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Wheat Letter

October 30, 2014

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. Fall Wheat Conference Anchors Busy Meeting Season
2. Though Short, 2014 Hard Red Winter Crop Offers Excellent Performance
3. Wheat Food Production Information Expands on the World Wide Web
4. TPP Represents Opportunity for Progress in Wheat Trade
5. Wheat Industry News


Online Edition: Wheat Letter - October 30, 2014 (http://bit.ly/1E6xsbl)

PDF Edition: (See attached file: Wheat Letter - October 30, 2014.pdf)

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


1. Fall Wheat Conference Anchors Busy Meeting Season

With the 2014 wheat crop in the bins and sowing of the 2015 winter wheat crop well underway, the U.S. wheat industry is embarking on a busy schedule of meetings around the world. This is a chance to review the experiences of the immediate past to help the industry continue to improve and support its customers into the future.

After a successful North Asia Marketing Conference with customers from Japan, Korea and Taiwan the week of Oct. 13, U.S. Wheat Associates (USW) President Alan Tracy travelled to Brazil to speak at the Brazilian wheat industry (ABITRIGO) conference. There he suggested that wheat buyers should carefully monitor the world corn market as well as wheat to help weather volatile price swings. Tracy also reviewed how consumer-facing U.S. wheat organizations defend against the gluten-free phenomenon.

This week, USW farmer directors and staff are in the state of New Mexico for the Fall Wheat Conference. The USW and the National Association of Wheat Growers (NAWG) boards hold joint meetings twice each year, including at this conference. In addition to the individual boards of directors meetings, there is a full schedule of committee meetings, including joint committees on biotechnology and international trade.

Consolidating the final 2014 grade and functional data for all six U.S. wheat classes was challenging this year with a late harvest. Yet, as they have for decades, USW and its partner organizations are now sharing the data at USW’s annual series of Crop Quality Seminars. These events will continue into November and USW has posted final data for soft red winter and hard red winter wheat at www.uswheat.org/cropQuality, and will soon publish complete data for all six classes. For more information about the Crop Quality Seminars and 2014-crop quality data, contact your local USW representative.

Alan Tracy will continue his international travels in November, first to speak at the Latin American Millers Association (ALIM) annual meeting in Dominican Republic. USW Vice President of Overseas Operations Vince Peterson will also speak at ALIM where 2014/15 Chairman Roy Motter, from Brawley, CA, will represent U.S. wheat farmers. Tracy then will deliver what USW considers an important speech at the IAOM Middle East and Africa Region Annual Meeting in Cape Town, South Africa, in early December. He then continues to Saudi Arabia for a speaking engagement at the International Grains Forum.

Annual domestic wheat farmer meetings start Nov. 13 when state wheat associations from Oregon, Washington and Idaho meet together. State wheat organizations continue to meet through early December and USW will send representatives to most of those meetings to report on the successes and challenges of the past calendar year.


2. Though Short, 2014 Hard Red Winter Crop Offers Excellent Performance

The now complete 2014 USW Hard Red Winter (HRW) quality survey details a crop with good wheat protein that translates into high flour protein content and very good functionality. Water absorption and loaf volumes are very good and exceed the five-year averages. This year's crop meets or exceeds typical HRW contract specifications and should provide a high value to customers. U.S. Wheat Associates (USW) posts all final crop quality reports on its website at http://bit.ly/1wua5Uw.

Across the HRW production area, from Texas to Montana and into in the states of Idaho and Washington, moisture was the most influential quality factor for this crop. Soil moisture heading into dormancy was generally adequate and the crop was in good condition by early spring. However, the rain virtually stopped until the crop was mature in areas from central Kansas south to Oklahoma and Texas. The drought conditions reduced yield and stressed the crop in those areas. Moving north, widespread rain that began in June initially was beneficial to yields and crop development. Rain continued, however, delaying harvest and reducing quality in some northern areas. Harvest began in Texas in late May and extended into early September in the northern states.

Overall test weight averaged 60.7 lbs/bu (79.9 kg/hl), which is well above the 2013 average of 59.9 lbs/bu (78.8 kg/hl) and equal to the five-year average of 60.8 lbs/bu (79.9 kg/hl). Kernel characteristics are similar to long-term averages, with significantly lower shrunken and broken kernels compared to last year and to the five-year average. Average wheat protein of 13.3 percent is similar to the 2013 average of 13.4 percent and almost one percentage point above the five-year average of 12.4 percent. The average falling number is 385, down somewhat from the five-year average of 410, but still indicative of a sound crop that is generally free of sprout damage.

Flour protein averages 12.3 percent, which is 1.5 percentage points above the five-year average. The average Buhler lab mill extraction is 73.9 percent, well above the five-year average of 72.7 percent. Farinograph stability time is slightly lower than the five-year average of 12.6 minutes, and water absorption is two percentage points higher than last year’s 60.4 percent for high protein. Overall loaf volume averages 859 cc, which is comparable to last year’s average of 860 cc and exceeds the five-year average of 816 cc. Alveograph "W" value, water absorption, farinograph development and stability times, and loaf volume all suggest that the protein quality and quantity present in the 2014 HRW crop is excellent.

USW will soon share final quality results for the 2014 U.S. hard red spring, white wheat and durum crops online as well as at its annual series of Crop Quality Seminars.


3. Wheat Food Production Information Expands on the World Wide Web

Millers and food processors need more and more information about ingredient sources to serve customer interests. USW occasionally shares new resources for its customers and recently noted two new websites from coalition organizations trying to engage in the global conversations about technology and sustainability in food production.

First is AgriBiotech.info, hosted by the University of California Davis College of Agricultural and Environmental Sciences, and compiled by a group of U.S. agricultural schools known as state or land grant colleges and universities. The site’s goal is to participate in the dialogue about the benefits and risks of this new technology, which is fast becoming a part of our everyday lives. As teaching, research and extension institutions, these organizations say they are convinced that some products developed through biotechnology can provide benefits to our food system and the environment. Furthermore, they state they believe that the risks and benefits of any technology, including biotechnology, should be evaluated through research.

The next site is new from the Sustainability Alliance at www.thesustainabilityalliance.us. U.S. agriculture, forestry and fishery export promotion groups are working jointly to boost awareness and engage in ongoing dialogue with European Union stakeholders. The alliance notes its partners are dedicated to developing and continuing sustainable practices and improving our operations through ongoing innovation and mindful approaches to conservation. The website provides information and background about how U.S. agriculture, forestry and fisheries grow, harvest and produce sustainably. In addition, in an outreach mission, representatives from the alliance met with stakeholders, government officials and media in London, UK, and Berlin, Germany, to present information about sustainable U.S. agricultural laws and practices. USW is currently monitoring the activities of the alliance.


4. TPP Represents Opportunity for Progress in Wheat Trade
By Shannon Schlecht, USW Vice President of Policy

High-level meetings associated with the 12-country TransPacific Partnership (TPP) closed this week in Sydney, Australia. The negotiators announced "...significant progress on both component parts of the TPP Agreement.” That includes market access and trade and investment rules, which will “define, shape and integrate the TPP region once the agreement comes into force."

As expected, no breakthrough occurred in the agriculture talks between Japan and the United States and significant challenges remain on agricultural and automobile trade that limit progress in other areas.

Wheat consumption in Japan has grown over the past seven decades and is an important component of the Japanese diet. Japan produces about 10 to 15 percent of its annual needs and relies on imports to meet demand. U.S. wheat farmers take great pride in the fact that they produce and export about 50 percent of the wheat used in Japanese products every year and value the partnership with Japan’s wheat buyers, millers and food processors since the late 1940s.

The quality requirements of Japan's wheat industry are among the most demanding in the world and U.S. wheat producers routinely meet or exceed them. That is why U.S. wheat producers stand ready to compete with other wheat suppliers and deliver the best value wheat in the world to Japan and the TPP member countries.

We see TPP as a landmark agreement that will set a new framework for trade across the Pacific and Atlantic, and could be a catalyst for additional agreements. Because it is so important, USW continues to support completion of a comprehensive agreement that eventually eliminates tariffs on wheat trade with all TPP member countries. We believe a comprehensive TPP agreement is the best, long-term solution to achieve additional wheat and agricultural trade opportunities.

"We will continue to build on the progress we made at this meeting and will meet again in the coming weeks," the ministers in Sydney said. There are several opportunities across Asia in November where talks can continue and there is hope for progress. That is good news, but U.S. wheat growers do not want to see diminished language in an agreement rushed out to meet artificial deadlines. The stakes are too high and the need too great to turn away from the original vision for TPP to truly be a forward looking, comprehensive agreement for the 21st Century.


5. Wheat Industry News
  • Wheat Looks Good in Kansas, So Far. On Oct. 22, 2014, Kansas wheat commissioners reported that planting in most areas is nearly complete; the wheat is coming up and looks good. USDA reported last week that winter wheat planted was 78 percent complete in Kansas, which is behind last year and the five-year average of 84. Winter wheat emerged in the top wheat producing state was 58 percent, equal to last year and near the 56 percent average. Read more at www.kswheat.org.
  • New Quality Standards for Europe. The Euronext futures exchange is introducing new quality standards for its milling wheat futures. The new criteria will include a minimum test weight of 59 pounds per bushel, a minimum protein content of 11 percent, and a minimum falling number of 220 seconds. The move brings the Paris wheat futures in line with major French elevator companies.
  • Falling Numbers. The analysis group SovEcon reported that Russian winter wheat is heading into dormancy in even worse condition than in 2010/11 when losses from cold weather and summer drought sent wheat production tumbling to about 42 MMT – and wheat prices skyrocketing. SovEcon’s report foresees a potential fall of some 15 to 20 percent possibly to less than 50 MMT.
  • Research on Soft Durum Variety. The USDA’s Agricultural Research Service (ARS) said it has developed a soft durum wheat variety with potential for use in a range of baked goods and pasta. Supervisory Research Chemist Dr. Craig Morris recently told participants at the AACCI annual meeting that his Pullman, WA, team produced a durum variety with a softer endosperm but with no functional changes in the semolina. He added that the scientists used non-transgenic methods to impart the genes for softness. This is a research variety with no current plans for commercialization. Read more at www.bakeryandsnacks.com/R-D/USDA-ARS-develops-non-GMO-soft-durum-wheat.


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