Rediscover Wheat - June 2016

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The official publication of the Kansas Wheat Commission and the Kansas Association of Wheat Growers

JUNE 2016

INSIDE THIS ISSUE

Contact elevators now to deliver hard white wheat at harvest Wheat takes a walk on the wild side Brazilian professionals learn U.S. wheat classification process

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In This Issue :

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Volume 3 • Number 6 www.rediscoverwheat.org The official publication of

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1990 Kimball Avenue Manhattan, Kansas 66502 (785) 539-0255

KAWG MEMBERSHIP $100 per year

EDITOR

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Marsha Boswell • mboswell@kswheat.com

ASSISTANT EDITOR/DESIGNER

CONTRIBUTORS

CEO

KAWG OFFICERS

Malerie Strahm • commintern@kswheat.com

Julia Debes • juliadebes@gmail.com Jordan Hildebrand • jhildebrand@kswheat.com

Justin Gilpin • jgilpin@kswheat.com

PRESIDENT Michael Jordan • Beloit

VICE PRESIDENT Kenneth Wood • Chapman SECRETARY/TREASURER Justin Knopf • Salina IMMEDIATE PAST PRESIDENT Gary Millershaski • Lakin

KWC OFFICERS

CHAIRMAN Jay Armstrong • Muscotah VICE CHAIRMAN Brian Linin • Goodland SECRETARY/TREASURER Mike McClellan • Plainville IMMEDIATE PAST CHAIRMAN Scott Van Allen • Clearwater

Rediscover Wheat is published by the Kansas Association of Wheat Growers (KAWG) and the Kansas Wheat Commission (KWC), 1990 Kimball Avenue, Manhattan, Kansas 66502, twelve times per year.

Contents of this publication may not be reprinted without permission.

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Contact elevators now to deliver hard white wheat at harvest Recipe: Buttermilk-Scallion Flatbreads Overseas customers discuss need for stability and consistency in HRW wheat quality Wheat takes a walk on the wild side Recipe: Best Baked Donuts IGP Stakeholders News Brief News from the National Association of Wheat Growers News from U.S. Wheat Associates Brazilian professionals learn U.S. wheat classification process Maltby Market Analysis Upcoming Events

Contact elevators now to deliver hard white wheat at harvest

by Jordan Hildebrand

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s Kansas wheat harvest approaches, farmers are making all necessary preparations. One of the most important is knowing where to market harvested grain. Kansas Wheat strongly encourages farmers planning to deliver hard white wheat to an elevator at harvest to communicate with their elevator now.

While a number of elevators will be accepting hard white wheat, others have indicated that they will help find a market for your grain, but that they need to have some advanced notice that you will be delivering to their location.

Companies accepting hard white wheat include, but are not limited to, ADM in eight locations, Bartlett Grain in seven locations, Skyland Grain at all locations, Alliance Ag in two locations, Midland Marketing in three locations, the Scoular Company in two locations and Scott Coop in five locations. A list of participating locations can be found at kswheat.com/hardwhite.

Western Kansas is well-suited for white wheat production due to ideal environmental growing conditions. There are a number of hard white wheat varieties that are performing very well this year. Kansas State University, Oklahoma State University and Colorado State University

all have recent new releases of hard white wheat varieties with good milling and baking characteristics. In addition, test plots look very promising for some new hard white wheat varieties as they continue to be options for farmers. KSU’s most recent white wheat variety, Joe, is a medium-late maturity, medium height white wheat with strong resistance to stripe rust, good resistance to leaf rust and good resistance to wheat streak mosaic virus.

Hard white wheat accounts for about three percent of the wheat grown by Kansas farmers, but the number of acres of hard white wheat is increasing every year.

The majority of the white wheat is planted in the southwestern portion of the state.

Hard white wheat isn’t just turning farmers’ heads.

Companies, like Archer Daniels Midland Company (ADM), have invested in the future of hard white wheat. Three years ago ADM partnered with the Kansas Wheat Commission Research Foundation and the Kansas State University wheat breeding program at Hays to strengthen hard white wheat variety development. The investment has allowed wheat breeder Guorong Zhang and his colleagues to use molecular marker and doubled haploid technologies to develop

new white wheat experimental varieties suited for the baking industry, while also offering farmers improved yield and agronomic traits.

Overseas customers are also seeing value in hard white wheat. According to Peter Lloyd, Regional Technical Director at U.S. Wheat Associates, the large Nigerian flouring milling companies are interested in increasing the amount of hard white wheat they are able to purchase.

“All of the large Nigerian flouring milling companies would like to double or triple or quadruple the amount of hard white wheat that they are able to buy,” said Lloyd. “We are at a disadvantage because of logistics.

We have growers who are happy to grow white wheat, and we have customers in Nigeria and all other parts of the world who would love to buy it, but getting it from the farm to the customer is the issue.

We must leverage all of the many years of varietal development, grading and inspection and good farming practices for our growers to make the best profit that we can in the international marketplace. I believe the best route for that is hard white.”

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Buttermilk-Scallion Flatbreads Ingredients ¼ cup (2 ounces) warm water (110°115°F) ½ teaspoon granulated sugar 1 (¼ ounce) package RED STAR® Quick·Rise™ Yeast 3 to 3 ¼ cups (13 ounces to 14 ounces) King Arthur White Whole Wheat Flour 1 ½ teaspoons (¼ ounce) kosher salt 5 tablespoons (2 ½ ounces) unsalted butter, melted, divided 2/3 cup (5 ounces) buttermilk, room temperature 1 large egg, lightly beaten ½ cup (1 ¼ ounces) finely diced scallions, white and green parts Vegetable oil

Nutrition Information Makes 8 flatbreads, 16 servings. (½ flatbread, 48g): 130 calories, 4.5g fat, 3g fiber, 2.5g saturated fat, 0g trans fat, 19g carbohydrates, 20mg cholesterol, 200mg sodium, 4g protein, 1mg vitamin C, 1mg iron, 17mg calcium.

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Directions

1. Whisk together water, sugar, and yeast in a glass measuring cup and wait 5 to 10 minutes for mixture to foam (proof).

2. In the bowl of a stand mixer fitted with dough hook, combine 3 cups white whole wheat flour and salt.

Add yeast mixture, 3 tablespoons melted butter, buttermilk, and egg; beat on low speed 2 minutes. Scrape bowl as needed.

3. Knead on medium speed 2 to 3 minutes, until smooth and elastic, adding flour as needed to form a soft dough that cleans the sides of bowl. Knead the scallions into the dough. Place dough in a greased bowl, cover with plastic wrap, and let rise until doubled, 30 to 40 minutes.

4. Preheat a large skillet or a 2-burner griddle, preferably cast iron, over medium-low heat 5 to 6 minutes. Lightly oil skillet, wiping away excess with a paper towel.

5. Divide dough into 8 equal pieces.

Shape each piece into a ball, and roll into a 6” to 8” round, about ¼” thick. Working in batches, transfer the dough rounds to the hot skillet.

6. Cook one side until bubbly, 1 to 1 ½ minutes, then flip and cook second side until lightly golden, about 1 to 1 ½ minutes. If the flatbreads are not bubbling, adjust the heat.

7. Lightly brush one side of flatbreads with remaining melted butter; remove to a platter and cover.

Serve warm.

Overseas Customers Discuss Need for Stability and Consistency in HRW Wheat Quality

by Amanda J. Spoo, USW Communications Specialist

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he process of developing a new wheat variety and its specific end use functionalities takes about 10 years, so it is very important for U.S. wheat breeders to have clear goals identified in part by understanding customer needs. To foster that process, USW invited seven wheat quality specialists to the first Overseas Variety Analysis (OVA) HRW Wheat Quality Summit May 24 to 26 in Kansas. They represented milling and baking companies from Nigeria, Japan, Taiwan, Korea and Israel — each a top HRW importing country.

The specialists were able to share information about their local wheat food demand and key quality parameters with breeders and farmers at the Kansas State Research and Extension Service (KSRE) - Agriculture Research Center in Hays, KS. The team also participated in a Kansas State University wheat field day and heard public and private wheat breeders discuss newly developed varieties and their potential for the industry.

Steve Wirsching, USW vice president and director of the West Coast Office in Portland, OR, and Amanda Spoo, USW communications specialist, traveled with the group. USW collaborated with the Kansas Wheat Commission to plan and host the Summit, which included a tour of the Kansas

Wheat Innovation Center in Manhattan, KS. “This Summit gives Kansas wheat farmers the opportunity to show overseas customers how we are investing in the product,” said Aaron Harries, Kansas Wheat vice president of research and operations.

“As products change and tastes evolve in each market, demand constantly shifts, so their feedback is vital to help U.S. breeders and farmers make the adjustments needed to keep up the changes.”

Wheat breeders like KSU’s Guorong Zhang understand that overseas customers can help direct breeding programs toward traits that will help U.S. wheat farmers compete more effectively in the world market.

“Breeders from public universities in Kansas, Oklahoma, Colorado and Nebraska, as well as private companies, utilize field days to demonstrate research outcomes to farmers,” said Zhang.

“We work together because we ultimately have many of the same goals aimed at helping farmers increase yields and improve wheat quality for their customers.”

However, as many participants discussed at the Summit, being able to connect the customer directly to breeders allows

for honest and transparent communication.

“It is important for us to communicate clearly with U.S. farmers, breeders and groups like the state commissions and USW,” said Koji Ishizuka, a quality control manager for Nisshin Flour Milling, Inc., in Japan. “Through our presentations and discussion, we hope the breeders and farmers understand how important specific hard red winter wheat qualities are to the Japanese market. I was very impressed with our discussions and with the breeders and farmers.”

A reputation for reliability, consistent quality has helped build a preference for U.S. wheat in many countries because it translates to a valuable return on investment. USW will continue working with overseas technical specialists and breeders to maintain that reputation and to help our farmers and their overseas customers successfully reach or exceed their goals.

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Wheat Takes a Walk on the Wild Side

By Jordan Hildebrand

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ucked quietly away in the Kansas Wheat Innovation Center is a treasure trove of genetics from around the globe. The Wheat Genetics Resource Center (WGRC) is an internationally-recognized gene bank that curates and houses more than 247,500 seeds from 2,500 wheat and wild wheat species accessions. While maintaining the collection in a climate and humidity controlled environment is an important cornerstone of the WGRC, it is not the only function of the organization.

meant for teaching and research.

One trait that scientists are looking for is resistance to leaf rust. The foliar disease is one that is familiar to Kansas famers, with the bright orange pustules causing up to 20% yield loss, but it is also a devastating disease found worldwide. WGRC scientists inoculate the plants with a composite of leaf rust strains and monitor the susceptibility of the plant to the disease. Useful genes like leaf rust resistance, as well as a number of others, are identified and then transferred to modern, agronomically useful breeding lines.

Included in the selection were 40 lines of diverse tauschii plants, a very close relative that crosses readily with wheat, and is a major source of genes for disease and pest resistance.

WGRC scientists showed off their work at the Rocky Ford Experiment Station on May 11. While the research plots did have familiar varieties in the collection, such as Everest and Jagger, attendees had the opportunity to wander and learn about a fraction of the weird and wonderful looking species housed by the WGRC. While growing these species provides a walk on the wild side for spectators, these plants are 6

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“There is valuable genetic information hidden in these plants that we’re trying to explore and use,” said Duane Wilson, associate scientist at the WGRC. The genes may be diverse, many of these lines may look similar to the untrained eye, but will have differences both large and small.

Traits as minute as small “hairs” on leaves or awn length could be the deciding factor between identification of two species.

“With each species there is one particular trick to identification,” said Jon Raupp, senior scientist at the WGRC. “But there will be some species that you’ll just never get right away.”

Some some wild species thrive in the Kansas environment, but others don’t fare as well.

Wilson reported that last year’s plots suffered from tremendous winterkill while the species planted this year handled the weather much better. Most of the species were headed and flowering at the time of the field day, but several of the wild wheat relatives were “late bloomers.” While this sounds like a mundane detail to most, WGRC scientists see potential to use possible early or late maturity genes in the next big wheat variety.

“This is the most active collection of its kind in the world,” said Wilson. “Lots of places just hold their collections, but we hold and evaluate these species which can be very beneficial to farmers worldwide. The WGRC is an incredible valuable genetic resource.”

Best Baked Donuts Celebrate National Donut Day on June 3rd!

Ingredients

2/3 cup shortening 1 cup granulated sugar 2 large eggs 1 cup skim milk 3 cups all-purpose flour 4 ½ teaspoons baking powder ½ teaspoon salt ½ teaspoon ground nutmeg Topping: 1/3 cup butter, melted ½ cup granulated sugar ½ teaspoon ground cinnamon

Directions Preheat oven to 350°F. Spray 24 muffin cups with no-stick cooking spray.

minutes, until lightly brown.

Remove donuts from pan and set aside.

In the bowl of a stand mixer fitted with paddle, blend shortening and sugar together.

Add eggs and beat well.

Prepare topping. Dip warm donuts in melted butter and roll in cinnamon-sugar mixture. Serve warm or cool completely and freeze in plastic bags. Reheat later.

In medium bowl, combine dry ingredients. Add alternately with milk to shortening mixture; beat well after each addition.

Nutrition Information

Makes 2 dozen medium donuts.

Nutrition Information Per Serving (1 donut, 56g): 200 calories, 8g fat, .5g fiber, 3g saturated fat, 0g trans fat, 27g carbohydrates, 22mg cholesterol, 532mg sodium, 3g protein, 0 mg vitamin C, 1mg iron, 105mg calcium.sodium, 28 g carbo, 1 g fiber, 4 g pro, 50 mcg folate.

Fill the muffin cups twothirds full. Bake 15 to 17 Rediscover WHE AT | JUNE 2016 7

May 2016

STAKEHOLDER NEWS BRIEF Moving the Mission The IGP Institute was lively with activity in May as we held four on-site trainings as well as some off-site educational outreach activities.

The IGP Institute faculty hosted eight USDA-Cochran participants from Brazil. Thanks to contributions by industry personnel and faculty, our Trina Adams visitors had a full agenda. Sessions pertaining to U.S. wheat classifications and market intelligence were co-led by Carlos Campabadal and Jay O’Neil. Pat Hackenberg and O’Neil led the group on a tour of the Cargill facilities in New Orleans, Louisiana.

The following week, IGP Institute hosted its first-ever Extrusion Applications in Global Food Security and Nutrition training. This offering was led by Sajid Alavi and it involved 10 participants from five countries.

Discussed were techniques addressing nutrition, sensory and economic aspects to help for-profit businesses and non-profit organizations. In addition, class members learned extrusion-processing practices for various foods such as fortified rice, fortified blended foods and textured vegetable proteins. Wenger Manufacturing and Insta-pro

In the Spotlight • Agricultural Specialist, Brazil USDA • Resident of Brazil • Participant in the USDA Cochran Wheat Classification course “We requested more basic information about trading, quality and understanding in the milling industry, but after this course we have much more information and knowledge about everything that goes on here in the U.S.” Priscilia Ming

representatives shared expertise during the four-day training.

The next educational event included a full house for the United States Soybean Export Council (USSEC) Latin America Oilseed and Grain Purchasing Tools course managed by Campabadal and O’Neil. Twenty-eight participants gathered at the IGP Institute Conference Center to engage in lectures over barge and railroad transportation, risk management when buying grains, hedging policies and competitive analysis on soybeans.

The IGP Institute held a second USSEC course hosting 17 participants. The Middle East and North Africa Poultry Feed Manufacturing Training Program led by Campabadal provided education on feed mill design, ingredient quality, principles of pelleting and several other feed-related topics.

O’Neil also taught several USSEC courses across the globe.

Traveling to Indonesia, Thailand and the Philippines, O’Neil lead workshops over risk management practices.

Along with the trainings, we were honored to host the President of Costa Rica, Luis Guillermo Solis, who presented the Landon Lecture on Public Affairs.

Continued on page two

Where in the World A monthly look at where we’ve been as we make our way around the globe promoting U.S. commodities and IGP Institute training opportunities.

• Conducted United States Soybean Export Council (USSEC)Northern Crops Institute (NCI)-IGP Risk Management Workshop in Jakarta, Indonesia; Bangkok, Thailand; and Manila, Philippines.

• Presented at the USSEC Feed Technology Seminar in Santiago, Dominican Republic.

• Traveled to Burkina Faso to work on the United States Agency for International Development (USAID) Appropriate Scale Up Mechanization Consortium.

1980 Kimball Avenue, 102 IGP Institute Conference Center | Manhattan, KS 66506–7000 | Tel. 785-532-4070 | Fax 785-532-6080 | www.grains.k-state.edu/igp | igp@ksu.edu

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Continued from page one.

At IGP we are always looking for ways to grow. With that idea in mind, Brandi Miller traveled to Raleigh, North Carolina to participate in the FSPCA Animal Food Lead Instructor Pilot Course. Watch for FSMA trainings coming to IGP this summer and fall.

With all of this visible activity, our distance education team has been behind the scenes supporting professional development of those active in grain elevator and processing careers where 98 participants joined us in May learning topics such as facilities planning, safety, materials handling, feed manufacturing and milling principles.

President Luis Guillermo Solîs (middle) and his staff pose with College of Agriculture Dean John Floros (far left), Grain Science and Industry Department Head Gordon Smith (second right) and Feed Manufacturing and Grain Management Curriculum Manager Carlos Campabadal (far right).

In my first three months as the distance education coordinator, I can share with you that the witnessed efforts of academics, support staff and industry to offer grain related education has been extraordinary.

Enjoy reading this news brief and please share it with others in your organization.

Sincerely,

Trina Adams Distance Education Coordinator

Participants engage in hands-on learning activities in the Bioprocessing and Industrial Value Added Products Innovation Center.

Trainings and Activities

Courses and activities held in May • GEAPS 506 — The Grain Industry in Canada: Climate, Crops and People • GEAPS 511 — Facilities Planning and Design II • GEAPS 542 — Electrical Safety • GEAPS 600 — Overview of Milling Principles • AFIA 500 — Fundamentals of Feed Manufacturing

Upcoming in June

USDA Cochran Training Program participants from Brazil touring Cargill Terminal Facility in Salina, Kansas.

• Buhler Executive Milling — June 13-17 • Flour Milling course for U.S. Wheat Associates Nigerian and South African Team — June 19-July 1 • National Feed and Grain Association-KSU Food Safety Modernization Act Feed Industry training — June 28-30

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News from : NAWG Weekly Updates May 6, 2016 NRCS, FSA Prompted to Re-Evaluate, Improve Conservation Compliance Reviews The USDA’s Office of Inspector General (OIG) released an interim audit report that the Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) need to improve their method for reviewing conservation compliance. In its investigation, the OIG revealed that only one FSA program, the Direct and Counter-cyclical Program (DCP), subjected its enrolled producers to random sample reviews from 2012-2014, despite the fact that all recipients of payments, loans, or other benefits from NRCS and FSA are all required to comply to the same extent as DCP participants with the highly erodible land (HEL) and wetland conservation requirements. The report also identified that in 2014, data from 10 states was omitted, with invalid results and records. With these revelations, OIG claims that RediscoverWH WH E AT| JUNE | JUNE 2016 1010Rediscover E AT 2016

the agencies cannot now verify an accurate representation of producer compliance. Following this, the OIG recommended that NRCS, FSA, and RMA establish a working solution to make the process for reviewing compliance more efficient, including creating working groups, outlining the roles of the agencies, and developing methodology for conducting reviews. Efforts are now being made to improve the review process in accordance with the findings.

Conservation Reserve Program Enrollment Exceeds 800,000 Acres More than 800,000 acres have been enrolled in the Conservation Reserve Program (CRP) through the program’s 49th sign up period, Agriculture Secretary Tom Vilsack announced. CRP allows the USDA to help farmers balance the cost of complying with conservation efforts like restoring, enhancing, and protecting certain plants that improve water quality, prevent soil erosion and protect wildlife habitat. This

sign up period saw record-high Environmental Benefits Index cut-off, and the lowest percentage of applications accepted, making it the most competitive selection in the history of the program.

Heightened selectivity means that the per-acre conservation benefits are being maximized while addressing several conservation priorities at once. Total enrollment as of March 2016 is 23.8 million acres with 1.7 million acres set to expire on September 30. In order to participate in CRP, producers establish resource-conserving plant species to mitigate soil erosion, improve water quality, and protect wildlife habitats that are on marginally productive lands. In return, producers receive rental payments and cost-share assistance from FSA, in contracts with a duration of between 10-15 years.

NWF and NAWG Seek Stakeholder Input into National Wheat Action Plan Farmer-leaders of the National Association of Wheat Growers (NAWG) and the National Wheat

Foundation (NWF) are developing a National Wheat Action Plan to serve as the catalyst to increase public and private wheat research and to improve wheat productivity and farmer profitability. NAWG and NWF leaders believe there is more that farmers can do to turn around the U.S. wheat industry, and believe increased engagement by farmers is critical to moving forward on a new path to revitalizing the wheat industry.

Together with our industry partners, we are seeking input and feedback from stakeholders across the industry as part of our research process. We invite you to complete the online survey at http://research.aimpointsurveys. com/s3/NationalWheat to provide your insights into how we can increase U.S. wheat growers’ productivity and competitiveness and overall profitability for all members of the wheat value chain. We value your input. For more information, FAQs and a list of industry partners, please visit http://wheatfoundation.org/ national-wheat-action-plan.

Annual Kansas Wheat Tour Concludes The annual Wheat Quality Council tour of the Kansas wheat crop concluded on Thursday.

With around 80 participants fanning out across the state to measure and review the wheat crop, the Wheat Quality Council ultimately estimates that the 2016 Kansas wheat crop will be 382.4 million bushels with an average yield of 48.6 bushels per acre.

Last year’s tour estimated 288.5 million bushels with an average yield of 35.6 bushels per acre.

The prospects for this year’s crop appear to be higher partially as a result of above average rains this

spring, though there was also widespread variability in the yield estimates.

For coverage and highlights of the tour, search #wheattour16 on Twitter. This marked the 25th and final year for Ben Handcock as Executive Vice President of the Wheat Quality Council, who will be retiring later this year. NAWG wishes Handcock all the best in his retirement.

TPP Will Bring Renewed Grower Competitiveness; Urge Congress to Act Soon With Congress out of session the week of May 6 and Members back home in their Districts, it is more important than ever for wheat growers to contact their Congressional representatives and urge them to support passage of the Trans-Pacific Partnership agreement. The trade agreement, which has been stalled in Congress, will bring new market access for U.S. farmers in the Asia-Pacific region by lowering burdensome tariffs which hurt U.S. competitiveness, boosting exports to regions of the world with growing middle classes, and establishing high-standard trade rules. Last month, NAWG joined a coalition of other agricultural organizations in sending a letter to the House and Senate Leadership, urging their quick action. The letter also emphasized that the longer Congress waits to take action on TPP, the more disadvantaged U.S. growers are compared to other countries in the region. With elected Representatives and Senators back in their Districts, growers should take this opportunity to interact with them about the importance of TPP for agriculture. NAWG

supports TPP and other trade deals that will sustain and improve the U.S. position in global markets and allow the U.S. to lead in wheat production and exports. With limited legislative days remaining before the end of the 114th Congress, NAWG continues to enthusiastically call for timely action by Congress, given the importance of TPP. $15.6 Million in Grants Will Strengthen Rural Communities The USDA have announced that $15.6 million in grants will go to rural American communities in order to increase prosperity through research, education, and extension programs. These programs, made through the Agriculture and Food Research Initiative (AFRI) and administered

by USDA’s National Institute of Food and Agriculture (NIFA), will promote community development, economic growth, and sustainability in America’s rural communities, where nearly 60 million Americans live and 85 percent of persistent poverty is located. Small and Medium-sized Farms will also benefit from the grant money, which will work to educate farmers and ranchers about management strategies and new technologies that will allow them to compete and improve the viability of their small and medium-sized commodity operations. Since the AFRI program was established, funding has been at less than half of the levels established in the 2008 Farm Bill. The program supports projects that sustain and amplify activities in rural areas that protect the environment and alleviate poverty in those areas, including education on issues such as consumer behavior and market structure.

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May 12, 2016 NAWG Farmer Leaders Hit the Hill, Meet with Farm Groups The officers of the National Association of Wheat Growers (NAWG) were in Washington, D.C., to participate in a number of organizational and policy meetings. To begin the week, the officers met with NAWG staff to review the organization’s resolutions and discuss strategy for advancing its policy goals for the year.

Now two years into the 2014 Farm Bill, NAWG has been actively seeking input about implementation and discussing issues that have arisen with others in the ag community, USDA officials, and Members of Congress. Farmers have been experiencing issues related to the use of NASS data in determining farm program payments under both the Agriculture Risk Coverage (ARC) program and the Supplemental Coverage Option (SCO). NAWG continues to work with our partners to try to find solutions that can be done administratively without opening the Farm Bill and in a way that will be more responsive to the experience of farmers participating in those programs.

Additionally, the leaders discussed the importance of defending crop insurance and farm programs from cuts during the appropriations process.

The officers also discussed a number of trade issues, including the Trans-Pacific Partnership, Canada’s grain grading system, the impact of China’s domestic agricultural support system on our farmers, and Cuba. The 12Rediscover RediscoverWH WH | JUNE 2016 12 E EATAT| JUNE 2016

status of legislation to establish a national framework for the labeling of foods containing genetically modified (GMO) ingredients was also discussed.

While the House has passed legislation to create a national voluntary system, the Senate hasn’t yet come to consensus on its own legislation.

NAWG Submits Comments to EPA on Mitigation Decision for Paraquat NAWG submitted comments to the EPA in reference to the EPA’s proposed interim mitigation decision to further regulate the application and handling of paraquat dicholoride, a crop protection product used by wheat growers. The new regulations proposed by the EPA would restrict the use of paraquat to only certified applicators, removing the ability of growers to supervise employees or other family members. This would result in additional producers and employers requiring certification, which would be cost-prohibitive to several producers and add additional financial burdens, without providing substantial safety benefits. NAWG believes that the current requirements for certification for restricted-use pesticides, and warnings on the product label adequately address the safe use of the herbicide.

DOJ Drops Appeal of Ruling on Lesser Prairie Chicken Designation under ESA The Department of Justice has dropped the appeal of the ruling by the U.S. District Court for the Western District of Texas that the U.S. Fish and Wildlife Service (FWS) failed to abide by

its own regulations in designating the lesser prairie chicken as a threatened species under the Endangered Species Act (ESA).

The District Court decision centered on the determination that FWS failed to take into account state conservation plans to protect the lesser prairie chicken. Efforts made by the Obama administration to protect the lesser prairie chicken under the ESA would have put undue burdens on farmers and ranchers who would have to abide by costly regulations in efforts to preserve the lesser prairie chicken. Senate Ag Committee Chairman Pat Roberts says that “with a little rain, we will see the lesser prairie chicken population bounce back.”

The dropping of this appeal is good news for farmers, but the FWS states that they will continue to work with states, federal agencies, and partners to conserve the lesser prairie chicken. Senator Jim Inhofe hopes that the FWS will abstain from reopening the issue until states have had a chance to develop their own conservation plans and demonstrate their success.

Survey Shows Strong Public Perception of Farmers A recent poll commissioned

by National Crop Insurance Services found that a significant majority of Americans have favorable views of farmers and are supportive of federal support for agricultural programs. The survey, which was conducted in early April and was based on telephone responses from 1,000 registered voters, showed that of all registered voters, 86 percent had a favorable view of farmers. This positive perception

reinforces the importance of grassroots engagement in public policy, and thus the importance of farmers contacting their Members of Congress about legislation that would negatively impact agriculture. The survey also provides helpful support to efforts to defend the federal crop insurance program. Specifically, the survey shows that 79% of all respondents support a system that discounts the price of crop insurance for farmers.

As the Senate Appropriations Committee is set to consider its version of the FY 2017 Agriculture Appropriations bill next week, it’s particularly important now for farmers to continue weighing in with their Senators about the importance of opposing any amendments to the appropriations bill that would undermine crop insurance, title 1 farm programs, or conservation programs.

May 19, 2016 World Health Organization Says Certain Crop Protection Tools Unlikely to Cause Cancer The World Health Organization and the Food and Agriculture Organization of the United Nations concluded that Glyphosate, Diazinon and Malathion are unlikely to pose a carcinogenic risk to humans from exposure through diet.

These determinations by the joint international panel on pesticide residue refute the conclusions from the International Agency for Research and Cancer that determined the three chemicals were probable human carcinogens. The use of these products has been debated in the

press, and diazinon, malathion and chlorpyrifos are currently undergoing registration review at EPA. The European Union is scheduled to vote on the continued use of glyphosate this summer. Glyphosate is one of many important tools used by wheat growers. It has been determined through independent grower surveys that approximately 30% of wheat acres in the U.S. receive an application of glyphosate to help manage weeds. These applications occur before planting, at planting or after planting but before wheat emergence in no-till or reduced tillage cropping systems. Glyphosate was first registered for use by the U.S. Environmental Protection Agency in 1974 and registration was completed in 1993. Regulatory bodies and scientific institutions have conducted science-based evaluations and concluded that typical glyphosate usage does not pose an unreasonable health risk to humans, when used according to label directions. For more than 20 years, the EPA has determined, through risk assessments and science-based evaluations, glyphosate is non-carcinogenic to humans. Glyphosate-based herbicides have had a long history of safe use.

Senate Appropriations Committee Advances FY 2017 Ag Appropriations On May 19, the Senate Appropriations Committee unanimously approved the Senate version of the FY 2017 Agriculture Appropriations bill.

The bill includes $21.25 billion in discretionary spending, including $2.54 billion for ag research

through the Agricultural Research Service (ARS) and the National Institute of Food Agriculture (AFRI). Additionally, similar to the House version, the Senate bill increases funding for the Agriculture and Food Research Initiative (AFRI) competitive grants program by $25 million up to $375 million. NAWG applauds these increases, particularly since the legislation includes an additional $2 million for the U.S. Wheat and Barley Scab Initiative.

This increase reflects the same level in the House Committeepassed version as well.

The bill also includes an amendment from Senator John Hoeven (R-ND) that would require USDA to establish a pilot program for the 2016 crop year that would enable state Farm Service Agency (FSA) offices to make supplemental Agriculture Risk Coverage (ARC) program payments in instances where there are significant yield calculation differences in comparable counties. Where such instances arise, within the pilot program, the applicable state FSA office would have an ability to recalculate ARC-County yields for relevant counties based on several specific requirements.

The bill would also provide $1.5 million for USDA to place Foreign Agricultural Service (FAS) employees in the new Cuban embassy. During the markup, the Committee considered a number of amendments, including one that would require the labeling of genetically engineered salmon as well as one to ban horse slaughter. Following Committee passage, the legislation would now be slated for floor action Rediscover E AT 2016 RediscoverWH WH E AT| JUNE | JUNE 201613 13

sometime in the coming weeks.

Video and documents, including a bill summary, from the markup can be found at http://www. appropriations.senate.gov/ hearings/markup-of-the-fy17agriculture-appropriations-billand-the-fy17-legislative-branchappropriations-bill.

Senate Agriculture Committee Reviews State of Farm Economy, Farm Credit System The Senate Agriculture Committee held a hearing on May 19, to review the state of the farm economy and to examine the role of the Farm Credit System in financing agricultural operations.

The Committee heard from all three board members of the Farm Credit Administration, which is an independent agency charged with regulating the Farm Credit System. A second panel included testimony from witnesses representing traditional financial institutions, the Farm Credit System, and a producer.

During the hearing, participants discussed the current economic conditions facing rural America, including the declining commodity prices and the ripple effect that has had throughout agriculture and rural communities. They also discussed the dynamics of the current economic conditions as compared to the farm economy of the 1980s. Video from the hearing and testimony from the witnesses can be found at http:// www.agriculture.senate.gov/ hearings/the-farm-credit-systemoversight-and-outlook-of-thecurrent-economic-climate.

14 Rediscover RediscoverWH WHEEAT AT| JUNE | JUNE2016 2016 14

ITC Releases Report on Economic Impact of TPP On May 18, the International Trade Commission (ITC) released its highly anticipated report on the economic impacts expected to accrue from the adoption of the Trans-Pacific Partnership (TPP).

For the entire agriculture and food sector, the report forecasts a $7.2 billion increase in exports or a growth of about 2.6 percent by 2032 compared to the same timeframe without TPP. The report recognized that the U.S. wheat industry would see substantial gains in market access and subsequent exports to Vietnam where the United States currently competes at a tariff disadvantage to Australian suppliers. Specifically, the ITC notes that U.S. wheat and other grain exports to Vietnam would increase by a healthy 25.3 percent by 2032 under TPP. However, ITC also concludes that U.S. wheat exports to Japan would decline by 17 percent under TPP. There are two distinct markets for wheat in Japan: one for high quality food grade wheat and one for lower quality, lower priced livestock feed wheat. Japan has consistently imported about 60 percent of its annual milling wheat needs from the United States, with Canada and Australia making up the balance. Because access to Japan’s milling wheat market would remain equal among the three suppliers under TPP and because Japan requires different types of wheat for distinct uses, we see no reason why U.S. sales would decline.

“The assumptions made in the ITC report are disappointing and misleading,” said NAWG

President Gordon Stoner. “U.S. wheat farmers stand to benefit from a lower MAFF markup and new market access in Japan and from being able to compete on a level playing field in Vietnam. Congress should act quickly to enable farmers to take full advantage of the potential economic opportunities at stake under TPP.” The full joint statement from NAWG and U.S. Wheat Associates can be found at www.http://uswheat.org/ newsRelease/doc/.

NAS Releases Report on GE Crops Effect on Human Health and Environment The National Academy of Sciences (NAS) Board on Agriculture and Natural Resources has released a longawaited report regarding their extensive study on the benefits, possible consequences, and prospects of genetically engineered crops. The report, which was released before a widely-broadcast event, states that while long-term effects of genetically engineered crops are difficult to analyze, there is no substantial evidence of a difference in risks to human health or environment between currently commercialized genetically engineered (GE) crops and conventionally bred crops.

Specifically, the report considered insight, comments, and research from nearly 1,000 sources to develop its conclusion regarding GE crops’ role in contributing to future crop improvement and enhanced resistance to diseases, herbicides, and insecticides.

The report analyzed insect populations in areas where GE crops were widely used, as well as weed resistance of GE crops

engineered to be resistant to herbicides such as glyphosate.

Their findings revealed that insect populations generally decreased in areas with GE crops, while weed resistance to herbicides was slow. The report also dives into the regulatory process and recommends that GE and non-GE crops be reviewed and determined if regulations are needed on traits. The study suggests that regulation should apply to the novel characteristics of the plant variety rather than the process.

As APHIS continues to review Part 340 and a potential update to the regulatory process, NAWG has conditionally supported the “analyze first, regulate second” approach that APHIS offered as a potential option, noting that a phase-in approach needs to build upon existing systems and not start from scratch. NAWG is generally in agreement with the NAS report and emphasizes that GE crops are a sound science whose application to crop development is crucial for the sustainability of global crops.

Seed Treatment Lawsuit Moves Forward Earlier this year, NAWG joined a coalition of agriculture groups, agricultural retailers and Crop Life America in requesting to intervene in a lawsuit brought against the EPA by environmental activists and others. The lawsuit is Anderson v. EPA, filed in the U.S. District Court for the Northern District of California on Jan. 6, 2016. The plaintiffs want the court to order the U.S. Environmental Protection Agency (EPA) to regulate seeds treated with pesticides as if the seeds were the pesticides. In an Order dated May 13, the court

rejected EPA’s motion to dismiss the case, but also issued an Order that granted the Motion to Intervene. NAWG will be working with the agriculture coalition on next steps for the lawsuit to defend EPA’s current regulation of neonicotinoid and other seed treatment pesticides and to ensure that the court and EPA understand the vital importance of treated seeds to American agriculture.

lead our D.C. staff.”

May, 26 2016

Stoner believes that with the experience Goule gained in his legislative work in Congressional offices, as well as his leadership experience on the House Ag Committee and at the NFU, and his work on three previous Farm Bills, Goule will provide beneficial policy and legislative guidance to NAWG as it develops priorities for the next farm bill.

Goule Selected as New NAWG CEO The National Association of Wheat Growers (NAWG) announced week the selection of Chandler Goule as its new Chief Executive Officer. Goule, currently Senior Vice President of Programs at the National Farmers Union (NFU), comes to NAWG with eleven years of agriculture policy experience on the House side of Capitol Hill and will assume the role of Chief Executive Officer beginning July 5. NAWG has been conducting a nation-wide search for a new Chief Executive Officer to fill the vacancy left by Jim Palmer, who announced in April his intention to step down to spend more time with family and on his Missouri farm.

“NAWG is very pleased to have Chandler on board,” said NAWG President Gordon Stoner, a wheat grower from Outlook, Montana.

“With our industry at a critical juncture, we know that with Chandler’s guidance, NAWG will be in a great position to advocate on behalf of all wheat farmers.

We are delighted to have such a talented and experienced person

In addition to his NAWG CEO responsibilities, Goule will also serve as the executive director of the National Wheat Foundation (NWF).

“Wheat has many challenges ahead, and we know Chandler is up to meeting them all headon,” said NWF Chairman Phil McLain, a North Carolina wheat grower.

NAWG President Hits the Hill to Talk TPP NAWG President Gordon Stoner was in Washington, D.C. to wish outgoing NAWG CEO Jim Palmer well as he steps down from his post at the end of the month. While in DC, Stoner also participated in a meeting of the U.S. Agriculture Coalition for Cuba (USACC) with Cuba’s Ambassador to the United States, José Ramón Cabañas Rodríguez.

He also hit the Hill to talk with Senate offices that supported Trade Promotion Authority (TPA) about the importance of quick ratification of the TransPacific Partnership (TPP). As part of the discussions, he also raised NAWG and U.S. Wheat Associate’s concerns about last week’s International Trade Commission (ITC) report that showed questionable assumptions Rediscover E AT 2016 RediscoverWH WH E AT| JUNE | JUNE 201615 15

about the outcome for wheat under TPP. Stoner discussed Japan’s historical preferences for U.S.-grown wheat and the fact that NAWG’s competitive position with respect to Canada would not change under TPP. Research Provides Guidance for National Wheat Action Plan Development U.S. Wheat Grower and Wheat Industry Stakeholder research recently completed by Aimpoint for the National Wheat Foundation’s (NWF) National Wheat Action Plan (NWAP) Project will provide strong guidance in the development of the final plan. The purpose of the research was to provide both NWF and the National Association of Wheat Growers (NAWG) grower leadership and the NWAP Executive Partner Council with insight into the market and producer dynamics impacting the future of U.S. wheat production, and help channel that insight into actionable strategies.

The research objectives were, among other things, to identify current producer and stakeholder perceptions of the U.S. wheat industry, gauge producer support of wheat as a preferred crop and current production practices, assess global and national trends in wheat production profitability, and provide insight to develop unifying principles and potential courses of action.

Key takeaways of the research indicated America’s wheat growers want the U.S. to be a leader in wheat production, developing new markets are as essential as new technology, and risk management tools and trade pacts are top federal priorities.

Universal stakeholder beliefs 16Rediscover RediscoverWH WHE AT | JUNE 2016 16 E AT | JUNE 2016

include the importance of the U.S. being a global leader in wheat, developing new uses for wheat would be a catalyst for growth, and sustainability should be approached with transparency and openness. Next steps in the NWAP process will be to determine key assumptions from the research, develop hypothetical “what if” scenarios, and work collaboratively to develop the final plan.

NAWG Supports Letter to Secretary Vilsack on APHIS 340 NAWG has supported the signing of a letter by 65 members of Congress to Secretary of Agriculture Tom Vilsack regarding the Animal and Plant Health Inspection Service’s (APHIS) Notice of Intent (NOI) to revise pre-market biotechnology regulations. The NOI was published in the Federal Register in February. The letter states that although the US Department of Agriculture (USDA) is supported in their commitment to scientific discovery and riskbased regulation for biotech, APHIS must be cautious in developing any revision of the current biotechnology regulatory structure. APHIS has proposed to exempt classes of biotech products that the agency knows do not present a risk to agriculture, which will benefit agriculture, but these proposals have also created uncertainty and ambiguity as to which breeding processes and products will receive premarket regulatory scrutiny, and to what degree. The signers of the letter worry that the ambiguity present in these proposals will inhibit the development and commercialization of innovative

technologies which will be valuable to crop producers, and that APHIS will group whole classes of plant breeding methods into a pre-market regulatory structure. The signers state that without scientific and risk-based justification, safe methods which have been utilized for decades could be jeopardized by APHIS’s proposals, hindering innovation and preventing the breakthroughs in biotechnology that are crucial to sustainable global food security.

Senate Holds Hearing on International Treaty on Plant Genetic Resources The Senate Committee on Foreign Relations held a hearing on May 19th to hear from witnesses regarding the International Treaty on Plant Genetic Resources. NAWG supports the ratification of this treaty, and is following the process within the Senate. In regard to the Plant Genetic treaty, the committee heard testimonies from Judith Garber, Acting Assistant Secretary at the Bureau of Oceans and International and Environmental and Scientific Affairs, and John Schoenecker, Director of Intellectual Property at HM. Clause, on behalf of the American Seed Trade Association (ASTA). The Treaty, which was adopted by the Food and Agriculture Organization of the UN in 2001, and signed by the U.S. in 2002, would, Garber and Schoenecker argue, create a stable legal framework for international germplasm exchanges, allowing for facilitation of access by public and private entities for the sharing of plant resources. The Treaty aims to increase development in sustainable use of plant genetic

resources by ensuring free and open access to germplasm centers internationally. Currently, the US is already complicit in most of the requirements of the treaty, which would not require any new implementation of laws or appropriations. However, ratification of the Treaty is necessary to enable the U.S. to participate in the framework.

Greater development with plant germplasms will address crop insecurities from disease, pests, and climate, as well as improve crop yields and the continuing development of new crop varieties. With food security as a high priority globally, the development of more resilient crop varieties with higher yields is crucial.

House Passes H.R. 897, Zika Vector Control Act In a vote which passed 258166, the House approved Ohio Republican Bob Gibb’s bill H.R. 897, which would eliminate the requirement for a Clean Water Act permit for certain pesticide applications. The permit required under the Clean Water Act is the National Pollutant Discharge Elimination System (NPDES) permit, which was established in response to a 2009 US 6th Circuit Court of Appeals ruling.

Pesticides are regulated under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), which considers water quality safeguards when reviewing and approving labels for crop protection tools. NAWG supports proper use of crop protection tools in accordance with their FIFRA approved labels. H.R. 897 would remove the duplicative regulation that the NPDES permit has caused, which has been

estimated to cost $50 million and require 1 million hours per year to implement, without adding any environmental protection. NAWG is in support of this bill, as an effort to reduce unnecessary and redundant burdens on farmers that cost time and resources.

economic sentiment. Purdue will also provide its research and ag economics expertise to measure producers’ expectations of key farm economy drivers, such as farm profitability, farmland prices, capital expenditures, and crop and livestock prices.

Purdue University/CME Group Launch Ag Economy Barometer

Quarterly, the index will be accompanied by a webinar and an in-depth thought-leader survey. The index is unique in that it is calculated based on producer sentiments about both current conditions and future expectations. According to Purdue, the agricultural sentiment of U.S. producers increased to an index of 106, which was an improvement in producer sentiment from the base period index established from October 2015 through March 2016. For more information on the Barometer, visit https://www. youtube.com/watch?v=RLhfFS2_ xDk&feature=youtu.

Purdue’s Center for Commercial Agriculture and the CME Group (Chicago Mercantile Exchange, Chicago Board of Trade and others) have partnered to produce a monthly Ag Economy Barometer to measure the health of the U.S. agricultural economy. Each month, the Ag Economy Barometer will provide a “state of U.S. ag health” with an index value. Results to calculate the index will be obtained through a survey of 400 large agricultural producers on

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News from : May 5, 2016 Global Wheat Production to Fall in 2016/17

By Stephanie Bryant-Erdmann, USW Market Analyst While farmers are busy with spring planting, organizations and agencies around the world are calculating the potential result of the farmers’ hard work. On May 10, USDA will release its World Agricultural Supply and Demand Estimates report with the first forecast for the 2016/17 marketing year. However, several key agricultural organizations have already made projections that, also considering crop conditions, provide a preview of what USDA might say next week.

On April 28, the International Grains Council (IGC) updated its 2016/17 wheat production estimates and provided a look at what marketing year 2016/17 may have in store. Due to reduced planted area, IGC pegged 2016/17 U.S. wheat production at 52.8 million metric tons (MMT), down 5 percent from 2015/16.

As of May 1, USDA reported 61 percent of U.S. winter wheat is in good to excellent condition compared to 42 percent at the 18Rediscover RediscoverWH WH E AT| JUNE | JUNE 2016 18 E AT 2016

same time last year. USDA rated 7 percent of winter wheat in poor condition, compared to 20 percent in 2015, and estimated that 42 percent of winter wheat had headed, compared to the 5-year average of 34 percent. U.S. spring planting is 54 percent complete.

That is behind last year’s pace but ahead of the 5-year average of 39 percent. USDA pegs spring wheat emergence at 22 percent compared to the 5-year average of 14 percent.

Canadians are also planting spring wheat into generally adequate soil moisture, though dry conditions are developing along Canada’s southern border.

According to a StatsCan survey, Canadian farmers intend to plant 6 percent less spring wheat this year due to increased competition from durum, pulses and oilseeds.

StatsCan estimates spring wheat area at 6.50 million hectares (16.0 million acres) and expects total planted area to fall 1 percent year over year to 9.64 million hectares (23.8 million acres). This includes 2.48 million hectares (6.12 million acres) of durum, a 5 percent increase from last year spurred by high durum prices and low stocks. According to Agriculture and Agri-Food Canada, its 2016/17 winter wheat area, especially soft red winter wheat in Ontario,

returned to average levels. Winter wheat area for 2016 is 681,000 hectares (1.68 million acres), or 7 percent of the total estimated wheat area. Despite the lower planted area, IGC predicted total 2016/17 Canadian wheat production would reach 29.5 MMT, up from 27.6 MMT last year.

European Union (EU) farmers also planted slightly less wheat for 2016. Strategie Grains estimated EU soft wheat planted area at 24.0 million hectares (59.3 million acres) compared to 24.1 million hectares (59.5 million acres) in 2015. According to IGC, winter wheat field conditions in the EU’s three largest wheat-producing countries — France, Germany and the United Kingdom — are “particularly good.” However, uncertainty about Poland’s winter wheat persists after dry sowing conditions slowed plant development and left the wheat vulnerable to a December freeze.

Strategie Grains estimated winterkill damaged 7 to 10 percent of Polish winter wheat and pegged its 2016/17 winter wheat production at 10.6 MMT, down 3 percent from 2015/16. IGC expects EU wheat production to dip to 152 MMT, down 7 percent from last

year’s record but still well above the 5-year average.

third highest on record and on par with 2013/14 production.

IGC also expects Black Sea (Kazakhstan, Russia and Ukraine) wheat production to decline to 94.0 MMT, down 8 percent year over year. UkrAgroConsult expects Ukraine will show the largest decrease because dry conditions last fall cut planted area by 12 percent year over year. Winter wheat accounts for 95 percent of Ukrainian wheat production and recent rain improved crop conditions there.

The same rainfall and favorable temperatures also benefited Kazak and Russian winter wheat, which UkrAgroConsult noted is in generally good condition.

Trade Negotiation Focus Turns to T-TIP

Winter wheat planting only recently began in the Southern Hemisphere. According to ABARES, Australia received beneficial moisture last week, which improved soil conditions across major wheat producing areas. IGC expects Australian wheat production to reach 25.0 MMT, up from 24.2 MMT in 2015.

Last week, government representatives met in New York for their thirteenth round of T-TIP negotiations that included stakeholder comments. While both governments praised the progress to date and expressed optimism at possibly finalizing an agreement this year, significant differences remain with increased pressure to complete an agreement before the end of President Obama’s administration. In particular, the two sides seem to have significant gaps to bridge on key agricultural issues.

In Argentina, heavy rains delayed soybean harvest but provided beneficial moisture across the country. IGC expects Argentine planted area to increase to a 9-year high of 5.2 million hectares (12.8 million acres).

IGC forecasts Argentine wheat production will jump to 14.6 MMT, up 30 percent from 2015 due to the Macri government’s more favorable farm policies.

Overall, IGC expects global wheat production to fall from a record 734 MMT set in 2015/16 to 717 MMT, which would be the

By Dalton Henry , USW Director of Policy U.S. trade negotiators are now focusing more and more on the Transatlantic Trade and Investment Partnership (T-TIP), a proposed free trade agreement between the United States and the EU. T-TIP negotiations started in 2013 and maintained a relatively slow pace until last fall when negotiators completed the 12-country Trans-Pacific Partnership (TPP) now awaiting congressional ratification.

Due to fears that negotiators could strike a narrower agreement without resolving those agricultural issues, a bipartisan group of 26 senators is calling for agricultural issues to remain a priority. Their recent letter highlighted the need for broadbased tariff elimination, sciencebased approaches to animal

and plant health issues and the improvements to the troublesome EU regulatory framework for approval of biotechnology products.

U.S. wheat exports currently face a complex “margin of preference” program that allows only high protein wheat and durum into the EU duty free, as long as world prices remain above a certain threshold. USW supports a comprehensive T-TIP agreement that eliminates all wheat duties, contains a fully enforceable sanitary and phytosanitary (SPS) chapter and provides for a predictable biotechnology approval process. USW established a full T-TIP priorities document as negotiations began three years ago.

As two large wheat producers and exporters, the United States and the EU are unlikely to see major trade shifts in wheat because of T-TIP. However, the agreement does have the potential to expand access for U.S. producers to the world’s largest agricultural importer and to establish key precedents for future trade agreements.

Agricultural issues are far from the only remaining sticking points. Significant differences remain in automobile market access, the creation of an investor-state dispute settlement (ISDS) mechanism and access to government procurement programs. According to the schedule, negotiators will take stock of progress in late May, with another formal round likely in July.

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Wheat Quality Council Tour See Upside HRW Yield Potential What a difference a year makes.

This week the Wheat Quality Council’s annual “Hard Red Wheat Tour” hit the road again to survey the Kansas crop, measuring yield potential and scouting conditions. This time last year, the tour participants estimated yield at a lower than expected 35.9 bushels per acre (bu/ac). In contrast, this year’s tour saw much better field conditions and projected higher yields.

Tour participants come from as far as Australia and represent all facets of the wheat industry, including millers, traders, media, farmers, researchers and government officials. USW sent two colleagues on the tour this year: West Coast Office Assistant Director Shawn Campbell and Policy Specialist Elizabeth Westendorf.

Just a few hours before USW published this issue of “Wheat Letter,” the tour estimated a final average yield potential of 48.6 bu/ ac or about 3.27 MT per hectare for the 2016/17 Kansas hard red winter (HRW) crop. This year the tour participants made 655 stops to scout fields. Combining seeded area with per-acre yield potential, the total production potential estimate was 382.4 million bushels (10.4 MMT). Last year’s total production estimate was 288.5 million bushels (7.85 MMT).

On the first day, starting in Manhattan, the tour traveled along several routes covering most of Kansas’ northern counties.

The cumulative Day 1 average yield potential was 47.2 bu/ac, 20Rediscover RediscoverWH WH | JUNE 2016 20 E EATAT| JUNE 2016

which is equivalent to about 3.15 MT per hectare, compared to 34.3 bu/ac in 2015. To reach that average, participants surveyed 306 fields — a tour record for a single day — with fields ranging from a low of 21 bu/ac to a high of 93 bu/ac. Pressure from stripe rust, wheat streak mosaic and barley yellow dwarf foliar diseases was evident. It was apparent that many farmers used preventive control measures, as untreated fields were visibly poorer. Kansas Wheat Commission CEO Justin Gilpin said that more farmers are protecting their wheat with fungicides this year because of last year’s disease damage and because the recent influx of moisture created optimal conditions for diseases to develop.

Participants also received a report on the Nebraska and Colorado wheat crops. Nebraska estimated an average 55.0 bu/ac for a total production estimate of 70.4 million bushels (1.92 MMT).

Colorado estimated an average of 39.0 bu/ac with total production estimated at 78.0 million bushels.

On the second day, the tour traveled on routes that led from the city of Colby to Wichita, making 300 stops. Again, field conditions varied by route, but the crop was noticeably better than last year. Wheat streak mosaic was more prevalent on Day 2, and participants reported seeing barley yellow dwarf, leaf rust and stripe rust. However, farmers were keeping aerial applicators busy to stay ahead of disease pressure. The Day 2 estimated average yield was 49.3 bu/ac (3.31 MT per hectare), for a combined two-day average of 48.2 bu/ac across 606 stops. Last year, the Day 2 average was 34.5

bu/ac and the combined two-day average was 34.4 bu/ac. This was the highest Day 2 average estimate the tour has seen since 2012.

Participants also received a crop report from Oklahoma, where low cash prices encouraged more cattle grazing on wheat this year.

The estimated average yield in Oklahoma is 33.6 bu/ac, for a total production estimate of 128 million bushels or about 3.48 MMT. The crop development is well ahead of normal with farmers expecting to start harvest at the end of May. The third and final day of the tour was shorter, with each car making 3 to 4 field stops on the way from Wichita back to Manhattan for the final report.

The Day 3 estimated average yield was 53.5 bu/ac, (3.51 MT per hectare) across 49 stops.

Fields throughout the tour exhibited signs of early season drought stress, but in many cases, the right amount moisture in April came just in time to save the crop.

While weather can still massively effect these estimates in the upcoming weeks, they highlight what a difference a year can make.

“The wheat tour is a valuable experience not only because you get in the field and look at the crop up close, but also because of the connections you make. These are aspects of the industry that you don’t always get to see when you are in the office,” said Westendorf, who was a first time participant on the tour. “Now I have a better understanding of the hard decisions that farmers have to make and the challenges they face growing wheat. It reinforced that the United States indeed produces high quality wheat.”

View highlights and photos from the tour by searching #wheattour16 on Facebook and Twitter. The WQC also sponsors a spring wheat tour in the Northern Plains in July.

For more information, visit the Council’s web site at http://www. wheatqualitycouncil.org.

Executive Assistant Joins U.S. Wheat Associates in Taipei USW has hired Fiona Lee as Executive Assistant and Accountant in the organization’s office in Taipei, Taiwan. Ms. Lee will train with long-time Office Manager/Accountant Serena C. Wu, who plans to retire later in 2016.

“Fiona’s work experience ranges from financial project management to legal matters and translation needs,” said Matt Weimar, USW’s Regional Vice President for South Asia. “These are strong assets that will certainly benefit the U.S. wheat farmers we represent and our industry and government partners in Taiwan.”

“We knew we had a difficult job to eventually replace Serena Wu,” said Ronald L. J. Lu, USW’s Country Director for Taiwan. “Serena has served this organization and our customers faithfully for more than 38 years.

With her guidance over the next several months, though, we are sure Fiona will be well prepared for another long and successful tenure with U.S. Wheat Associates.”

Ms. Lee comes to USW after serving as a clerk and English secretary at a Taipei law firm and as an executive assistant at Henkel Taiwan, a large industrial

products company. She worked as an investment manager with UniPresident and at the consulting firm KPMG Taipei, she served on corporate finance teams related to merger and acquisition projects as well as in corporate finance risk management. Ms. Lee has a bachelor’s degree in journalism from National ChengChi University, Taipei and a master’s degree in finance from George Washington University, Washington, DC. She is fluent in Mandarin and English.

Taiwan is on average the sixth largest market for U.S. wheat, purchasing more than 15 million metric tons (more than 550 million bushels) since 1998. In each of the past two marketing years, Taiwan’s flour millers purchased about 1.0 million metric tons (MMT), or nearly 37 million bushels, of U.S. wheat.

Significant hard red spring (HRS) imports reflect a need for strong gluten flour for breads, rolls and frozen dough products as well as for blending with hard red winter (HRW) to make traditional Chinese flour foods and noodles.

Soft white (SW) imports, including Western White (a blend of SW and up to 20 percent club), help meet growing demand for cake, cookie and pastry flours.

USW Taipei works directly with end users and importers to help them strengthen commercial links with U.S. export companies through trade serving and technical assistance activities managed by Ron Lu and Ms. Shu-ying Yang, Asian Products/ Nutrition Specialist, and by facilitating customer visits to the United States.

Mapping Wheat Ancestors’ Genomes to Implement Valuable Traits

By Audrey Schmitz If there is one thing Kansas farmers understand, it is unpredictability. Unpredictable crop conditions keep farmers on their toes, but what if those farmers had drought tolerant wheat, or maybe even wheat with resistance to common pests?

Kansas wheat farmers are funding research into this resiliency through their investment in the Kansas Wheat Commission. Eduard Akhunov, associate professor in plant pathology at Kansas State University, has been dedicating his time to creating markers for wheat ancestor species genomes to identify valuable genes like these, which could improve wheat’s resiliency.

Wild relatives of wheat have valuable genes that have resistance to pests, pathogens and stress factors such as temperatures, drought or wind, said Akhunov.

However, access to these useful genes in wheat breeding programs is limited because they have not been identified or marked.

“We are trying to use some useful genes that are found in wild ancestors of wheat by transferring them [through breeding] to wheat and then actually putting them into the field,” he said.

According to Akhunov, they characterize a diverse collection of wild ancestors and relatives of wheat in collaboration with colleagues from the Wheat Genetics Resources Center, RediscoverWH WHEEAT AT| |JUNE JUNE2016 2016 21 21 Rediscover

Department of Agronomy and the KSU Integrated Genomics Facility.

“In total, currently we have characterized 30 species. We have used next-generation sequencing technology to sequence their genomes and gather molecular information for all genes in each of these grass species,” said Akhunov.

For plant research, exploring a plant’s genome is key. The genome sequence is like a map, and genes and other functional pieces of genetic code are the landmarks, roads and towns that bring the big picture together. Akhunov’s team first developed a database of functionally important genome sequences of the wild relatives of wheat using high throughput DNA sequencing technology combined with a process called sequence capture. Sequence capture allows for only the functional portion of the plant's genome to be examined for genetic variation.

According to Akhunov, molecular markers are used to mark variations in genome sequences of DNA. These markers allow researchers to pinpoint exactly where in the genome the exact gene for a specific resistant or high-yielding trait is located, much like symbols you will see on a map differentiating hospitals from tourist attractions.

If researchers find the marker in a genetic sample, they know that the gene is present, long before it would have been expressed when planted in a test plot.

Akhunov said that the project so far has taken about three years and will still need about one year to be fully completed.

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He said his team has completed making markers for almost all the wild relatives and completed generating all the data. The next step in the project is to convert these markers into easyto-use assays that will allow characterizing large number of wheat lines at low cost.

“Starting next year, we will start putting plants developed using some of these sequenced ancestors into the field,” said Akhunov. “With our K-State collaborators we will start phenotyping them for drought, disease resistance, and for all the traits. This kind of data will help us to identify genes that control these traits.”

Editor’s Note: Similar work is underway at many public and private research organizations, such as this one in the United Kingdom: New Gene-Detecting Technology Developed at the John Innes Centre. https://www.jic. ac.uk/news/2016/04/new-genedetecting-technology-developedjohn-innes-centre-brings-newresilient-super-wheat-closer/ Wheat Industry News Wheat Quality Council (WQC) Executive Vice President to Retire. When the popular HRW wheat tour launched from Manhattan, KS for its annual crop-scouting caravan on May 2, organizer Ben Handcock said it would be his last time on the Kansas tour, after recently announcing his retirement.

While the tours are a relatively small part of the work the WQC does, they draw considerable attention and publicity. “It’s been 25 years since we started doing this,” said Handcock. “When we started, we had 28 people and

now it’s close to 100, depending on crop conditions.” Handcock has spent a lifetime following the highs and lows of the annual wheat crop. He grew up on a 15,000-acre wheat farm in South Dakota and continued farming for several years, then joined the South Dakota Wheat Commission before moving to his current role at the WQC “I’m going to miss the tours the most. That’s been a lot of fun,” he said. “You get to meet so many people. It’s just incredible.”

USW extends its appreciation to Ben for his many years of service to the U.S. wheat industry. Read the full article from “Ag Journal” at http://www.agjournalonline. com/article/20160429/ NEWS/160429795/SHARED/st_ refDomain=t.co&st_refQuery=/ uAt8VHbnnJ/?Start=3.

WQC Seeks New Leadership.

The WQC is searching for an individual with a passion for the wheat industry and proven industry leadership experience.

Please email a letter of application and resume by May 31, 2016 to Ben Handcock at bhwqc@aol.com or call 303-558-0101 for more information. The position starts in November 2016. Read the full job description at http://www. wheatqualitycouncil.org/2016/ ExecutiveJobDescription.pdf Wheat Marketing Center Advanced Asian Technology Course. This hands-on course is scheduled for June 6 to 10, 2016.

For more information, please visit http://wmcinc.org.

Register Now for the BuhlerKSU Executive Milling Course.

Kansas State University's IGP Institute, in conjunction with Buhler, Inc., will host its BuhlerKSU Executive Milling course

June 13 to 17, 2016 at the IGP Institute Conference Center in Manhattan, KS. Course topics include raw materials, cleaning systems, milling systems, finished product handling and storage, performance evaluation in a flour mill and factors that influence an investment decision and basics in aspiration. Also included will be hands-on exercises demonstrating the influences of wheat characteristics on yield and mill performance, special systems for mycotoxin reduction and top quality flour production, machine and flow sheet technology, system design and various tempering philosophies. For more information and to register, visit www.iaom.info.

Subscribe to USW Reports.

USW has added a “Subscribe” menu at www.uswheat.org where visitors may subscribe to this newsletter, the weekly Price Report and the weekly Harvest Report (available May to October.)

Follow USW Online. Visit our page at 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, additional photos at www.flickr.com/ photos/uswheat, plus video stories at www.youtube.com/ uswheatassociates.

May 19, 2016 U.S. Wheat Export Price Cycle in Buyers’Favor

By Stephanie Bryant-Erdmann, USW Market Analyst When retailers need to clear out old inventory, consumers

are going to find some bargains.

Right now, there is a similar opportunity for U.S. wheat importers. Looking at historical price cycles, nearby free-on-board (FOB) prices are lowest for hard red winter (HRW), soft red winter (SRW) and soft white (SW) in June before harvest is complete.

Hard red spring (HRS) and durum nearby FOB prices, on average, are lowest in August in the middle of the Northern Plains harvest.

However, USDA Export Sales data show that customers do not always take advantage of these pricing opportunities.

While it is difficult to pick lows, wheat markets tend to be cyclical, even this year with plentiful old crop inventory. USDA expects U.S. wheat supplies will grow to 81.3 million metric tons (MMT).

That is up 6 percent from 2015/16 due to a 30 percent increase that will push beginning stocks to 26.6 MMT. On average over the past 15 years, U.S. wheat export sales in June accounted for 7 percent of total annual sales for all U.S. wheat classes except hard white, yet June typically has the lowest nearby FOB prices for three of the five U.S. wheat classes exported.

On average, June HRW nearby FOB prices were $20 per metric ton (MT) lower than the average August/September price. In spite of this, an average 22 percent of U.S. HRW export sales occur in August and September.

USDA Export Sales data shows an average 43 percent of SRW export sales happen from August through December, even though nearby FOB prices are $26 per MT more than those recorded in June, when 7 percent of SRW

export sales transpire. June is also the best time to buy SW. On average, June nearby FOB prices for SW are $20 per MT lower than the highs recorded in November, December and February.

While SRW, HRW, and, to a lesser extent, SW nearby FOB prices usually increase in August, HRS and northern durum nearby FOB prices generally fall to season lows. For Gulf and Pacific Northwest (PNW) shipments of HRS, average August nearby FOB prices are $37 per MT lower than the yearly high, normally reached in February. While February and August are nearly equal in U.S. HRS export sales volumes at an average 8 percent each, 12 percent of HRS export sales take place in September when average nearby FOB prices are $16 per MT above August values. The Great Lakes has a slightly different cycle due to the late December to late March closure. August nearby FOB prices for HRS from the Lakes are lower than the average annual price, but December marks the lowest nearby FOB price, which is $39 MT lower than June’s season high.

August nearby FOB prices for northern durum from the Great Lakes are an average $68 per MT lower than the peak prices recorded in November, and Durum from the Gulf is an average $51 per MT lower. On average, 55 percent of U.S. durum export sales happen between August and December, but there is a wide range of prices within those five months.

Well-informed customers can take advantage of these cycles and lock in lower prices for Rediscover RediscoverWH WHEEAT AT| |JUNE JUNE2016 2016 23 23

high-quality U.S. wheat in the next few weeks. Your local USW representative is ready to help answer any questions about U.S. wheat pricing or the U.S. wheat marketing system. To track U.S. wheat nearby prices, subscribe to the USW Price Report at http:// www.uswheat.org/subscribe1.

Wheat Farmers to Learn More About Advanced Breeding Methods

By Steve Mercer, USW Vice President of Communications A few weeks ago, the U.S. wheat industry heard about a new wheat cultivar developed by a research company called Calyxt using advanced plant breeding methods.

The company says the new variety is resistant to a foliar disease called powdery mildew, which is occasionally a concern in damp, cool growing conditions.

The technique Calyxt used is one of several new, highly precise seed improvement methods that allow breeders to develop new crop varieties by using a plant’s own genes to create a desired characteristic. An underlying common denominator for these methods is that they often achieve the same result that could be achieved through more traditional plant breeding methods, but in a more accurate and efficient way.

In this situation, USDA’s Animal and Plant Health Inspection Service (APHIS) examined information Calyxt provided and determined that it will not require the new variety to go through a special pre-market safety review.

To learn more about these processes, USW and the National Association of Wheat Growers (NAWG) have invited Calyxt, 24Rediscover RediscoverWH WH E AT| JUNE | JUNE 2016 24 E AT 2016

other organizations and experts to meet with their farmer directors at future board meetings.

It is important to note that the Food and Drug Administration regulates all foods derived from plants and USDA comprehensively regulates seeds.

Most new agricultural plant varieties go to market without a specific pre-market safety review, given the long history of safe use of the underlying varieties used for breeding. A key feature of the plant breeding process is extensive testing and evaluation starting early in the breeding process and continuing until the final product is commercially available. These tests are based on procedures breeders have used for many decades to create new plant varieties that are safe to grow and eat.

These advanced breeding methods can result in plant varieties that do not contain any new DNA from a non-compatible species. Under our industry’s definition*, resulting plants with no new genetic material would not be considered genetically modified organisms (GMO) — a determination shared by many scientists and regulators, including in the governments of Sweden and Argentina.

U.S. wheat farmers and the organizations that represent their interests, including USW and NAWG, strongly support research using advanced breeding methods in safe and responsible ways. Application of new methods have the potential to produce new wheat varieties that address production challenges and help increase yields, improve quality, reduce inputs and carbon

emissions while adapting to our changing climate.

Wheat is the world’s most important food grain and global demand is rapidly increasing with population and economic growth. Yet annual wheat planted area around the world is relatively flat and current yield increases cannot keep up with the growing demand. Farmers everywhere will have to keep growing more and better wheat, with less impact on the environment. Expanded research into wheat innovation through all means will help to ensure a more consistent and sustainable supply of wheat to meet these needs and to bring new varieties more efficiently to market than with conventional breeding.

Any variety of wheat or other crops developed with the new methods is still a long way from approval for commercial use.

Public and private researchers and seed companies will have to determine whether a new variety has sufficient value and commercial acceptance. Part of that effort will include seeking the opinions of end-use customers about the benefits of the new breeding methods.

Currently regulators around the world are considering the optimal approach for new breeding methods and we are keeping abreast of the latest developments.

While we cannot predict farmer and market reactions to ongoing news, our commitment to meeting our customers’ needs and keeping them informed about advanced breeding methods as well as biotechnology remains strong. The years ahead give us all the time to learn more about the

process and results — together. * U.S. Wheat Industry Definition: Biotechnologically Derived (Genetically Modified Organisms). “Genetically modified organisms (commonly referred to as “transgenic”) are organisms derived from somatic cell fusion or direct insertion of a gene construct, typically but not necessarily from a sexuallyincompatible species, using recombinant DNA techniques and any genetic transformation technology (e.g., bacterial vectors, particle bombardment, electroporation).”

APHIS defines genetic engineering as the genetic modification of organisms by recombinant DNA techniques.

National Academies of Sciences, Engineering and Medicine on Genetically Engineered Crops

By Alan Tracy, USW President On May 18, the highly respected National Academies of Sciences, Engineering and Medicine released the results of their lengthy study on genetically engineered crops. The primary conclusion, after extensively reviewing past studies and comparing health and disease rates in Europe, where biotech crops are extremely limited, with North America, where such crop have been widely used for two decades, is that our current genetically engineered crops are safe, posing no apparent risks to human health.

The National Academies are private, nonprofit organizations set up by the U.S. Congress to provide expert scientific advice.

A group of 20 scientists mostly from U.S. universities wrote the report. They also found no negative environmental impacts and made recommendations for a more flexible regulatory approach in the future that would take into account the individual risks any new types of bio-engineered crops might pose. Interestingly, they did not find any yield impacts from the use of these crops thus far.

As a former farmer, I find that last point surprising. Most of the traits introduced into these crops through bioengineering do target reducing insecticide applications or tolerating herbicides, rather than for direct yield impacts. At the least, they have reduced yield variability because the traits help the plant reach its full genetic potential. Coming traits, such as nitrogen use efficiency, will more directly improve yields.

Of course, this study, definitive as it is, will not end the controversy over genetic engineering. Consumer fears remain, labeling issues still wait to be settled, regulations need updating and trade disruptions will still occur as new traits are introduced into the marketplace.

Genetic knowledge and plant breeding methods are advancing at an accelerating pace. Whether we are ready or not, genetically engineered crops are here to stay and will become more widespread each year. Let us hope that our policies, perceptions and market systems can keep pace. This study represents a valuable step in that direction.

USW Ready to Help Customers Adjust to Columbia Snake River System Upgrade U.S. wheat importers are likely aware that the Columbia Snake River System (CSRS) will close for extended maintenance beginning Dec. 12, 2016, and ending March 20, 2017. This will allow the U.S. Army Corps of Engineers to make essential renovations to all the navigation locks on the Columbia River and the Snake River. No barge traffic will be able to pass during this time.

USW welcomes this investment as a critical need that will underpin the United States as the world’s most reliable wheat supplier to our customers for years to come. However, importers may be concerned about supply, cost impact and logistical options because of the closure. We take those concerns seriously and want to help you minimize any possible impact before, during and after the river system closure.

Such extended closures are unusual, but as our overseas customers learned during the last extended closure in 2010/11, the entire PNW system is fully capable of ensuring an uninterrupted supply of wheat to export terminals.

USW believes the industry will consider every logistical option to keep wheat — especially SW wheat — flowing to export elevators. Significant changes will help make this closure more manageable. For example, total export terminal storage capacity on the Columbia River has grown substantially since 2011.

Rediscover E EATAT| JUNE 2016 RediscoverWH WH | JUNE 201625 25

The addition of a brand new terminal, plus the construction of new storage at several others, has increased storage capacity from 564,000 MT to 866,000 MT today. The PNW’s total upcountry grain storage capacity has also grown to 17.3 MMT from 16.4 MMT. Rail shipments made up 54 percent of SW wheat sourced by rail during the outage in 2010/11.

Rail shipping will likely make up most of the barge capacity shortfall during this closure as well. PNW exporters already source an estimated 80 percent of their HRW and 90 percent of their HRS supplies by rail. For SW to move west, rail sourcing will have to increase as much as 25 percent (see chart below). Fortunately, railroads have been investing in capacity, and there are now four shuttle train-loading terminals in eastern Washington, compared to two that were operational in 2010/11. The system is even better prepared to meet demand in 2016/17. ************************************ How U.S. Wheat Normally Moves to PNW Export Terminals Wheat Class SW/Club

Barge Rail Delivery Delivery 75% 25%

HRW

20%

HRS

10%

80% 90%

Source: USDA ************************************

Given advanced notice of the closure, exporters, grain originators, barge operators, railroads and trucking lines are already planning to minimize interruptions and costs.

Alternatives include: • Pre-positioning the maximum number of barges to load SW before the closing (the Bonneville Lock and Dam should re-open after 8 weeks, which would open facilities up river to The Dalles, about 307 km east of Portland); • Moving more rail cars and locomotives into the region to handle increased demand from rail-loading interior elevators; • Coordinating truck and rail delivery from the Willamette Valley, south of Portland.

Buyers can help themselves by preparing for the maintenance period. USW believes there will be sufficient volume of all U.S. wheat classes normally available from the PNW. Buyers can also help lower the risk of interruption and minimize potential costs by taking a longer view of their purchase needs.

USW advises its customers to consider: • Consulting with PNW exporters as early as possible to help give exporters more time to respond to your needs and to manage their logistical challenges.

• Scheduling a meeting soon with the local USW representative to identify buying strategies that fit specific needs and capabilities; • Analyzing inventory needs and logistical capabilities; • Increasing SW purchases now through harvest (export prices

26 Rediscover RediscoverWH WHE AT | JUNE 2016 26 E AT | JUNE 2016

generally are at their lowest in June; see U.S. Wheat Export Price Cycle in Buyers’ Favor above) • Increasing SW wheat and/or flour storage; • Deferring as an offset some HRW and HRS shipments from the immediate post-harvest period into the maintenance period.

As an objective voice for U.S. wheat producers, USW greatly values the trust customers have in our products and service. Our focus remains fixed on helping buyers, millers and wheat food processors learn how to grow their enterprises using our wheat.

Working together, we believe we can help ease any concerns related to the closure and even strengthen our partnership. We look forward to assisting you now, as always.

About the Columbia Snake River System. The CSRS is a vital transportation link for wheat producers in the states of Idaho, Montana, Oregon and Washington. The economies of these four states rely heavily on the commerce that flows up and down this system. The CSRS is the #1 U.S. wheat export gateway.

The deep draft channel supports 46 million tons of cargo each year, valued at $20 billion. The inland system supports more than 9 million tons of cargo.

For more information, visit the Pacific Northwest Waterways Association online at http://www. pnwa.net/.

USW Harvest Report Provides Valuable and Timely Information for Overseas Customers

By Amanda J. Spoo, USW Communications Specialist When a farmer pulls up to the local gas station for his second cup of morning coffee and sees his neighboring farmer, chances are they are going to chat about how their crops are doing. It is a regular topic on farm radio stations, at county elevators and between grain traders. Following the wheat harvest is a beloved tradition in the United States, but our friends and customers overseas are watching closely, too.

Between May and October, USW publishes a Harvest Report every Friday afternoon with updates and comments on harvest progress, crop conditions and current crop quality for HRW, SRW, HRS, SW and durum wheat.

USW’s 15 overseas offices share the report with their market contacts and use it as a key resource for answering inquiries and meeting with customers.

USW also publishes the report in Spanish in “Trigonoticias,” distributed to Latin American wheat buyers and millers.

“The weekly Harvest Report is a key component of USW’s international technical and marketing programs,” said Mitch Skalicky, USW regional vice president for Mexico, Central America and the Caribbean. “It is a consistent and timely tool that buyers use to analyze U.S. wheat conditions and it leads them to other helpful resources on the USW website.”

“It is a resource that helps customers understand how the crop situation may be having an impact on basis values and premiums, or discounts that might affect the FOB values,” said Matt Weimar, USW regional vice president for South Asia.

A preliminary 2016/17 Harvest Report on May 13 indicated that the 2016 HRW wheat harvest has started in parts of Texas, but precipitation has already delayed the harvest in other areas for an estimated additional week. Rain also hampered HRW wheat seeding last fall, and most producers had to plant over multiple weeks — if they were able to plant at all. The early-planted wheat is currently mature and ready to harvest, but the wheat planted later is still 2 to 3 weeks from maturity.

Virtually all HRW production areas experienced above average temperatures during the winter, which pushed the crop about four weeks ahead of normal plant development in March. Moderate temperatures and rain in April and May, however, slowed crop development to near normal.

According to USDA’s latest National Agricultural Statistics Service (NASS) report on May 16, all winter wheat (HRW, SRW and SW) is in better condition than the 2015/16 crop on this date last year. NASS rated 62 percent of this year’s winter wheat crop as good or excellent compared to 45 percent last year. It also rated only 8 percent of this crop as poor or very poor, compared to 19 percent on this date last year.

Looking ahead, NASS reported that by May 15, 60 percent of the

2016/17 U.S. spring wheat crop was up and growing. This is in step with last year’s progress by this date and ahead of the 5-year average by nearly 30 percent.

Planting is 89 percent complete.

NASS expects to release the first spring wheat condition report on May 23.

“These reports keep our USW overseas staff well up-to-date on the progress of the U.S. wheat crop, its quality characteristics and how it relates to the previous year,” said Alvaro de la Fuente, USW regional vice president in South America. “We rely on that information in our trade servicing meetings with buyers and millers.”

You can follow the progress of the 2016/17 crop through the USW Harvest Report every Friday afternoon at http://www.uswheat. org/harvest. To get insight directly from the custom harvest crews as the combines roll north, visit “High Plains Journal” and its “All Aboard Wheat Harvest” blog at http://allaboardharvest.com/.

Wheat Industry News Congratulations to Ben Conner and His Family on their newest addition. A baby girl, Eva Cecilia, was born Monday, May 9, 2016. Ben is the Deputy Director of Policy in the USW Headquarters Office in Arlington, VA. ITC Report Shows TPP Would Help U.S. Farmers and Ranchers. This week, the International Trade Commission (ITC) released its highly anticipated report on the economic impacts expected to accrue from the adoption of the Trans-Pacific Partnership (TPP).

The U.S. Congress required the Rediscover RediscoverWH WHEEAT AT| |JUNE JUNE2016 2016 27 27

report, which is widely seen as an official “scorecard” of the trade agreement. For the entire U.S. agriculture and food sector, the report forecasts a $7.2 billion increase in exports or a growth of about 2.6% by 2032 compared to the same timeframe without TPP. Read the report online at https:// www.usitc.gov/publications/332/ pub4607.pdf.

Seeking Stakeholder Input on the National Wheat Action Plan. The National Association of Wheat Growers (NAWG) and the National Wheat Foundation (NWF) are developing a National Wheat Action Plan to serve as the catalyst to increase public and private wheat research and to improve wheat productivity and farmer profitability. The organizations believe increased engagement by farmers is critical to moving forward on a new path to revitalizing the wheat industry. They are seeking input and feedback from stakeholders through an online survey at http:// research.aimpointsurveys.com/ s3/NationalWheat. For more information, FAQs and a list of industry partners, please visit http://wheatfoundation.org/%20 national-wheat-action-plan/.

U.S. Sustainability Alliance Updates Website. USW is a partner with USSA, a group of U.S. farm, fishery and forestry producers that have come together to explore and share their values about sustainability and conservation. The updated website features additional resources, including new reports, video and infographics. To view the site and learn more, visit http://thesustainabilityalliance. us/.

28Rediscover RediscoverWH WH E AT| JUNE | JUNE 2016 28 E AT 2016

WQC Seeks New Leadership.

The Wheat Quality Council (WQC) is searching for an individual with a passion for the wheat industry and proven industry leadership experience.

Please email a letter of application and resume by May 31, 2016 to Ben Handcock at bhwqc@aol.com or call 303-558-0101 for more information. The position starts in November 2016. Read the full job description at http://www. wheatqualitycouncil.org/2016/ ExecutiveJobDescription.pdf.

IGP Institute Risk Management Short Course.

This course, scheduled for Aug. 1 to 5, 2016, at the IGP Institute Conference Center in Manhattan, KS, focuses on principles of risk management and commodity price control. The course includes basic and advanced sections on why, when and how to trade commodity futures and options.

For more information and registration, visit www.grains.kstate.edu/igp/.

Subscribe to USW Reports.

USW has added a “Subscribe” menu at www.uswheat.org where visitors may subscribe to this newsletter, the weekly Price Report and the weekly Harvest Report (available May to October.)

Subscribe at http://www.uswheat. org/subscribe1.

Follow USW Online. Visit our page at 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, additional photos at www.flickr.com/

photos/uswheat, plus video stories at www.youtube.com/ uswheatassociates.

Brazilian Professionals Learn U.S. Wheat Classification Process

Participants enjoy ride on the Mississippi River while viewing several export facilities during the field trip in Westwego, Louisiana.

Kansas State University’s IGP Institute educates Brazilian Cochran Fellows on U.S. wheat Classification and Standards.

By Eryn Carter, IGP Communications Intern

T

he IGP Institute held true to its Kansas reputation in wheat knowledge, growth and management by hosting the USDA’s Cochran Program on U.S. Wheat Classification and Standards for Brazil.

Seven professionals traveled to the IGP Institute Conference Center in Manhattan, Kansas, May 1-13, 2016. IGP curriculum managers Carlos Campabadal and Jay O’Neil taught segments on production structure, grain trading and markets, storage, food safety with wheat processing and flour mill management. The group also traveled to New Orleans, Louisiana, for a Cargill Westwego export facility tour and Thionville Laboratory to view chemical analysis tests on wheat. They also visited a Cargill Grain Elevator in Salina, Kansas.

Course participant Ricardo Alcantara says he enjoyed getting to know the various people who

came for the course. He also learned about the supply chain.

“You hear a lot about it, but you have to come to see it to understand a little bit more about the U.S. wheat classification and standards,” Alcantara says.

The IGP Institute worked closely with the USDA to meet their qualifications for the course to maximizeparticipants learning.

flour milling, grain marketing and risk management, and feed manufacturing and grain quality management. For more information about upcoming courses visit the IGP website at www.grains.k-state.edu/igp.

“I think this course covered everything that the USDA requested, even above what we requested,” says Priscila Ming, agricultural specialist for USDA in Brazil. “We requested more basic information about trading, quality and understanding the milling industry, but after this course we have much more information and knowledge about everything that goes on here in the U.S.” This is just one example of the partnership trainings offered by the IGP Institute. IGP also offers trainingin grain processing and

Course participants visit Cargill elevator in Salina, Kansas.

Rediscover WHE AT | JUNE 2016 29

Hello Kansas Wheat. I hope you had a good Memorial Day.

Maltby Market Analysis

by Dan Maltby

USA HRW wheat harvest would love to gain momentum, although the weather may not cooperate…

Certainly some of the Texas Blacklands’ wheat is in trouble from too much moisture, and as much of The Wheat Belt is ripe, she’s nervous. A little “hot and dry” would be appreciated right now.

The forecast calls for rain in the Northern Plains, favoring spring wheat development, and in general, most of the world’s coming wheat crop is in pretty good shape. I read some believe the Russian crop might be a record. And that statement alone tempers any better USA wheat price outlooks.

Right or wrong, much of the wheat importing world believes Russian wheat to be a fairly acceptable substitute for USA HRW, especially in this age of wide-spread world-wide usage of dough conditioners and improvers, and if that’s the case, then often the importer’s choice boils down to one thing: price.

The USA HRW producer will face another difficult price competitive situation this season.

The best thing he has going for him is something difficult for me to explain: USA corn has rallied 60c/bu since the beginning of April.

Charts and discussions follow, with the goal of giving you useful information to help you with your business. My disclaimer remains the same: these are my sometimes rapidly changing opinions; the markets are quite treacherous; and past performance is no guarantee…dm Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 1

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Rediscover WHE AT | JUNE 2016

This is a daily July corn chart. Friday’s close, almost $4.13 is 62c higher than the March 31 close.

Most of this has been due to short-covering from a big short Fund position, and a largely uncovered (hand-to-mouth) end-user, reluctant to extend coverage (buy) aggressively is the face of a 14.4-billionbushel production estimate, and a corresponding 2.2-billion-bushel carryout next August. And therein lies the rub…that’s all coming, next year, but it’s not here today. In fact, what we have seen “today” is USA weekly corn export inspections were over a million tonnes again, with the season’s total commitments over 41 million tonnes, compared to the crop year estimate of 43.8 mmt, making some traders wonder if this corn export forecast will be raised. And all of that is fairly amazing as China has openly made a big deal of selling out their massive corn stocks. Friday morning, they reported selling 800,000 tonnes at about half of their local price. Admittedly, their local price is heavily subsidized, and much higher than world prices…

All of that leads to various articles regularly pointing out that China holds almost 50% of the world’s corn carryout stocks, which leads to the question: “what if those stocks are overstated?”.

I’m not sure we can answer that question.

We do know Argentina’s corn production was cut by flooding, and Brazil’s potential has been reduced because of dry weather.

The forecast map on page 1 might even suggest the USA Corn Belt is not enjoying perfect weather either. “sell the rumor, buy the fact” …maybe, but clearly, USA corn prices have rallied 60c/bushel.

Is it over?

Well… this table suggests new highs will bring in new buying, and the way I read this table is they have plenty of buying power. Every time it looks like the week will closer higher than the previous week, funds will add to their position. And we’ve seen that in soybeans too. Soybeans have rallied $1.60 since their 3 blue weeks in a row in mid-to-late March: Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 2

Rediscover WHE AT | JUNE 2016 31

CLOSE

KWN16

KWZ16

KWN17

CN16

CZ16

CN17

WN16

MWN16

MWZ16

SN16

05/27

$4.60

$4.99

$5.33

$4.13

$4.14

$4.24

$4.82

$5.28

$5.49

$10.87

05/20

$4.49

$4.89

$5.16

$3.95

$3.97

$4.13

$4.68

$5.28

$5.47

$10.62

05/13

$4.56

$4.97

$5.30

$3.91

$3.98

$4.14

$4.75

$5.36

$5.54

$10.65

05/06

$4.54

$4.95

$5.27

$3.78

$3.85

$4.05

$4.64

$5.35

$5.54

$10.35

04/29

$4.79

$5.18

$5.47

$3.92

$3.95

$4.10

$4.89

$5.47

$5.66

$10.30

04/22

$4.74

$5.10

$5.37

$3.76

$3.81

$3.97

$4.67

$5.33

$5.53

$9.96

04/15

$4.68

$5.04

$5.35

$3.82

$3.88

$4.07

$4.60

$5.28

$5.48

$9.64

04/08

$4.71

$5.05

$5.34

$3.65

$3.75

$3.95

$4.60

$5.30

$5.52

$9.25

04/01

$4.89

$5.23

$5.49

$3.58

$3.70

$3.89

$4.76

$5.38

$5.59

$9.26

03/25

$4.83

$5.16

$5.40

$3.75

$3.87

$4.03

$4.63

$5.23

$5.46

$9.18

03/18

$4.80

$5.14

$5.40

$3.72

$3.86

$4.02

$4.63

$5.18

$5.42

$9.04

03/11

$4.93

$5.25

$5.51

$3.70

$3.83

$3.98

$4.76

$5.24

$5.47

$9.02

03/04

$4.78

$5.11

$5.38

$3.64

$3.78

$3.94

$4.61

$5.05

$5.31

$8.85

Old-crop corn has snugged up to even money with the new-crop corn, and in that regard, as bad as it sounds, new-crop wheat will be the limiting factor on this spread, which has entered into an area of previous stiff resistance‌

Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 3

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Similarly, old-crop beans at a 30c premium to new-crop beans appear to be a point where the market is taking a breather…

YET…I’m not sure we can say the soybean market is “over”.

These are Nov 16 beans (new-crop), shown in a weekly, line—chart format, to help match up with the weekly table:

That chart says…the longer beans stay above $10.50, the greater the chances they go take a look at $11.50. $11.50 beans…would surely help corn make a run at $4.50! BUT can that help wheat?

The simple answer is…yes. When? That’s the harder question. Go back to the table on page 3. UNTIL there are 3 weeks of blue numbers on wheat, the funds will not go long. And unless the funds go long, wheat will not rally. THAT is the state of wheat.

Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 4

Rediscover WHE AT | JUNE 2016 33

These posted cash bids are higher this week, but remain of course well under the cost of production, nor am I convinced they are the harvest lows either. (That will depend on corn.)

Date 05/27 05/20 05/13 05/06 04/29 Date 05/27 05/20 05/13 05/06 04/29 BASIS 05/27 05/20 05/13 05/06 04/29 Date 05/27 05/20 05/13 05/06 04/29

Dodge $3.80 $3.69 $3.76 $3.74 $3.90 Concordia $3.95 $3.74 $3.81 $3.79 $4.00 Dodge -80 -80 -80 -80 -89 Concordia -65 -75 -75 -75 -78

Colby $3.90 $3.79 $3.86 $3.84 $4.09 Salina $4.10-$4.10 $3.89-$3.94 $3.96-$3.99 $3.94-$3.97 $4.15-$4.20 Colby -70 -70 -70 -70 -70 Salina -50, -50 -60, -55 -60, -57 -60, -57 -63, -58

Goodland $3.90 $3.79 $3.86 $3.84 $3.95 Hutchinson $3.81-$4.10 $3.70-$3.99 $3.77-$4.06 $3.75-$4.04 $3.96-$4.25 Goodland -70 -70 -70 -70 -84 Hutchinson -79, -50 -79, -50 -79, -50 -79, -50 -82, -53

Protection $3.85 $3.74 $3.81 $3.79 $3.95 Wichita $3.93-$4.10 $3.82-$4.06 $3.89-$4.13 $3.87-$4.11 $4.08-$4.30 Protection -75 -75 -75 -75 -84 Wichita -67, -43 -67, -43 -67, -43 -67, -43 -70, -48

Scott City $3.78 $3.67 $3.74 $3.72 $3.95 Ark City $3.90 $3.79 $3.83 $3.81 $4.00 Scott City -82 -82 -82 -82 -84 Ark City -70 -70 -73 -73 -78

Sublette $3.80-$3.82 $3.69-$3.71 $3.76-$3.76 $3.74-$3.74 $3.99-$3.99

Sublette -80, -78 -80, -78 -80, -80 -80, -80 -80, -80

Notice the better basis bids at the North Central terminals. Besides the fact that these basis bids are still 30 to 40c LESS than last year, as I’ve written several times, the CARRYING CHARGES are huge. 73c from July16 to July17 futures tells those big white elevators to stay as full as possible, for as long as possible.

And Dodge City corn is bid at a 8c premium to wheat on a bushel basis, which would be more on a ton basis, which of course points out that for many of you, the feed lot will be a better bid this summer for spot wheat.

Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 5

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Can wheat rally? I didn’t really expect corn to rally, although the soybean rally isn’t totally surprising, so that means, yes, wheat could rally. I don’t think it’s going to, but…

Anyways…this is December KC wheat. I’m showing the Dec instead of the July. When Dec wheat closes above $5.25 on a Friday, and it’s above the purple line (200 day moving average), then, finally, it will be high enough to get bullish wheat.

In the meantime, sell what you have to. Store what you can (although to do it right, you’d store it, and lay off some July 17 futures above $5.60. With nearby futures at $4.60, $5.60 seems like a lot, but because of the carrying charges, that would “only” be another 30c higher.) This is the long term weekly KC wheat chart.

So far, we haven’t had to jump off of the $4.50 ledge. The corn rally has helped, and USA wheat at $180 has turned out to be “value”. This fall’s winter wheat planting season will be more than “interesting”. I don’t see wheat acreage dropping another 7%, but I don’t see how growing wheat at a loss works either.

Kansas Wheat market update #223 danmaltby.riskmgmt@gmail.com 05/27/16 pg. 6

Maltby Market Analysis is provided weekly to members of the Kansas Association of Wheat Growers via email.

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Rediscover WHE AT | JUNE 2016 35

Upcoming Events June 2016 • Wheat Foods Council Summer Meeting, June 22, 2016, Westin Downtown Denver Monday, June 20, 2016 - Executive Committee meeting Tuesday, June 21 - Educational Tours Wednesday, June 22 - WFC board meeting.

8am – 3pm

JULY 2016 • USW 2016 Summer Board Meeting, July 16 - July 21, Fargo, North Dakota AUGUST 2016 • Annual meeting, Aug 9 • Wheat U, Aug 10