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As the world celebrated Earth Day, the National Association of Wheat Growers (NAWG) launched a new Special Climate and Sustainability Committee. The committee’s purpose is to review wheat sustainability issues and guide the development of climate policies on behalf of U.S. wheat farmers.

U.S. Wheat Associates (USW) salutes our colleagues at NAWG for making climate and sustainability a formal priority. This will be a great chance to recognize the already strong commitment by U.S. farm families to economic and environmental sustainability – and help ensure farmers have a voice in climate initiatives.

For a Positive Impact

Portrait of Dave Milligan quoted in the Earth Day story

Dave Milligan, NAWG President

“Wheat growers are having a positive impact on the environment and have increased resource-efficient practices in land, water and energy use,” said NAWG President and Cass City, Mich., wheat farmer Dave Milligan.

U.S. wheat farmers work every day to contribute to a sustainable future in agriculture. It is reflected in agronomic practices, research and development, and transportation methods, making the United States a sustainable source of wheat for export. Sustainability is also about innovation — reducing inputs while producing better wheat varieties to increase yield potential and provide consistently high-quality wheat to customers around the world.

USW joined the U.S. Sustainability Alliance in 2015 to better communicate the importance of sustainability to U.S. wheat farmers, including developing a fact sheet on wheat sustainability.

Engagement on Climate

To show a responsible farmer

Justin Knopf, Gypsum, Kan.

Milligan said Congress and USDA are currently considering ways to include a wide range of interests in the climate discussion. The Special Climate and Sustainability Committee will provide recommendations on policy options and NAWG’s engagement in climate discussions. Committee members are current and past NAWG board members, including Kansas farmer Justin Knopf and Wyoming farmer Derek Jackson as co-chairs of the committee.

“As we celebrate Earth Day, NAWG is excited to take initiative by engaging in climate policy discussions and focusing on practices that benefit the environment, wheat producers and the general public,” Milligan said.


Read other stories in this series:

Precision Agriculture Improves Environmental Stewardship While Increasing Yields
U.S. Farmers Always Think About Economic and Environmental Sustainability
Technology, Innovative Farming Practices Advance Wheat Farm Sustainability
Minnesota Farmer Spread the News with His Conservation Practices
U.S. Farmers Embrace Conversation Practices
Farmers Look to New Technologies to Foster Precision Agriculture
Cargill CEO Highlights Farmers Role in Pandemic and Promoting Sustainability

Research by USW Communications Intern Dylan Davidson

U.S. farmers working hard to produce six distinct, high-quality classes of wheat must manage a multitude of risks to put bread on tables at home and across the globe. Beyond the agronomic and economic challenges, the decisions and policies of the U.S. government and international trade policy have affected wheat farm families for decades.

In April 1950, Clifford R. Hope was a U.S. Congressman from Garden City, Kan. He told wheat farmer leaders that “there are many questions that come before Congress that need answering by wheat-oriented people.” He was speaking to farmers meeting in Kansas City, Mo., who would go on to create the National Association of Wheat Growers (NAWG) to represent the interests of wheat farmers with members of Congress. After leaving Congress, Hope was hired as the first president of Great Plains Wheat.

As U.S. wheat stocks piled up, the government created federally managed grain reserves and in 1954, with support from NAWG and state wheat associations, the U.S. Congress passed Public Law (PL) 480 to help expand exports of surplus agricultural products. This was a huge incentive to form commissions and, by 1960, to create Great Plains Wheat and Western Wheat Associates to promote U.S. wheat in designated countries under PL 480 and other commercial overseas markets. The final details of the merger that created U.S. Wheat Associates (USW) were developed on the sidelines of a NAWG conference in 1980.

Celebrating Together. Representatives of NAWG and the Kansas Association of Wheat Growers participated in the January 1959 opening of the first European office of Great Plains Wheat. At the office in Rotterdam, left to right: KAWG Vice President Ora Root of Garden City, Kan.; NAWG President Floyd Root, Wasco, Ore.; USDA/FAS Assistant Agricultural Attache Henry Baehr; and GPW/Rotterdam Director Harvey E. Bross.

In many ways, NAWG and USW have grown up together. In coalition with its state wheat associations, NAWG lobbies Capitol Hill and the Administration on behalf of U.S. wheat growers. USW works to develop and maintain export markets.  While their missions are different, they share a goal to work for the common good of U.S. wheat farm families.

Essential Organizations

“This is a positive relationship where each organization’s role helps the other,” said NAWG CEO Chandler Goule. “For instance, NAWG is able to lobby to Congress in an effort to create policies that improve the livelihoods of wheat farmers. USW cannot lobby members of Congress but does have the capabilities to promote wheat abroad, creating international markets where U.S. wheat farmers sell their crops. Both organizations are essential.”

As the wheat industry continued to develop domestically and abroad, both organizations continued evolving to meet farmer needs. As with any long-term partnership, the relationship at times proved challenging. Yet with the positive influence of the farmers who fund and direct each organization, NAWG and USW have worked through any issues to work more closely in representing the U.S. wheat industry.

“Working together means we can share resources and provide a better voice for our farmers and our customers abroad,” said Ron Suppes, Dighton, Kan., wheat farmers and the 2007/08 USW Chairman.

Kansans Ron Suppes (above, testifying on Capitol Hill on the crucial role of wheat in food aid programs) and John Thaemert established joint board meetings when they were leading USW and NAWG in 2007/08.

Meeting Together

As USW Chairman, Suppes worked with fellow Kansan and NAWG President John Thaemert to establish joint board meetings of the two organizations. Today, that effort has evolved into two joint board meetings each year and joint committees that evaluate and propose policies that cross over both U.S. government oversight and the NAWG and USW missions, such as trade policy, wheat breeding innovation, food aid and wheat quality.

Each committee includes four members of each organization and a chairman. The chairmanship of each committee rotates annually between the USW and NAWG to promote equal representation for each organization.

The Joint USW/NAWG International Trade Committee meets together two times each year to review trade policies that affect U.S. wheat farmers and their overseas customers.

“The committees are critical for both organizations,” said USW President Vince Peterson. “They really get into the details of policy issues and it is where some of the main collaboration between the two organizations happen.”

In Kenya, November 2019, representatives of NAWG and USW visited a refugee camp to observe direct donations of U.S. wheat by the World Food Programme. U.S. rice and sorghum organizations also participated in the visit to Kenya and Tanzania.

Policies developed in these joint committees and working groups are reviewed and approved by each organization’s full board of directors. Often, these policy positions are shared publicly through joint statements shared with domestic and international media, such as on trade agreements and wheat breeding innovation.

In addition, “every month, the top leaders of each organization get on a call to discuss our shared priorities,” said Dave Milligan, a wheat farmer from Cass City, Mich., and current President of NAWG. “I feel both organizations are realizing more and more that when we work together, we are able to move the wheat industry forward and make it prosperous.”

NAWG President Dave Milligan, a wheat farmer from Cass City, Mich.

“With shared trade issues, technological changes and economic stresses, there has never been a more important time for all wheat farmers in the country to work together,” said Darren Padget, a wheat farmer from Grass Valley, Ore., and current USW Chairman. “I am glad that our two organizations continue to lead the way, together.”

USW Chairman Darren Padget, a wheat farmer from Grass Valley, Ore.

 

Then NAWG President Wayne Hurst (center,  just right of Pres. Obama) and then USW Chairman Randy Suess (just right of Hurst) represented wheat growers at a reception celebrating the signing of the Trade Adjustment Assistance (TAA) for workers, and the Korea, Panama and Colombia Free Trade Agreements, in the Rose Garden of the White House, Oct. 21, 2011. Official White House Photo by Pete Souza.

 

NAWG President Ben Scholz (standing left) and USW President Vince Peterson (2nd from left) represented wheat farmers at the formal signing of the U.S.-Japan Trade Agreement Oct. 7, 2019, as President Donald Trump and other representatives watch U.S. Trade Representative Ambassador Robert Lighthizer and Japanese Ambassador to the U.S., Shinsuke Sugiyama, do the honors. Official White House photo.


Read other stories in this series:

Western Wheat Associates Develops Asian Markets
Great Plains Wheat Focused on Improving Quality and HRW Markets
Evolution of a Public-Private Partnership
The U.S. Wheat Export Public-Private Partnership Today

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The U.S. wheat industry is speaking out boldly on the need to pass the United States-Mexico-Canada Agreement (USMCA) this year.

Speaking at a widely attended rally sponsored by Farmers for Free Trade on Capitol Hill today, Ben Scholz, a wheat farmer from Lavon, Tex., said agriculture and wheat farmers desperately needs a win in trade and “passing the USMCA will put us in the right direction.”

As President of the National Association of Wheat Growers (NAWG), Scholz was representing all U.S. wheat farmers and, by proxy, their loyal customers in Mexico, at the rally. Members of Congress, including House Agriculture Committee Chairman Collin Peterson and Ranking Member Mike Conaway, as well as other farm leaders attended the event to discuss how USMCA provides growers with improved market access while maintaining the zero-tariff platform.

“Over the past five years, Mexico has consistently been the top market for U.S. wheat exports,” said Scholz. “USMCA retains tariff-free access to imported U.S. wheat for our long-time flour milling customers in Mexico. Further, the Agreement takes an important step towards fixing the Canadian grain grading system which automatically designates U.S. wheat imported as the lowest grade wheat which puts America’s wheat growers at a competitive disadvantage.”

Ben Scholz, a wheat farmer from Lavon, Tex.

On behalf of wheat farmers, NAWG is a member of Farmers for Free Trade, which is very focused on getting USMCA passed, including sponsoring #MotorcadeForTrade to highlight the importance of ag trade with Mexico and Canada and passing USMCA. In June 2019, NAWG joined nearly 1,000 groups representing the U.S. food and agriculture value chain at the national, state and local levels in signing a letter supporting USMCA passage. This week, Ben was also joined by fellow NAWG growers from several other states to meet with more than two dozen congressional offices to urge swift consideration of USMCA.

NAWG and U.S. Wheat Associates (USW) applauded the three countries for working together to finalize USMCA. This agreement includes important provisions for wheat farmers. Retaining tariff-free access to imported U.S. wheat for Mexico is a crucial step toward rebuilding trust in U.S. wheat as a reliable supplier in this important, neighboring market.

USW thanks Ben and the entire NAWG organization for their efforts representing wheat farmer interests in Congress.

About NAWG
NAWG is the primary policy representative in Washington D.C. for wheat growers, working to ensure a better future for America’s growers, the industry and the general public. NAWG works with a team of 20 state wheat grower organizations to benefit the wheat industry at the national levels. From their offices in the Wheat Growers Building on Capitol Hill, NAWG’s staff members are in constant contact with state association representatives, NAWG grower leaders, Members of Congress, Congressional staff members, Administration officials and the public.

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On Feb. 15, 2019, the United States submitted a counter notification, co-sponsored by Canada, in the World Trade Organization (WTO) Committee on Agriculture on India’s market price support for pulse crops – based on publicly available information. With this counter notification, the U.S. government continues to use the rules-based trading system established by the WTO as an appropriate and welcome step toward fairness and transparency for all its member countries.

In May 2018, the U.S. Trade Representative (USTR) formally questioned data India has reported to the WTO about its market price support programs for wheat and rice from marketing years 2010/11 to 2013/14. And in 2016, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed two trade dispute actions by the USTR challenging Chinese government policies that distort the wheat market and harm wheat growers throughout the rest of the world.

Specifically, in September 2016 a U.S. trade enforcement action challenged the level of China’s trade-distorting market price support programs for wheat as well as for corn and rice. In describing its action, the USTR said domestic price support to Chinese farmers “significantly exceeds China’s aggregate measure of support commitments under the WTO Agreement on Agriculture.” In December that year, a U.S. dispute case alleged that China is not fairly administering its annual tariff rate quotas (TRQ) for corn, rice and 9.64 million metric tons of imported wheat. This request stated that China’s TRQ administration unfairly impedes wheat export opportunities.

The WTO is expected to announce the panel decision in the next few weeks on the original U.S. challenge to China’s domestic agricultural subsidies. The TRQ challenge also continues moving through the dispute process at the WTO.

Progress in these dispute cases indicate the WTO dispute mechanisms continue to provide an effective way to challenge unfair practices and policies. But the approach represented by the Trump administration’s use of unilateral tariffs and the threat of escalation to challenge unfair trade practices threatens the stability of the global trading system. That said, instability channeled properly could be beneficial to the trading system and result in greater long-term stability if it results in eliminating trade barriers, rather than creating new ones.

The past two decades have been a lost opportunity for the WTO negotiating function as major countries like China have refused to take on new responsibilities. Perhaps this unfortunate situation will be the wake-up calls countries need to realize that restricting trade and unfairly advantaging domestic industries in global markets winds up hurting everyone.

USW’s stakeholders hope that that the Administration’s alternative policy does result in positive shifts toward a more open trade environment that encourages strong domestic development in all countries. Yet the Administration’s continued use of the WTO dispute settlement and counter notification processes is also a positive sign that trade disciplines, supported by most of the world, will remain an essential part of global trade.

 

 

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U.S. farmers consistently produce enough wheat to meet domestic demand and still have about half of their crop available to overseas customers year. They support U.S. Wheat Associates (USW) with a portion of 17 state checkoff programs to build and maintain overseas demand. In turn that support qualifies USW to apply for program funding appropriated by the U.S. Congress and administered by USDA’s Foreign Agricultural Service.

 

This public-private partnership started in the 1950s and has earned a legacy of success giving wheat farmers the ability to maintain bases of operation and local USW representatives to conduct trade service and technical support activities with buyers, flour millers and wheat food processors.

 

The partnership was renewed in the Agricultural Improvement Act of 2018, which established the Agricultural Trade and Facilitation Program and provides funding for the Market Access Program (MAP), the Foreign Market Development (FMD) program and other programs available to USW and many other organizations representing U.S. farmers, ranchers and dairy producers. President Trump signed the Farm Bill into law on Dec. 21, 2018.

 

Pres. Trump signs the new U.S. Farm Bill into law on Dec. 21, 2018. National Association of Wheat Growers President and wheat farmer Jimmie Musick, (sixth from left) witnessed the signing.

 

 

Without the federal programs renewed in the current Farm Bill, USW would not be able to fulfill its mission to mission to develop, maintain, and expand international markets to enhance wheat’s profitability for U.S. wheat producers and its value for their customers.

 

USW thanked Congress for renewing the long-term investment in export market development programs.

 

“We also thanked the National Association of Wheat Growers for working to present our positions on export development funding and we are very pleased that members of Congress and their staff addressed those concerns effectively in this Farm Bill,” said USW Chairman Chris Kolstad, a wheat farmer from Ledger, Mont.

 

An additional change in the legislation now allows Congress to appropriate discretionary funds to cover the cost of administering the export market development programs, rather than covering costs from the appropriated program budgets. The law also establishes a Priority Trust Fund to be used at USDA’s discretion to help meet requests that exceed the appropriated program funds. Another important change now allows qualified organizations like USW to use program funds to conduct market development activities in Cuba.

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Overall, U.S. wheat farmers are certain they produce some of the highest quality milling wheat in the world and want to compete on that basis freely and fairly. That desire is being challenged in unique ways right now by trade policies and global reactions that have never been a part of the world wheat market. To express the challenges of these policies on farmers and the rural community, the National Association of Wheat Growers (NAWG) this week arranged for one of their members to testify before the U.S. House of Representatives Ways and Means Committee’s Trade Subcommittee. We want to share that testimony here:

Mr. Chairman and Members of the Committee. My name is Michelle Erickson-Jones and I am the Co-Owner of Gooseneck Land and Cattle from Broadview, Montana. I also currently serve as the President of the Montana Grain Growers Association, am on the Board of Directors of the National Association of Wheat Growers and a member of Farmers for Free Trade. As a fourth generation farmer, it is my honor to testify today on the impacts of tariffs on my farm, my industry and most importantly my community that depends on trade for its livelihood.

American agriculture is a tremendous global marketing success story. We export 50 percent of our wheat and soybeans, 70 percent of fruit nuts, and more than 25 percent of our pork. We are also the top exporter of corn in the world. Exports account for 20 percent of all U.S. farm revenue and we rely on strong commercial relationships in key markets including Canada, Mexico, Japan, the European Union and, of course, China – the second largest market for U.S. agriculture, accounting for nearly $19 billion in exports in 2017. U.S. agriculture exports also support over 1,000,000 American jobs. As such, trade is critically important to the U.S. economy and our rural communities.

Rep. Dave Reichert (R-WA) and Michelle Erickson-Jones.

Farmers across the country depend heavily on the ability to sell our commodities to foreign consumers. We are painfully aware of the prevalence of unfair trading practices used by some countries and we support the Administration’s interest in finding solutions to tariff and non-tariff barriers that impede fair trade. But what I’d like to share with you today are some examples of the impact of tariffs imposed by our own Administration and by the retaliatory tariffs levied by our trading partners. These impacts are felt by farmers such as myself throughout our supply chain, from higher input costs to reduced exports and lower market prices.

In May, I testified at Section 301 hearing at the International Trade Commission. As I said then and believe more strongly than ever now, “while many rural American families are optimistic about economic growth under the current Administration, there is mounting concern among farmers about trade policies that would reduce access to the export markets they depend on.”

There have been very few issues in my career as a farmer that have caused me to lose sleep. But these tariffs are one of them. I’d like to share some of the effects that have directly impacted my farm and family.

The first wave started at the time the Administration imposed tariffs on steel and aluminum. For me and farmers across the country that translates into increased costs of capital investments. For example, earlier this year we priced a new 25,000-bushel grain bin to increase grain storage capacity on our farm. The price was 12 percent higher than an identical bin we had built in 2017.

As we weighed our options, the bid on bin #2 expired, so we sought a second bid. This bid was 8 percent higher than the one we received just a few weeks prior – a 20 percent increase total in the cost of the same steel product in just one year.

The bin company attributed the difference in the final bin cost to a significant increase in their cost of steel. I learned that their domestically sourced steel suppliers had increased their prices to match the price of imported steel which was subject to an additional 25 percent duty when imported. As a result of this dramatic cost increase and volatility in the market, we abandoned our grain storage expansion project. The implications of that decision not only harmed my operation, it also hurt my community: a small local construction company lost a project, a U.S. grain bin company missed a sale, and a domestic steel company had one less shipment to send out of their factory.

Another unexpected outcome is something we are living through right now. Back in January, we built cattle guards for several capital improvement projects we had planned for later in the fall. A neighbor saw the finished product and asked to buy several from us. We agreed because we thought we would be able to utilize the profits for other investments. Last week I priced the steel needed to replace the cattle guards I had sold. To my shock, the price of steel had increased 38 percent – evaporating our profits. To make matters worse, now we will no longer break even on the project.

These scenarios are playing out across the nation, particularly the states that depend on agriculture. These states depend on healthy agricultural commerce for a robust economy. As our profits evaporate and our ability to spend on rural main street businesses or take weekends away decreases, our other top economies, including tourism and manufacturing, are negatively impacted as well.

While one singular example is a small sum of money in the big picture, adding up those small singular examples shows the real and substantial increase to agriculture and rural main street.

There are countless examples in Montana, where last summer, large portions of my state were on fire. Just imagine the cost or replacing fencing or other equipment with prices increasing by double digits – at a time of record low prices for agriculture commodities. The impacts on our input costs coupled with increased market volatility and lower farmgate prices have further reduced our already slim margins. According to the USDA Economic Research Service net farm income is expected to drop to a 12-year low, down 6.7 percent from 2017.

Now allow me to further illustrate the impact of tariffs on our topline – sales – especially in an industry that exports $450 million in wheat to China annually, $65 million of which was from Montana. China is the world’s largest wheat consumer, with a significant trade opportunity in their market. In market year 2016/2017 China was our fourth largest customer, however when China placed a 25 percent retaliatory tariff against U.S. wheat not one new shipment has been purchased from the United States since March, and the last shipment arrived in June.

Wheat growers also understand that China hasn’t been keeping to their trade obligations they agreed to when they joined the WTO (World Trade Organization), and as such the United States has two cases against China for their domestic support programs and their TRQ (tariff rate quota) requirements for wheat, rice and corn. We applaud the Administration for moving forward with these cases and believe this is the proper course of action to hold our trading partners accountable to their trade commitments. We do not, however, support the tariffs which have already hurt many farmers across the United States through both the tariff retaliation and domestic decisions as I have outlined.

For Montana, other commodities are also being hurt. Our producers are already suffering from the 25 percent import tariff on American pork and are bracing for the impacts on beef. Mexico has also targeted these two sectors in response to the steel tariffs.

In addition, these markets that we’ve been growing for decades could be lost to our competitors who do not have tariffs against their products, a fate that could last for years or decades to come. The same can also be said by not seeking or joining new trade agreements, for example when CPTTP (Comprehensive and Progressive Trans-Pacific Partnership) is implemented our Canadian and Australian wheat competitors will gain a price advantage in Japan against U.S. wheat, potentially losing our largest wheat market.

Currently farmers like me are not only struggling to ensure this year’s crop is profitable, but we are also concerned about the long-term impacts to our valuable export markets. For young and beginning farmers like me the stakes are even higher. We are often highly leveraged, just establishing our operations, as well trying to ensure we have access to enough capital to successfully grow our operations. Increased trade tensions and market uncertainty makes our path forward and our hopes to pass the farm on to our sons less clear. I hope to pass my farm to my sons and as such urge you to consider the tolls these tariffs will have on my operation and how it impacts that possibility, and many other family farms, as outlined in my testimony.

Thank you for the opportunity to testify today.

Image of wheat field to illustrate report on global wheat production

This week marks the 10-year anniversary of the signing of the U.S.-Panama Trade Promotion Agreement and the Korea-U.S. (KORUS) Free Trade Agreement. These were the last free trade agreements completed by the United States. In the decade since, there has been plenty of negotiating, but nothing to show for it.

The Trans-Pacific Partnership (TPP) is on its way to ratification without the United States. The Transatlantic Trade and Investment Partnership (TTIP) is indefinitely on ice. The North American Free Trade Agreement (NAFTA) modernization effort is now likely to slip into 2019. An update to KORUS made only cosmetic changes.

Meanwhile no other country has agreed to sit down at the negotiating table as the United States slaps unilateral tariffs on close allies and strategic competitors alike.

The familiar African proverb says that when elephants fight, it is the grass that suffers. Unfortunately for farmers, that grass is the wheat growing in their fields as the big guys in the United States, China and other countries escalate this trade fight.

In a trade war, agriculture always gets hit first and the effects are likely to force overseas customers who want quality U.S. farm products to compromise or seek alternative supplies and to further erode the incomes of farm families who strongly support addressing the real concerns about trade barriers.

That is why in 2016, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) called for World Trade Organization (WTO) cases intended to push China to meet its WTO commitments on domestic support and tariff rate quota management. We are glad the Trump Administration supports and is pursuing those cases. That is also why USW will continue to press for new trade agreements, including U.S. accession to TPP.

USW and NAWG know that farmers still want our organizations to keep fighting for fair trade opportunities because they know they can compete successfully in the world based on the quality and value of what they produce — given the freedom to do so.

We would prefer, however, to see our government do that first within the processes already in place.

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By Jonathan H. Harsch, Agri-Pulse, Excerpted with Permission

(Editor’s note: This is the third in a new series of Agri-Pulse in-depth stories dealing with the challenges and opportunities for U.S. agriculture when it comes to selling more commodities and value-added products to overseas customers. This article was sponsored by funding from the National Association of Wheat Growers, U.S. Wheat Associates, Washington Grain Commission, North Dakota Wheat Commission and Idaho Wheat Commission.)

Prospects for U.S. farm exports can change suddenly and dramatically.

Breaking into foreign markets takes decades of persistent hard work and hefty investments in building infrastructure, relationships and, ultimately, sales.

Augusto Bassanini, chief operating officer for United Grain Corp., knows firsthand the challenges of building all three. This experienced grain exporter tells Agri-Pulse that after taking years to build trust and a reputation for reliability, “any interference with that trust, that reliability, is going to have an immediate impact … So, you spend years building that rapport and everything could change overnight.”

“It takes years, especially in Asia, to build that rapport,” he says, “and you have to build it face-to-face.”

Bassanini says he’s seen major new export markets developed in South America, Asia and elsewhere thanks to vital funding from farmers’ checkoff dollars and USDA’s export promotion programs. But he warns that current concerns over U.S. trade agreements and tariff battles with China “create an environment of uncertainty,” forcing buyers and end-users to scramble to find new sources for the grain, soybeans, or other commodities they need to stay in business.

Vancouver, Wash.-based, United Grain operates grain terminals in Oregon, Montana, and North and South Dakota where, Bassanini says, “small farming communities are dependent upon grain exports for providing crucial revenue to those remote locations.” So, any threat to export growth will have a disproportionate impact on these farming areas. And he says that threat is already here.

“We continue to lose market share in terms of volume to competing major export hubs like South America, Brazil, Argentina, Russia and the Black Sea region,” he says. “If we are going to compete with them on a yield basis, I don’t think we are going to win that fight.”

Still, he says that despite headwinds, “we continue to expand our share in regions like Southeast Asia because competing countries are not able to deliver quality products on a consistent, reliable basis.” Maintaining these gains, he says, depends on the U.S. investing in improving supply chain efficiencies, upgrading the infrastructure needed to deliver product reliably, and avoiding even rumors about trade disruptions.

Disruption Concerns. Since taking office, the Trump administration has made several gains on the export front for agricultural products.

However, the administration has also unnerved trading partners by renegotiating the North American Free Trade Agreement (NAFTA), pulling out of the Trans-Pacific Partnership (TPP) and announcing tariffs on steel, aluminum and a variety of other products – prompting retaliatory threats from the Chinese and other countries.

Several U.S. agricultural groups say that one of the best ways to keep pressure on the Chinese and counter the Asian giant’s influence is for the U.S. to rejoin what used to be called the Trans-Pacific Partnership (TPP).

The U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed the possibility of reviving the full 12-nation pact. “If the United States joins TPP, U.S. wheat should be able to compete on a level playing field with Canadian and Australian wheat,” said USW Chairman Michael Miller, a wheat farmer from Ritzville, Wash.

Representing 140,000 American wheat farmers, USW and NAWG wrote USTR’s Lighthizer in March, warning that “Lost market share is incredibly difficult to regain.” They pointed out that under new CPTPP rules, Japan will cut its tariffs on imported Canadian and Australian wheat to $85 per ton but keep the current $150 per ton tariff in place for U.S. wheat. While the change will phase in over nine years, the wheat groups said the “loss in market share and its negative effect on farm-gate prices are likely to come much sooner, as Japanese millers reformulate their product mix to avoid the need to purchase artificially expensive U.S. wheat.”

Hopes were also raised that the farm sector’s major role in the U.S. economy would translate into White House support for increasing rather than flat-lining or reducing funding for the two USDA cost-share programs that, in partnership with farmer-funded checkoff dollars, have played a vital role in expanding U.S. farm sales abroad: the Market Access Program (MAP) and the Foreign Market Development (FMD) Program.

Export promotion legislation. To support these programs, last September Sen. Angus King, I-Maine, introduced S. 1839, the “Cultivating Revitalization by Expanding American Agricultural Trade and Exports Act.” Along with the companion House bill, H.R. 2321, King’s CREAATE bill would steadily raise MAP [and] FMD funding.

The House version of the new farm bill takes a different approach. USDA’s trade programs, including the MAP and FMD, would be combined under a new International Market Development Program … Under current law, only MAP would have funding after this year under the expiring 2014 farm bill. Combining the programs would ensure all the programs have a permanent funding baseline. Boosting both ag exports and export promotion funding has become vital to both the rural and the national economy.

Success in the Philippines. Based in Manila, USW Regional VP for the Philippines and South Korea Joseph Sowers is keenly aware of … aggressive competition. He says it’s an “uphill battle” to convince buyers to opt for premium-priced but better performing U.S. wheat. He also points to significant gains.

In the Philippines, Sowers says, “We have a program here where we invest in increasing consumption of wheat-based foods. And we’ve done it.” He adds that almost all the gains benefit the U.S. with its 97 percent market share, proving that “These kinds of investments are paying off.”

Key to this level of market dominance, Sowers insists, is being on-the-ground for decades with regional offices and regular seminars. He says this presence builds trust with buyers and end-users to the point that “decision makers trust us, they look to us for advice.” He considers [state wheat] checkoff, FMD and MAP funding vital to maintaining USW’s foreign offices and “absolutely essential to everything we do.”

“Our mandate is twofold,” Sowers says. “One is to create the greatest returns to our farmers, to the people who fund us. The other mandate is to make the local industry here the most profitable they can be, to increase their profits so they will buy from us.”

To make it all happen, Sowers hosts seminars year-round, with upcoming ones set for Manila, Bangkok and Jakarta, “talking to buyers about methods that they can use to decrease their purchasing price or to plan their purchases through the year. And then at the same time, have a mill management seminar showing them how to increase their profitability using, of course, U.S. products.”

Along with working to increase exports to developing markets like Sri Lanka and Malaysia, Sowers says Thailand, Indonesia and Vietnam offer “the most opportunity for huge increases in sales” and that new trade agreements offer the best way to make U.S. products more competitive.

New Coalitions. USW’s President Vince Peterson and VP of Overseas Operations Mark Fowler [say] with the farm economy struggling in an already down market, the tariff battle with China puts 1.5 million metric tons of U.S. wheat sales at risk just when unsettled NAFTA and TPP issues threaten sales to other major buyers like Mexico and Japan.

Peterson says the trade battles have “forced us to form coalitions” with other U.S. stakeholders and with “customers overseas worried about their supply relationship with us. They don’t like this any more than we do.” He says the new coalitions aim to alert the Trump administration to escalating impacts on U.S. agriculture from recent policy changes.

Peterson and Fowler tell Agri-Pulse that the strategy to success is to sign new trade agreements, complete the NAFTA negotiations without harming ag exports, reconsider joining the TPP, use the WTO dispute settlement process, and double funding for USDA’s MAP and FMD programs as … CREAATE legislation proposes.

Trade Battles Undermine U.S. Reputation as a Reliable Supplier. U.S. Grains Council President and CEO Tom Sleight warns that due to the trade battles launched by the U.S., “our loyal, longtime customers are actively looking at alternative sources of supply … We’re hurting our reputation not only in China, but with other trading partners, with key ones like Japan, Korea, Mexico. Even in places in Southeast Asia that are new and growing markets for the U.S., we’re creating doubt.”

“There are definite consequences if these battles do not get settled expediently and with proper attention to the impact on agriculture,” he says.

National Association of Wheat Growers President Jimmie Musick explains that with his wheat, cattle, alfalfa, cotton and sorghum operation in Sentinel, Okla., “it doesn’t appear like I raise a commodity that China [is] not [targeting] in their tariff trade war.” To help remove this threat, he wants the administration to understand “how important it is that we maintain good trade relationships and how devastating it will be to our farmers when China puts a 25 percent tariff on our commodities.”

Musick’s also at work on getting more support from farm-state members of Congress. He’d like them to persuade the administration to switch from tariffs to negotiations by offering in return to support legislation that’s on Trump’s priority list.

With today’s long list of farm and trade organizations linking arms as never before, Musick and his colleagues are hopeful their concerted pressure on Congress and the White House will pay off in terms of less turbulent waters ahead and continued growth in the U.S. ag export markets that they’ve worked so diligently to build over several decades.

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It is a busy week in Washington, D.C., for wheat industry leaders. They have gathered to participate in joint board meetings between U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG), and for an educational event on Capitol Hill Feb. 8 (see separate story).

Official USW business was called to order Feb. 7 at the organization’s headquarters office in Arlington, Va., with a budget committee meeting and a comprehensive orientation for new farmer directors. USW and NAWG farmer directors are meeting in joint committee meetings to learn more about plant breeding innovation and international trade policies that affect wheat farmers and their customers. USW’s individual committees are also meeting on long-range planning, sanitary and phytosanitary issues affecting wheat trade, hard white (HW) wheat production and export demand, and topics related to wheat quality.

Of significant interest is the status of three-country negotiations between the United States, Mexico and Canada on the North American Free Trade Agreement (NAFTA). USW and NAWG strongly support maintaining NAFTA rules that have benefitted U.S. wheat farmers as well as their customers primarily in Mexico, while improving parts of the agreement. Many directors are also learning more on the real concerns about the sustainability of U.S. wheat imports by Japan under the new Trans-Pacific Partnership recently negotiated by 11 of the original member countries without the United States.

Committee meetings continue on Feb. 9, followed by a joint meeting of USW and NAWG governing boards. USW will hold its own board meeting Feb. 10 to review committee actions and recommendations and to hold its annual election of officers for the 2018/19 fiscal year (July to June).

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By Gordon Stoner, President of the National Association of Wheat Growers (NAWG) and a wheat farmer from Outlook, Mont. This op-ed first appeared in “The Hill.”

The United States is known for producing the highest quality wheat in the world, yet when U.S. farmers market their wheat at a Canadian elevator, it is automatically labeled as “foreign wheat” and given the lowest possible grade (a way to measure grain quality). Cross-border wheat faces major hurdles in Canadian marketing channels, primarily due to the country’s grain grading system. Conversely, Canadian wheat has full access to the U.S. bulk grain handling system. U.S. wheat farmers should be treated the same when delivering to Canadian grain elevators as their neighbors to the north are when delivering to U.S. elevators. The modernization of the North American Free Trade Agreement (NAFTA) is a ripe opportunity to level the playing field.

I grow hard amber durum wheat primarily used in pasta production. This high-quality wheat class is valued for its premium protein and gluten strength, within 10 miles of the Canadian border. When prices are higher in Canada, it would not be difficult for me to take advantage of those price premiums and drive across the border to deliver my wheat. But until this grading issue is resolved, that is not an option. My neighbors just on the other side of the border do not have this problem; if prices are higher at a U.S. elevator, they can easily drive south to deliver their wheat. This kind of disparity is frustrating for farmers in Northern Tier states, especially given declining wheat prices and thin profit margins in recent years.

Canada’s grain policies require all wheat not grown domestically to be segregated and classified as “foreign grain” and therefore automatically demoted to “general purpose” or feed wheat. Canada’s grading system even discriminates against wheat grown in the United States that is identical to varieties of wheat approved for planting in Canada (Canada regulates the varieties of wheat plants that can be graded, unlike the United States, where we only grade based on the intrinsic properties of the grain). Such classification results in a substantial price discount regardless of the quality of the wheat, and segregation costs provide little incentive for elevators to handle U.S. wheat of equal or better quality.

An updated NAFTA should remove Canada’s discriminatory grading treatment. All U.S. wheat moving into Canada should be evaluated on quality parameters without regard to country of origin. Canada’s policies are clearly national treatment issues, which Canada has a current obligation to resolve under its World Trade Organization commitments. However, NAFTA can also be the vehicle to fix the grading issue. Canada’s grain policies deprive U.S. wheat farmers near the border of significant marketing opportunities, while millions of bushels of Canadian wheat stream uninterrupted across the border.

Trade agreements have the potential to create a level playing field where individuals, families and companies can make their own decisions about what to buy and sell. The role of trade agreements is to provide that opportunity, and that benefits both U.S. wheat buyers and wheat producers. Industry groups on both side of the border agree that this is an issue that needs to be resolved.