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Wheat Letter

November 13, 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. 2014 U.S. Wheat Crop Quality Report Now Available
2. Support for Science-Based Decisions on Biotechnology Gains Strength
3. USDA Cuts Global Wheat Production Forecast in Nod to Weather Concerns
4. TPP Leaders’ State Desire to Complete Comprehensive Agreement Soon
5. Wheat Industry News

Online Edition: Wheat Letter – November 13, 2014 (http://bit.ly/1xCmQid)

PDF Edition: (See attached file: Wheat Letter - November 13, 2014.pdf)

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


1. 2014 U.S. Wheat Crop Quality Report Now Available

U.S. Wheat Associates (USW) has published its 2014 Crop Quality Report on www.uswheat.org at http://bit.ly/1wua5Uw. USW is now sharing the data with hundreds of customers around the world through its annual series of Crop Quality Seminars. “Wheat Letter” recently shared summary data for the 2014 soft red winter (SRW) and hard red winter (HRW), soft white (SW) and durum crops. We summarize 2014 quality data for hard red spring (HRS), soft white (SW) and durum in this issue. In addition, quality data for hard white (HW) is included in the final Crop Quality Report.

Hard Red Spring. The 2014 HRS crop is large with a good grade profile and generally similar functional quality to the 2013 crop. This crop is 14 percent larger than 2013 due to larger planted area and excellent yields, especially in the Northern Plains. Yields were below recent averages in the Pacific Northwest region. The average grade is No. 1 NS with 82 percent of the samples from the West export region and 90 percent from the East grading No. 1. Protein and vitreous kernels are lower than average because of late-season rainfall and will be premium-pricing factors. Average protein is 13.6 percent, similar to 2013 but about one-half point below the five-year average. Average vitreous kernel content (DHV) in both regions is 48 percent, the lowest average in a number of years. While DON and lower falling numbers affected some areas, these factors are not significant in the overall crop averages. Functional performance tends to improve with higher protein segments, though buyers may find good value opportunities in lower protein segments due to wide spreads in market pricing. Because of the quality variability this year, diligent contract specifications for DHV, DON and falling number are encouraged to ensure buyers get the quality they demand.

Soft White. The 2014 crop has the typical high quality expected of SW with high test weight, slightly higher than average protein and excellent milling and processing characteristics. Average SW wheat protein (12 percent mb) of 10.9 percent is higher than 2013’s 10.3 percent and the five-year average of 9.9 percent. White club (WC), a sub-class of SW, had average protein of 11.1 percent, which is also higher than last year’s 10.5 percent and the five-year average of 10.0 percent. SW and WC sponge cake volumes and scores are lower than 2013 and the five-year averages. SW cookie diameter is smaller than last year and the five-year average, while WC cookie diameter is similar to last year and the five-year average. SW and WC cookie spread factors are less than last year and five-year averages. Specific volumes for Chinese southern-type steamed bread, compared with a control flour, are higher for SW and WC than last year and five-year averages. Total steamed bread scores are slightly lower than 2013 but higher than the five-year average for SW and lower than the five-year average for WC.

Northern Durum. Buyers will find a wide range of values in the 2014 northern durum crop due to challenges from adverse weather. Variability in such key parameters as vitreous kernels, falling number, protein and DON mean buyers must evaluate the importance of each factor for their end-use needs. Similar conditions in Canadian durum production mean an extended period of challenge for the world’s durum buyers. Premium contract specifications will command higher prices and buyers will have to be diligent about contract specifications and communication with sellers.

Desert Durum®. While total 2014 Desert Durum® harvested area was lower than in 2013, higher yields helped offset a production drop. The new crop exhibited consistently large kernel size and low moisture, traits that contribute to high extraction rates. Overall, quality characteristics met expectations. As buyers have come to expect, the 2014 Desert Durum® crop will deliver valuable milling as well as strong semolina and pasta quality traits.


2. Support for Science-Based Decisions on Biotechnology Gains Strength
By Elizabeth Westendorf, USW Policy Specialist

Those engaged in monitoring the debate about the future of plant biotechnology have recently seen a rising tide of scientific support for ongoing research, even as opponents to the technology remain vocal. Just in the past few weeks, a peer-reviewed statistical analysis of the effects of plant biotechnology and an open letter from scientists to European lawmakers have been published.

The first, “A Meta-Analysis of the Impacts of Genetically Modified Crops” by Wilhelm Klümper and Matin Qaim, was published on “PLoS ONE,” a peer-reviewed, open-access, online science publication. The work analyzed past studies on the effects of biotech crop production* and the results were striking and positive. On average, the analysis indicated that biotechnology adoption reduced pesticide use by 37 percent and increased crop yields by 22 percent. By reviewing studies from around the world, the authors concluded that yield gains from biotech crops are even higher in developing countries than in developed countries. The higher cost of the seeds with biotech traits is offset by lower input costs, leading the authors to the conclusion that no significant cost of production differences occur between crops with biotech and non-biotech traits.

This analysis is important because it not only reviews past studies of biotech crop effects but also statistically analyzes them to look at average impacts. It pre-emptively addresses a number of key possible criticisms in biotechnology research and illustrates the overall positive effects of biotechnology in production agriculture.

Even in Europe, scientists are defending plant biotech research. Last week, 21 of the “30 most cited authors in plant science” in Europe, all of whom hold positions at publicly funded European research organizations, signed an open letter to European decision makers concerning plant science and biotech crops. The scientists believe that Europe will have difficulty meeting its Horizon 2020 goals of ensuring “Europe produces world-class science [and] removes barriers to innovation” unless significant changes are made in the industry.

The letter calls for maintaining or increasing funding for plant science research, the ability for plant scientists to perform field experiments for biotech crops without being blocked on political grounds or being at risk of systemic vandalism and calls for Europe to allow “prompt authorization” of GM plant varieties that have already been found safe by regulatory authorities. The scientists added that the current de facto moratorium on approvals makes it impossible for publicly funded scientists or small companies to compete with major corporations to address some of the big challenges facing society.

The scientists present a balanced viewpoint that merely calls for the enhanced ability of plant science to conduct relevant research and does not challenge the regulatory system. Instead, the authors called for the EU government to abide by the scientific regulatory practices already in place rather than allowing political motivations to influence decisions. Read more about the letter here.

Because they believe the world will need more and better food, produced in ways that are better for the environment, U.S. wheat farmers fully support the science-based call for research and development. The published meta-analysis and open letter from European scientists both offer a positive outlook for future acceptance of biotechnology, both in regulation and public opinion. However, for biotechnology to succeed, it is vital that governments use sound, science-based evidence in their policy-making decisions.

* Studies were included when they build on primary data from farm surveys or field trials anywhere in the world, and when they report impacts of GM soybean, maize, or cotton on crop yields, pesticide use, and/or farmer profits. In total, 147 original studies were included.


3. USDA Cuts Global Wheat Production Forecast in Nod to Weather Concerns

In its November World Agricultural Supply and Demand Estimates (WASDE) report released Nov. 10, USDA noted that late-season rain in the United States and persistent dry weather in southeast Australia and Kazakhstan are cutting into 2014/15 world wheat production. USDA also anticipates less consumption in Egypt because of a government plan to reduce bread subsidies.

Overall, USDA forecasted U.S. wheat supplies for 2014/15 to be nearly 76 million metric tons (MMT), or 2.79 billion bushels, based on updated production estimates. The agency reported that farmers did not harvest a significant number of HRS and durum fields. At 55.1 MMT, the U.S. production forecast is 2.98 MMT less than in 2013/14. Global 2014/15 wheat supplies of 905.6 MMT are 1.1 MMT lower in this forecast, even though EU’s production estimate increased by 1.4 MMT.

Global wheat consumption of 712.7 MMT for 2014/15 is lowered 1.4 million tons due mainly to what USDA expects to be 0.8 MMT less food and feed use in Egypt. Global wheat trade for 2014/15 now stands at 153.4 MMT, which is 1.3 MMT lower compared to USDA’s October forecast. If realized, world trade in 2014/15 would be more than 7 percent less than in 2013/14. USDA’s analysts made no change to its U.S. wheat export forecast of 25.2 MMT.

Corn futures prices jumped a bit after USDA surprised traders by lowering its estimate for U.S. corn yield in the report. The agency slightly reduced its estimate of 2014/15 U.S. corn ending stocks to just more than 51.0 MMT. That is a very large carryover, likely to influence feed grain markets well into next year, affecting world wheat prices as well.

Read more at http://bit.ly/1ElMZCf.


4. TPP Leaders’ State Desire to Complete Comprehensive Agreement Soon

Trade representatives from member countries in the Trans-Pacific Partnership (TPP) met this week on the sidelines of the Asia-Pacific Economic Cooperation summit in Beijing, China, to discuss ways to move the talks toward conclusion. In a statement after the meetings, they said that is a “top priority … so that our businesses, workers, farmers and consumers can start to reap the real and substantial benefits of the TPP agreement as soon as possible.”

USW shares the ministers’ stated commitment to a “common vision of an ambitious, comprehensive, high-standard” TPP agreement and USW supports eventually eliminating tariff and non-tariff barriers to wheat trade.

Politico Pro reported that observers said there was a better tone evident in the bilateral negotiations in Beijing compared to previous talks. However, 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,” said USW Vice President of Policy Shannon Schlecht in the Oct. 30 issue of “Wheat Letter.”

You can read the TPP leaders’ statement at http://www.whitehouse.gov/the-press-office/2014/11/10/trans-pacific-partnership-leaders-statement.


5. Wheat Industry News
  • The 2014 Borlaug Dialogue included a panel discussion moderated by World Food Prize President Amb. Kenneth M. Quinn with top food and agricultural policy experts who discussed national and global security issues. You can watch the discussion at this link. Photos of the events are available at www.flickr.com/photos/theworldfoodprize/.
  • GE Potato, Alfalfa Varieties Gain U.S. Nonregulated Status. USDA's Animal and Plant Health Inspection Service (APHIS) announced it has granted nonregulated status for a genetically engineered (GE) low-lignin alfalfa variety and GE potato varieties developed by for low-acrylamide potential and reduced black spot bruising. Under law, APHIS has reviewed the required information about these alfalfa and potato varieties and has officially accepted evidence that they are “unlikely to present a greater plant pest risk than the unmodified organism.” Read more at http://1.usa.gov/1pN8Xgn.
  • IQ2US Debate on GM Issues. On Dec. 3, 2014, Intelligence Squared U.S. (IQ2US) will hold a public debate on the motion "Genetically Modify Food." Four authorities with a variety of backgrounds – including an appearance from Dr. Robb Fraley (@RobbFaley) from Monsanto arguing for the motion and an advisor to the USDA arguing against - will debate the risks and rewards of genetically modified food. IQ2US will stream the debate live, online at http://bit.ly/1tEDtYb.
  • Last 2014 Short Course at WMC. The Wheat Marketing Center’s Frozen Dough Technology short course, Dec. 8 to 17, is filling up fast. Contact Dr. Gary Hou, technical director and wheat food specialist, at ghou@wmcinc.org for details. To download the course agenda and registration form, go to http://www.wmcinc.org/WMC_03_Frozen_Dough.html.


  • Intro to Milling at IGP. To gain general understanding of milling principles, the effect of wheat quality and working knowledge of different flours produced from various wheat types, even those with no milling experience are eligible to take the IGP-Kansas State University Introduction to Flour Milling Course, Jan. 12 to 16, 2015, in Manhattan, KS. Learn more at http://bit.ly/1xfxHjC.
  • AIB International Names Lance Reeve as director of food safety services innovation. With AIB since 1994, Reeve moves up from his position as global innovation manager. He will oversee new product development, facilitate cross-functional teams and monitor food safety advancements or failures as part of a global executive leadership team at AIB. Click here to learn more.
  • Sincere Condolences to USW/Santiago Regional Program Manager Sonia Muñoz on the death of her son Ricardo Quiroga, 43, after a prolonged illness, and to USW/Lagos Marketing Consultant Muyiwa Talabi on the death of his daughter, Dr. Mrs. Oluwadamilola Akinkoye Oluwadamilola, 35, after a brief illness. Our thoughts of sympathy are with these colleagues and their families.


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