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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. APHIS Says Unapproved GM Wheat Source is Inconclusive; Commercial Supplies Not Affected
2. Separate Discovery of GM Wheat Will Have No Impact on Commercial Supplies
3. Wheat Stocks Report Does Not Account for Storage, Quality
4. Cotton Case Agreement Ends Threat of Retaliation on U.S. Wheat Exports
5. Conner Brings Hill Experience to Policy Work at U.S. Wheat Associates
6. The World Celebrates Pasta in October
7. Wheat Industry News


Online Edition: Wheat Letter - October 2, 2014 (http://bit.ly/YUV5nE)

PDF Edition: (See attached file: Wheat Letter - October 2, 2014.pdf)

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


1. APHIS Says Unapproved GM Wheat Source is Inconclusive; Commercial Supplies Not Affected

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) were notified Friday, Sept. 26, 2014, that USDA’s Animal and Plant Health Inspection Service (APHIS) has completed its investigation into the May 2013 discovery of an unapproved Roundup Ready (RR) trait in isolated volunteer wheat plants. APHIS has determined that the source of the RR trait is inconclusive but reconfirmed that there is no indication that any wheat with this regulated trait has entered the commercial supply chain. This is consistent with the results of independent testing by Japan and Korea that has not identified a single event among all classes of U.S. wheat exported to those countries. APHIS also noted that in 2004, the U.S. Food and Drug Administration concluded that the Roundup Ready trait in wheat did not pose a health risk in food or animal feed.

“As we have said before, nothing is more important than the trust wheat growers have earned with our customers,” said Paul Penner, NAWG President and wheat farmer from Hillsboro, KS. “We appreciate the thorough and diligent investigation that APHIS has conducted and we accept its findings. We also believe those findings show that our customers can be confident that we are still producing a reliable supply of high-quality, wholesome and nutritious wheat.”

“As we move on from this isolated incident, wheat growers remain committed to keeping up the dialogue with partners and customers at home and around the world,” said Roy Motter, USW chairman and a Desert Durum® grower from Brawley, CA. “We have always provided the resources and information they need to make the best decisions about the wheat they purchase and that will not change.”

Like many other farmer organizations from the United States, Canada and Australia, USW and NAWG believe innovation in wheat varieties is needed in the years ahead. Yield increases are needed because wheat is and will remain essential to helping meet rapidly growing global food demand. Changes in consumer preferences call for more sustainable production through the use of less water, fertilizer, fuel and pesticides and for improved wheat foods. The organizations applaud the increasing private and public research investment in hybridization, high through-put genetic screening and in biotechnology that will help farmers responsibly grow more and better wheat with less impact on the environment.

“At the same time, we understand that choice is paramount,” Motter said. “We respect consumer preferences and are committed to ensuring all customers have access to non-biotech or biotech wheat, whichever they may prefer. And we stand ready to assist all industry segments to assure supplies of non-biotech wheat within reasonable commercial tolerances to markets that require it.”

For more information visit http://www.wheatworld.org/issues/biotech or http://www.uswheat.org/biotechnology. Here are additional resources:


2. Separate Discovery of GM Wheat Will Have No Impact on Commercial Supplies

In its announcement Sept. 26, APHIS also shared information about a second detection of genetically modified wheat that occurred in July 2013 at a research facility in Montana where field tests on GM wheat were conducted between 2000 and 2003 under APHIS regulatory approval.

APHIS noted that this was quite distinct from the event in 2013. This find was entirely contained within a small, regulated test site and no GM wheat was found in any commercial field. It reported that no wheat from the Montana research facility entered commercial channels this year. APHIS confirmed that no wheat from the authorized trials between 2000 and 2003 was allowed to enter commercial channels. It also noted that the research facility never sells wheat for seed.

APHIS said it is now working to determine why GM wheat was found growing at the research center after the conclusion of the field trials. In addition, APHIS will take several additional steps to ensure that unintended biotech wheat is not growing in other locations in the United States where field trials are taking place or have recently occurred. APHIS will inspect all field trials planted in 2014 and follow-up with post-harvest inspections to ensure those conducting the field trials adhere to its requirements to monitor for and remove volunteer plants (plants that grow in a field following a previous growing season). It will also conduct some post-harvest volunteer monitoring inspections of biotech wheat field trials that were planted in 2012 and 2013. Beyond this, APHIS said it would also assess other measures to minimize the potential for any further incidents involving regulated biotech wheat field trials.

For more information:


3. Wheat Stocks Report Does Not Account for Storage, Quality
By Casey Chumrau, USW Market Analyst

Fundamental supply and demand factors can explain the dramatic downtrend in global wheat prices and futures markets the past few months. In principle, high supply leads to low price. In practice, the global wheat market is a much more complicated and dynamic scenario. A closer look reveals the supply of high-quality milling wheat may be less accessible than it appears.

In its quarterly grain stocks report released Sept. 30, USDA indicated that total U.S. wheat stocks on Sept. 1 were 2 percent higher than a year earlier. This is largely due to a slower export pace than last year when Brazil and China were aggressively importing U.S. wheat.

What the report did not show is that USDA’s U.S. stocks estimate of 2.16 million metric tons (MMT) is 11 percent lower than the five-year average for this quarter. The number that really stands out, however, and is more relevant to the world’s wheat buyers is the location of those stocks.

USDA reported this week that 30 percent more wheat was being stored on farms in the United States on Sept. 1 compared to the same date last year. USDA’s report of a 9 percent decrease in wheat that has left the farms compared to last year does reflect the large crop. There is little doubt, though, that U.S. farmers are willing and able to hold on to more of their old- and new-crop wheat until they can get a better price. In turn, this trend holds down effective U.S. stocks available for export.

USDA indicated that Russia harvested its third largest wheat crop of all time this year at 59.0 MMT. It is the second consecutive bumper crop there. However, the country seems to be exiting the export market earlier than in years past. The Russian agricultural minister announced recently that instead of implementing any type of export embargo, the Russian government would instead use intervention pricing to protect the domestic market. In recent days, the government has bought wheat at much higher than market prices, taking even more supplies away from export markets.

China and India have produced a combined 31 percent (270 MMT) of the world wheat supply on average the last five years but represented less than 3 percent of total world exports, according to USDA. The two top wheat producers in the world are also the top two wheat consumers, using almost everything they grow. India reached a record high 6 percent of world market share in 2012/13 but USDA expects India will only capture 2 percent (3.0 MMT) of world exports this year. USDA projects the two countries will account for a combined 41 percent (79.6 MMT) of global carryout stocks at the end of 2014/15, stocks that are unlikely ever to leave their countries of origin.

The condition and quality of wheat stocks that are actually available to the world market also carry concern. Every major wheat producing country in the northern hemisphere had quality issues in the 2014 crop. France, the EU’s largest wheat producer, is perhaps most notable. Analyst group Stategie Grains estimates that just 64 percent of the country’s 37.6 MMT crop is of milling quality, down from 88 percent last year. France has had difficulty meeting minimum quality specifications, including those of Algeria, its top customer.

The world may be full of wheat this year but the availability and condition of that wheat are factors the world’s wheat buyers must also consider. Customers looking for specific qualities and proteins will have to dig deeper, sooner rather than later, before those supplies dwindle from the export market.


4. Cotton Case Agreement Ends Threat of Retaliation on U.S. Wheat Exports
Following is a joint statement from U.S. Wheat Associates and the National Association of Wheat Growers.

The announcement this week that Brazil and the United States have negotiated a settlement in a long-running trade dispute will help U.S. wheat growers remain competitive in one of the world’s largest wheat importing nations.

In 2005, and again in 2008, Brazil won a case against U.S. cotton support programs and export credit guarantees in the World Trade Organization (WTO), giving it the right to impose retaliatory measures on U.S. products if a settlement could not be reached. Brazil’s government published a long list of U.S. goods, including U.S. wheat, against which it might retaliate. After many years of negotiation, the agreement ends the threat of retaliatory tariffs to U.S. wheat exports to Brazil.

“Brazil has been a major U.S. wheat importer since 2013,” said Shannon Schlecht, USW vice president of policy. “U.S. wheat growers support the settlement because it protects our competitive position in Brazil, preserves the GSM-102 Export Credit Guarantee Program and provides certainty for trade with Brazil.”

In the final settlement, Brazil also agreed not to launch future disputes over U.S. farm programs for the life of current U.S. farm legislation. In return, the United States will make a reparation payment to Brazil’s Cotton Institute and place new disciplines on the GSM-102 program.

USW and the National Association of Wheat Growers (NAWG) believe the GSM-102 program remains a vital option to our customers. The agreement means that this important program will continue operating, though with its features somewhat modified.

"NAWG applauds the administration’s efforts to settle this ongoing dispute, which will allow U.S. wheat growers to continue their strong trading partnership with Brazil. In addition, NAWG is pleased that negotiators found a path forward with Brazil that decouples trade opportunities for both countries from policy disagreements," said NAWG President Paul Penner.

“We value the WTO as an organization and support fair trade policies and adherence to WTO disciplines,” Schlecht said. “U.S. negotiators deserve credit for forging a workable agreement for U.S. agriculture that lays a smooth path for more productive relationships with our trading partners in Brazil."

For more information about the settlement, visit the USTR website.


5. Conner Brings Hill Experience to Policy Work at U.S. Wheat Associates

USW was pleased to announce this week that it has hired C. Benjamin Conner as Assistant Director of Policy. Conner brings more than five years of agriculture and trade policy work to the position, mainly in the office of U.S. Sen. Mike Johanns. Starting Oct. 6, 2014, he will report to USW Vice President of Policy Shannon Schlecht and support USW’s efforts to work collaboratively with wheat farmers and customers around the world to create a fair and competitive trade environment.

“Sen. Johanns has consistently supported agricultural trade and Ben played a critical role in forming and articulating those positions,” Schlecht said. “So we are very pleased to have someone with Ben’s experience to help advocate for U.S. wheat farmers in international trade monitoring and negotiations as well as food aid and biotechnology issues.”

Conner joined Sen. Johanns’ staff in an administrative role in 2009 and rapidly moved into legislative roles as a correspondent, aide and, most recently, as legislative assistant. He also worked as a special assistant at the U.S. Department of Energy following his graduation from Miami University with a bachelor’s degree in international studies. His undergraduate experience included academic work in Management and Middle East and Islamic Studies at American University in Cairo, Egypt. Conner went on to earn a master’s degree in International Commerce and Policy at George Mason University. He is also completing an MS/MBA in Food and Agribusiness Management from Purdue and Indiana Universities.


6. The World Celebrates Pasta in October

Durum growers and food processors are encouraging consumers to celebrate October as National Pasta Month and Oct. 19 to 25 as “Pasta Lovers’ Week” in the United States by enjoying a favorite pasta dish. The world also celebrates this month on “World Pasta Day,” Oct. 24.

North Dakota produces about 60 percent of the nation’s durum, which traditionally is pasta’s key ingredient. Montana also produces northern hard amber durum. Farmers in the southern deserts of California and Arizona grow Desert Durum® under irrigation. It is usually delivered as “identity preserved,” allowing U.S. and importing customers to specify for the intrinsic characteristics of different durum varieties.

Erica Olson, NDWC marketing specialist noted that her state produces about 50 million bushels of durum annually, which is enough durum to make nearly 15 billion servings of spaghetti. The U.S. domestic market for durum is large and a significant part of the U.S. durum crop is exported to Italy, Venezuela, Algeria and about 20 other countries.

Simple, quick, inexpensive and healthy pasta is an ideal meal option for today’s busy families. This year’s U.S. Pasta Month theme is “Keep Calm and Eat Pasta,” a reminder to consumers that despite misconceptions in several countries about the healthiness of gluten and carbohydrates, pasta is a nutritious food choice when eaten as part of a balanced diet.

“One cup of cooked, whole wheat pasta has four grams of fiber, 174 calories, virtually no fat, is low in sodium and full of essential nutrients such as folic acid, iron and B-vitamins,” said Olson. Pasta meals are an integral part of the so-called “Mediterranean Diet,” which may reduce the risk of heart disease and cancer.

World Pasta Day 2014 celebrations and the International Pasta Organization (IPO) Annual General Assembly will be will be hosted by UIFRA (Unión Industrial de Fideeros de la República Argentina) in Buenos Aires, Argentina. Together, the theme of these events is "Pasta: Added Value for Family Nutrition” (“Pasta: Valor Agregado Para la Nutrición Familiar”). For more information about the event, please visit the official World Pasta Day 2014 website at www.worldpastaday2014.org.

For additional pasta information and recipes, visit the following websites:


7. Wheat Industry News
  • Timely Review Requested. USW and NAWG joined 17 U.S. agricultural organizations in signing a letter urging the European Commission to respect the EU’s obligations under the WTO to make timely regulatory decisions on new biotechnology applications and asked that EU Commissioners support authorization of eight new biotechnology products for import, food and feed processing in the European Union. All of these products have received positive European Food Safety Authority (EFSA) scientific assessments and have reached the final stage of the EU’s risk management process. It is now up to the European Commission to make a final decision on their authorization.
  • Grant to Expand Kansas Wheat Innovation Center. USW member organization Kansas Wheat recently won a grant from the state’s Economic Development Administration to help fund construction of a greenhouse and other space that will help the Kansas Wheat Innovation Center in Manhattan, KS, expand and enhance its public-private collaborative research and commercialization of wheat innovations.
  • New “Wheat to Bread” Course Coming in November. Kansas State University's IGP Institute has collaborated with Buhler, Inc., to offer a five-day course covering raw material, cleaning and conditioning of wheat, flour mill operation and finished product handling and bakery. The course is geared for mix plant owners, millers, bakers, directors and managers but prior milling experience is not required. Registration closes Oct. 12. Learn more about the course here or visit the IAOM website.
  • NCI Hosts USW-Sponsored Grain Procurement for Importers Course. Thirty-one grain buyers from 19 countries came to Northern Crops Institute (NCI), Fargo, ND, for the Grain Procurement Management for Importers course Sept. 15 to 24. This was the largest group of nations to come to NCI for any course since its founding in 1983. Course participants were from Belgium, China, Colombia, Egypt, El Salvador, Italy, Japan, Jordan, Kenya, Lebanon, Netherlands, Peru, Philippines, Portugal, Qatar, Saudi Arabia, Spain, Tunisia, and USA. USW and the USDA FAS Cochran Fellowship Program sponsored many of the participants. Read more at http://www.ndsu.edu/news/view/detail/14534//.
  • WMC Frozen Dough Technology Short Course. The Wheat Marketing Center in Portland, OR, will hold its Frozen Dough Technology Short Course Dec. 8 to 17, 2014. For more information or to register, visit http://wmcinc.org/WMC_03_Frozen_Dough.html.
  • Congratulations to Hesham Hassanein who marked 20 years with USW on Sept. 18, 2014. Hesham is Regional Marketing and Special Projects Manager serving customers in the Middle East, East and North Africa from the USW office in Cairo, Egypt. Thank you for your service!


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