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Proposed Legislation Would Protect Snake River Dams and Export Efficiency

In March, U.S. Representatives Dan Newhouse (R-WA) and Cathy McMorris Rodgers (R-WA) introduced the Northwest Energy Security Act to protect four lower Snake River Dams. Senators Jim Risch (ID) and Steve Daines (MT) introduced a companion bill in the Senate. While the legislation focuses mainly on the benefits of hydroelectric power, protecting the lock and dam system will also preserve efficient barge delivery of U.S. wheat to export elevators in the Pacific Northwest.

These members of Congress and Pacific Northwest wheat leaders provided the following comments about the effort to protect Snake River dams.

Region Cannot Afford to Lose Dams

“The four lower Snake River Dams are integral to flood control, navigation, irrigation, agriculture, and recreation in Central Washington and throughout the Pacific Northwest—to put it simply, we cannot afford to lose them,” said Rep. Newhouse. He also expressed concern regarding the amount of non-scientific information being used to mislead people regarding the dams.

“A comprehensive, scientific process made clear dam breaching on the lower Snake River is completely unnecessary and unwarranted,” said Senator Risch. “With the Northwest Energy Security Act, Congress will ensure the Columbia River Power System continues to provide reliable and clean energy and supports the region’s transportation, agriculture, and irrigation needs.”

River Transportation Essential for Wheat

Grain barge navigation on the Columbia Snake River System is an essential part of a logistical web that moves over half of all U.S. wheat exports to more than 20 Pacific Rim countries including some of the largest U.S. wheat buyers in the world. The Snake River moves more than 10% of all wheat that is exported from the United States. Barging is also the most environmentally sound and efficient mode of transportation in the region, benefiting farmers and overseas buyers by helping keep export basis lower.

This is why U.S. Wheat Associates (USW), state wheat commissions, the National Association of Wheat Growers and state wheat associations strongly support the sustainability and reliability of wheat transportation by barge.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

“The Washington Grain Commission supports continued efforts to maintain the Snake River dams as an essential piece of the larger Columbia River System,” said WGC CEO Casey Chumrau. “Washington farmers rely on the river system to transport more than half of the state’s wheat and access overseas export markets. Barging is the most environmentally sound and economically viable mode of transportation in the region and critical to the competitiveness of Washington farmers.”

“The importance of the four lower Snake River dams to our region’s farmers and rural communities for both transportation and energy production cannot be overstated,” said Bryan Searle, president of the Idaho Farm Bureau Federation. “The science is clear that salmon and dams can co-exist, and therefore we support the Northwest Energy Security Act. The members of the Idaho Farm Bureau Federation thank the sponsors of the bill.”

“The Snake River dams are vital to Washington’s wheat growers,” said Michelle Hennings, executive director of the Washington Association of Wheat Growers. “Scientific evidence conducted by the U.S. government has proven that removing the Snake River dams goes against environmental statutes and public interests. Washington wheat growers support any efforts that ensure the dams continue to operate as an integral part of the Columbia River System.”  

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‘Up and Down, Down and Up’: Input Costs Vary for Wheat Farmers as Pivotal Spring Season Arrives

Farmers who spent the past year staring at charts and graphs that gauge costs and returns would certainly by now be quite familiar with the sensation of vertigo.

Up and down, down and up.

The proper term is “volatility,” and for those who make a living growing wheat and other crops, it can affect decisions made in spring – a time when farmers typically spend a lot of money on the front end of one crop while also waiting for the rear end on another.

As they arrive at that sensitive juncture in 2023, growers are finding a “mixed bag” compared to 2022. Analysis have revealed that most farmers are projecting their 2023 production costs to increase 6% to 15% compared to 2022. USDA’s most recent Farm Sector Forecast is slightly more optimistic, but still points to the expectation of higher input costs:

  • Production expenses are forecast to increase for a sixth consecutive year, growing in 2023 by 4.1%.
  • Fertilizers, lime and soil conditioners are expected to decrease 3%, from $43.42 billion to $42.17 billion. Typically, fertilizers represent about 15% of a crop farmer’s costs.
  • Fuels and oils are expected to experience the largest percent decline – 17% – from 2022.
  • These drops, however, are easily outpaced by increases in other expense categories including marketing, storage and transportation, which are forecast to increase 11%.

“Input costs are still quite elevated, but nitrogen fertilizer has decreased since its peak last year,” confirmed Jason Scott, a U.S. Wheat Associates (USW) Board of Directors member who grows soft red winter (SRW) wheat on the eastern shore of Maryland. “One of the larger issues we have been dealing with so far this year is availability of some specific inputs, as well as some parts for equipment.”

Indeed, national agriculture groups say input costs are once again the top concern among farmers in 2023, though there has been some “wiggling toward the positive” in recent months.

“Higher input costs remain the number one concern, chosen by 34% of producers in March, but concern about input costs has been falling since last summer’s peak when it was chosen by 53% of producers,” James Mintert, the Purdue University/CME Group Ag Economy Barometer principal investigator, noted in the most recent Barometer, which was released April 4. “Although producers still cite high input costs as their top concern in the upcoming year, they are becoming more worried about rising interest rates and the impact those higher rates will have on their operations.”

Michael Peters, who farms in central Oklahoma, inspects an emerging hard red winter wheat crop.

USW Vice Chairman Michael Peters, who farms in central Oklahoma, inspects an emerging hard red winter wheat crop a few years ago. As was the case back then, production input costs continue to be a major concern for wheat farmers all across the country. Weather and lack of rain, of course, is another point of worry.

But First, Here’s the Weather . . .

USW Vice Chairman Michael Peters, who grows hard red winter (HRW) wheat in Oklahoma, is the farmer who put the “mixed bag” label on his current inputs situation.

He has bigger problems with moisture, or lack thereof.

His farm being located on the Southern Plains, Peters has an added challenge he and other Oklahomans share with fellow producers in northern Texas, most of western Kansas and portions of Nebraska and Colorado.

“The problem for my area is the lack of rainfall,” he said. “Our winter wheat crop is looking a little tough at this point.”

According to USDA, approximately 51% of U.S. winter wheat is produced in an area currently experiencing drought, down from 69% as the year began.

For Oklahoma, in mid-March the USDA rated 34% of the winter wheat crop in “good-to-excellent” condition. For Texas, 18% of the crop was “good-to-excellent.” Roughly 22% of Nebraska’s winter wheat crop was “good-to-excellent.”

Equipment Inputs Rise

While fertilizer and chemical prices have mostly decreased heading into the 2023 spring planting season, sticker shock on parts and machinery have stepped in to replace them as causes for consternation.

“The prices for parts to fix our equipment have really spiked, as have prices for equipment that we would need to purchase new,” said Scott. “The supply chain has still not caught up on some key things.”

Part of the problem being recognized this spring is that there is a transition of sorts in the farming equipment arena. Fixing a broken-down combine or tractor used to take wrenches and a steady hand. Now repairs might require a mobile-device interface, online diagnostic tools and secure software updates. Those “parts” aren’t just hanging on someone’s wall.

As a result, breakdowns that might have been repaired in hours can now take days or weeks. During busy times such as spring planting and harvest, that can mean losing time and money.

“You really think about what you need to get you through the season and what you can do without,” said Peters. “There’s a lot of deferred maintenance on farms right now. When you see elevator prices seep down, you erase projects off your list. If prices start to spike, you add things to the list.”

Jason Scott, who grows soft red winter wheat in Maryland, stands in one of his fields during a spring tour of his farm.

Jason Scott, a member of the USW Board of Directors who grows soft red winter wheat in Maryland, stands in one of his wheat fields during a spring tour of his farm.

Chemicals Leveling Off

“It’s this and that, up and down,” said Peters. “Some fertilizer prices have fallen. Chemicals are mixed, with prices on products like Roundup falling substantially. Other chemicals seem steady.”

Farmers Business Network (FBN) recently released its 2023 Ag Chemical Price Transparency Report, which highlights the extreme price variation facing farmers from coast to coast.

“The last two years have seen extreme fluctuations in chemical pricing for farmers,” said Kevin McNew, chief economist for FBN. “We know, this season in particular, a lot of farmers have postponed or waited a little longer than normal to make purchases because prices have been declining. We’re close to the point of needing those pre-emergents and I don’t think prices are going to slide much more.”

McNew also acknowledges higher interest rates make some farmers hesitant to borrow against an operating loan for chemical purchases.

“The takeaway is a lot of the inputs we’ve come to rely on like fertilizer, ag chem, and energy are going to remain high priced for the foreseeable future,” he said. “For years to come, in some sense. It is really important for farmers to think strategically about investing in new technologies that improve or reduce those inputs.”

The Bottom Line

Enduring volatility is what farmers do, so those preparing to harvest winter wheat and those getting ready to plant spring wheat will adjust to conditions.

It won’t be long until fall arrives and the process repeats itself.

As far as profits, every farm is different. USDA expects inflation-adjusted net farm income to drop 18%. But it notes last year’s net farm income was well above the 20-year average.

The decline will be felt a little differently in each sector of agriculture, said Seth Meyer, the USDA’s chief economist, who spoke at the 2023 Agricultural Outlook Forum in Arlington, Virginia.

Wheat acreage is expected to be its largest since the 2016-17 season, thanks to high prices and tight supply.

“After a period of trending lower (U.S.) wheat acres, this represents a sharp rebound, but is not likely to be a trend reversal for the long term,” Meyer said.

As always the biggest question about 2023 is grain prices, especially wheat prices, which are expected to remain strong, though lower than in 2022.

From a wheat farmer’s perspective, Peters summed it up in a simple manner.

“No matter who you listen to, everything is up and down, up and down,” he said.

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Rolling on the River: Wheat Export and Marketing Workshop Launches in Portland

For six or seven seconds Monday afternoon, a group of wheat farmers from Idaho were able to imagine pushing 15,000 metric tons of wheat up the river. Maybe the wheat had been harvested in Idaho, or maybe it came from Washington or Oregon or Montana or even the Dakotas. Regardless, the imaginary barges under their control – the tugboat they each got to pilot was real, the barges not so much – were filled with U.S. wheat destined to be loaded on a ship headed for an export market.

The tugboat “driving lesson” was part of the Wheat Export and Marketing Workshop, an annual educational seminar and tour sponsored by the Idaho Wheat Commission and anchored at the Wheat Marketing Center in Portland, Oregon.

Here’s a brief video from the first day of the 3-day workshop:

 

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Legislation Supports Barge Transportation and Lower Snake River Dams

A coalition of U.S. farm and food industry groups recently expressed support for a bipartisan Congressional agreement that, in part, maintains navigational access to the Lower Snake River Dams.

The Agricultural Transportation Working Group noted that the Water Resources Development Act* (WRDA) of 2022 helps protect U.S. agriculture’s dependence on comprehensive transportation system including inland waterways and ports.

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) join the working group in its strong support for the sustainability and reliability of wheat transportation by barge.

Barges Move U.S. Wheat and Other Grains

The “WRDA can impact trade because barges move about half of all grains to export elevators …,” the ATWG said in a letter to Congressional committee leadership that negotiated the 2022 WRDA. “Critical farm inputs … are transported via the inland waterways system. From the Pacific Northwest to the Mississippi River and the Gulf Coast, the importance of inland waterways and ports to the ATWG and American agriculture is definitive.”

Grain barge navigation on the Columbia Snake River System is an essential part of a logistical web that moves over half of all U.S. wheat exports to more than 20 Pacific Rim countries including some of the largest U.S. wheat buyers in the world. The Snake River moves more than 10% of all wheat that is exported from the United States. U.S. Wheat Associates (USW) and its state wheat commission members strongly support the sustainability and reliability of wheat transportation by barge.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash. Illustration from the Pacific Northwest Waterways Association.

Protect Most Fuel-Efficient Shipping

The working group also noted that the removal of barge access through the Lower Snake River dams would require 39,000 rail cars or 152,000 semi-trucks to replace the cargo volume shipped on the Snake River in 2019, according to the Pacific Northwest Waterways Association. The group added that barging is the most fuel-efficient way to ship goods and failure to maintain access to this system would dramatically increase carbon emissions.

The Columbia Snake River System and other major U.S. river systems truly connect the United States to its trading partners. The river system keeps U.S. wheat competitive by moving higher volumes more efficiently. USW, its state wheat commission members, wheat associations and supply chain stakeholders in the tri-state region of Idaho, Oregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

*The Water Resources Development Act is biennial legislation that authorizes flood control, navigation, and ecosystem restoration projects for the U.S. Army Corps of Engineers. The final version comes after months of negotiations to reconcile Senate- and House-passed versions of the legislation.

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Korean Journalists Visit a U.S. Wheat Industry Open for Business

It was an unusually calm morning at Blown Away Ranch outside Ione, Oregon. Dozens of wind turbines surrounding Deacon and Erin Heideman’s farm operation were still as we pulled up to their tidy, welcoming homestead. A mastiff dog named Duke greeted us first. He was as big as a calf, but quickly let us know we were welcome.

I was travelling in the Pacific Northwest (PNW) with two Korean journalists doing research for an article on how U.S. wheat is developed, grown and transported to flour mills, bakeries and consumers in South Korea. U.S. Wheat Associates (USW) and the wheat commissions in Washington, Idaho and Oregon welcomed the opportunity to show these reporters the wholesome, reliable nature of our export supply system.

South Korean flour millers have imported U.S. wheat for more than 50 years. Over the past 10 years, the average import volume is almost 1.3 million metric tons (MMT) per year including soft white (SW) and Western White, hard red spring (HRS), and hard red winter (HRW).

In Washington’s Palouse Country

I met Mr. Changsup Song and Mr. Haewook Kim on a Monday afternoon at the Washington Grain Commission (WGC) office in Spokane, Wash. They had spent the morning learning about the Washington wheat industry with WGC CEO Glen Squires and Vice President Mary Palmer Sullivan. They also saw how up-country elevators like High Line Grain Growers near Cheney, Wash., load train cars with SW wheat bound for river terminals and export elevators.

Wheat and fallow fields in eastern Washington's Palouse Country seen from the peak of Steptoe Butte

Eastern Washington’s Palouse Country (here from atop Steptoe Butte near Colfax, Wash., in October 2022) boasts one of the world’s most ideal places to grow wheat.

On the drive from Spokane to Pullman, Wash., we braved the tight curves on the drive up Steptoe Butte to take in the panoramic view of Washington’s iconic Palouse Country. Here and there we could see the dust from a few farmers still planting winter SW in mid-October. Away from irrigated land around rivers, dry land farmers in the region plant into fields that have lain fallow for a full year to increase available moisture and improve organic matter in the soil.

On the Washington State University (WSU) campus in Pullman, the journalists saw how WGC invests money from wheat farm families in new variety research and development. At the recently expanded breeding lab, Dr. Aaron Carter, Professor, O.A. Vogel Endowed Chair in Winter Wheat Breeding and Genetics, WSU, and Dr. Kim Garland-Campbell, Research Geneticist, USDA-ARS, explained how their work serves both farmers and end-users. Field testing proves the yield potential of each new line. The functional quality of flour from the varieties is first tested in cooperation with the USDA’s Agricultural Research Service Western Wheat Quality Laboratory on the WSU campus where Research Biologist Dr. Alecia Kiszonas hosted our tour.

Conventional Cross-Breeding is the mainstay of work done by Washington State University and the USDA-ARS. USDA geneticist Dr. Kim Garland-Campbell showed Korean journalist Haewook Kim (above) research on new Club wheat varieties. Breeding efforts focus on developing cultivars with high yield potential, excellent end-use quality, and resistance to biotic and abiotic stress.

How the Wheat is Moved

Our little team moved on to Lewiston, Idaho, where Song and Kim interviewed Genesee wheat farmer and Idaho Wheat Commissioner Joe Anderson. Their questions focused on the varieties Anderson plants and about the risk management tools available to PNW farmers. A stop at the Lewis and Clark Terminal showed how farmers deliver truckloads of grain that is segregated by protein level, stored and then loaded onto barges for the journey down the Snake River to the Columbia River and export elevators in the Portland, Ore., area. The Port of Lewiston is the most inland port on the U.S. west coast.

Korean journalist Changsup Song photographs soft white wheat being unloaded from a trailer at the Lewis and Clark Terminal in Lewiston, Idaho.

Korean Journalist Changsup Song photographs soft white wheat being unloaded from a pup trailer at the Lewis and Clark Terminal in Lewiston, Idaho.

Our long drive from Lewiston, through Washington State’s Tri-Cities, to Portland featured the truly unique vistas along the Columbia River and the wheat country of northern Oregon.

Korean journalist Kim in front of the Heideman family's wheat seeding rig

Ready to Ride. Journalist Haewook Kim rode with Deacon Heideman as he planted soft white wheat at Blown Away Ranch.

Our visit with the Heideman family gave Song and Kim additional insight into dry-land wheat farming, while enjoying fresh, homemade cake baked with flour from the family’s operation. The chance to ride and talk with Deacon Heideman as he planted soft white wheat was a highlight for the journalists. The photo at the top of this page is from the ranch’s website.

“We are a family farm raising wheat for a global market, working diligently to be sustainable. Our desire is to share our slice of heaven with others while maintaining our farming heritage so that we can pass it to the next generation in a better state.” – The Heideman Family, Blown Away Ranch, Ione, Oregon

Outside of Grass Valley, Ore., USW Past Chairman Darren Padget discussed how PNW farmers help ensure they produce the best quality wheat possible by publishing a Preferred Variety List based on yield potential and functional quality. His family had completed harvest and winter wheat planting by the time our team arrived, but Darren was able to show Song and Kim the operation’s seeding, application and harvesting equipment.

Assuring Quality and Supply

In Portland, Ore., after a briefing with the USW West Coast Office team and the Oregon Wheat Commission, the journalists visited the Wheat Marketing Center, offering an impressive look at how farmers invest a part of their own incomes into demonstrating the diversity and quality of U.S. wheat to domestic and overseas customers.

At the regional USDA Federal Grain Inspection Service (FGIS) office, experienced inspector Jimmy Pan offered a complete demonstration of how the agency independently inspects wheat at vessel loading to certify that the quality of the wheat loaded matches the quality stated in the customer’s import contract.

FGIS inspector Jimmy Pan demonstrates the wheat inspection process to Korean journalists.

Standardized Wheat Inspection. At the FGIS regional office in Portland, inspector Jimmy Pan demonstrated to journalists Kim and Song the process inspectors must follow to certify that wheat bound for overseas customers is the same as what the customers asked for.

Even as the world’s wheat buyers face a lot of uncertainty in today’s market, USW, the farmers we represent and our state wheat commission members were happy to open up our system, processes and quality to these Korean journalists. We believe that transparency contributes to world food security and economic stability.

We also believe Mr. Song and Mr. Kim left the United States with assurance that the U.S. industry will remain an open, dependable supplier of the highest quality wheat in the years ahead.

USW thanks every organization that helped make arrangements for this important team event.

A Korean journalist photographs a wheat export elevator and loading ship on the Willamette River in Portland, Oregon.

Loading SW Wheat. Through the foggy conditions, Korean journalist Changsup Song photographs a vessel being loaded across the Willamette River at the TEMCO LLC export elevator in Portland.

By USW Vice President of Communications Steve Mercer.

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As Projected Soybean Acreage Surges, Can Wheat Coexist?

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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Ukrainian Wheat Farmers Struggle to Harvest Their Crop

As an export market development organization, U.S. Wheat Associates (USW) represents the interests of U.S. wheat farmers in overseas markets. We are happy to compete fairly with wheat farmers in other countries on the basis of functional quality and value. Yet, working for these hard-working farm families also gives us great empathy for wheat farmers everywhere.

As the U.S. winter wheat harvest rapidly progresses, our thoughts include Ukrainian farmers as they try to harvest their wheat amid the unimaginable challenges of an armed invasion of their lands. There is growing evidence that Russian forces are deliberately targeting ripe winter wheat fields. The Washington Post also reported that in recent fighting in the east devastated a large flour mill and grain elevator.

Failed Strategy

Targeting wheat fields and other agricultural infrastructure is also an attempt to demoralize the Ukrainian people, but that will be a failed strategy.

CNN and its reporter Ivan Watson recently showed why frontline Ukrainian wheat farmers vow never to give up.

“Military drone footage exclusively obtained by CNN shows Russian artillery pounding wheat fields, burning the summer harvest charcoal black,” Watson reported, as wheat farmers race to protect their crops. “Despite the threats, these brave farmers still bring in their harvest only to face another obstacle. [They cannot] sell wheat because the Russian military has blockaded Ukraine’s ports, so there is no way for this to be sold except at an enormous loss.”

German media company Deutsche Welle (DW) recently reported that Ukraine’s infrastructure minister accused Russia of “terrorism,” saying Moscow is “holding people all over the world hostage” by blocking the country’s grain exports. Putin wants to force the international community “to take off some of the sanctions and then the grain can get out,” he said.

A Ukrainian wheat farmer talks to CNN reporter Ivan Watson

Never Give Up. In spite of Russian strikes on his wheat fields, this Ukrainian farmer told CNN his country, its soldiers and the world need his crops. CNN Image.

Why We Keep Working

As a combine operates in the background, CNN’s Watson asked a Ukrainian wheat farmer to explain why he continues his work.

“Our soldiers are fighting and dying to get rid of these occupiers,” the wheat farmer said. “We need to feed our country, these soldiers, and help the whole world with our food. That is why we will keep working.”

The world is fortunate to have wheat farmers like this man and other Ukrainian farmers willing to do everything it takes to help feed us all.

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USW Expresses Support for Maintaining Lower Snake River Dams

On behalf of the U.S. Wheat Associates (USW) Transportation Working Group, we* appreciate the opportunity to provide comments on the draft Lower Snake River Dams Benefit Replacement Report.

The draft report raises serious concerns among U.S. Wheat Associates (USW) and its member states. The USW Transportation Working Group (TWG) questions many of the baseline assumptions argued in the draft report. The draft is incomplete because many of the key variables cannot be quantified. The Lower Snake River Dams (LSRD) provide a critical need that moves U.S.-grown wheat to high-value markets around the world. Breaching the dams would have serious economic consequences for producers and grain handlers. Removing the dams also runs counter to achieving climate-friendly goals.

Barging Benefits

USW strongly supports the sustainability and reliability of wheat transportation by barge. The Columbia Snake River System is an essential part of a logistical web that moves over half of all U.S. wheat exports to more than 20 Pacific Rim countries and encompasses some of the largest U.S. wheat buyers in the world. The Snake River moves more than 10% of all wheat that is exported from the United States. Because of the cost savings conveyed by barging grain and examples used in the draft report, we can conclude that farmers save considerably by using the waterway in place of rail or truck and are able to pass on savings to consumers.

Barge loading wheat to move through Lower Snake River Dams and down the Columbia River to export elevators.

The Lower Snake River Dams provide critical needs for wheat farmers, grain handlers, merchandisers, and millers. The draft report clearly outlines the benefits enjoyed by grain handlers, “barging is the lowest-cost option (per ton-mile) for wheat shipping, an additional benefit for Pacific Northwest producers, as they operate on narrow cost margins and use barging to maximize their profit per bushel.” Shifting the current volume of wheat and other grains moving via barge on the LSRD over to rail or truck is not a viable and straightforward solution as portions of the draft study imply. Rail and truck cost significantly more on a per bushel basis, and trucks have distance limitations.

Breaching Increases Transportation Costs

An excerpt from the draft report outlines the literal costs to farmers: “One of the most significant transportation impacts connected with LSRD breaching is shipping costs. Several studies cite shipping prices during scheduled lock outages for maintenance between December 2010 and March 2011 and found that during the outage, over 90% of the grain by volume was shipped by rail and that shippers experienced a nearly 40% increase in shipping and storage costs.” This example shows that railroads will use their power to raise rates when other alternatives, like the river system, are unavailable.

The Port of Lewiston is the most inland port in the U.S, Pacific Northwest. Its placement on the Snake River allows farmers in Idaho and other states to barge their wheat efficiently and affordably. The U.S. competes with six other primary wheat-exporting countries. According to the Foreign Agricultural Service (FAS), the United States is the third-largest wheat exporter in the world. However, for the U.S. to remain competitive with other wheat exporting nations, export prices must remain competitive. Inland transportation costs are a primary factor in determining the competitiveness of U.S. wheat. Using barges to ship grain is one of the most efficient and cost-effective ways that U.S. wheat farmers stay competitive.

Rail Cannot Make Up Difference

All wheat production zones in the U.S. would be impacted, not just those in close proximity to the Lower Snake River Dams system. The U.S. rail system has some severe issues with service and reliability, and in recent years, tariff costs to move wheat have steadily increased. Adding more volume to the system would raise costs for all farmers and lead to a decline in service for a significant portion of all U.S. wheat producers. This would directly impact U.S. wheat’s global competitiveness as an export market.

Transporting wheat by barge is an environmentally friendly alternative to rail and truck hauling. One four-barge tow can move as much grain as 144 rail cars or 538 semi-trucks. Removing the dams would not only remove clean hydroelectricity but would mandate more significant carbon emissions as grain handlers are forced to rely on railroads and semi-trucks for long-haul delivery to export facilities in Portland and elsewhere.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

More Competition Not Less

The draft report provides no sincere considerations for alternative freight, and what suggestions it does make are unrealistic. While railroads and trucks compete with barge companies to move grain, farmers and grain handlers would be held captive without barges as an alternative.

USW supports the Columbia Snake River System and will continue to emphasize its importance in serving wheat buyers worldwide. Breaching of the dams on the Lower Snake River would have a devastating economic impact on wheat production and market competitiveness, not just in the Pacific Northwest Region, but nationally.

*This article represents public comments by the USW Transportation Working Group to the Lower Snake River Dams Benefit Replacement Report submitted July 11, 2022, by working group co-chairs Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission, and Charlie Vogel, Executive Director, Minnesota Wheat Research & Promotion Council.

 

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Report on Replacing the Benefits of the Lower Snake River Dams Generates Concern

A draft report on what would be needed to replace the benefits of the four Lower Snake River dams and locks was released June 9, 2022, for public comment through July 11, 2022. The report, conducted on behalf of Sen. Patty Murray and Gov. Jay Inslee of Washington state, suggests that breaching these dams to prevent the extinction of native salmon and replacing the benefits of barging and hydropower could cost between $10.3 billion and $27.2 billion.

Pacific Northwest (PNW) agricultural and commercial organizations responded to the report with serious concerns. A coalition of Republican members of Congress also introduced legislation that would protect the dams, arguing their benefits are irreplaceable.

No Dams, No Barges

U.S. Wheat Associates (USW) strongly supports the sustainability and reliability of wheat transportation by barge. The Columbia Snake River System is an essential part of a logistical system that moves more than half of all U.S. wheat exports every year to more than 20 Pacific Rim countries. Wheat loaded and barged on the Snake River makes up 10% of all U.S. wheat exports.

The Pacific Northwest Waterways Association (PNWA) questioned a number of baseline assumptions in the new report, including that the future value of the dams will decline and that all losses from dam breaching can be mitigated or compensated.

For example, PNWA Executive Director Heather Stebbings said in a news release that there are significant gaps in the report as it relates to understanding the reality of shifting wheat and other grains from barges to rail and trucks. This would require a massive investment in new infrastructure and likely increase wheat export basis with significant negative impact on regional farmers, the efficient Pacific Northwest export system and, ultimately, overseas wheat buyers.

Barge loading on Snake River

An estimated 10% of total annual U.S. wheat exports passes through the four locks and dams on the Lower Snake River between Lewiston, Idaho, and terminals like this one, to its confluence with the Columbia River and on to export elevators.

Serving Asia, Latin America

The Port of Lewiston on the Snake River, the most inland U.S. port, is uniquely positioned to source wheat from Idaho and other states. River terminals on the Lower Snake serve eastern Washington farmers. That wheat is barged on the Lower Snake River to the six major PNW export elevators serving Asian and Latin American wheat markets. All aspects of the river system are essential for transporting wheat from farm to market. However, barging is the most efficient, affordable, and environmentally friendly way to get that wheat to export locations. For context, one four-barge tow on this river system moves as much cargo as 144 rail cars or 538 semi-trucks.

Economic Value

This Columbia Snake River System transports four classes of U.S. wheat grown by dependable farmers in 11 states. In addition, some of that wheat and other crops for export markets are irrigated with water from the system. And the dams on the Columbia Snake River System generate 90% of the renewable electric power in the PNW.

Sean Ellis, representing the Idaho Farm Bureau, told the Capital Press its members “wholeheartedly” support ongoing efforts to improve salmon runs but continue to “adamantly” oppose dam breaching.

“There is no evidence to support the claim that breaching the dams would save the salmon but it’s quite clear that doing so would have a major negative effect on the region’s economy and put a lot of farmers out of business,” Ellis said.

Map of the Columbia Snake River System from Pacific Northwest Waterways Association

Eight Steps Down. Lock and dam systems on the Columbia Snake River System allow barges to efficiently and safely navigate the 222-meter elevation change from Lewiston, Idaho, to export elevators as far west as Longview, Wash.

“We continue to approach the question of breaching with open minds and without a predetermined decision,” Sen. Murray and Gov. Inslee said about their report. “In the coming weeks, we will carefully review and consider public input, tribal consultation, and other engagement from stakeholders before making any recommendations.”

A Necessary Link

The Columbia Snake River System and other major U.S. river systems truly connect the United States to its trading partners. The river system keeps U.S. wheat competitive by moving higher volumes more efficiently. USW, its state wheat commission members, wheat associations and supply chain stakeholders in the tri-state region of Idaho, Oregon and Washington all support the Columbia Snake River System and will work to see that it continues working for wheat buyers around the world.

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New Study: Agricultural Export Market Development Has Wide-Ranging Benefits

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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