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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. Variable Conditions Likely to Affect Hard Red Spring and Soft White Crops
2. ILWU Ratifies Four-Year Grain Contract
3. Japanese Milling Managers to Learn About U.S. Wheat Supply System
4. Kansas Wheat Signals Innovation with Launch of New Brand Mark
5. USW Hosts Successful Buyers Conference in Costa Rica
6. Wheat Industry News


Online Edition: Wheat Letter – September 4, 2014 (http://bit.ly/Yfd88i)

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

PDF Edition: (See attached file: Wheat Letter - September 4, 2014.pdf)


1. Variable Conditions Likely to Affect Hard Red Spring and Soft White Crops
By Casey Chumrau, USW Market Analyst

U.S. spring wheat harvest is off to a slow start this year and the quality is variable in the early stages. Too much rain in the northern Plains region and too little rain in the Pacific Northwest has tested the crops.

USDA reported that farmers had harvested 38 percent of spring wheat as of Aug. 31, well below the five-year average of 65 percent. The only state ahead of average is Washington, which has harvested 94 percent of the spring crop compared to the five-year average of 71 percent. Hot weather in June and July sped up the growing season in Washington, where the majority of the crop is white wheat. In the largest hard red spring (HRS) producing state of North Dakota, USDA reports harvest at just 21 percent complete, well below the 60 percent average for the same date and farther behind than all other spring wheat states. The crop was already behind schedule due to slow maturation and heavy rains have stopped harvest several times the past two weeks.

As of Aug. 29, the annual crop quality survey by U.S. Wheat Associates (USW) indicated average HRS protein content of 13.6 percent (12 percent moisture), equivalent to last year's final average. Falling number average was more than 400 seconds. Average vitreous kernel content was 78 percent giving HRS samples collected so far a grade of No. 1 Dark Northern Spring (DNS).

USW’s report bases these results on about 8 percent of all the samples scheduled for analysis. Recent reports from production regions suggest HRS protein levels may now be lower than average. In some areas, there is concern about potential disease pressure and falling number issues. This is an early look at the HRS crop and the final results may be quite different. With such diverse growing regions, the United States produces a wide range of quality — an advantage for wheat buyers — and there have been a number of reports this year of protein levels greater than 14 percent as well as HRS with little to no damage. USDA has lowered the overall U.S. spring wheat rating in recent weeks but still rates 63 percent as very good or excellent, compared to 70 percent very good or excellent at this time last year.

The northern amber durum crop and harvest are also well behind schedule. There will be some bleaching due to the heavy rain but again it is too early to predict the final impact. Very early samples show lower HVAC counts and reduced falling numbers but it may not be representative of the entire crop. According to Jim Peterson of the North Dakota Wheat Commission, a factor that should help limit quality losses in durum is the fact that farmers planted a good portion of the durum later than HRS.

Soft white (SW) winter and spring wheat growing conditions in the Pacific Northwest were very different from growing conditions in the northern tier’s HRS region. Hot, dry weather stressed the SW crop and pushed protein levels higher than normal. USW’s survey results peg average protein at 10.8 percent (12 percent moisture) based on analysis of about half the samples expected. That level is similar to a separate report from the Washington Grain Commission (WGC) of protein levels averaging 11.2 percent for both SW and club wheat. Although rainfall in early August stopped harvest in a few areas, WGC reported that wheat with low falling numbers is not an issue. USDA recently rated Washington spring wheat conditions as 36 percent poor or very poor with 19 percent rated very good or excellent.

As with the 2014/15 soft red winter crop, buyers will need to pay close attention to weekly updates from the USW crop quality survey posted on www.uswheat.org/harvestReport every Friday afternoon (Eastern Time). Importers should be able to adjust their specifications to receive the wheat they need and, as always, their local USW representatives are ready to help them account for any variability.


2. ILWU Ratifies Four-Year Grain Contract
Includes excerpts from JOC.com, Aug. 26, 2014. Copyright © JOC.com

The International Longshore and Warehouse Union has ratified a new collective bargaining agreement with grain handlers in the Pacific Northwest, spelling the end to an embittered, two-year battle between the two parties.

The Federal Mediation and Conciliation Service announced a tentative agreement on Aug. 12, and the ILWU has now ratified the contract with three large grain exporters: Louis Dreyfus Commodities, United Grain Corporation and Columbia Grain. Just over 88 percent of the union voted in favor of the deal, which goes into effect immediately and will last until May 31, 2018. ILWU members resumed work at the facilities on Wednesday, Aug. 27.

“Bargaining was difficult but in the end both sides compromised significantly from their original positions, resulting in a workable collective bargaining agreement that preserves the work of the ILWU-represented workforce and fosters stability for the export grain industry,” the ILWU said in a press release. The negotiations have been going on since August 2012.

Last fall, state grain inspectors requested escorts to United Grain’s terminal in Vancouver, WA, because of a perceived threat of violence. Washington’s governor made the decision to stop providing escorts in July and inspectors refused to enter the facility without state police, which nearly shut down export operations at the terminal.

As part of the new agreement, all picketing has ceased, and both the grain handlers and the ILWU have agreed to drop all pending legal actions associated with the dispute, including all complaints to the National Labor Relations Board.

“The ratification by ILWU members of a new multi-year labor contract ensures that operations at Northwest export terminals run by the Pacific Northwest Grain Handlers will continue smoothly,” said a statement from that organization. “Reaching an agreement was obviously not easy, but hard work from both management and union negotiators produced a fair agreement providing well-paid employment to our longshore workers and allowing terminal operators to remain competitive.”

USW and the National Association of Wheat Growers (NAWG) worked closely throughout this situation with other stakeholders to advocate the underscore the importance of official inspection services and exports for farmers and their customers. U.S. federal law requires the Federal Grain Inspection Service or a delegated state agency to inspect all grain for export. Having a neutral third party certifying contract specifications 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. Both USW and NAWG will continue doing all they can to avoid similar disruptions in the future.


3. Japanese Milling Managers to Learn About U.S. Wheat Supply System

From Sept. 13 to 20, 2014, USW will bring a team of four mid-level flour milling managers from Japan to visit the and hard red winter (HRW), HRS and SW wheat supply system in Montana, Idaho and Oregon. USW collaborated with the Montana Wheat & Barley Committee, the Idaho Wheat Commission and the Oregon Wheat Commission to organize this team.

“These customers are successful managers with influential flour milling companies,” said USW Japan Country Director Wataru Utsunomiya who will accompany the team. “Experience shows that as they advance in their positions, having a deeper understanding of wheat breeding, production, marketing and handling systems helps to create a preference for U.S. wheat. In turn, these milling managers will have an influence on imports by Japan’s Ministry of Agriculture, Forestry and Fisheries.”

The milling managers will start their learning experience in Great Falls, MT, with visits to country elevators, large shuttle loading terminals and the Montana State Grain Laboratory that provides unbiased testing for wheat quality and grade. In Moscow, ID, the team will learn how wheat breeders balance the need for higher yields and quality to produce improved varieties and see how farmers apply that technology. Next up will be opportunities to learn about wheat supply logistics in Idaho and Oregon. The visit ends in Portland, OR, where the team will see the Pacific Northwest export system at work and learn how the Wheat Marketing Center is helping customers develop new wheat foods.

Japan typically imports more U.S. wheat each year than any other country. Japan’s importing pace is remarkably consistent year to year with SW, HRS and HRW making up more than 57 percent of Japan’s total annual wheat imports on average. However, U.S. wheat farmers must compete in Japan with Canadian and Australian wheat supplies. That is why USW and its state wheat commission members focus on giving buyers detailed quality information, keeping both Japanese government and millers informed on market and policy developments, advising government officials on their policy change proposals and collaborating in detail on any food safety related concerns.


4. Kansas Wheat Signals Innovation with Launch of New Brand Mark

The Kansas Wheat Commission and the Kansas Association of Wheat Growers, Manhattan, KS, have unveiled a new brand mark and a new “Rediscover Wheat” theme. The branding changes coincide with Kansas Wheat's focus on helping consumers rediscover wheat in their diets, developing a renaissance in wheat research and concentrating research efforts on exploring the genetic diversity and complexity of the wheat plant.

The new Kansas Wheat symbol represents the positive and innovative changes that the Kansas Wheat Innovation Center has had on the wheat industry. Wheat provides around 20 percent of global calories for human consumption and the Kansas wheat industry is working to ensure that the world has enough to eat.

The Kansas Wheat Commission built the Kansas Wheat Innovation Center through the Kansas wheat checkoff. It represents the single largest investment by wheat farmers in the nation. The facility opened in November 2012 and houses the two Kansas Wheat organizations and other industry organizations, and includes research laboratories and greenhouses.

"In recent years, consumers have increasingly followed fad diets such as the low-carb and gluten-free crazes. Our new tagline invites them to rediscover wheat foods, which have positive effects on the diet," said Kansas Wheat CEO Justin Gilpin. "The new brand mark signals a clear purpose for our brand, which is investing in the future through wheat genetics research. By rediscovering genetics in ancient wheat ancestors, we hope to unlock the true potential of modern day bread wheat."


5. USW Hosts Successful Buyers Conference in Costa Rica

USW was proud to host a Latin American and Caribbean Buyers Conference in Herradura, Costa Rica, in late July. The conference included about 100 registered participants, including wheat buyers, wheat farmers, grain merchandisers and other wheat industry leaders.

“USW wants to thank the 69 wheat buyers representing 16 countries for participating in this year’s conference,” said USW President Alan Tracy. “We see great potential ahead for them and we believe the conference program and the interaction with farmers and exporters, as well as the activities USW conducts in these regions, will help them grow their business.”

The conference agenda included such topics as the global wheat outlook and prices, economic advantages of blending U.S. wheat classes to improve quality and reduce costs, an update on the Panama Canal expansion project and other ocean freight trends, an update on the Trans Pacific Partnership and discussion on the gluten-free fad diet.


6. Wheat Industry News
  • Farewell to USW Assistant Director of Communications Julia Debes who, effective Aug. 29, 2014, is returning to Hoisington, KS, with her husband Josh and their daughter Emaline to become the fifth generation on her family's farm. Fortunately, Julia has agreed to help USW part-time on a contract basis. Thank you, Julia, for all you have contributed and we look forward to much more to come.
  • USW Seeks Communications Specialist. USW has an opening for a new position in its Arlington, VA, Headquarters Office for a Communications Specialist to provide a broad range of public affairs and marketing communications support to the organization. For more information and application requirements, please visit http://www.uswheat.org/newsRelease.
  • Study Highlights Need for Innovation to Feed the World. A majority of U.S. consumers and farmers agree that farmers are responsible for feeding the world and new technology and innovations are critical to achieving this goal according to results of the latest BASF Farm Perspectives Study, conducted in early 2014, comparing consumer and farmer viewpoints on agriculture-related issues. More than 9,000 people located in seven different countries participated in the study. The study also showed that although farmers feel prepared for this tremendous responsibility, most feel consumers do not appreciate this responsibility. Only 40 percent of U.S. farmers surveyed feel respected by the general U.S. population. Read more at http://on.basf.com/1CaIL23.
  • GSM-102 Funds Released. USDA’s Foreign Agricultural Service has released additional fiscal-year 2014 funds for its Export Credit Guarantee Program (GSM-102). The total amount now available to U.S. agricultural exporters is $3.586 billion. GSM-102 provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products, while providing competitive credit terms to buyers. By reducing financial risk to lenders, USDA said credit guarantees “encourage exports to buyers in countries — mainly developing countries — that have sufficient financial strength to have foreign exchange available for scheduled payments.” Read more at http://1.usa.gov/1qo1zEN.
  • International Grains Program Renamed IGP Institute. While the name may be new to industry professionals, it stems from the original name established in 1978. For more information, visit http://bit.ly/1rMU3XV.
  • Barkley Seed buys Desert Durum Wheat Research Program. Barkley Seed Inc. announced its acquisition of the Desert Durum Wheat Research Program, with a long history of producing high quality, identity-preserved durum wheat seed, from Monsanto Company, which acquired it from an affiliate of Barkley Seed in 2009. “We’re glad to get the program back,” said Michael Edgar, president of Barkley Seed and a past USW chairman. “We know Desert Durum very well and believe it will continue to be an important crop in our region.” For more information, visit http://bit.ly/1BbMR8x.
  • Licensing Agreement for Mycotoxin Technology. Mitsui Chemicals Agro, Inc. and Hokusan Co., Ltd. announced the signing of an exclusive licensing agreement allowing Verdesian Life Sciences global access to its patented technology for suppressing mycotoxin contamination in wheat and barley. For more information, visit http://bit.ly/1rMU3XV.
  • 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 Institute Milling Courses. IGP in Manhattan, KS, will hold its Buhler-KSU Executive Milling Course 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/.
  • Congratulations to USW President Alan Tracy on the birth of a grandson named London Thomas Tracy on Aug. 24!


Nondiscrimination and Alternate Means of Communications
USW prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USW at 202-463-0999 (TDD/TTY - 800-877-8339, or from outside the U.S., 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, USW, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. USW is an equal opportunity provider and employer.
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Wheat Letter - September 4, 2014.pdf
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