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U.S. durum producers appreciate World Pasta Day – widely celebrated each Oct. 25 – because it pays tribute to a product made from the wheat they grow.

But many of them agree with Erica Olson, who believes “every day is Pasta Day” for at least one segment of the wheat industry.

That will be especially true next month when Olson, market development and research manager for the North Dakota Wheat Commission, travels to Europe to participate in a U.S. Wheat Associates (USW) Crop Quality Seminar. Over the course of a week, Olson and USW Vice President of Programs Erica Oakley will present on the 2022 U.S. wheat crop – including durum, the primary wheat class used for making pasta – to wheat buyers in Italy and the United Kingdom. Other USW staff will host similar sessions for buyers in Spain and Portugal.

“Buyers from Italy are especially curious each year to hear about the U.S. durum crop and there are always a lot of questions,” explained Olson. “They are very quality-conscious, and pasta makers in Italy have a strong focus on the quality of the wheat they purchase. This year we will be able to share that the U.S. durum supply has rebounded, and the overall crop is exceptionally good.”

North Dakota produces a majority of the U.S. northern durum crop, followed by Montana. The Desert Durum® class is grown in Arizona and California.

Among the things Olson and Oakley will share with European buyers about the 2022 U.S. durum crop is that semolina color values are very high, which is an important quality for pasta makers who annually seek two things in the wheat they purchase: color and hardness.

Celebrating Pasta on a Global Scale

World Pasta Day was the result of 40 pasta makers from around the world gathering in Rome, Italy in 1995 for the inaugural World Pasta Congress. The goal of the special day is to promote  pasta consumption, as well celebrating its culinary and cultural importance.

The International Pasta Organization (IPO) was formed on Oct. 25, 2005, and was formally constituted in Italy a year later. IPO coordinates international communications aimed at safeguarding the product, develops common strategies to promote the worldwide consumption of pasta, and creates and manages information and food education.

While celebrations vary in each country, World Pasta Day focuses on consumers – the people around the world who enjoy eating some of the 600 or so shapes and sizes of pasta.

For U.S. durum producers, World Pasta Day is an opportunity to take pride in the role they play in putting high quality pasta on the plates of consumers around the world.

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Building upon its long relationship with Brazilian flour millers while also learning about current market conditions across South America, U.S. Wheat Associates (USW) recently took part in the Abitrigo Congress in Foz de Iguazu, Brazil.

During this year's Abitrigo Congress, USW presented a course completion certificate for its Online Baking Certification program to the owner one of Brazil’s largest milling companies

During this year’s Abitrigo Congress, USW presented a course completion certificate for its Online Baking Certification program to the owner one of Brazil’s largest milling companies.

Abitrigo, the association representing the Brazilian wheat milling industry, had not held an in-person annual meeting since 2019. USW President Vince Peterson said attendees from all industry sectors were thrilled to finally be able to engage in business face-to-face.

“Everyone we spoke with noted how nice it was to be back together,” said Peterson, who was joined by USW Vice Chairman Michael Peters and staff members from the USW Santiago Office. “Our presence is a way to show how important Brazilian millers and buyers are to U.S. wheat producers and the entire U.S. wheat industry. It gives us an opportunity to interact with key wheat buyers and have discussions with both new and long-time representatives of the mills.”

Peters, who was attending his first Abitrigo meeting, was impressed with the work of the USW Santiago office, which was represented by Regional Director Miguel Galdos, Assistant Regional Director Osvaldo Seco, Technical Specialist Andres Saturno and Senior Marketing Specialist Claudia Gomez.

“It was very clear that our staff has tremendous relationships with millers in that part of the world and have earned the respect of the industry,” said Peters, a wheat producer and cattle rancher from Okarche, Oklahoma. “It is a tough and competitive market for U.S. wheat, but we’ve remained connected and have done a great job of maintaining U.S. wheat’s reputation for providing a high-quality product.”

USW took center stage during one segment of this year’s meeting when it presented a course completion certificate for its Online Baking Certification program, a new USW technical project that promotes baking methods using all six U.S. wheat classes. The recipient owns one of Brazil’s largest milling companies.

“Having a significant business owner take her personal time to take the USW baking course is quite a compliment,” Peterson noted.

Abitrigo provides more information about its endorsement of the USW Online Baking Certification program on its website.

While Brazil has been importing U.S. wheat for more than 40 years, it still is an extremely competitive market due to Brazil’s domestic production and advantages enjoyed by some U.S. competitors, including Argentina and other countries that have mostly duty-free access under the Mercosur Agreement. In 2019, Brazil agreed to implement an annual duty-free tariff rate quota (TRQ) of 750,000 metric tons of wheat imports from countries not part of the Mercosur Agreement.

Peterson pointed out that the quality of U.S. wheat remains desirable to many Brazilian buyers.

“The core of the Brazilian milling industry recognizes that U.S. hard red winter (HRW) and soft red winter (SRW) wheat – and even hard red spring (HRS) wheat, which has been purchased by Brazilian customers this year – are the most applicable wheat sources to produce the best quality Brazilian wheat food products. Because of this, the market continues to be a long-term priority. And we will continue providing the best service and support we can to Brazilian millers and bakers.”

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In an example of USW’s commitment to service, it has combined knowledge with experience to extend the shelf life of bakery products. Headline photo: USW Baking Consultant Roy Chung leading a bread baking course at the UFM Baking and Cooking School in Bangkok, Thailand. (Photo courtesy of UFM)

Expanding the window of time breads and cakes remain fresh would help retailers, food distributors and bakers around the world broaden their customer bases and grow their businesses. It would also benefit the U.S. wheat industry, which provides a key ingredient for baked goods in international markets.

But can the window really be expanded? U.S. Wheat Associates (USW) believes it can.

In an example of USW’s commitment to service, the organization’s technical staff and consultants have combined knowledge with experience to extend the shelf life of bakery products. USW has “explored all possibilities” to develop processes and procedures that result in products remaining fresh for days – even weeks – longer than current standards.

Eager to Share the Knowledge

USW, which plans to conduct educational courses late next year or early in 2024 to share what it has learned on the topic, is confident its classrooms will be full.

Most of USW’s work on extending shelf life has been conducted in Southeast Asia, but the lessons learned apply to every bakery across the globe.

“In Southeast Asia, a typical shelf life of bread is seven days, and the maximum shelf life is about 10 days,” explained USW Baking Consultant Roy Chung, who is based in Singapore. “For large bakeries and food distributors, extending it beyond that 10 days would mean they could sell baked goods in towns and villages farther away from their manufacturing base. Retail markets would benefit. Consumers would benefit. Everyone up and down the supply chain would benefit, too.”

USW is planning to conduct educational courses to share what it has learned about extending the shelf life of baked goods.

USW is planning to conduct educational courses to share what it has learned about extending the shelf life of bread and other baked goods. Lessons taught in the courses will apply to bakeries in every region of the world.

The ‘Squeeze Test’

Shelf life is defined as “the time during which a freshly-manufactured product remains acceptable to the consumer.”  Of course, consumers in each region have different tastes and preferences, but the main goal of extending shelf life is universal: The product must pass the “squeeze test.”

The test plays out every day, in every grocery or supermarket. A shopper eases up to a bakery shelf, positions a hand over an unsuspecting loaf of bread and gently squeezes in order to judge the freshness of a prospective purchase.

USW’s work aims to help more loaves and baked goods pass the squeeze test long after leaving a baker’s oven. The result would be more consumers in more places having the ability to purchase the products. That in turn creates more demand for U.S. wheat.

Enemies of Shelf Life

According to Chung, the two major factors that lead to failure in extending shelf life are mold and staling.

“These are separate issues that must be tackled separately, and those are the things we have been working on,” he said. “The mold problem involves things like sanitation, moisture, temperature, relative humidity, water activity and the use of preservatives. The staling problem involves formulation and ingredients selection.”

Tools and formulas in the effort are many, including natural gums and enzymes, sugars and fats, and chemical additives and alternatives to chemical additives. Packaging innovations are being addressed, too, such as packing bread and other baked goods in airtight plastic under a modified atmosphere.

The tools and formulas used are designed to match consumer preferences.

For example, the European market is less accepting of additives. The typical shelf life of a loaf of bread was traditionally one day, but now is 2 to 3 days.

“This is achieved either by using very high-quality wheat such as hard red winter (HRW) or hard red spring (HRS), which have a slower rate of natural staling than some lower-cost wheats,” Peter Lloyd, USW Regional Technical Manager based in Morocco, said. “Our efforts in the European Union and Middle East regions also promotes the use of HRS wheat in bread as a way of getting to cleaner labeling (less additives), a growing issue in that part of the world.”

Longer Shelf Life, Cleaner Labels

The various requirements and preferences in different countries and regions makes the USW effort to extend shelf life of breads and baked goods an ideal subject for baker education.

And a perfect topic for USW’s planned training course and technical support for its overseas customers.

“There are many details involved in achieving the ultimate goal of reaching more consumers with quality bakery products made with U.S. wheat,” said Chung. “We are planning to offer a course that addresses all those details, and from the conversations we have had, there is tremendous interest everywhere.”

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A dramatic increase in demand for oilseeds could impact U.S. wheat production in coming years, with significantly more acres expected to be planted in soybeans destined for new and expanded crushing facilities.

Between 20 million and 25 million additional acres of soybeans will be needed to meet requirements of the renewable diesel industry, some analysts are predicting.

At the same time, global demand for wheat is also expected to rise, setting up dynamic competition for acreage in states where both crops are grown. For the U.S. wheat industry, the situation creates important questions: How much wheat acreage could potentially be lost to soybeans? Will lost acres impact the U.S.’ standing as the world’s most dependable wheat supplier? Can wheat and soybeans co-exist in a competitive environment?

This chart shows acreage planted in soybeans and wheat in 2022 in the country's top 10 soybean states, according to USDA's National Agricultural Statistics Service.

This chart shows total acreage planted in soybeans and total acreage planted in wheat in the country’s top 10 soybean states in 2022, according to USDA’s National Agricultural Statistics Service (NASS).

Where possible, farmers may adapt and double-crop more wheat and soybeans to maintain supplies of both crops. It is already a common practice in top soybean states like Illinois, Indiana and Ohio, where soft red winter wheat is the dominant class. But in soybean states that produce hard red winter and hard red spring wheat – Kansas, Nebraska, South Dakota and North Dakota, for example – allotting acreage is more complicated due to average rainfall and shorter growing seasons.

The ultimate question is if U.S. farmers will be able to meet the demand for both wheat and soybeans by doing what they have always done – figure out a way to do more with less.

Many Options, Limited Acres

Mike Krueger, a grain industry consultant with Lida Communications, put a spotlight on the emerging “competition for acreage” during last month’s U.S. Wheat Associates World Staff Conference.

While describing volatility in global wheat and grain markets due uncertain market conditions, Krueger noted a more predictable factor that will affect markets and decisions made by U.S farmers.

“Renewable diesel is projected to increase eight-fold by 2030 and significant investments of more than $2 billion are being put into new and expanded soybean processing plants in the U.S. right now,” Krueger explained. “The U.S. soybean crush will expand by 10%, or more. We are talking vast numbers, and while sunflower and canola should be big beneficiaries of renewable diesel, soybeans are certainly going to be in even higher demand.”

A boost of 20 million acres would catapult soybean and go a long way toward meeting the projected oilseeds demand.

But at what cost?

The U.S. has consistently ranked as one of the top five wheat producing countries in the world and one of the top three wheat exporting countries. Would a major shift in acreage affect U.S. production, thus its place as a supplier?

“We must remember there’s also a global demand for wheat, as well as corn, and we have to consider ongoing drought and weather patterns, not to mention political conflicts that are impacting grain production and supplies all over the world,” Krueger said. “All of this, all the things going on that affect global trade, will put major emphasis on overall crop production in the U.S. and the entire Northern Hemisphere. To be honest, no crop can afford to give up or lose acres.”

Can Double-cropping Help?

Higher prices caused by global demand for wheat and soybeans appears to be motivating more farmers in the Midwest to consider seeding soft red winter wheat in the fall and soybeans in the same field following wheat harvest.

About 40% of producers responding to a Purdue University Ag Economy Barometer survey in June indicated they have utilized a wheat and soybean double-crop rotation in the past. About 28% of those producers planned to increase the amount of cropland devoted to this rotation by seeding more wheat this fall followed by soybean plantings on the same acres in spring 2023.

Some analysts have predicted that renewable diesel demand in coming years will require the planting of at least 20 million additional acres of soybeans. This chart from USDA shows soybean acreage over the past decade.

Some analysts have predicted that renewable diesel demand in coming years will require the planting of at least 20 million additional acres of soybeans. This chart from USDA shows soybean acreage and harvest over the past decade.

Ultimately, the biggest factor behind whether farmers begin growing an extra crop of wheat is what price they can get for the crop.

“The shift toward increasing soft red winter wheat acreage is likely the result of the expected profitability improvement of the wheat and double-crop soybean rotation,” James Mintert and Michael Langemeier, authors of the Purdue survey, noted.

A move by the federal government earlier this year to increase the number of counties eligible for double-cropping insurance was a move aimed at boosting U.S. production of wheat and soybeans by reducing the risk for farmers who decide to take the double-crop route.

Producers are well-aware that there are drawbacks to double-cropping wheat and soybeans.

“Compared to single-crop soybeans, double-crop soybeans have a shorter growing season due to the delay in planting until the wheat is harvested, which often result in reduced yields,” said Scott Gerlt, Chief Economist for the American Soybean Association (ASA). “Despite this drawback, double-cropping does allow increased production.”

Wheat Demand to Grow

Despite questions about acreage and production, U.S. wheat continues to be in demand by international customers because of its consistent quality and reliability.

Krueger expects the demand will continue to expand.

“A primary reason is that global wheat supplies are likely to shrink due to a renewed focus on soybeans, and to a lesser extent, corn,” Krueger said. “Another factor favoring U.S. producers involves shipping and logistics limitations that hamper competing wheat-growing countries, including Russia and Ukraine.”

Effects from a third consecutive La Nina would further pressure global supplies.

“These things will undoubtedly lead to more export demand for wheat,” Krueger said. “Can the U.S. meet the demand? That is the puzzle that’s still being put together. Farmers make decisions every single planting season. They only have so many acres to work with.”

 

 

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USW Vice Chair Michael Peter( left) with Sen. Frank Lucas, R-Oklahoman (center) and Yi-Cheun "Tony" Shu, chair of the TFMA, after the Letter of Intent signing at the U.S. Capitol.

USW Vice Chair Michael Peters ( left) with Sen. Frank Lucas, R-Oklahoma (center) and Yi-Cheun “Tony” Shu, chair of the TFMA, after the Letter of Intent signing at the U.S. Capitol.

Representatives from the Taiwan Flour Millers Association (TFMA) signed a Letter of Intent September 14, 2022,  with U.S. Wheat Associates (USW) to purchase 1.9 million metric tons – about 69.8 million bushels – of wheat from the U.S. over the next two years, a commitment with an estimated value of $576 million.

The signing, held at the U.S. Capitol in Washington, D.C., was a much-anticipated stop for the 2022 Taiwan Agricultural Trade Goodwill Mission, a team made up of Taiwanese government officials and representatives of some of the largest importers of U.S. grains. The group is led by Yi-Cheun “Tony” Shu, chair of the TFMA and of Formosa Oilseed Processing Co. Also participating is Dr. Ching-Cheng Huang, deputy minister of Taiwan’s Council of Agriculture.

Taiwan is the 6th largest U.S. wheat export market and the 7th largest overseas market for U.S. agricultural products. Along with its intent to purchase U.S. wheat in 2023 and 2024, the team also signed Letters of Intent with the U.S. Soybean Export Council (USSEC) and the U.S. Grains Council (USG) to purchase soybeans and corn. The total estimated commitment in the three letters total $3.2 billion.

Michael Peters, USW Vice Chairman, signed the TFMA Letter of Intent on behalf of the U.S. wheat industry.

“American farmers place great value on the relationship between U.S. agriculture and Taiwan,” Peters, a wheat producer and cattle rancher from Okarche, Oklahoma, said during the signing ceremony. “We pride ourselves as being dependable partners who grow the highest quality agriculture products in the world. The TFMA and its members have been great trading partners who fully recognize the value of purchasing U.S. wheat.”

Among U.S. officials on hand were Senators Kevin Cramer, R-North Dakota, John Hoeven, R-North Dakota, Frank Lucas, R-Oklahoma, Jim Risch, R-Idaho, and Chuck Grassley, R-Iowa. Representative Steven Chabot, R-Ohio, co-chair of the Congressional Taiwan Caucus, was also present to witness the signing.

Following the visit to Washington, D.C., flour millers on the Mission headed west to get a first-hand look at U.S. wheat production and meet the people responsible for supplying high-quality wheat to Taiwan. The team is scheduled to visit wheat farmers in Kansas, Idaho and Oregon. Other scheduled stops also include the Kansas Wheat Innovation Center and the Port of Portland in Oregon.

USW also joined USSEC, USGC, the National Association of Wheat Growers (NAWG) and the North American Export Grain Association (NAEGA) in hosting a reception for the Mission team on September 13. The event provided leaders of the U.S. wheat and grain industry an opportunity to catch up with members of the Taiwan Goodwill Mission, which last visited the United States in 2019.

USW President Vince Peterson addresses those gathered for a reception welcoming the 2022 Taiwan Agricultural Trade Goodwill Mission

USW President Vince Peterson addresses those gathered for a reception welcoming the 2022 Taiwan Agricultural Trade Goodwill Mission

USW President Vince Peterson addressed the gathering by pointing out the long and beneficial history of cooperation between Taiwan’s flour milling industry and the U.S. wheat industry that first opened a promotional office in Taipei 56 years ago.

“Our legacy organization Western Wheat Associates established a presence in Taiwan in 1966, so we are going on six decades of working with the country’s flour millers and food industry,” Peterson said. “In that time, Taiwan has purchased more than 45 million metric tons of U.S. wheat. This partnership between TFMA, U.S. Wheat Associates and U.S. wheat producers has been on a great path, and we plan to continue on that path in the future. We truly thank the Taiwan Goodwill Mission for coming to the United States and for its ongoing preference for U.S. wheat and other agricultural products.”

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In 2021, the U.S. Wheat Associates (USW) team in Beijing asked then-Chairman and Oregon wheat farmer Darren Padget to record a video message to Chinese milling and trading managers participating in a USW-sponsored “Contracting for Wheat Value” seminar.

The USW team wanted to show customers the important things U.S. farmers do every day to produce more and better wheat with less impact on the environment. Chairman Padget took the challenge to heart and spent an entire spring day walking the Chinese team through his operation to tell his farm’s sustainability story.

USW is sharing that story here with a wider audience that is increasing interested in learning more about sustainable food production.

Better Soil 

Joined by his son Logan and his father Dale — partners in Padget Ranches — Darren talked in his video presentation about the effort to improve the soil in which they grow high quality soft white wheat.

“From when my father came to farm … things have changed quite drastically,” Darren said. “Taking care of the land and making sure it is sustainable is very important  to us as we move forward. We used to till the soil heavily with a moldboard plow … it took a lot of time, a lot of fuel, and a lot of resources. Now, we do ‘direct seeding,’ which means the stubble in the field stays intact, which builds our soil organic matter and is less susceptible to erosion. It has been a big change. We have adopted the technology, and it seems to be the best answer to make sure this farm is here for many generations to come.”

Image shows Darren Padget bending down to drink from a garden hose on his farm

Clean Drinking Water. In the “A Visit to Padget Ranches in Oregon” Darren Padget said his family’s drinking water comes from a well on the farm, a personal reason why they are very cautious about crop protection applications.

Logan Padget is the fifth generation of his family to farm in this dry north-central Oregon region just south of the Columbia River. He has embraced precision agricultural technology. In the video, he talks about the efficiency of the farm’s crop protection product application equipment.

Precision Applications

“This machine is almost as late and great as you can get on technology,” Logan said. “It is GPS-controlled. Once I make the first pass on a field, the GPS can perfectly mimic that line across the field with just one-third of a meter of overlap. That is better than anybody could drive by hand. There’s also section control through the GPS, so if you’re coming across at an angle, each section will shut off to avoid double spraying, which saves us money. It also means fewer chemicals applied to the crop. It’s just a win-win all the way around.”

Better Quality Wheat

Darren also described how farmers are reaching beyond their own fields to help improve the functional quality of the milling wheat they grow for overseas and domestic consumption. He showed a “Preferred Variety List” that ranks public and commercial wheat varieties by desirability of quality characteristics based on three years of data. The list is developed by the state wheat commissions in Oregon, Washington and Idaho, which are directed by farmers who fund commission activities (including membership in USW).

Image shows the front and back of the 2021 Preferred Variety List for PNW wheat

Ranked by Quality. The Pacific Northwest Preferred Variety List encourages functional quality improvement for overseas and domestic millers and food processors. The description of the list states: “When making a decision between varieties with similar agronomic characteristics and grain yield potential, choose the variety with the higher quality ranking. This will help to increase the overall quality and desirability of Pacific Northwest (PNW) wheat.”

We invite you to view the entire video below.

Image shows the opening scene from a video featuring Darren Padget

https://vimeo.com/578611568

 

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Consumers and suppliers both appreciate uniformity, the ability to purchase a reliable product that is available when needed. Customers of U.S. wheat know that dependable people grow and supply reliable wheat, which marks the difference between the U.S. wheat market and some competing suppliers.

Freedom to Trade

Free trade has been upheld in U.S. commerce since the country’s founding. The Export Clause, in Article I, Section 9, Clause 5 of the U.S. Constitution, states, “No Tax or Duty shall be laid on Articles exported from any State.” The framers of the constitution, eager to throw off the history of colonial rule, made it a policy that goods from the U.S. would be available to markets worldwide, and no elected official would tell them otherwise.

However, farmers have fought for uninhibited trade.

When the Soviet Union invaded Afghanistan in 1980, President Carter cut off U.S. grain exports to the Soviets. In the aftermath of the grain embargo, more stringent laws such as the export sales reporting and contract sanctity law were passed that doubled down on the freedom of commerce.

Protectionism Rising

Despite the sincere efforts by the World Trade Organization (WTO) to keep international markets open, some countries remain quick to block exports when markets become uncertain. Covid-19 and the global shutdowns that followed showed a pattern of export bans from major commodity producers. Russia’s recent invasion of Ukraine has also had a reverberating effect on the grain markets. Many would-be suppliers have instead banned or restricted the sale of their wheat, creating a supply worry and once again proving that not all markets remain reliable.

When countries implement wheat export bans claiming to protect their domestic market it creates uncertainty and higher prices for buyers. Putin’s war with Ukraine pushed already increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated.

Putin’s war with Ukraine pushed increasing world wheat prices to spike to more than a decade high in March, and prices remain elevated. The latest USDA Supply and Demand Report expects Ukrainian wheat exports to fall by nearly half year-over-year from 19.0 million metric tons (MMT) in 2021/22 to 10.0 MMT in 2022/23. This 9.0 MMT reduction is almost the equivalent of all the wheat Turkey is expected to import in 2022/23. Russia’s unprovoked invasion has interrupted Ukrainian commercial sales and added uncertainty to the market.

India abruptly halted commercial wheat exports on May 13, catching the wheat market off guard. The immediate suspension has moderated somewhat since then. Still, the government’s promise to fulfill export shortages caused by Russia’s invasion of Ukraine was an unexpected and costly blow to the market.

Intervention Expands

Other countries have weighed the use of export-curbing measures. Argentina’s president in May urged its legislature to increase export taxes to protect domestic prices from “surging international prices.” Kazakhstan applied a quota on wheat, including durum, soft wheat, and wheat flour, from April 15 to June 1. Belarus imposed an export ban on grains from late 2021 to early 2022.

And Russia, with a very large wheat crop now expected, has not stopped its protectionist wheat export tax that only increases the cost for buyers. Russia also imposed export bans on countries in the Eurasian Economic Union (EEU), which comprises former Soviet countries. The ban is in place from Mid-March to August 31, 2022.

When countries implement wheat export bans, they often claim to be protecting their domestic market. But the actual effect is higher prices for every buyer. Export bans also create uncertainty. India’s sudden export ban is a prime example.

“We bought wheat from traders and moved it to ports,” said a wheat trader caught off guard by India’s export ban. “Our intention is to fulfill export commitments, but we can’t overrule government policy. Therefore, we don’t have any option but to declare force majeure*.”

Buyers expect reliability, and that requires suppliers to have dependable partners. U.S. wheat farmers and their export supply chain partners, with government support, strive to be that dependable partner to world wheat buyers.

By Michael Anderson, USW Market Analyst

*Force Majeure is a provision in a contract that frees both parties from obligation if an extraordinary event directly prevents one or both parties from performing.

Header photo courtesy of Adams Farms LLC in Oklahoma, June 2022

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A recently released econometric study confirmed that two export market development programs administered by the USDA Foreign Agricultural Service (FAS) benefit wheat farmers, their overseas customers and the general U.S. economy.

“Four studies since 2007 using various econometric models have all shown the same bottom line result – export market development programs work for American agricultural producers,” said Robbie Minnich, Chair of the Coalition to Promote U.S. Agricultural Exports and Senior Government Relations Representative with the National Cotton Council. “Without question, the economic benefits they return far exceed the investment made.”

Cover of USDA FAS Export Market Development yearbook for 2021.

Learn more about USDA export market development here.

U.S. Wheat Associates (USW) participates in the Market Access Program (MAP) and the Foreign Market Development (FMD) program on an annual basis. These programs are apportioned by law in the U.S. federal budget. They are public-private partnerships between USDA and organizations like USW and 17 state wheat commission members that help fund its activities. Across all the participating organizations, private contributions to the programs represented more than 70% of total funding in recent years.

Wheat Trade

Wheat is the most trade-dependent of the major food and feed crops grown in the United States. But individual farming operations cannot effectively market wheat overseas. The MAP and FMD programs help to encourage those customers to consider the various classes and qualities of U.S. wheat.

With funding from MAP, FMD and U.S. wheat farm families, experienced USW staff and consultants add exceptional value to all U.S. wheat class imports. USW also invests substantial funding to help overcome trade or technical barriers that would otherwise keep end-users from realizing the highest value and most revenue from using U.S. wheat.

“These export market development programs enable U.S. Wheat Associates to build a critical reserve of trust and goodwill with our overseas buyers, end-users and influential government officials, as well as key U.S. government agencies and officials,” said USW President Vince Peterson. “And there is a clear return on investment—for every dollar spent on export promotion, there is a return of $24.50 in additional net export revenue – and the return is even higher to the U.S. wheat supply system.”

U.S. Farm and Economic Returns

The new econometric study, conducted by IHS Markit and Texas A&M University agricultural economists Dr. Gary Williams and Dr. Oral Capps, showed export programs added an average of $9.6 billion per year to export value between 1977 and 2019. For farmers, livestock producers and dairy operators, the study showed MAP and FMD increased cash receipts by $12.2 billion per year. The study also indicated that these export market development programs added 225,800 new jobs across the entire U.S. economy.

“Our work indicated that MAP and FMD have accounted for 13.7% of all the revenue generated by U.S. agricultural exports between 1977 and 2019,” said Dr. Williams. “The additional export revenue bolsters the entire U.S agricultural sector and creates a multiplier effect throughout the U.S. economy.”

Infographic information noting 13.7% increase in revenue from export market development programs.

Export Market Development programs fund the trade and technical service that adds value to U.S. wheat imports and dozens of other U.S. agricultural export products.

The Coalition to Promote U.S. Agricultural Exports welcomed the results of the study. In letters sent on April 27, 2022, members of the Coalition, including USW and other organizations, asked U.S. House and Senate agricultural appropriations subcommittee leadership to maintain funding of at least $200 million for the Market Access Program (MAP) and $34.5 million for the Foreign Market Development (FMD) program in FY2023.

ATP Investment Also Analyzed

The study also analyzed the potential impact of the Agricultural Trade Promotion (ATP) program that the USDA established in 2019.

The ATP program provided $300 million to cooperating organizations, to which they contributed $90 million in cash, goods and services. The study’s analysis of future expected returns from those investments between 2019 and 2026 predicts that incremental funding for agricultural export market development will provide an excellent return.

The full export market development study, the Coalition letters to congressional appropriators, and more information about the value of U.S. agricultural exports to U.S. producers and their global customers are available at www.AgExportsCount.org.

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It is 3:00 on a brisk and overcast Tuesday afternoon, and the sun is already low in the sky. I am sitting in the galley of a tugboat — state of the art, I am told. The tugboat has all the amenities any crew would need with five staterooms, a kitchen, a washer and dryer, and even a weight room. There is some tension on board, with a hurry-up-and-wait attitude, when the phone finally rings. The deck mechanic answers and the barge we are waiting on is finally loaded with 1,500 metric tons (MT) of soft white wheat. The motor hums to life, and we start moving, slowly, toward the grain elevator. It is growing dark as two grain barges are tethered together, and we begin downriver from Lewiston, Ida., headed to Portland, Ore. It will be a two-and-a-half-day journey first down the Snake River, connecting to the Columbia River and finally to the Willamette River, to reach our Portland export elevator destinations, about 360 miles.

This river, in general, is very handsome, except at the rapid, where it is risking both life and property to pass.” – From the Journal of Sgt. Patrick Gass, a member of the Lewis and Clark Expedition.

Michael Anderson is picture front, left with the crew of the tugboat crew.

We follow the same route that Lewis and Clark took as the “Corps of Discovery” traveled west. The rivers were different in 1805, untamed by today’s intricate system of dams and locks. The eight dams that we will pass through have made it possible to harness the rivers into a major artery carrying U.S. wheat bound for export from farm to port.

The boat rocks side to side on my first night. It is comfortable, but the unfamiliar feeling makes it hard to settle in. Suddenly the boat lurches, and the light outside gets brighter. The first lock, Lower Granite, comes into view from the deck. Two spotlights illuminate our way as we creep up to the lock. Slowly we approach the brightly lit lock and are guided in along a long concrete wall. The force of the shallow water beneath us is the only thing that keeps the tug and barges moving forward. With inches to spare on either side, we have entered the lock. Behind the boat, a gate rises from underneath the water; it is about three feet above the surface when suddenly the gate stops rising, and our boat starts sinking below the surface. It is a rapid movement, but it continues for a long time. The watermark rises above us as we descend below the surface, protected by thick concrete walls. Finally, we stop moving. We are now 100 feet below the level at which we entered the lock. I walk to the front of the boat just in time to see the gates in front, towering above us, start to open, revealing the river ahead, and slowly we make our way out of the lock and down the river.

As a crew member aboard a tug, your day is not a simple “9-to-5.” With one crew on and one off, the day is broken into shifts of six hours each, from 12 to 6 and 6 to 12. The environment shared by the crew is family-like, cooking meals together and watching TV. Only the person driving the boat, the captain or the pilot, is constantly on watch. The deck mechanics jump into action when the boat enters a lock or when we pick up another barge, and this journey is a four-barge tow, meaning four barges being pushed by one tugboat.

From the bridge, the captain has a sweeping view on all sides, and plenty of sophisticated equipment helps him navigate even when we are surrounded by fog, which in the Pacific Northwest is common. Another lock is just ahead. The boat only moves about nine miles per hour. We fit into the lock with precision, again with just a foot on each side to separate us from the massive concrete walls. Unlike the lock last night, this lock is too short to fit the whole tow in at once, but that is nothing out of the ordinary for this crew. Once the barges are tethered in place, the captain skillfully maneuvers the tugboat like a game of Tetris into a tiny space giving the back of the boat just enough room for the lock keeper to close us in. Again, a large iron gate rises from the water behind us, and like an elevator, we start moving down inch by inch. In front is what looks like a massive garage door. The lock opens, revealing the next stretch of the river ahead.

The mechanics of the lock are simple: we are moving down river with the flow of the water, so when we enter a lock, it is full of water. The lock seals behind us, and a valve is released to allow the water to rush out of the lock. The tow itself is being moved to the same level as the river we are moving down. Once the tow is at the same level as the water outside the lock, the valve is closed, and we wait for the massive concrete door ahead of us to open so the tow can move out. It is a similar procedure for ships going upriver against the flow, but instead of the valve releasing water, the valve fills the lock. It takes about 30 minutes to pass through each lock.

The Columbia Snake River System is a superhighway for moving wheat and other agricultural products from farm to market. The barges and rail lines that run on both banks of the Columbia River carry more than 55% of all U.S. wheat bound for export each year. Barges are the most efficient way to move large volumes of grain, making the river system a cost-effective and “green” logistical option. The Army Corps of Engineers maintains the lock system; its history goes back to the 1930s when President Franklin Roosevelt personally inaugurated Bonneville, the first of the eight dams and locks east of Portland.

After about 60 hours on board the tugboat, we arrive in Vancouver, Wash., on the north bank of the Columbia River. We drop off two barges at an export elevator and proceed west again, up the north-flowing Willamette River that bisects Portland. It is my third river in a week, and we are taking the last barge to an export elevator just across the river from the U.S. Wheat Associates (USW) West Coast Office. There is a vessel at berth waiting for the wheat we carry. The crew drops the barge, and me, at the elevator. I walk up a set of metal stairs connected to a hoist and hop off, touching land for the first time since Tuesday. I walk across the river on Portland’s Steel Bridge, under which the wheat from our tow will pass on its way overseas, to my office.A tugboat pushes a grain barges down the Snake River on its way from Lewiston, Idaho to Portland, Ore.

By Michael Anderson, USW Market Analyst

This story was originally published on October 21, 2019.

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The first of its kind interactive wheat export supply system map that U.S. Wheat Associates (USW) introduced in 2020 is a helpful planning tool for U.S. wheat customers, our staff, and others. USW produced the map with Heartland GIS using USDA Foreign Agricultural Service Agricultural Trade Promotion program funds. The “USW Wheat Export Supply System” map is posted here on the USW website.

“There are six distinct wheat classes grown across many states and delivered by many different routes. So the U.S. wheat supply chain truly is driven by geography,” said USW Vice President of Overseas Operations Mike Spier. “The wheat export supply system map provides a geographical information system. That helps USW representatives show the world’s wheat buyers where the wheat they want is grown and transported to the export elevator.”

“Assisting overseas customers is a critical service that helps add value to U.S. wheat,” said USW Vice President of Communications Steve Mercer. “This wheat export supply system map is unique, and a practical addition to the trade service our representatives conduct around the world.”

Interactive export supply system map to help when buying U.S. wheat

Click on the map to use this tool.

 

The map includes a selection tool that allows the viewer to identify, in any combination, U.S. wheat production by class, wheat shuttle loading terminals, Class 1 U.S. rail lines and spurs, wheat terminals on major rivers, and export elevator locations.

“Working with U.S. Wheat Associates and its state wheat commissions, we used data from a lot of sources, including satellite imagery, to identify wheat planted area data,” said Todd Tucky, Owner and Senior Consultant of Heartland GIS. “I believe this is the most accurate representation ever developed of where individual U.S. wheat classes are produced along with the parts of the export system.”