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With the 2018 U.S. winter wheat harvest complete and October right around the corner, U.S. wheat farmers are now seeding a new crop. Across the 18 states that represent 90 percent of the area planted to winter wheat last year, USDA’s National Agricultural Statistics Service (NASS) estimates that 28 percent of the 2019 crop was planted as of September 23.

 

An image of wheat planting that caught our eye came recently from John McManigal, who grows soft white wheat with his family in Wasco County, Ore. John is an excellent agricultural field photographer and, with Mt. Hood looming over this mid-Columbia region, has a remarkable landscape on which to work. The photo he shared with U.S. Wheat Associates (USW) that we have posted here and his words tell an inspiring story of hope and renewal.

 

Seeding in Dust, Wasco County, Oregon,

Photo © John McManigal, Used with Permission

 

The Substation Fire started Tuesday, July 17, on US 197 near The Dalles, Ore., about 3:30 p.m. By evening it had raced east across Wasco County, jumped the Deschutes River and started up into Sherman County. The next day brought more wind. The fire gathered itself again and started another run to the east. By the end of the day on Wednesday, Mid-Columbia Producers figured roughly 2 million bushels of wheat went up in smoke.”

 

“That is my son Brad in the photograph seeding on Rich Kortge Farms, only about five miles east of where the Substation Fire started. This field had been left fallow last season but the vegetative cover was lost to the fire. The field in the background to the left of the fence was standing wheat that went up in flames on the afternoon of July 17.”

 

“It has not rained in months here and the seeding conditions look a little bleak.”

 

“But you know farmers. Maybe next year…”

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U.S. Wheat Associates (USW) works on behalf of U.S. wheat producers to help the world’s wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat.

 

The U.S. grain marketing system is a consistently reliable and transparent resource, but it can be a bit complicated for new and, sometimes, experienced buyers to navigate. That is why USW focuses so much of its activity on trade service, keeping buyers and processors informed about crop quality and prices, and how to use the grain marketing and inspection system to protect value and better manage price risks.

 

This is a crucial effort giving buyers and users the ability to specify the qualities necessary for almost every end-use product from among the six classes grown across the country. Our dedicated staff is well equipped to help individual customers get the best value possible. They are backed by a wide range of support posted on the USW website at www.uswheat.org. “Working with Buyers” is a very informative section of the site and provides, in effect, a primer on U.S. wheat classes and grade factors, the basic “language” of the U.S. wheat marketing system and other resources available to international wheat buyers.

 

The opening page of Working with Buyers describes the basic services USW provides, including: trade servicing to answer questions and resolve issues in purchasing, shipping or using U.S. wheat; technical assistance to help strengthen milling, storage, handling and end-product industries; market information and analysis that may affect imports, and projections for future wheat production and consumption; and promotion to expand consumer awareness and appreciation for wheat foods.

 

 

 

All six U.S. wheat classes are profiled next in the section, along with a map showing their general production areas. Milling and processing characteristics and examples of wheat foods made with flour from each class round out this page.

 

There is a glossary of terms that help the buyer better understand the U.S. grain marketing and grading system. Wheat grades reflect the physical quality and condition of a sample and thus may indicate the general suitability for milling. Terms such as test weight, vitreous kernels and defects are included in this information along with “non-grade” data terms including dockage, protein, ash and kernel size and weight. Representative terms associated with flour and dough performance have their own sections. Baking evaluations, with annual results summarized in the USW Crop Quality reports, are also explained.

 

Still another section of this resource pulls together the other information to explain “How to Buy” U.S. wheat. It covers the U.S. wheat supply chain, production and grain shed regions and notes on who supplies wheat, and how it is transported, to the export elevators. Quality assurance through the Federal Grain Inspection Service is detailed along with the contracting process and financial arrangements.

 

 

Finally, a Resources section of Working with Buyers includes links to several other relevant materials. Here you can learn how wheat and flour testing is done, how USW collects and analyzes almost 2,000 annual crop quality samples and more.

 

This combination of reliability and quality provides excellent value to U.S. wheat customers. And the U.S. wheat marketing system can work effectively for buyers and end-product users. When USW representatives are, briefly, not available, we hope you will remember to look online for the Working with Buyers resource.

 

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Recent news and highlights from around the wheat industry.

Quote of the Week: Though the Russians have been quick to deny potential [wheat] export curbs, we believe truth lies somewhere within these statements and that some restriction is forthcoming. The question remains when and how much.” Oklahoma-based market analyst Brady Sidwell.

 

Analyst Believes U.S. Wheat Demand Can Grow. Brady Sidwell, Principal of Sidwell Strategies in Enid, Okla., told farm broadcaster Ron Hays on Oklahoma Farm Report that U.S. wheat prices are nearing some key support levels and are within only a few dollars per metric ton with Russian supplies. He notes that only 45 percent of the new Russian crop meets milling quality and that could be another factor leading its government to intervene in exports. Listen to this interesting analysis at https://bit.ly/2xjWzMd.

Changes to USW Price Report. Due to increased demand for higher protein U.S. soft white (SW) wheat and the low average protein levels of the 2018/19 crop, the USW Price Report will change this week to show min 9.5 protein premiums (currently about a 20 cent per bushel premium to max 10.5 SW prices) and no longer show an unspecified protein level. Unspecified protein SW has priced equal to max 10.5 SW for the last several months. USW will continue to monitor market conditions and make changes to the report as necessary.

 

September is Whole Grains Month. Wheat is the most widely grown crop in the world and serves as an excellent source of nutrition. Read more about whole grains from the National Wheat Foundation here. Visit the Wheat Foods Council website for additional whole grains and wheat foods resources.

 

Curious About the Latest Innovations in Plant Breeding? The American Seed Trade Association (ASTA) has prepared a great resource on plant breeding innovations like gene editing. You can find these materials on a special section of ASTA’s website at https://seedinginnovation.org/.

 

Subscribe to USW Reports. USW publishes a variety of reports and content that are available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts, the weekly Price Report and the weekly Harvest Report (available May to October). Subscribe here.

 

Follow USW Online. Visit our page at https://www.facebook.com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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By Stephanie Bryant-Erdmann, USW Market Analyst

 

USDA expects global wheat production to fall to the lowest level in 5 years at 733 million metric tons (MMT), down 3 percent from the record high of 758 MMT in 2017/18. If realized, it would be slightly below the 5-year average. This downturn is, unfortunately, led by decreasing supplies in historic wheat exporters. At the same time, USDA raised its forecast for global wheat consumption to a record high 746 MMT, up 1 percent from 2017/18. To help buyers stay up to date on this fundamental information, U.S. Wheat Associates (USW) is providing this round-up of current conditions and forecasts for Canada, Argentina and Australia.

 

The estimated wheat production in countries still harvesting adds only a small portion of the 2018/19 supplies in exporting countries, and the total is expected to be down for the second year in a row 

 

Canada. Winter is here, if you farm in Alberta and Saskatchewan that account for roughly 70 percent of Canadian wheat production. Provincial weekly crop reports on Sept. 11 noted harvest delays from early frosts, wet field conditions and, in some areas, snow. We do not yet know the extent of any damage to wheat quality from these conditions, but it raises concern because more than half of the spring wheat in the two provinces was still in the field. Harvest was an estimated at 23 and 46 percent complete in Alberta and Saskatchewan, respectively.

 

Agriculture and Agri-Food Canada (AAFC) had already pegged 2018/19 Canadian wheat production (excluding durum) down 4 percent from 2017/18 at 24.0 MMT. A 10 percent decrease in average wheat yields is partially offset by a 7 percent increase in expected harvested area. AAFC reported average wheat yields of 48.3 bu/acre (3.25 MT/ha) compared to 54.0 bu/acre (3.63 MT/ha) in 2017/18. Canadian durum production is expected up 1 percent from 2017/18 to 5.03 MMT; an expected 17 percent increase in harvested area more than offsets a14 percent reduction in average yields year over year. AAFC expects 2018/19 Canadian total wheat exports (including durum) to total 22.2 MMT, up 3 percent from 2017/18.

 

Argentina. According to the Bolsa de Cereales, the Buenos Aires Grain Exchange, Argentine farmers saw prices staying at profitable levels and planted 7 percent more wheat area for 2018/19. Since planting, the Argentine government announced an export duty of 4 pesos per dollar on wheat exports with its effects to be determined. Bolsa estimated total wheat planted area at 15.1 million acres (6.1 million hectares), up from 14.1 million acres (5.7 million hectares) in 2017/18.

 

On September 13, Bolsa reported beneficial moisture fell on the La Pampa region and areas around Buenos Aires. However, rainfall has been low in northwestern Argentina, which accounts for roughly one-third of wheat planted area. USDA’s September estimate for 2018/19 Argentinian wheat production was 19.5 MMT (716 million bushels), up 8 percent from 2017/18 and 35 percent greater than the 5-year average. Argentina harvest typically occurs in late November through early January.

 

Australia. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts 2018/19 wheat production at 19.1 MMT. That is down 10 percent from 2017/18 due to severe drought in New South Wales and Queensland, where Australian Prime Hard (APH) and Australia Hard (AH) production is centralized. Increased wheat production in Western Australia may partially offset the lower production elsewhere. Still, if realized, production volume would be the lowest since 2007/08. Australian wheat harvest typically occurs in December. USDA expects Australian exports to decrease to 14.0 MMT, 21 percent below the 5-year average.

 

With global wheat supplies tightening and global demand on the rise, customers should pay close attention to crop conditions in these countries. Even if early snows or drought cut supplies there, or a government intervenes in the market somewhere else, U.S. farmers remain the most reliable suppliers of high quality wheat in the world.

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By Steve Mercer, USW Vice President of Communications

 

Things have changed in Nigeria’s flour milling industry. Members of a U.S. Wheat Associates (USW) Board Team meeting with millers in Lagos recently learned more about how the West African nation’s economy and consumer preferences are forcing mills to reduce costs and produce a wider range of flour products without diminishing quality.

 

State wheat commission leaders who participated in the Sub-Saharan Africa Board Team that traveled to Lagos, Nigeria, and Johannesburg and Cape Town, South Africa, included Jay Armstrong of Muscotah, Kan., a Past-Chairman of the Kansas Wheat Commission and USW director, Michael Edgar of Yuma, Ariz., and Don Schieber of Ponca City, Okla., who are both Past USW Chairmen. USW staff included Vice President of Communications Steve Mercer and Assistant Regional Director Chad Weigand. USW Marketing Consultant James Ogunyemi and Administrative Officer Olatunde Omatayo, based in Lagos, and Regional Director Gerald Theus, based in Cape Town, met the Team in Lagos.

 

Many millions of Nigerians cannot afford to spend much more than $2 on food every day, according to USDA Foreign Agricultural Service Regional Agricultural Counselor Jude Akhidenor, who briefed the Team in Lagos.

 

“We used to sell all we could produce; now we produce only what we can sell,” the general manager of a leading Nigerian flour milling company told the Team. He said consumers are looking for variety and mills are competing aggressively to respond. High-loaf bread is being eclipsed by instant noodles and pasta as staples.

 

Nigeria is one of the few global markets that has imported all six U.S. wheat classes. The changes in the market are putting pressure on Nigerian mills to cut their costs, however, leading to a growing volume of imported Black Sea region wheat because its price has been significantly lower than the U.S. hard red winter (HRW) that used to dominate Nigerian imports. Nevertheless, one leading miller in Nigeria continues to import HRW even in the face of that price difference.

 

USW 2018 Sub-Saharan Africa Team, L – R, James Ogunyemi, Chad Weigand, Oletunde Omatayo, Steve Mercer, Michael Edgar (behind), Gerald Theus, Jay Armstrong, Don Schieber.

 

The team members noted that the price of HRW and other U.S. classes is determined transparently by the market, not by farmers or the sellers and emphasized the industry’s efforts to continue improving HRW milling, baking and processing characteristics. The shift will likely continue, the millers said, even though they know by experience that HRW offers consistent performance and usually higher quality milling characteristics than Black Sea wheat.

 

“For those who like to see things stay as they are, that would be disappointing,” said Armstrong. “Markets change, however, and for those who like to adapt to new markets this could be viewed as an opportunity. To be more competitive again in Nigeria, I believe we will have to ramp up production of hard white (HW) wheat back at home. The millers we met with in Nigeria and in South Africa all made it clear the benefits of hard white wheat would outweigh cost differences.”

 

After USW introduced HW to Nigerian millers in 2008, Nigeria became the leading global importer of this wheat class.

 

Scaling up HW production in the United States to the point at which exportable supplies are consistently available will take a long, sustained effort. There are signs that the industry is moving in that direction.

 

Hard red winter wheat, however, will remain a very competitive class in the domestic market and in many other parts of the world. The U.S. supply chain is doing all it can to make HRW as competitive as possible, including opportunities to reduce export basis. This year, as exportable Russian wheat supplies decline or are blocked by government interference, Nigeria’s millers will be prepared to import more HRW.

 

From Lagos, the team travelled to Johannesburg, South Africa, and then to the capital city of Pretoria to meet the USDA/FAS agricultural team headed by recently posted Minister Counselor for Agricultural Affairs Jim Higgiston. Over lunch, he and his colleagues discussed the South African agricultural economy and unique challenges including the government policy of “expropriation” of land.

 

Income and gross domestic product are significantly higher in South Africa compared to Nigeria, but as they visited flour millers there the last two days of their trip, the Team members heard that cost is also a determining factor. In addition, the South African government sets domestic wheat prices at levels that remain consistently more competitive than U.S. No. 2 HRW prices to encourage production at home.

 

The USW Board Team at Tiger Foods headquarters in Pretoria, South Africa.

 

Three meetings with the flour milling divisions of successful South African food companies rounded out the team’s trip.

 

“It was very encouraging to hear that South Africa’s millers like U.S. wheat very much and do import more of it when prices are more competitive,” said Schieber. “And the people we met were so welcoming. One of the managers spent the last free day on our trip taking me to visit an implement dealer and a farm machinery show. I really appreciate that.”

 

Two additional highlights of the team’s South African visit were a tour of a plant where a popular, wheat breakfast food is produced and time with a very impressive South African family at their large dairy and grain farm.

 

USW and the team members want to thank all the customers they met on this trip for their candor and hospitality, and the USW staff who worked hard to make the arrangements, including Financial Accountant Cathy Marais and Regional Program Coordinator Domenique Opperman based in the USW Cape Town Regional Office.

 

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Seventy-nine people participated in the 2018 edition of the biennial U.S. Wheat Associates (USW) North Asia Marketing Conference (NAMC) Aug. 26 to 28 in Kota Kinabalu, Malaysia.

Top management from leading milling companies in Japan, Korea and Taiwan, as well as U.S. wheat producers, state wheat commission staff and industry partners gathered to discuss current market factors and trends, U.S. wheat industry activities and the 2018 U.S. wheat harvest. Topics from 21 different speakers included the Global Wheat Outlook, Producing More and Better Wheat in More Sustainable Ways, The Trump Trade Agenda, and The Southeast Asian Milling Industry.

Quality improvement was a reoccurring theme at this year’s conference.

“We want customers to know that we are continuing research and work toward quality improvement,” said Mark Fowler, USW Vice President of Overseas Operations, whose presentation focused on why U.S. wheat remains the best choice for North Asia customers. “It is something that U.S. wheat farmers believe in and continue investing in.”

USW Vice President and West Coast Office Director Steve Wirsching provided insight to how U.S. wheat quality continues to improve and was joined by Arron Carter, wheat breeder and Washington State University associate professor, in a discussion on plant breeding innovation. Carter also expanded on these topics in a popular, second presentation on how U.S. farmers are producing more and better wheat in more sustainable ways.

USW President Vince Peterson addressed the current trade policy climate, its current and future impact on the market and discussed what U.S. wheat industry is doing to support its customers.

“We understand and share our customer’s concerns on trade policy affecting the region,” said Fowler.

U.S. participants also provided a wide-ranging look at the supplies and quality of U.S. hard red winter (HRW), hard red spring (HRS) and soft white (SW) wheat classes during the conference.

Additional guest speakers and topics included: Kenji Takihara, Executive Officer, Nisshin Seifun Group, providing a Japan market outlook; Kuen-Ho Shih, President, CGPRDI, highlighting the development and prospect of the Taiwanese market; Chang Kyoon Park, Chairman, KOFMIA, providing a Korea market outlook; Michael Drury, Chief Economist, McVean Trading and Investments, LLC, discussing the U.S. market environment; Jeff McPike, Manager of Global Marketing, McDonald Pelz Global Commodities, highlighting mega trends in world grain markets and North American grain logistics infrastructure; Joong-Ho Ahn, Senior Managing Director, PanOcean, providing an overview of the world ocean freight market; Collin Watters, Executive Vice President, Montana Wheat & Barley Committee covering North American Grain Logistics Infrastructure; Matt Weimar, USW Regional Vice President, discussing the Southeast Asian milling industry; and Joe Sowers, USW Regional Vice President, providing a global wheat outlook.

“This conference is always an excellent opportunity to meet with buyers and millers from collectively the largest U.S. market,” said Glen Squires, CEO, Washington Grain Commission (WGC). “It allows us, the state wheat commissions, and U.S. Wheat Associates to hear and discuss important issues and to showcase efforts underway to better serve them as customers in providing high quality wheat.”

In addition to the wheat buyers from milling companies at the conference, U.S. wheat producers from seven states either attended or provided financial support for the conference. USW thanks the Idaho Wheat Commission, the Oregon Wheat Commission and the Washington Grain Commission for their sponsorship and additional participants from the Kansas Wheat Commission, Montana Wheat & Barley Committee, North Dakota Wheat Commission and Ohio Small Grains Marketing Program for their support to make the conference a continued success. Additional funding was provided by USDA’s Foreign Agricultural Service.

“It is important for us to be present and engaging with our customers and serve as a reliable resource,” said Fowler. “But it also means taking the time to listen to their needs and input.”

USW has posted presentations from the 2018 North Asia Marketing Conference on its website here: https://www.uswheat.org/marketing/2018-north-asia-marketing-conference/ 

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By Elizabeth Westendorf, USW Assistant Director of Policy

The United States has been a leader in helping those in need around the world for more than 60 years. In marketing year (MY) 2017/18, the United States sent approximately 800,000 metric tons (MT) of wheat overseas through international food aid programs, according to U.S. Wheat Associates’ internal tracking. Almost half of this amount, 385,000 MT, was soft white (SW) wheat that went to Yemen. Other recipient countries included Ethiopia, Kenya, Mali and Sri Lanka.

To put this number in perspective, the top five export markets for SW wheat in MY2017/18 were:

  1. Philippines – 1,174,200 MT
  2. Japan – 828,800 MT
  3. South Korea – 805,800 MT
  4. Indonesia – 599,100 MT
  5. China – 312,600 MT

Currently, an estimated 22.2 million people in the country require humanitarian assistance to meet basic needs, and 17.8 million of those need emergency food assistance. Wheat donations overseas vary from year to year because they are driven by need. Two years ago, Ethiopia was receiving the vast majority of wheat donations due to famine caused by drought that decimated local production.

Yemen is now receiving large quantities of wheat due to prolonged civil unrest that contributes to food insecurity. In August, the World Food Programme (WFP) and the U.S. Agency for International Development (USAID) hosted an event in Portland, Ore., to bring attention to the need for food in Yemen and the ongoing U.S. efforts to provide aid. The media event was held across the Willamette River from an export elevator where government-purchased SW wheat was being loaded into an bulk container ship bound for Yemen.

Yemen is experiencing the largest food security emergency in the world, with people facing famine because they are unable to access sufficient food on their own. To complicate matters, ongoing violence around key ports makes getting food into the country more and more difficult. So far in 2018, WFP’s work in Yemen has reached approximately 7 million food-insecure people monthly with food assistance and food vouchers. Other than U.S. wheat, USAID’s Food for Peace program has also provided U.S.-sourced peas and vegetable oil to the country, as well as ready-to-use therapeutic foods that combat severe malnutrition.

As we face a world with political instability and unpredictable natural disasters, the demand for food aid is unlikely to abate; instead, the recipient countries will simply shift from year to year.

Given this continued need, it is vital that the United States continue to be a leader in humanitarian efforts abroad. Wheat is a staple food source for much of the world, providing an average of 20 percent of calories and protein to people worldwide. If the United States is to remain a leader, then in-kind commodity donations must remain a key part of our donations programs.

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Recent news and highlights from around the wheat industry.

Quote of the Week: “It’s hard to hide the optimism associated with the potential of gene editing for wheat. While bread wheat has existed on the planet for 10,000 years, science has only started to understand its complex genetic structure in the past few decades.” – Aaron Harries, vice president for research and operations, Kansas Wheat Commission. Read full article here.

USAID Awards $21.9 Million for Efforts to Help End Hunger, Poverty. Officials from the U.S. Agency for International Development (USAID) announced Aug. 23, 2018, that they have awarded $21.9 million to Kansas State University (KSU) to continue funding three research labs that work to end global hunger and poverty. In 2013, USAID awarded three “innovation labs” to KSU through the Feed the Future initiative, which is the U.S. government’s effort to end global hunger. Read the press release in its entirety here.

Cereal Science Events Calendar. Prof. Dr. M. Hikmet Boyacýoðlu, associate editor of “Cereal Science,” contributing editor to “World Grain” and a cereal science consultant continues to track industry events. Contact him to receive the calendar.

September is Whole Grains Month. Wheat is the most widely grown crop in the world and serves as an excellent source of nutrition. Read more about whole grains from the National Wheat Foundation here. Visit the Wheat Foods Council website for additional whole grains and wheat foods resources.

2018 Borlaug Dialogue International Symposium. Registration is open for the annual Borlaug Dialogue International Symposium Oct. 17 to 19, 2018, in Des Moines, Iowa. This year’s theme is “Rise to the Challenge” and will include a panel of leaders in genome engineering and agriculture that will discuss potential uses for CRISPR-CAS technology in agriculture as well as ethical implications of the technology. Click here for registration and more information.

Subscribe to USW Reports. USW publishes a variety of reports and content that are available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts, the weekly Price Report and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online. Visit our page at https://www.facebook.com/uswheat for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at www.twitter.com/uswheatassoc and video stories at https://www.youtube.com/uswheatassociates.

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By Stephanie Bryant-Erdmann, USW Market Analyst

It is no secret that global wheat production will fall this year due to unfavorable weather across the European Union (EU), Black Sea — Kazakhstan, Russia and Ukraine — and Australia. However, government policies are further constraining the global wheat supply, increasing costs and uncertainty for global wheat buyers.

Currently, there are two countries that have changed their export policies — Argentina and Ukraine — and a third, Russia, is thinking about it. These three countries account for an average 26 percent of global wheat exporter supplies and an average 50.7 MMT of global wheat exports. In Russia and Ukraine, the respective agricultural ministries are actively monitoring domestic wheat prices and wheat export quantities following a decline in 2018/19 production and rising domestic bread prices.

On Aug. 10, the Ukrainian Agricultural Ministry, in consultation with Ukrainian wheat traders, set the 2018/19 wheat export limit at 16.0 million metric tons (MMT), including 8.0 MMT of milling wheat. The export limit will cause Ukraine’s total wheat exports to fall by 7 percent year over year, but the milling wheat portion will fall by 20 percent compared to last year’s milling wheat export volume of 10.0 MMT. The export limit memorandum could be reviewed as early as the end of September, causing additional uncertainty about the availability of Ukrainian wheat.

On Sept. 3, the Russian Agricultural Ministry stated that it did not have plans to implement a grain export duty or “curb grain exports in any other way.” The Ministry released this statement following its second meeting with Russian grain exporters about export volumes in just 17 days. While the statement eased immediate concern from the markets (and resulted in 11 to 16 cent per bushel decreases for nearby wheat futures contracts on Sept. 4), the frequency of the meetings and letters obtained by Reuters have grain markets on edge.

As noted in the Aug. 23 Wheat Letter article A Risky Proposition, Russia implemented export taxes twice and completely banned wheat exports twice over the past decade. Each time, those policy changes resulted in significant, rapid price movement. Russia currently has an export tax on wheat that is set at zero percent, though it can adjust that tax at any time.

While Russia and Ukraine policies are adjusting to decreased domestic production and resulting increases in domestic prices, in Argentina, an export tax has been implemented in an attempt to shore up the domestic currency, which has fallen more than 50 percent compared to the U.S. dollar year over year. On Sept. 3, Argentina President Macri announced a 4 peso per dollar export tax on wheat and corn shipments.

According to International Grains Council (IGC) data, Argentine wheat has averaged $252 per metric ton (MT) since the beginning of the 2018/19 marketing year on June 1. This export tax will raise Argentine wheat prices by roughly 10 percent at today’s exchange rate of 39 Argentine pesos to 1 U.S. dollar, or about $25 per MT, on average. Argentine wheat production is expected to total 19.5 MMT, up 8 percent from 2017/18 and 35 percent above the 5-year average.

These policy changes and uncertainty from three of the world’s top wheat exporters come at a time when global wheat consumption is increasing and with it, the need for additional global exportable supply. USDA expects 2018/19 world wheat trade to rise 1 percent to a new record high of 184 MMT; if realized, it would be 6 percent greater than the 5-year average of 174 MMT.

With all of the uncertainty in the global wheat futures today, the U.S. wheat industry commitment to being the world’s most reliable supplier remains constant. Your local U.S. Wheat Associates representative stands ready to help with any questions about the U.S. marketing system, U.S. wheat supply and demand situation and U.S. wheat pricing.

To track U.S. wheat prices, subscribe to the USW Weekly Price Report.

By law, the only way to block U.S. grain exports is through a presidential declaration of national emergency. Importantly, a national emergency does NOT include short-term, fundamental rises in wheat prices or weakness in the U.S dollar. Further, the U.S. Constitution expressly forbids export taxes.

When he joined USDA in 2017 as the first Undersecretary for Trade and Foreign Agricultural Affairs, Ted McKinney said he anticipated investing significant time overseas building trust, opening doors for farmers and processors [and] removing trade barriers.

“Half the battle of winning the game is showing up,” he said.

U.S. Wheat Associates (USW) completely agrees with Undersecretary McKinney. The U.S. wheat farmers from 17 states who direct our activities fully support eight U.S. citizens and 43 locally employed staff serving customers from 14 offices around the world. USW also sends leading U.S. farmers overseas twice a year to strengthen customer relationships and learn more about how the organization and local USDA Foreign Agricultural Service (FAS) staff are working toward the same goals Mr. McKinney described.

USW calls such delegations “Board Teams” because they typically include members of USW’s board of directors who are selected by state wheat commission members. The next Board Team leaves soon to visit customers in Lagos, Nigeria, and Johannesburg and Cape Town, South Africa. Farmer participants include USW Past-Chairman Michael Edgar of Yuma, Ariz.; Don Schieber of Ponca City, Okla.; and Jay Armstrong of Muscotah, Kan., a Past-Chairman of the Kansas Wheat Commission and USW director. USW Vice President of Communications Steve Mercer is participating as staff lead in his fourth Board Team since he joined USW in 2006.

The team will get orientated for their trip at USW Headquarters in Arlington, Va., before meeting with senior FAS officials in Washington, D.C. Lagos is the hub of Nigeria’s vital flour milling industry and the participants will meet with executives from four major flour mills as well as FAS staff posted in country. Flour mills and wheat food production facilities are on the itinerary as well for the South African leg of this Board Team.

These trips represent a valuable learning experience for the participating board members and wheat buyers, many of whom have never had the chance to hear why U.S. wheat classes offers the best value directly from the farmers who produce it.

This team will report to their fellow USW directors later this year. USW will post photos and comments from the trip on its Facebook page at www.facebook/uswheat.

Michael Edgar.

Jay Armstrong.

Don Schieber.

Steve Mercer.