storm. Its higher yield potential was a cautious hope for some farm profit this year, a hope now broken like the stems under the snow in so many fields.

This unusual event may have overshadowed separate freeze events April 22, 23 and 27 that affected a big portion of central Kansas as well as south central Nebraska and north central Oklahoma. Kansas Wheat said “the freezes may cause significant damage in many areas because the crop was in boot and early heading stages at the time.”

Local agronomists say it will take 10 to 14 days before the final effects of the unprecedented late-season freeze and snow events can be determined with any accuracy. The first estimate from the snow alone put loss potential at 50 million bushels or almost 1.4 million metric tons (MMT). That would be roughly equal to 5 percent of the 23.8 MMT 5-year average total U.S. HRW crop.

National Association of Wheat Growers (NAWG) President David Schemm, who farms near Sharon Springs in far western Kansas, captured what is probably on the minds of most Kansas farmers. In a Facebook Live video from one of his fields as he surveyed the damage, he said, “all we can say, thankfully, in these situations is that with crop insurance we can maybe keep our farm for another year.”

More tough blows to already strapped farmers are, as Justin Gilpin added in his striking Tweet, “Just terrible.” Perhaps some of the wheat — and all Central and Southern Plains wheat farmers — will recover from these stresses.

We can only hope.


2. Wheat Tour Finds Lower Yield Potential; Snow and Freeze Losses Still Uncertain
By Stephanie Bryant-Erdmann, USW Market Analyst

This week I joined the annual Wheat Quality Council (WQC) “Hard Red Wheat Tour” for an early survey of the new crop. Each year, participants gather in Manhattan, KS, and spend the next two and a half days in small team, randomly stopping at 14, 15 or more fields in a full day along the same routes followed for many years. The scout teams measure yield potential, determine an average for the route and estimate a cumulative average for the day when all the scouts come together in the evening.

Just a few hours before USW published this issue of “Wheat Letter,” the tour estimated a final average yield potential of 46.1 bushels per acre (bu/ac) or about 3.10 metric tons per hectare for the 2017/18 Kansas hard red winter (HRW) crop. This year the tour participants made 469 stops to scout fields. Combining seeded area with per-acre yield potential, the total production potential estimate was 282.0 million bushels (7.67 million MT). Last year’s total production estimate was 382.4 million bushels (10.4 MMT). Sampling this year was skewed toward central and eastern Kansas due to difficulties sampling in the west.

On the first day, the tour traveled from Manhattan along several routes covering most northern Kansas counties. The cumulative Day 1 average yield potential was 43.0 bu/ac, which is equivalent to about 2.89 MT per hectare, compared to 47.1 bu/ac (3.16 MT per hectare) in 2016. To reach that average, participants surveyed 222 fields recording a range from a low of 18 bu/ac to a high of 96 bu/ac. We saw moderate pressure from stripe rust, a fungal disease, as well as viral diseases wheat streak mosaic and barley yellow dwarf. Many farmers were having fungicide applied by air to protect against fungal diseases, but there is no input to check viral disease.

Participants also received a report on the Nebraska and Colorado wheat crops. Nebraska estimated an average 40.0 bu/ac (2.69 MT per hectare) for a total production estimate of 41.8 million bushels (1.14 MMT), down roughly 41 percent from last year’s tour estimate. Colorado estimated an average of 31.6 bu/ac (2.12 MT per hectare) with total production estimated at 69.5 million bushels.

On the second day, the tour traveled on routes that led from the city of Colby to Wichita, making 202 stops. The number of observations was down significantly this year due to the challenging field conditions found in the western third of the state where wet, heavy snow continued to blanket wheat fields (see First Reports on HRW Damage from Late Season Snow and Freeze Events: “Just Terrible” in this issue). After digging the wheat out of the snow, scouts noted the combination of heavy snow and accompanying 50 to 60 mile per hour winds had laid substantial portions of the wheat down and in some instances had broken the wheat stems. Wheat that was knocked over by the heavy snow then endured several days of cold temperatures.

Standing water in fields and flooded ditches made field evaluation difficult in the south central part of the state where lodging and some freeze damage was also noted. Wheat streak mosaic was prevalent on Day 2, and participants reported seeing barley yellow dwarf, leaf rust and stripe rust. This year the tour estimated Day 2 average yield at 46.9 bu/ac (3.15 MT per hectare), for a combined two-day average of 44.9 bu/ac (3.02 MT per hectare) across 427 stops. Last year, the Day 2 average was 49.3 bu/ac (3.31 MT per hectare) and the combined two-day average was 48.2 bu/ac (3.24 MT per hectare).

A word of caution to our overseas customers is prudent. The wind, snow and cold events this year are unprecedented. Participants in the tour did the best they could to evaluate the western Kansas crop, but Dr. Romulo Lollato, Assistant Professor, Wheat and Forages Production, Kansas State University told us the most accurate assessment of the storm and freeze will not be possible for 10 to 14 days after each event. “High Plains Journal” magazine is reporting from the Tour and provides more details on Day 2 challenges here. Kansas Wheat published additional information here.

Participants also received a crop report from Oklahoma, where drought conditions severely impacted the southern half of the state which received one inch (2.5 cm) of rain between September and mid-February. The northern half of the state benefited from the recent rainfall. The estimated average yield in Oklahoma is 33.7 bu/ac (2.26 MT per hectare), for a total production estimate of 100 million bushels or about 2.72 MMT. If realized, that would be down 27 percent year over year. The crop development is well ahead of normal with farmers expecting to start harvest in the next three weeks.

The third and final day of the tour was shorter, with each car making 3 to 4 field stops on the way from Wichita back to Manhattan for the final report. The Day 3 estimated average yield was 58.3 bu/ac, (3.92 MT per hectare) across 49 stops.

View highlights and photos from the tour by searching #wheattour17 on Facebook and Twitter. The WQC also sponsors a spring wheat tour in the Northern Plains in July. For more information, visit the Council’s web site at http://www.wheatqualitycouncil.org.


3. Profiling U.S. Wheat Sustainability: Roy Motter, Desert Durum® Farmer
By Elizabeth Westendorf, USW Policy Specialist

Roy Motter farms 2,500 acres in the Imperial Valley of California, and while that may be small compared to other U.S. wheat farms, his operation supports three families. Motter has been farming with his two brothers-in-law since the 1970s, and he oversees their wheat production. They grow Desert Durum® wheat, as well as lettuce, cabbage, onions, sugar beets, sugar cane, alfalfa seed and hay, Sudan grass, melons and tomatoes.

“I chose to start farming more than 40 years ago because I like being outdoors, and I like the dynamics of working for yourself and making those decisions,” said Motter. “Farming is multi-dimensional; every crop is different and has different demands.”

Motter is one of six U.S. wheat farmers featured in a USW series on wheat sustainability representing the six U.S. wheat classes, grown in distinct regions and local micro-climates. The series suggests that while aggregate measures of sustainability are important, but they fail to capture the nuances of a crop that is grown across many different climates, soil types and farm environments. These profiles show the differences in farming practices across the country and how those practices enhance the sustainability of U.S. agriculture.

For Motter, wheat is a pivotal part of their approach to sustainable farming.

“We can’t grow our money crops — lettuce, onions and sugar beets — year after year,” said Motter. “You have to have a rotation, and wheat is a good rotational crop for us. It lets us control weeds and disease that affect the other crops and gives the ground a chance to rest.”

Farmers in the Southwest increase economic water productivity (the dollar value of crop production per acre-foot of water consumed) by 9 to 21 times by rotating wheat production with vegetable production. And in an arid climate like the Imperial Valley, maximizing water productivity is vital.

“We get a lot of criticism for using irrigation water from the Colorado River. But if you want to sustain a growing world population with food and fiber, you must modify the environment to satisfy those needs,” said Motter. “If we want to talk about sustainability issues in relation to wheat crops, the primary issue is to use our water as efficiently as we can, and we work to improve that every year.”

Motter’s reliance on irrigation does not mean his farm is less sustainable. The Imperial Valley grows 85 percent of the nation’s lettuce in the winter months of the year, and with or without its wheat production, the region will continue to grow its vegetable crops. By rotating wheat with that lettuce production, Motter reduces the amount of water his farm uses. In fact, over the past 30 years, farmers in the desert Southwest have reduced their water usage for barley and wheat by approximately 30 percent and consistently invest money in water and energy conservation efforts.

U.S. wheat farmers deal with unique challenges and growing conditions. For Motter, those challenges are managing water use in an arid climate and controlling crop diseases without the benefit of a cold winter in between growing seasons. Motter and his family’s farm have thrived because they use rotation and best practices to maximize soil health and production while minimizing required inputs. This formula is one that all farmers strive to balance, and each go about it in ways that make the most sense in their region. Sustainability is not “one size fits all.”

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


4. Wheat Grower Organizations Expressed Concern Over Possible NAFTA Withdrawal

Last week, USW and NAWG expressed alarm over media reports that the Trump Administration was considering a withdrawal from the North American Free Trade Agreement (NAFTA).

Fortunately, many other organizations representing U.S. farmers, livestock and milk producers quickly joined us on public record opposing a blanket withdrawal. The President’s decision not to withdraw finally came after a meeting with Secretary of Agriculture Sonny Perdue and other Administration officials and calls with Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau.

We welcome the opportunity to improve agricultural trade rules in North America, but strongly oppose changes that would limit the current NAFTA’s benefits for wheat farmers and their customers, specifically in Mexico’s flour milling and wheat food processing industries.

“I cannot emphasize enough how important Mexican customers are to U.S. wheat farmers,” said USW Chairman Jason Scott, a wheat farmer from Easton, MD.

Mexico is the largest U.S. wheat buyer in marketing year 2016/17, which ends May 31, importing more than 10 percent of all U.S. wheat exports this year. NAFTA truly opened the door to the strong and growing market opportunity in Mexico. Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers.

USW and NAWG understand that there are several elements of the trade agreement that could be re-examined and modernized. However, we believe withdrawing from NAFTA could threaten to undermine the long-standing, loyal relationship U.S. wheat farmers have built with Mexico’s wheat buyers and food industry.

Assuming a process of renegotiation lies ahead, U.S. wheat farmers and our organizations will continue advocating for the benefits of NAFTA and other agreements that we share with our overseas customers.


5. USW Reports and Resources Provide Valuable and Timely Information

USW is committed to helping customers get the wheat they want at the best value possible by providing critical information throughout the year. USW Marketing Specialist Stephanie Bryant-Erdmann leads this effort, working closely with a network of traders, extension specialists, market contacts, USDA staff and, of course, colleagues in USW’s overseas offices to analyze and update these resources regularly.

Between May and October, USW publishes a Harvest Report every Friday afternoon with updates and comments on harvest progress, crop conditions and current crop quality for HRW, SRW, HRS, SW and durum wheat. USW expects to publish a preliminary 2017/18 Harvest Report on May 5. Follow the progress of the 2017/18 crop at www.uswheat.org/harvest.

Every Friday, USW compiles information from market sources, including exporters of all U.S. wheat classes from various U.S. ports, to publish the Price Report. The prices represent the value of number two grade and the proteins indicated. The report includes FOB and futures prices by class, as well as ocean freight and currency exchange rates. View the Price Report at www.uswheat.org/prices.

Each Thursday, USW releases a Commercial Sales Report that documents sales-to-date for the current marketing year compared to the previous marketing year at the same date. The report sources data from the Weekly Export Sales report published by the USDA Foreign Agricultural Service. View this report at www.uswheat.org/commercialSales.

Once a month, USW updates a graphic summary of USDA's World Agricultural Supply and Demand Estimates Report. The report summarizes factors affecting the global wheat market, historic information for all major wheat exporting countries and regions, and a by-class summary of U.S. wheat supply and demand. The data may be used without permission, but attribution to USW and USDA is appreciated. View this report at www.uswheat.org/supplyDemand.

In addition to USW’s market data reports, USW publishes this bimonthly newsletter, Wheat Letter. It features coverage on market analysis and crop updates, trade policy, export promotion activities and other general wheat industry news. Read the latest issue of Wheat Letter at www.uswheat.org/wheatLetter.

USW’s 15 overseas offices share these reports and resources with their market contacts and use them as key resources in their trade servicing activities. USW also publishes many of the reports in Spanish in “Trigonoticias,” distributed to Latin American wheat buyers and millers.

You may subscribe at
www.uswheat.org/subscribe1 to have the Price Report, Harvest Report and Wheat Letter sent straight to your email.


6. Wheat Industry News
  • Quote of the Week: “The only legacy that I seek is the only one that any grandparent or parent seeks – to be good stewards, and to hand off our nation, our home, our fields, our forests, and our farms to the next generation in better shape than we found it.” – Sonny Perdue, U.S. Secretary of Agriculture during his welcome address to USDA on April 25.
  • USDA Cochran Program for Ethiopia. The IGP Institute hosted a group of Ethiopian importers April 17 to 27 for the Introduction to U.S. Wheat Quality and Grading short course. While in Kansas, the participants learned about U.S. wheat quality and grading, and toured farms, grain handling operations and port facilities. “The Ethiopians were impressed with the methods of determining wheat quality and function in the United States and seeing the size and scale of farms, grain elevators, the export facility and the mill,” said Shawn Thiele, IGP’s flour milling and grain processing course curriculum manager and course coordinator. “They were eager to go back home to incorporate the techniques they learned here into their own milling practices.”
  • Online Home for Ag Export Information. The website www.AgExportsCount.org provides information about U.S. agricultural export market development and is the foundation of a unified public presence for the multiple coalitions and individual organizations that leverage USDA’s Market Access Program (MAP) and Foreign Market Development (FMD) program to promote U.S. commodities and high-value agricultural products overseas.


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