Rediscover Wheat - March 2016

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

MARCH 2016

INSIDE THIS ISSUE

Kansas Wheat celebrates 3 years of innovation IGP milling courses to be held in June Is a bread revolution following the gluten free fad?

Rediscover WHE AT | MARCH 2016 1

In This Issue :

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

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4 Kansas Wheat celebrates 3 years of innovation 6 Recipe: Bananna Cupcakes

7 Wheat Foods Council

8 March is National Bake and Take Month

9 Recipe: Cranberry Griddle Cakes 10 Is a bread revolution following the gluten free fad?

12 IGP Stakeholder's news brief 14 Executive Milling Course Coming in June 15 Milling Practice Courses to be held in June 16 News from the National Association of Wheat Growers 20 News from U.S. Wheat Associates 29 Maltby Market Analysis 36 Upcoming Events

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

KAWG MEMBERSHIP $100 per year

EDITOR

Marsha Boswell • mboswell@kswheat.com

ASSISTANT EDITOR/DESIGNER

Audrey Schmitz • commintern@kswheat.com

CONTRIBUTORS

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

CEO

Justin Gilpin • jgilpin@kswheat.com

KAWG OFFICERS 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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The Search for New Wheat Streak Mosaic Virus Resistance

The Search for New Wheat Streak Mosaic Virus Resistance

by Julia Debes

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esearchers are looking for wheat genes that will provide additional resistance to wheat streak mosaic virus, thanks to funding from the Kansas Wheat Alliance. Yield loss due to wheat streak mosaic virus equaled more than 4.25 million bushels in the 2013 Kansas wheat crop alone, adding up to a $32.6 million economic impact.

Wheat streak mosaic virus flies on the Kansas wind from one wheat field to another – courtesy of its host, the wheat curl mite.

As the mites feed on wheat, wild grasses like foxtail, and other plants, they spread the virus from one field to another.

The Kansas wheat crop does not have sufficient protection to avoid yield loss due to the virus’s infection. That may soon change as Dr. Guorong Zhang, Kansas State University wheat breeder, is leading this research with his team at the K-State Agricultural Research Center in Hays.

K-State agronomist Jeanne FalkJones compares the wheat streak mosaic virus to the flu virus in humans. “It is the toughest on the young because they have a harder time fighting off the virus,” she said. “In addition, there is no medicine or treatment to cure the virus. Wheat that is stressed will be more susceptible to severe symptoms. This includes stress from drought, lack of nutrients, or poor growing conditions. ”

Three current genes are known to have wheat streak mosaic virus resistance, referred to by number: Wsm1, Wsm2 and Wsm3. Of these three genes, only one is found in conventional wheat – Wsm2.

The other two genes come from a wild wheat relative, Thinopyrum intermedium.

This Wsm2 gene is important because wheat breeders start by using genes from wheat before exploring the complicated introductions of genes from other wheat relatives.

Four existing wheat varieties include the Wsm2 gene: RonL, Snowmass, Oakley CL and Clara CL. But, as Zhang pointed out, all these resistant varieties have the same resistance source.

As a result, if the virus evolves under selection pressure and breaks down this resistance, then all the currently-resistant varieties would become susceptible. Therefore, it is necessary to explore new resistant sources and discover new resistance genes, which researchers can then introduce into new varieties or stack with Wsm2 to make the resistance more durable.

To find new resistance genes for K-State wheat varieties, Zhang and his team are testing 20 new resistant plant introductions (13 from winter-type wheats and seven from spring-type wheats). These have been selected from more than 3,000 germplasm lines, to try and identify if any of these varieties

has a gene for wheat streak mosaic resistance other than Wsm2.

Among the 13 winter-type wheat lines, Zhang and his team have found two lines that may contain a gene different from Wsm2.

They have initiated the process to introduce these two resistance sources into their elite breeding lines, which should introduce another barrier for the wheat streak mosaic virus.

Zhang is continuing the search for other unique genes with virus resistance in the seven springtype resistant sources. His initial testing shows great promise for one line that might have a different resistance gene than Wsm2. Early indications are that the resistance gene in this line should be located in a different genomic region than Wsm2, which would provide a more durable resistance to wheat streak mosaic virus when stacked with Wsm2. Zhang’s team is continuing to work on this line to identify its location within the wheat genome and its linked molecular markers.

While the search continues, Zhang’s team is zeroing in on this new resistance gene. In the near future, this new gene will be introduced into elite breeding lines and be stacked with Wsm2 or other resistance genes.

As a result of this Kansas Wheat Alliance-funded research, Kansas farmers will have more protection of wheat crop yield potential thanks to more durable resistance to wheat streak mosaic virus.

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Kansas Wheat celebrates 3 years of innovation

by Jordan Hildebrand

“What’s up with those greenhouses in the back?”

Harries, Vice President of Research and Operations at Kansas Wheat.

That is a question which pops up every now and then between Kansas Wheat staffers and motorists who are just passing by the Kansas Wheat Innovation Center (KWIC). What these passersby don’t know is the greenhouses are an important part of the Center. Not only do they provide a welcoming glow to those driving east on Kimball Avenue in the early morning hours or late at night, but they also house the future of Kansas agriculture.

Kansas Wheat helps to fund around 20 wheat research projects every year. Topics of research range from preserving and exploring wheat’s genetic diversity with the Wheat Genetics and Genomics Resource Center (WGRC) to developing a celiacsafe variety of wheat.

While most travelers and tailgaters may only see the outward facing 10,000 square feet of office space, what is commonly missed is the 15,000 square feet of laboratory space and 10,000 square feet of greenhouse space.

A common exclamation of visitors entering the building is, “It’s so much larger on the inside!”

“Farmers investing in the future” was a common theme during the planning and execution of the project. Construction of the KWIC marked the largest single research investment that Kansas wheat farmers have ever made, and that research is still at the heart of the facility. This venture for the future of wheat came at a time when private research in wheat was limited.

“One goal of the innovation center was to raise that flag that said, ‘Ok. We’re ready. We’re willing to put our money into this research and you should, too,’” said Aaron 4

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“The Kansas Wheat Innovation Center provides the opportunity to expand our partnerships with both private and public researchers,” said Justin Gilpin, CEO of Kansas Wheat. “That is exciting for Kansas farmers.”

Recent successes of research funded by the Kansas Wheat Commission include progress towards stopping four of the hardest hitting wheat viruses wheat streak mosaic virus, triticum mosaic virus, soilborne mosaic virus and barley yellow dwarf virus – literally in their reproductive tracks. The KWIC also provided the opportunity to grow the WGRC. The organization devoted to preserving and researching genetic diversity from wild wheat relatives from around the globe has been able to expand since it found its new home at the KWIC. The program is now the heart of a National Science Foundation Industry/University Cooperative Research Center. According to Harries, this means multiple “big time players” are able to invest in research while partnering with public researchers at Kansas

State University, Colorado State University and more, in order to accelerate wheat research.

The base mission of the KWIC is to provide wheat farmers with the tools they need to be the best at raising their wheat crop. Having a dedicated space for this research helps put wheat improvement on a fast-track. Prior to the KWIC, there was limited capacity for wheat breeding in Kansas, but the Center has brought more facilities, more equipment and more collaborators to the table, and the end result is a strengthened Kansas wheat industry.

“The first three years have been getting this place up and running,” said Harries. “The next five to ten years are about the results that will come from those efforts.”

While research is a topic that is on everyone’s mind at KWIC, it’s not the only benefit from the facility. During the last three years, thousands of visitors have toured the Center to learn about Kansas’ most endearing crop. These tourists range from local Girl Scout troops to international corporate executives and from Arkansas 4-Hers to government officials.

“The innovation center has been a huge educational opportunity for the public on the complexity of wheat research and the history of wheat,” said Gilpin. “We’ve had thousands of visitors come through here and learn about what Kansas farmers do, as well as what they’ve invested in.”

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Banana Cupcakes Ingredients ¾ cup granulated sugar ¼ cup vegetable shortening ¼ cup unsweetened applesauce 2 beaten eggs 1 teaspoon vanilla extract 1 ½ cups all-purpose flour ½ teaspoon salt 1 teaspoon baking powder ½ teaspoon baking soda 1 tablespoon water 1 cup ripe, mashed bananas

Directions 1. Preheat oven to 375°F. Coat muffin cups with nonstick cooking spray or line with paper baking cups.

2. In a large mixing bowl, beat sugar, shortening, applesauce, eggs and vanilla until blended.

3. Add flour, salt, baking powder, soda, water, and ripe bananas; beat on medium speed until blended.

4. Fill muffin cups ⅔ full and bake 20 to 25 minutes, or until golden brown.

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Nutrition Information

5. Remove from pans and cool.

Makes 14 cupcakes.

Variations: For bananas, substitute 2 cups shredded zucchini and add 1 teaspoon cinnamon.

Nutrition information per serving (one cupcake without icing): 151 cal, 5 g fat, 30 mg chol, 154 mg sodium, 25 g carbo, 1 g fiber, 2 g pro, 27 mcg folate.

Add chopped nuts if desired.

For icing, combine 1 cup confectioners’ sugar, 1 - 1 ½ tablespoons milk and 1 teaspoon margarine.

Tip: Over-ripe bananas can be peeled and frozen in a plastic container or freezer bag. Remove from freezer and thaw before using in recipe.

Wheat Foods Council Revs Up Promotion Efforts with Adoption of New Strategic P lan T

he Wheat Foods Council (WFC) adopted a new strategic plan at its Annual Meeting on January 14, 2016 that identifies new target audiences and establishes messaging priorities developed through an extensive dialog with the wheat industry including producers, millers and bakers.

As we developed this strategic plan our guidelines were: - Focus on ideas appropriate for the WFC to undertake - Seek the opportunities with the greatest ROI and upside potential that WFC could advance - Identify the industry’s biggest problems for which WFC could provide solutions

Mission Statement: The WFC is an industrywide partnership dedicated to increasing domestic wheat foods consumption through nutrition information, research, education and promotional programs.

Vision: The WFC seeks to deliver a program of wheat foods promotion while correcting misinformation where appropriate—play offense as much as possible; play defense when necessary.

WFC follows an influencer strategy targeting our programs to influencers who will multiply our messages to the audiences they communicate with. This strategy is highly appropriate due to the WFC’s limited budget and the effectiveness of message multiplication by selecting the right influencer targets and providing them with compelling information and programs.

WFC Strategies

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ontinue educating Registered Dietitians about wheat and wheat foods as part of our key influencer target mix. WFC has developed a strong relationship with RDs over several decades and will utilize this relationship to provide RDs with the most current nutrition updates and information from our new strategies and messaging priorities.

Improve the image of enriched wheat products by further educating influencers and consumers about the significant health contributions of enriched wheat products, demystifying the milling process, taking a closer look at the science around enriched and building off past industry efforts to support enriched products by developing new initiatives.

Educate personal trainers about wheat foods as a new influencer category of particular interest due to their strong relationship with consumers as a go-to source for health and nutrition information.

Improve the image of “modern wheat” and wheat breeding by proactively addressing the misinformation surrounding this topic with education and messaging to influencer groups using science and facts.

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iving a home-baked gift is a great way to show someone you care. This March, the Kansas Wheat Commission is teaming up with the Home Baking Association to promote Bake and Take Month. For more than 40 years, Bake and Take Month has been an opportunity to celebrate relationships with friends and family by baking and sharing treats.

“The purpose of Bake and Take Month is to encourage participants to bake a product made from wheat and take it to a neighbor, friend or relative,” said Cindy Falk, nutrition educator of Kansas Wheat and coordinator of Bake and Take Month.

“Bake and Take Month has a long tradition in Kansas as a promotion designed to educate consumers in the importance of home baking and wheat foods consumption,” Falk said. “The personal visit to members of the community is as rewarding and important as the baked goods you take them.”

Falk recommends trying Brown and Serve Rolls to share with friends and family for Bake and Take Month. Or, if you’re RediscoverWH WH E AT| MARCH | MARCH 2016 88Rediscover E AT 2016

baking for a large group like a church potluck or a school fundraiser, be sure to check out the Kansas Wheat Test Kitchen’s latest creation, Hawaiian Sweet Pan Rolls. These rolls will take the eater to paradise as they enjoy the tropical treat. For these recipes and more ideas for Bake and Take Month, visit nationalfestivalofbreads.com or like the National Festival of Breads Facebook Page.

While a month long celebration might not be the right fit for some, Bake and Take Day, celebrated annually on the fourth Saturday in March, is a great opportunity for families and service groups to get together in the kitchen and around the oven. Prepare gifts of fresh-baked wheat foods for relatives, friends, co-workers, neighbors and just about anyone who likes to eat. The visit when you deliver the baked goods is one of the most enjoyable aspects!

Mark the date on your calendar and plan to participate. If you do bake it off, let Kansas Wheat and the Home Baking Association see your creations on social media.

If you’d like to share the joy of baking, but don’t feel like you have any baking talent, never fear!

You can find great video tutorials on the Kansas Wheat Youtube channel and Facebook page. These videos focus on the basics of baking, and even some step-bystep instructions on recipes like Smokehouse Cranberry Cheese Bread, Rosemary Cardamom Twisters, Cupid’s Crunch and more. The Home Baking Association also has some great resources for beginners, as well as seasoned bakers, at their website www.homebaking.org.

Bake and Take Day began in 1970 as a community service project of the Kansas Wheathearts in Sumner County.

The Kansas Wheathearts, an auxiliary organization of the Kansas Association of Wheat Growers, set out to share baked goods with family members, friends, neighbors, and those in need, generating goodwill in the community. The idea of a community member sharing a favorite recipe with someone special became so successful that the Kansas Wheathearts created a national Bake and Take Day celebration in 1973. Although the Kansas Wheathearts disbanded in 2001, the tradition continues to be supported by KWC and KAWG.

Cranberry Griddle Cakes As stated in the 1977 pancake-shaped booklet,“Good any time...of the year!”

Ingredients 1 ½ cups all-purpose flour 2 tablespoons granulated sugar 1 tablespoon baking powder ¾ teaspoon salt 1 beaten egg 1 cup low-fat milk 3 tablespoons vegetable oil ¾ cup diced, jellied cranberry sauce

Directions 1. In medium bowl, sift together flour, sugar, baking powder, and salt. In second bowl, combine egg, milk, and oil. Add liquid ingredients all at once to flour mixture and stir until mixture is smooth.

Gently stir in cranberry sauce.

2. Pour about 1 tablespoonful batter on hot greased griddle.

Cook until golden brown on both sides, turning when uncooked side has a bubbled surface. Turn only once. Serve hot.

Nutrition Information

Makes about 2 dozen griddle cakes nutrition information per serving (one griddle cake): 68 cal, 2 g fat, 9 mg chol, 112 mg sodium, 11 g carbo, 0 g fiber, 1 g pro, 13 mcg folate.

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Is a bread revolution following the gluten free fad?

By Jordan Hildebrand “I love bread,” are the words heard 'round the wheat industry.

Oprah shared her passion for all things bread in January with enthusiastic and passionate commercials and tweets for Weight Watchers (WW), a points based weight loss system. This statement is amongst the boldest things the “Queen of Media” has said, not because bread is intrinsically taboo, but because other trendsetters think it is.

After years of the gluten free trend, is Oprah enough convince the public to turn back to bread?

Oprah’s weight loss journey with a side of bread might be the sign of a turning tide that the wheat industry needed. Just a few weeks ago, the new season of The Bachelor, the show that helps beautiful people find love, premiered. The contestants included a woman who promoted herself as a “nutritional therapist.”

To grab the attention of the man who’s heart she longed to steal, the woman requested to “break bread” with him. Instead of buttering his biscuits, the woman promptly started bashing

baguettes on the sidewalk while declaring that “gluten is Satan.”

This pickup line probably didn’t impress you much, and the same could be said for the bachelor who sent her packing at the end of the show.

That spectacle showcases the hostility felt for gluten in the media during the last five years, but the tide seems to be turning.

Articles from institutions like Time, Consumer Reports, BBC, New York Post and The New Yorker and from popular digital media like Huffington Post, The Daily Beast and Slate are bringing science into the gluten free conversation. These articles paired with Oprah’s emotional narrative and an episode of South Park’s satire might just be indicators that the diet fad has officially “jumped the shark.”

All signs are pointing toward a bread revolution. In addition to the influx of diet-skeptical news articles, according to Google Trends, searches are down across the board for terms like “gluten free,” “gluten” and “gluten-free diet.” During Winter Storm Jonas, photos of empty bread shelves emerged from across the East Coast showing that there may be no such thing as gluten-free when there’s even the hint that there might not be any bread.

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Oprah’s Instagram feed seems to show many bread appearances in the last few months, but she isn’t an impartial voice of reason in the debate. Last fall, the media mogul purchased 10% of Weight Watchers stock and landed herself a position on the board of directors. While the love of bread is probably very real for Oprah, using it as a cornerstone in a new marketing plan for the company also makes sense monetarily.

According to MarketWatch.com, Oprah tweeted a video declaring that she has lost 26 pounds while not denying herself bread, and within the hour WW stock had risen more than 16%. This increased Oprah’s portfolio worth by more than $12 million in that hour alone. While the stocks have since fallen a smidge since the late January campaign, WWs’ stock worth is still nearly doubled from what it was in the pre-Oprah days.

This only makes sense, because people love a company that lets you have your bread and eat it, too.

Three Cheers for Oprah – A Celebrity Affirming Science Dr. Julie Miller Jones, LN, CNS Oprah’s statement that bread every day was part of her weight loss diet jolted consumers into questioning current popular press claims that bread and grains are making us fat. Yah for Oprah!

I am delighted when a celebrity affirms what science has been saying since the beginning of nutrition science and advice such as USDA MyPlate and the 2015 Dietary Guidelines.1 ,2

Oprah’s diet success and the success of millions who use Weight WatchersTM challenge the prevailing view that when dieters restrict, or eliminate, bread they will become suddenly slim. Her statement also raises questions about fad diets and easy fixes, and those who promote them. Consumers should consider that if any fad diet effectively addressed overweight for the long term, there would be no need for another book or miracle diet.

In terms of bread and weight, the medical literature provides supporting evidence to back up Oprah’s statements. For example, her testimonial with an ‘n of one’ reflects findings from a study on over 120 middle-aged, overweight or obese women who went on a low calorie diet. They were divided into two groups – one included bread in the diet and one eliminated it. Despite the bread group eating more carbs, this group consumed fewer total calories – a good start on weight loss. More importantly, only 6% of the bread group dropped out, compared to over 20% of the non-bread group. Satiety data also differed with subjects who ate bread reporting they felt more satiated than those not including bread.3 Satiety while dieting helps with diet compliance,4 and compliance is one key to successful weight loss. For longterm diet success, a large study published in JAMA documented that the diet subjects stayed with was one associated with weight loss and maintenance. In

other words, diets that enable a sustainable, long-term dietary change provide the key to longterm weight loss success. In fact, the JAMA study also showed that those on the Weight WatchersTM diet were more likely to have longterm success than those assigned to a low-carb diet.5 6 One potential reason is that the diet is one that is not radically different from mainstream diets.

The Weight WatchersTM plan, like the Mediterranean Diet or the DASH diet, is balanced with the “right stuff” for all food groups. For the bread and cereal group, this means both the right quantity and balance of whole and enriched bread and grain products. The right balance continues to follow the Dietary Guidelines for Americans (DGA) recommendation to make “half your grains whole.”

In conclusion, diet patterns that include breads, whole grains, and cereals in the right balance are associated with lower body weights and less weight gain over time. Dietary patterns such as DASH or Weight Watchers that include bread do allow weight loss. Such dietary strategies encourage adherence, which means there is a greater likelihood of maintaining weight loss over the long term.

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February 2016

STAKEHOLDER NEWS BRIEF Moving the Mission Late winter is always an interesting time at Kansas State University and for the IGP Institute. Our state commission partners and their boards are planning for spring and looking to the future. The GEAPS organization holds its annual exchange, which facilitates conversations with a Gordon Smith wide range of stakeholders. Additionally, IAOM, ABA, ASB and NAMA host major conventions as well, which provide great opportunities for us to interact with alumni and key industry leaders.

The IGP Institute is equally focused on the future on-boarding of two key staff. Trina Adams joined the team as the distance education coordinator at the end of the month. We are also beginning the search for the technical milling instructor faculty position that was vacated by Mark Fowler.

Mid-February, Carlos Campabadal hosted a group of fish feed industry leaders from Pakistan in the fourth installment of an on-going WISHH project. Interestingly, at the graduation dinner, several participants not only commented on what they had learned, but also noted how different their first trip to the U.S. was from what they expected. I’d like to believe beyond programs, we’re also changing the world one person at a time.

Jay O’Neil is working on several potential opportunities for the IGP Institute that could have global impact. Additionally, he is working closely with our commodity commission partners including participation in the Kansas Commodity Classic.

This month, Brandi, Carlos, Jay and I also participated in the spring grain science and industry faculty retreat where issues vital to the department and IGP were discussed. These are interesting times at K-State that present opportunities for the GSI/IGP Institute complex. We concluded that continuing to leverage the synergistic talent of both groups was key to future success.

Please enjoy the updates in this newsletter. We hope you can come to Manhattan to see all the great things we have going on.

Gordon Smith Department of Grain Science Head and IGP Institute Director

In the Spotlight

Trainings and Activities

• CEO of Asia Poultry Feeds.

Courses and activities held in February.

• WISHH Pakistani Aquaculture

• Resident of Pakistan.

• Participant in the WISHH Pakistani Aquaculture course.

Ahmed Hassan Chaudhry

Brandi Miller is continuing to drive our GEAPS distance education program while settling into her role as the interim associate director of the IGP Institute. At the GEAPS exchange, the distance education oversight committee is meeting to review on-going programs and progress on new initiatives. At the close of the meeting, we have been invited to attend the international board meeting as a key stakeholder.

“We have gained new knowledge that is practical so that when we return we can implement these processes right away.”

• GEAPS 530 - Quality Management Systems • GEAPS 500 - Introduction to Grain Operations Management • GEAPS 500 - Introduction to Grain Operations in Spanish • GEAPS 521 - Aeration Systems Design & Fan Operational Management • GEAPS 555 - Advanced and Preventive Maintenance

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Rediscover WH | MARCH 2016 1980E AT 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

Participants of the WISHH Pakistani Aquaculture course stand with Carlos Campabadal (left) observing the fish on a field trip to the Milford Nature Center and Fish Hatchery.

Pat Hackenberg, Trina Adams, Carlos Campabadal and Brandi Miller represented the IGP Institute at the annual GEAPS exchange industry trade show in Austin, Texas.

Marketing Minute

Where in the World

by Kelly Hannigan

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.

We are excited to add the use of the Periscope application to our marketing tools. The live video streaming app was released in the spring of 2015 after being acquired by Twitter.

The livestreaming app for iOS and Android allows us to broadcast live video to the world. When we begin a broadcast, a notification will be sent out to our followers on Twitter so they can begin watching in real time.

The app also offers a replay feature so that our viewers can watch our videos at any time via the app or our other social media platforms.

We have already completed a trial run with our senior agricultural economist, Jay O’Neil, to advertise his upcoming grain purchasing course. O’Neil talked about the topics that will be covered in the course as well as the field trips that the group will be taking.

We hope to utilize this program as our course coordinators travel the world conducting IGP-related events so that our viewers can stay up-to-date with the latest IGP news.

• Attended and spoke at the International Association of Operative Millers Latin American District Annual Meeting in Panama City, Panama.

• Attended the Kansas Commodity Classic in Manhattan, Kansas.

• Visited Extru-Tech with the WISHH Pakistan group in Sabetha, Kansas.

• Visited the Milford Nature Center and Fish Hatchery with the WISHH Pakistan group in Junction City, Kansas.

• Attended the GEAPS Exchange in Austin, Texas.

• Met with professors from K-State’s Department of Entomology to discuss the project for the U.S. Grains Council that is looking into the insect pest problem found in DDGS. • Attended the K-State grain science and industry faculty retreat at the IGP Institute.

Rave Reviews “I came to IGP to improve my feed quality and to utilize the latest extrusion technology.”

– Kamran Maqsood, Super Punjab Feed Owner, WISHH Pakistani Aquaculture participant “IGP gave me the opportunity to learn about what is going on in the world in agriculture and what new things are happening.”

– Ahmed Hassan Chaudhry, Asia Poultry Feed CEO, WISHH Pakistani Aquaculture participant

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Executive Milling Course Coming in June Kansas State University's IGP Institute partners with Buhler to offer milling course

By Jackie Newland, Communications Intern IGP

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ansas State University’s IGP Institute, in conjunction with Buhler, Inc., will host its Buhler-KSU Executive Milling course June 13-17, 2016 at the IGP Institute Conference Center in Manhattan, Kansas. The course is designed as an introduction to grain cleaning, flour milling and flour quality and functionality.

Course instructor, Jason Watt says the course is an asset for those wanting to broaden their knowledge of the flour milling industry.

“It is a great course for new managers, sales personnel or customer service representatives.

This course will give them an understanding of the flour milling

process and allow them to be more successful in the industry,” says Jason Watt, Buhler instructor of milling.

Course topics for this training 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 in this course 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, among other topics.

Participants do not need any past milling experience to take the course. The course is designed for mill owners, directors and managers.

Former course participant, Scott Kohl, vice-president of technology for White Energy, enjoyed the many hands-on aspects of the course.

“Going out to the actual mill is fascinating. To be able to open up the equipment, look inside it and touch it, feel it and see the principles behind how it operates is exciting.”

This is just one example of the trainings offered through IGP Institute. In addition to grain processing and flour milling, IGP offers courses in the areas of grain marketing and risk management, and feed manufacturing and grain quality management.

To register, visit www. igpevents.grains.ksu.edu.

For more information visit the IGP website at www. grains.k-state.edu/igp.

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Milling Practice Courses to be Held Kansas State University's IGP Institute to hold two courses focused on milling practices

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illers wanting to gain a better understanding of the milling process and how their own job fits into milling operations are encouraged to attend the IGP Institute’s Managing Mill Balance and Control course. The course will be held June 7-10, 2016 at the IGP Institute Conference Center in Manhattan, Kansas. Participants are encouraged to stay a second week and attend the Milling Practices to Improve Flour Quality course. This course will be held June 14-17, 2016.

Course instructor Shawn Thiele encourages participants to stay for both courses as each covers important components in the milling process.

“The Managing Mill Balance and Control course focuses on the front half of the milling process with optimizing breaks and purifiers where as the Milling Practice to Improve Flour Quality course, focuses on the reduction system of the milling process and how flour quality is managed,” says Thiele, milling operations manager.

Managing Mill Balance and Control covers topics including measuring break extraction, optimizing break release and product distribution for different classes of wheat and the impact of wheat quality on extraction.

It provides students with more information about the milling

process and how employees impact it. The training is designed for milling engineers, operation managers, production managers and shift managers. Practical work experience in a flour mill is required to take the course.

The Milling Practices to Improve Flour Quality course is designed for milling engineers, operation managers, production managers, head millers and shift managers. However, anyone with a theoretical milling background and practical work experience in a flour milling may attend.

Topics covered in the training include analysis of mill flow sheets and design, analysis of mill balance and product distribution, adjustment of roll stands, sifting and sifter design, purification system and process control.

Former course participant Jason Wahl, a miller at Birkett Mills who participated in both courses, wanted to learn more about the science behind flour milling.

“With years of experience, I have an idea of what I’m doing but I wanted to get more of the science behind it and understand a little better what I was doing and what I was looking for.”

This is just one example of the trainings offered through IGP Institute. In addition to grain processing and flour milling, IGP offers courses in the areas of grain marketing and risk management, and feed manufacturing and grain quality management. To register, visit www.igpevents.grains.ksu. edu. For more information the visit IGP website at www.grains.kstate.edu/igp.

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News from : NAWG Weekly Updates February 11, 2016 Administration’s Proposed FY 2017 Budget Invests in Research, Cuts Crop Insurance President Obama unveiled his FY 2017 budget request, which kicks off the FY 2017 appropriations process in Congress. Cabinet secretaries are now in the process of testifying before Appropriations Subcommittees in the House and Senate to discuss their budget justifications. Agriculture Secretary Vilsack appeared before the House Agriculture Appropriations Subcommittee to defend the budget request for the Department of Agriculture. Those subcommittees will then work to draft and consider their own appropriations bills.

Within the realm of agriculture, the budget request includes a significant increase in funding for USDA’s Agriculture and Food Research Initiative (AFRI).

Specifically, the Administration’s proposal nearly doubles funding for AFRI to the Farm Billauthorized level of $700 million, RediscoverWH WH E AT| MARCH | MARCH 2016 1616Rediscover E AT 2016

allocating $375 million in discretionary spending and $325 million in mandatory funding.

In addition to a significant investment in agricultural research, the request includes full funding for conservation programs. Furthermore, to lay the foundation for the hopeful elimination of the Cuban embargo, the Administration requests funding to place five USDA employees at the new embassy in Cuba to promote American agricultural products.

Unfortunately, the Administration is once again proposing severe cuts to crop insurance. Specifically, the budget would cut $18 billion (over ten years) by reducing the premium subsidy for policies with the Harvest Price Option (HPO) by ten percentage points and by reducing the subsidy for particular prevented planting options. The Administration has proposed similar cuts in the past, which have been rejected by Congress. However, the inclusion of this provision continues to

underscore the need for grassroots engagement by farmers across the country to defend the crop insurance program and Title 1 during the upcoming appropriations process.

USDA APHIS Notice of Intent on Biotechnology Regulation The U.S. Department of Agriculture published a Notice of Intent in the Federal Register, indicating plans to prepare an environmental impact statement on the introduction of biotechnology products. The goal of the Notice is to identify “reasonable alternatives and potential issues to be evaluated in the environmental impact statement” as well as to redefine the term “biotechnology”. This is the first step in beginning USDA’s overhaul of its biotechnology regulations since its current processes were developed over thirty years ago. USDA’s Animal and Plant Health Inspection Service (APHIS) hopes to accelerate the development of new crop traits considered to be of little risk to the environment,

as well as determine regulatory requirements for specific new breeding techniques, such as gene editing.

New breeding techniques are valuable to breeders as the technology continues to advance, especially to public breeders of wheat who are excited to incorporate the technology into their respective programs.

These techniques vastly differ from biotechnology, as currently defined, which adheres to strict regulation and serves as one tool of many for a breeder to use when overcoming challenges related to plant pests and nutritional improvements for the consumer.

The USDA Notice of Intent specifies broadly a process of analyzing new crop traits and determining which class of traits would be subject to regulation.

APHIS has asked for public comments to “further define the scope of the alternatives and environmental impacts and issues for APHIS to consider.”

NAWG continues to work with industry to provide comments on this federal register posting, and encourages states to provide comments as well. These comments are due by March 7, 2016.

U.S. Agriculture Coalition for Cuba Celebrates One-Year Anniversary NAWG is a member of the U.S. Ag Coalition for Cuba, a broad coalition of more than 100 agriculture organizations and businesses seeking to liberalize trade with Cuba. The coalition formed a year ago following President Obama’s announcement of several Administration efforts to ease some trade and travel

restrictions. The anniversary celebration included an event at the National Press Club on Wednesday, where coalition members and the media heard from Agriculture Secretary Tom Vilsack as well as several members of Congress and Senators that have been champions of legislation to ease trade restrictions. As part of the program, Kansas wheat farmer Doug Keesling introduced Senator Heidi Heitkamp (D-ND), who discussed her legislation to enable private financing of agricultural exports to Cuba. Following the event, NAWG hosted a Congressional Hill visit briefing to prepare coalition members for a lobby day.

NAWG and U.S. Wheat Associates Host Joint Board Meeting The 2016 Joint Winter Wheat Conference of the National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) concluded in Washington, D.C. The four-day meeting brought wheat growers and industry partners from across the nation together to discuss critical issues in agriculture and policy, and to plan for upcoming events. NAWG and USW board members discussed key issues such as trade legislation, environmental and renewable resources, and biotechnology.

Attendees heard remarks from several legislative staff, as well as Senate Agriculture Committee Chairman, Pat Roberts (R-KS). In addition to the policy meetings, wheat grower leaders took advantage of Congress being in session and were on Capitol Hill visiting their representatives and senators. Many of NAWG’s

industry partners participated in the meetings.

February 18, 2016 House Agriculture Committee Hears From EPA Administrator The House Agriculture Committee members held a hearing to consider the EPA’s actions on the rural economy.

The committee questioned EPA Administrator Gina McCarthy about a variety of regulations and agency actions having adverse impacts on agriculture producers including the Waters of the U.S. (WOTUS) regulation and renewable fuels standard.

Administrator McCarthy defended the agency’s actions despite the Government Accountability Office report that concluded the Agency violated grassroots lobbying restrictions related to WOTUS. During the hearing, McCarthy also supported voluntary conservation practices, stating that the programs are working, but more can be done, and that EPA is working with the USDA’s Natural Resources Conservation Service to promote their efforts, but not duplicate them. NAWG joined several agricultural organizations to provide a list of issues impacting producers to the House Agriculture Committee prior to the hearing.

Crop Insurance Association Releases Results of Producer Survey The Crop Insurance Professionals Association recently released the results of a survey at http://www.cipatoday. com/resources/Documents/ CIPAProducerSurveyResultsFinal.pdf of the association Rediscover E AT 2016 RediscoverWH WH E AT| MARCH | MARCH 201617 17

conducted seeking farmer attitudes toward crop insurance programs and efforts to undermine federal spending.

The survey queried more than 1,300 farmers and showed that 96 percent of respondents oppose funding cuts to the federal crop insurance program proposed in the administration’s FY 2017 budget request. Specifically, the budget request would seek $18 billion in cuts over 10 years by reducing federal premium support for policies containing a harvest price option and for some prevent planting policies.

Additionally, the survey found that 94 percent oppose legislation introduced by Senator Jeff Flake (R-AZ) and Representative Ron Kind (D-WI) called the AFFIRM Act, which would establish a hard cap on premium support, establish an adjusted gross income threshold for eligibility and cut reimbursements to the crop insurance companies, among other cuts.

NAWG Board Meeting and Commodity Classic Only Two Weeks Away The 2016 Commodity Classic, the annual convention for the National Association of Wheat Growers, National Corn Growers Association, American Soybean Association, National Sorghum Producers and Association of Equipment Manufacturers, will be held March 3-5, 2016, in New Orleans. Ahead of the convention, NAWG will be holding policy committee meetings on March 2, its full board meeting the morning of March 3 and a National Wheat Foundation board meeting that afternoon. NAWG reminds our state associations 18Rediscover RediscoverWH WH | MARCH 2016 18 E EATAT| MARCH 2016

and board members to send any policy resolutions you intend to offer during committee meetings to the NAWG staff at your earliest convenience.

NAWG Participates in National FFA Commodity Breakfast This week, NAWG participated in a panel discussion for the National Future Farmers of America (FFA) officers who were visiting Washington, D.C., as part of a weeklong advocacy experience. The panel consisted of staff from NAWG, the National Corn Growers Association and National Cotton Council.

Discussions centered on each commodity organization’s role in shaping policy on trade and exports, and the agricultural industry as a whole. NAWG provided information on current issues such as the Trans-Pacific Partnership, GMO labeling and how to communicate about these issues with a range of audiences.

The officers asked many questions and thanked the commodity groups for taking time to invest into the future of the agricultural industry and the students in agricultural education.

February 25, 2016 Vilsack Testifies on the State of the Rural Economy U.S. Department of Agriculture (USDA) Secretary Tom Vilsack testified before the House Agriculture Committee at a hearing that discussed the state of the rural economy. In his testimony, Secretary Vilsack discussed the difficult economic conditions resulting from falling commodity prices, indicating that USDA anticipates real net farm

income to be at the lowest level since 2002. At the same time, he indicated that median farm household income (including off-farm income) has grown more than 40 percent between 2010 and 2015. Additionally, his testimony stated that the debt to asset ratio for U.S. producers is still near record lows.

In addition to discussing general economic conditions, the hearing also delved into a number of other topics including the cotton industry’s proposal to designate cottonseed as an “other oilseed” for purposes of farm program eligibility, the Conservation Reserve Program (CRP) sign-up, USDA’s biofuel programs, nutrition program, the Department budget to battle forest fires, biotechnology regulations and a number of other topics.

More information about the hearing can be found at http://agriculture.house. gov/news/documentsingle. aspx?DocumentID=3167, including Chairman Conaway’s opening statement at http://agriculture.house. gov/news/documentsingle. aspx?DocumentID=3166 and Secretary Vilsack’s testimony at http://agriculture.house. gov/uploadedfiles/vilsack_ testimony_022416.pdf.

House Ag Appropriations Subcommittee Holds Budget Review Hearings The House Agriculture Appropriations Subcommittee is holding several hearings to review USDA’s budget request following the release of the Administration’s FY 2017 budget request.

The Subcommittee heard from Food, Nutrition, and Consumer Services Undersecretary Kevin Concannon and others about the budget request for the Food and Nutrition Service, followed by a hearing with Food Safety Deputy Undersecretary Al Almanza to talk about the Food Safety and Inspection Service budget request. The Subcommittee also heard from Food and Drug Administration (FDA) Acting Commissioner Stephen Ostroff, and they will hear from NRCS Chief Jason Weller. Additional budget hearings will continue over the coming weeks, including one Thursday, March 3, which will feature Marketing and Regulatory Programs Administrator Ed Avalos and the administrators for APHIS and GIPSA, who oversees the Federal Grain Inspection Service.

Information about the House Appropriations Committee’s work can be found at http:// appropriations.house.gov/ and the Senate Appropriations Committee can be found at http://www. appropriations.senate.gov/.

Appeals Court Rules in WOTUS Case The 6th Circuit Court of Appeals issued a ruling in the cases against the Obama Administration’s Waters of the U.S. (WOTUS) regulation. Several of the court cases pending against the Environmental Protection Agency and the Army Corps of Engineers were consolidated in the 6th Circuit. The decision before the court was based on the issue of whether or not the court has jurisdiction to hear the case.

The ruling was a split decision, 2-1, with two judges agreeing

that the 6th Circuit Court does have jurisdiction. For now, the restriction on the implementation of the WOTUS regulation will remain in place. Additional actions on this case are expected in the 6th Circuit.

Senate Agriculture Committee Chairman Proposes GMO Labeling Markup Last week the Senate Agriculture Committee Chairman released his Chairman’s Mark on biotech labeling. In an effort to pass a bill in the Senate prior to the Vermont implementation date on July 1, 2016, Chairman Roberts has proposed preemption to avoid a state-by-state patchwork of biotech labeling bills. His proposal also creates a voluntary biotechnology-labeling program through USDA, requires USDA to define biotechnology and creates an educational program on biotechnology for consumers.

The Chairman’s proposal received high support from the food chain including producers, cooperatives, agribusinesses, processors, seed makers, handlers, food and feed manufacturers, lenders, and retailers. NAWG signed onto

a letter viewed at http://www. agriculture.senate.gov/imo/media/ doc/Chairman%20Roberts%20 Letter%20-%202.23.16.pdf, with 651 other organizations and companies thanking the Chairman for his “strong leadership aimed at enacting a national uniform solution on biotech labeling.” A markup with the Committee is scheduled for Tuesday, March 1.

Stop by the NAWG Booth at Commodity Classic The 2016 Commodity Classic will be held in New Orleans, LA, next week. Stop by the NAWG booth, #715, to learn about what’s new in the world of wheat and to sign up for a chance to win a GoPro camera. NAWG board meetings will be held adjacent to Commodity Classic.

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News from : February 11, 2016 Uncertainty Creates Market Volatility

By Stephanie Bryant-Erdmann, USW Market Analyst With fundamental factors well established, wheat futures markets thus far in 2016 are reacting mainly to changing government policies, notably those of Argentina, Egypt and Russia. Markets dipped when Argentina’s government removed export barriers. Prices rose and fell with each new rumor about the Russian export tariff, and fell again when Egypt’s muddled import requirements led to two cancelled General Authority for Supply of Commodities (GASC) tenders, slowing the pace of wheat imports by the world’s largest buyer. Over the next several months, we will watch and see how the markets reflect the consequences, both intended and otherwise, of those policy changes.

Argentina. In December, Argentina removed its 23 percent export tax on wheat, eliminated its wheat export quota and devalued its currency, all of which pushed Argentine wheat to the global market in a big way. According to Reuters, Argentine ports loaded 20Rediscover RediscoverWH WH E AT| MARCH | MARCH 2016 20 E AT 2016

1.77 million metric tons (MMT) of wheat between Dec. 14 and Feb. 5.

USDA pegs total Argentine wheat supply at 14.2 MMT and expects exports to reach 6.50 MMT in 2015/16.

Removal of the restrictive export policies helped Argentine farmers by giving them more market access. From 2012/13 to 2014/15, USDA estimated that ending stocks there climbed from 288,000 metric tons (MT) to 3.17 MMT due to increased usage of on-farm silo bag storage. This has given farmers a unique hedge this year because higher protein wheat supplies in Argentina are short and holding better quality wheat will likely mean more revenue. In marketing year 2015/16, USDA expects ending stocks to fall 57 percent to 1.36 MMT. Though the extent is still being determined, the recent export policy changes for wheat will also affect the Argentine flour industry. The International Grains Council (IGC) expects Argentina to be the sixth largest exporter of flour in the world in 2015/16; Turkey and Kazakhstan are numbers one and two, respectively.

Russia. With the U.S. dollar strengthening to 12-year highs in mid-January, and the Russian

ruble plunging to record lows, Russian wheat gained competitive price strength. Russia produced 61.0 MMT of wheat in 2015/16, up 3 percent year over year. On Jan. 27, Russian officials sparked speculation by announcing it was examining its current wheat export tariff, but the government did not say if it would raise or lower the rate. While Russia has since announced that it will leave the export tax unchanged, further depreciation of the ruble will increase the tax due to the way it is calculated. On Jan. 21, Russian wheat prices offered for an Egyptian tender averaged $187/ MT ($5.09/bu) free-on-board (FOB). The Russian export tax of 50 percent of the customs price minus 6,500 rubles ($83) per ton but not less than 10 rubles per ton on $187/MT of wheat adds roughly $10/MT. Since 2008, Russia has restricted wheat exports three times, including the 2015 export tax increase, in order to control domestic food prices and inflation.

The uncertainty about export policies and limited on-farm storage capacity in Russia create an incentive for Russian exporters to front-load their sales each marketing year to ensure they sell as much wheat as possible,

regardless of price. In the first half of 2015/16, Russia exported 17.2 MMT according to SovEcon, a Russian consultancy. USDA predicts total Russian exports in 2015/16 will reach 23.5 MMT. Egypt. After four weeks of debate, Egypt’s Agriculture Quarantine Authority announced that it would accept the GASC 0.05 percent ergot specification for imported wheat. However, GASC cancelled its most recent tenders after continued uncertainty forced traders to reevaluate the risk involved. All traders boycotted GASC’s first tender, then only a few bids came in on the second tender, each with a $10 to $20 per MT risk premium.

USDA expects 2015/16 Egypt domestic consumption to increase to 19.6 MMT, a 3 percent increase year over year.

To meet the growing demand, Egypt is expected to import 11.5 MMT of wheat in 2015/16, a 4 percent increase from the prior year. About half of Egypt’s wheat imports go directly to production of subsidized flat bread (Baladi bread) to maintain the food security of its 92 million citizens.

Reuters reported Egypt’s strategic wheat reserves would last until May 11, time Egypt’s government buyers can use to work on regaining trader confidence.

Markets will continue to adjust as the long-term implications of these policy changes become clear, but in the short-term, buyers and sellers need to weather the inevitable price volatility that always result.

Markets Still Rely on U.S. Wheat for Quality, Variety Circumstances in today’s global wheat market are generating some breathless headlines. Plentiful wheat supplies, a strong U.S. dollar and record low freight rates are making it possible for Black Sea region, Canadian and Argentine exporters to sell more of their wheat at low prices in more markets around the world. While it is accurate to say U.S. wheat export volume is down, predictions of U.S. wheat becoming a second tier source of wheat rely on old perspectives of what is now a changing and highly segmented world market.

Total world wheat use and global wheat trade is growing and has set records in two of the past three marketing years. Much of that sustained growth is happening in markets that demand diverse types of wheat to produce premium ingredients in high-quality products. Unlike other wheat exporting countries and regions, U.S. farmers do not produce "generic" wheat. They supply six distinct wheat classes with excellent functional qualities and value for specific uses in specific end-product wheat foods.

That is why even under the current conditions, U.S. wheat exports are steadily increasing in markets that demand high quality.

This is especially true in Asia and Latin America. These regions imported about 10 MMT of U.S. wheat in 1985/86, about 15 MMT in 2000/01 and just under 20 MMT in 2014/15. USW is seeing long-term value in these emerging markets and is adjusting its resources to help meet customers’

needs. In addition, customers recognize the U.S. wheat supply chain as the most reliable in the world; U.S. wheat buyers know they will face no risk from export taxes or other arbitrary government interventions.

It is a market development strategy that also provides value to U.S. farmers in the form of higher prices for their wheat compared to farmers in most competing countries.

“Trade paper headlines seem to imply the world wheat market is some kind of public competition — a race to see which country can claim the largest exporter position.

I do not see it that way,” said USW Vice President of Overseas Operations Vince Peterson.

“Selling wheat with consistently higher quality and a greater diversity of end-use applications is more complicated than a lowprice strategy, but I think it is worthwhile for our overseas customers and our farmers.”

“We believe markets tend to correct themselves,” said USW President Alan Tracy. “Given population growth in markets that cannot grow their own wheat, increasing disposable incomes and growing demand for premium flour products in the quality markets we serve best, we are optimistic about future U.S. wheat production and exports.”

USW Lays Down Policy Priorities for Year Ahead

By Ben Conner, USW Deputy Director of Policy A professor once told me this about achieving goals: “If you don’t write it down, it will never Rediscover WH WHEEAT AT || MARCH MARCH 2016 2016 21

happen.” On behalf of the farmers we represent, USW takes a similar approach to our policy priorities: we write them down for the board to review every year. That happened again last week at the USW Board of Directors meeting in Washington, DC. USW divides policy goals into three general categories: the World Trade Organization (WTO), free trade agreements (FTAs) and U.S. government policies. USW priorities in all three categories reflect our mission, which is ultimately to enhance the profitability of U.S. wheat producers and their customers.

The WTO category includes both trade enforcement and negotiations. A major policy priority is to ensure that wheatproducing countries follow WTO rules. Right now, a number of major developing countries are blatantly ignoring those rules, costing U.S. farmers in the form of lower exports and prices, and hurting their overseas customers in the form of more expensive domestic supplies. Studies conducted for USW estimated U.S. wheat farmers are losing more than $1 billion in revenue from domestic support policies in just four countries: China, Turkey, Brazil and India. Some of those countries have blatantly ignored WTO import rules in order to protect domestic wheat sectors. That is unacceptable and underscores the need to enforce past trade commitments. Similarly, our board supports negotiations through the WTO that create a more level playing field, but opposes rules that weaken current disciplines in the WTO 22Rediscover RediscoverWH WH | MARCH 2016 22 E EATAT| MARCH 2016

Agreement on Agriculture or in continued negotiations under the failed Doha framework.

Free Trade Agreements are another priority. If the WTO negotiations remain at an impasse, aggressive market access gains will only come through bilateral regional sectoral trade agreements.

The Trans-Pacific Partnership (TPP) is now signed and, hopefully, will soon be ratified by legislatures including the U.S. Congress.

Beyond that, the wheat industry is hoping for rapid TPP expansion to other countries in the Asia-Pacific region as well as to new FTA opportunities.

Finally, U.S. government policies also affect U.S. wheat export potential. One of our priorities is on-going funding for the beneficial federal market promotion programs that — along with investment from state wheat commissions — help organizations like USW provide valuable services and information to customers around the world. USW also supports an end to the U.S. embargo of Cuba.

Now that we have written our 2016 Policy Priorities, it is time to make it happen. We are passionate about the profitability of farmers and their overseas customers, so we will be working hard to remove the policy obstacles in the way.

Wheat Grower Organizations Welcome TPP Signing, Look for Rapid Congressional Review The signing of the 12 nation TPP in New Zealand Feb. 4 marked another step toward putting the world’s largest free trade agreement into action. The National Association of Wheat

Growers (NAWG) and USW welcomed this step and called for rapid consideration and eventual ratification of TPP by Congress.

"Wheat growers are ‘all-in’ regarding the promise of the Trans-Pacific Partnership," said NAWG President Brett Blankenship, a wheat farmer from Washtucna, WA. "Expanding sales and market share are important pillars to help revitalize the wheat industry. Now, the ball is in Congress’ court and NAWG urges Congress to act quickly.”

A number of national and state wheat grower association members visited congressional offices recently to stress their support for the agreement. That is because wheat is the most exportdependent grain grown by U.S. farmers. South Asia and Latin America represent growing, but highly competitive markets for our production. When implemented, TPP will have a significant positive impact on U.S. wheat producers and on our country’s export supply industry.

“We need swift consideration and approval because every day that implementation is delayed, we face tariff disadvantages that undercut our ability to compete in established and new markets,” said USW Chairman Brian O’Toole, a wheat farmer from Crystal, ND. With duty-free access under its free trade agreement with Vietnam, for example, Australia currently enjoys a $12 to $15 per metric ton price advantage over U.S. wheat. U.S. wheat exports are at a tariff disadvantage in a number of other countries that want to join TPP but cannot

apply for membership until after Congress and the governments of the 11 other countries ratify the agreement.

As soon as possible after the implementing legislation is introduced, Congress should complete its work and ratify TPP. USW Directors Elect 2016/17 Officers The USW Board of Directors unanimously elected new officers for the 2016/17 (July to June) fiscal year at their meeting Feb. 6, 2016, in Washington, DC. The board elected Chris Kolstad of Ledger, MT, as Secretary-Treasurer, current Vice Chairman Jason Scott of Stevensville, MD, as Chairman and current Secretary-Treasurer Mike Miller of Ritzville, WA, as Vice Chairman. They will take office at the USW Board meeting in July 2016 in Fargo, ND, when current Chairman Brian O’Toole will become Past Chairman. USW is the export market development organization for the U.S. wheat production industry.

“Wheat has paid the bills on my family’s farm for 100 years and I want to thank the board for giving me the opportunity to give something back to this country’s wheat industry,” Kolstad said.

“I look forward to working with USW’s directors and staff, as well as with the National Association of Wheat Growers, to make sure U.S. wheat remains the world’s top choice for quality and value.”

Kolstad is the fourth generation of his family to farm in Montana’s “Golden Triangle” region. He and his wife Vicki have four children, including their son Cary who is a partner in their operation. They

grow hard red winter (HRW) wheat, dark northern spring wheat and durum, plus barley and dry peas. A commissioner of the Montana Wheat & Barley Committee, Kolstad has represented his state on the USW board since 2012. He is also a member of the Montana Grain Growers Association and Montana Farm Bureau. His community leadership includes serving on his local school board, as treasurer of his family’s church and as a regular blood donor who has given almost 19 gallons of blood since 1972.

Jason Scott is a sixth generation wheat farmer from Maryland’s Eastern Shore, where he manages his family’s soft red winter (SRW) wheat, row crop and vegetable operation. He also owns and operates a Pioneer Hi-Bred® seed dealership with his father.

Scott has been a member of the Maryland Grain Producers Utilization Board since 2003 and served as president from 2005 to 2007. Scott received the Maryland Farm Bureau Young Farmer Achievement Award in 2011. In his seven years on the USW Board, Scott has represented his state and USW on two board team delegations to Africa and Europe and served as Secretary-Treasurer.

He and his wife Casey have a young daughter.

Mike Miller is a fourth generation farmer who operates a dryland wheat farm and grows multiple crops on a separate, irrigated farm in east central Washington. He has served on many local, state and national boards, and is in his third term on the Washington Grain Commission and his fifth year

as a USW director representing Washington. Miller is also very active in supporting wheat research and development. He and his wife, Marci, have three children.

Brian O’Toole is the president of T.E. O'Toole Farm Seed Company. He and his wife Sara have four children and raise wheat, edible beans and sugarbeets on their northeast North Dakota farm. O'Toole is an experienced agricultural and community leader. He serves on the North Dakota Wheat Commission, on the board of the Wheat Marketing Center in Portland, OR, and is Chairman of SBARE Wheat Granting Committee. He is also past president of the North Dakota Crop Improvement and Seed Association and past president of Crystal Farmers Elevator Co-op.

O’Toole has received the Young Outstanding Farmer Award, Master Farmer Award and Friends of 4-H Award. He has served as Secretary-Treasurer and Vice Chairman of USW. Wheat Industry News USW Welcomes New Communications Consultant.

Nicole Lane is a native of Eastern Oregon and a recent graduate of Kansas State University in agriculture communications and journalism. In her role, Nicole will compile and distribute the daily “Articles of Interest,” and consult on additional USW communications projects.

Work in the Foreign Agricultural Service. FAS is recruiting new Foreign Service Officers and taking applications until Feb. 17, 2016. Read the full announcement RediscoverWH WHEEAT AT| |MARCH MARCH2016 2016 23 23 Rediscover

at https://www.usajobs.gov/ GetJob/ViewDetails/427788000.

To access the “Guide to the Foreign Service Officer Selection Process” for more information about the position and the assessment process, visit http:// www.fas.usda.gov/about-fas/ careers.

Maryland Farm & Harvest.

USW Vice Chairman Jason Scott recently appeared on an episode of “Maryland Farm & Harvest,” a television program that regularly airs on Maryland Public Television. The show is in its third season and is hosted by Emmy award winner Joanne Clendining, who takes viewers around the state to see and experience what it is like to run a 21st century farm.

View the episode at http://www. mpt.org/programs/farm/farm312/.

Wheat Marketing Center Asian Noodle Technology and Ingredient Application Course.

This hands-on course, scheduled for April 5 to 8, 2016, will focus on better understanding noodle formulation, processing technology, evaluation techniques, and the functionality of food ingredients in Asian noodle applications. For more information and to register visit http://wmcinc.org.

Northern Crops Institute Pasta Production and Technology Course. This course, scheduled for April 12 to 14, 2016, introduces the fundamental and applied aspects of manufacturing extruded pasta products.

Raw material quality criteria, specifications and processing variables, and their impact on final pasta quality will be present in detail. The registration deadline is March 28. For more 24Rediscover RediscoverWH WHE AT | MARCH 2016 24 E AT | MARCH 2016

information and to register visit www.northern-crops.com/ training-courses.

IGP Institute Grain Purchasing Short Course. This course, scheduled for April 4 to 15, 2016, will benefit individuals who are responsible for buying U.S. food and feed grains.

The course focuses on the mechanics of purchasing raw materials and features detailed discussions of cash and futures markets, financing and ocean transportation. The registration deadline is March 16. For more information and to register visit www.igpevents.grains.ksu.edu.

February 25, 2016 Changing Dynamics of U.S. Wheat Exports

By Stephanie Bryant-Erdmann, USW Market Analyst Over the past twenty years, roughly 10 million metric tons (MMT) of U.S. wheat exports have shifted from price sensitive markets to quality-driven markets. Consumption in qualitydriven markets in Southeast Asia and Latin America increased an average 2 percent annually over the past ten years, according to USDA. However, the strength of the U.S. dollar continues to weigh on U.S. exports, transforming the relatively low prices U.S. farmers are receiving for their wheat domestically into prices that are equal to or greater than those paid in prior years by international buyers.

In 1995/96, the top ten destinations for U.S. wheat included Egypt, Pakistan and Sri Lanka, whose respective governments purchased large

quantities of wheat for subsidized food programs and strategic reserves. Thus, these markets were very price sensitive. While some liberalization has occurred in these markets, subsidized food programs and strategic reserves are still the primary uses for imported wheat.

Rounding out the top destinations in 1995/96 were markets that value quality: Japan, Mexico, the Philippines, South Korea, Taiwan, Nigeria and the European Union. These markets continue to be top ten destinations for U.S. wheat. Over the past five years, U.S. wheat exports to these seven countries averaged 12.9 MMT compared to 9.78 MMT in 1995/96, an increase of 32 percent, while total consumption increased 26 percent, indicating increased usage and preference for U.S. wheat despite prices often higher than from other sources.

Since 1995/96, wheat consumption in other qualitydriven markets has also grown.

Southeast Asian markets, including Indonesia, Thailand, Vietnam and Malaysia1, have grown an average 5 percent annually. U.S. exports to the region grew 27 percent to 1.47 MMT in 2014/15, according to Global Trade Atlas data. U.S. wheat exports also increased 44 percent to Latin and South America with 5-year average sales of 5.87 MMT compared to 4.07 MMT in 1995/96.

In 2014/15, countries from Southeast Asia and South America — Indonesia, Thailand and Brazil — became top ten destinations for U.S. wheat. In total, the top ten destinations

represented 48 percent of U.S. wheat sales during that marketing year. Countries in Central America, including Colombia, Guatemala, Peru, Venezuela and the Dominican Republic, were in the top 20 destinations for U.S. wheat and accounted for another 11 percent.

Despite the value these markets place on quality, the strength of the U.S. dollar makes U.S. goods relatively more expensive for consumers in other countries.

Japan is historically the number one buyer of soft white (SW) wheat. The average price for 9.5 max protein SW is down 1 percent from 2014/15 at $300 per metric ton (MT). However, the Japanese yen weakened against the U.S. dollar year over year resulting in Japanese importers paying an average 6 percent more for 9.5 max protein SW this year. Similarly, average 12.0 protein hard red winter (HRW) prices from the Gulf have fallen 18 percent, but U.S. HRW prices have increased an average 14 percent in Brazil due to the weakness of the Brazilian real.

The goal for any company selling a high-quality product is to make demand for that product inelastic — an increase in price does not have an equal decrease in quantity demanded. Put another way, consumers have such a strong preference for the good that increases in price result in very small decreases in quantity demanded. Creating inelastic demand takes a combination of the right consumers, the right product, hard work, and, in many cases, time.

U.S. farmers continue to work on product quality, investing an

average $12 million annually on wheat research through their state checkoff programs, according to a study done by the National Wheat Improvement Committee in 2012.

USW has also put more focus on its marketing efforts in markets that are traditionally quality conscious and experiencing growth, such as Japan, Mexico and the Philippines; now, U.S. wheat farmers just need the U.S. dollar to cooperate.

U.S. Wheat Industry Encourages Discussion on Border Issues with Canada

By Elizabeth Westendorf, USW Policy Specialist Government officials from Canada and the United States met for the biannual Consultative Committee on Agriculture — a committee designed to facilitate cross border trade flows and cooperation. In preparation for this meeting, USW sent a letter to the USDA highlighting the need for Canada to correct its discriminatory treatment of foreign grain. Both countries have a strong commitment to crossborder collaboration and open trade, but Canada’s protectionist measures go against these principles and deny U.S. wheat farmers access to a market that is right next door.

While Canada is one of the United States’ largest trading partners, USW continues to have concerns about the closed nature of its bulk grain handling system, which will not allow U.S. wheat to receive an official grade commensurate with its quality.

Though Canada privatized the Canadian Wheat Board in 2012, it has not completely liberalized

its wheat industry. Instead of letting U.S. wheat into its bulk grain handling system, Canada downgrades all foreign wheat to the lowest grade, feed wheat.

U.S. wheat is of comparable quality to Canadian wheat, so this downgrading of all foreign wheat is a blatantly protectionist action. It denies U.S. farmers access to the market across the border, access that Canadian farmers have if they choose to bring their wheat to U.S. elevators during harvest. This lack of access means that when there is a price premium at Canadian elevators near the border, as we saw in the late summer and fall of 2015, U.S. farmers cannot take advantage of those higher prices.

USW hopes that Canada’s new government will commit to reform its Grains Act and allow foreign grain to receive the same treatment as domestic.

The United States repealed Country of Origin Labeling (COOL) for meat in December 2015 as Canada requested, but Canada’s discriminatory wheat treatment does much of the same thing as COOL. Now that the United States has domestically addressed its treatment of Canadian livestock, it seems only fair that Canada fix its treatment of U.S. wheat. This will ensure a healthy continuation of the long-term partnership between the two countries. Governments should never be responsible for segregation that market forces could manage more efficiently.

USW is happy to see our Canadian industry counterparts calling for reform alongside us, and we look forward to Canada continuing to break down barriers to the free trade of wheat.

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USW Board Teams Will Allow Farmers to Follow Their Wheat Overseas Every year USW plans two board team trips overseas, giving U.S. wheat farmers and state wheat commission staff the opportunity to travel to the markets to which they supply wheat. The intense, regional visits help educate participants about the day-to-day work of USW’s overseas offices and connect them to their customers and industry stakeholders.

“Board teams help build personal connections between our overseas customers and U.S. wheat farmers,” says USW Vice President of Overseas Operations Vince Peterson. “U.S. wheat is the world’s most reliable source of high quality wheat, and part of that quality is in the people who grow it. We consistently hear how much the customer appreciates getting to know the farmer.”

USW Policy Specialist Elizabeth Westendorf will lead the 2016 North Asia Board Team to Japan and Korea in early March. The team includes Darren Padget, a wheat farmer from Grass Valley, OR, and a current USW director representing the Oregon Wheat Commission; Greg LeBlanc, a wheat farmer from Crookston, MN, and a director of the Minnesota Wheat Research and Promotion Council; Clark Hamilton, a wheat farmer from Ririe, ID, and a current USW director representing the Idaho Wheat Commission; and Gary Bailey, a wheat farmer from St. John, WA and a current USW director representing the Washington Grain Commission.

26Rediscover RediscoverWH WH E AT| MARCH | MARCH 2016 26 E AT 2016

The team will first meet at the USW West Coast Office in Portland, OR for orientation before traveling overseas. During its three days in Japan, the team will visit government contacts at the U.S. Embassy and the Ministry of Agriculture, Forestry and Fisheries, and meet with millers and bakers. The second leg of the trip features three days in Korea, which includes visiting the largest fried noodle manufacturing facility in Korea, mill tours and a meeting with the Korea Flour Mills Industrial Association.

USW Program Manager Erica Oakley will lead the 2016 EU/ MEENA Board Team to Morocco, Italy and Israel in early March.

The team includes Michael Edgar, a wheat farmer from Yuma, AZ, and a current USW director representing the Arizona Grain Research and Promotion Council; Ken Davis, a wheat farmer from Grandview, TX, and a current USW director representing the Texas Wheat Producers Board; and Michael Peters, a wheat farmer from Okarche, OK, and the secretary/treasurer of the Oklahoma Wheat Commission.

The team will first meet at the USW Headquarters Office in Arlington, VA for orientation before traveling overseas. During its three days in Morocco, the team will meet with government contacts, tour a couscous plant and two durum mills, and meet with the Moroccan Miller’s Federation and the Moroccan Importers Federation. The team will then travel to Italy and be accompanied by Regional Director Ian Flagg and Marketing Specialist Rutger Koekoek from the USW Rotterdam Office on

tours of multiple pasta plants and semolina mills. In Israel, on the last leg of the trip, the team and Koekoek will visit the Port of Haifa, two mills and a bakery.

Both teams will post regular travel updates and photographs, and will report to the USW board.

Follow their progress on the USW Facebook page at www.facebook/ uswheat and on Twitter at @ uswheatassoc.

Korea and Taiwan Earn First and Second Place in the World Baking Cup Baking is both an art and a science, and every four years, bakers from around the world compete at the prestigious Coupe du Monde de la Boutlangerie (World Baking Cup) to see who has best mastered those skills.

This year, twelve teams gathered in Paris, France, Feb. 5 to 9 for the competition that focuses on advancing the baking profession and promoting the quality and value of bread.

Competing live in front of an audience of judges and other professionals, the team from Korea beat the pressure to take home the top award, followed by Taiwan and France, respectively.

The Korean team included Chang-Min Lee, Jong-Ho Kim and Yong-Joo Park. The Taiwan team included Chung-Yu Hsieh, Yu-Chih Chen, and Peng-Chieh Wang.

Each participating country appoints a team of three bakers, each of whom specializes in one of the competition’s categories: baguettes and breads of the world; viennoiserie and savory baking; and artistic creation. Elements of the competition include cooking

Winner Chang-Min LEE - Breads candidate Jong-Ho KIM - Viennese pastries candidate Yong-Joo PARK- Artistic piece candidate And coach Sang-Gyu PARK with mystery ingredients randomly drawn at the last minute and creating a themed sculpture in baked goods, which in this case was to represent a national sport of the competing country.

USW is proud of the rich history we, and the U.S. wheat farmers we represent, share with the flour milling and baking industries in both Korea and Taiwan. Both countries are loyal U.S. wheat importers and are each home to a local USW office that provides trade service, technical support and other resources to the milling and baking industries.

“I want to offer my heartiest congratulations to the Korean team on their first place finish,” says Chang Yoon Kang, USW Country Director for Korea.

In Taiwan, USW, along with the Taipei Baking Association and the Taiwan Flour Millers Association, jointly established the Taiwan Baking Contest Association in 2006.

“The association trains bakers and helps raise money for them to enter contests like the Bakery World Cup around the world,” says Ron Lu, USW Country Director for Taiwan. “We are very proud of this team’s accomplishment and the continued success of the association.”

Watch videos on this year’s competition by visiting https://www.youtube.com/ watch?v=aBBnLYKBR5A& feature=share. Read more about the competition and this year’s competitors by visiting http:// www.coupelouislesaffre.com/ fileadmin/user_upload/Contenus/ espace_presse/CMB/CMB_CP2_ BILAN-ENG.PDF. California Wheat Commission Names New Executive Director

Fernandez was the International Program Director at the Raisin Administrative Committee in Fresno, CA. She brings a breadth and depth of leadership with strategic and analytical thinking as well as innovative skills.

She has experience planning, developing, and implementing successful programs for export markets as well as knowledge analyzing trade statistics and market research and development efforts. She has also developed and maintained relationship with U.S. growers, packers, U.S. government agencies, and international representatives working for the industry.

Roy Motter, CWC Chairman and USW Past Chairman said, “We are very pleased to announce Deanna Fernandez as the new Executive Director and welcome her to the California wheat industry."

"I am excited to begin work at the California Wheat Commission and looking forward to establishing California Wheat as the premium wheat on the market, both domestically and on a global scale," said Fernandez. "I look forward to working with the California Wheat Commission Board and the staff in Woodland, CA.” USW extends its congratulations to Fernandez and looks forward to continuing its relationship with the CWC as a state commission member.

The California Wheat Commission (CWC) is pleased to announce that Deanna Fernandez will become the new Executive Director of the Commission effective March 22, 2016.

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Wheat Industry News USW Technical Managers Travel to Ohio to Gather Information on SRW Functionality. A team of USW technical managers, including Peter Lloyd, Regional Technical Director, USW/Casablanca; Marcelo Mitre, Technical Specialist, USW/Mexico City;

Wheat Industry Weighs in on Wheat ‘Wish List.’

Representatives spanning the entire U.S. wheat chain took part in a forum during the Wheat Quality Council (WQC) annual meeting held Feb. 17 in Kansas City, MO. Panelists, including breeders, producers, millers

be offered April 11 to 15, while the second installment of the course will be held April 18 to 22. These courses are intended for employees, supervisors and managers directly associated with flour milling plant operations.

For more information visit http://www.iaom.info/content/ wp-content/uploads/Ocrimbrochure16.pdf.

Condolences. Our thoughts are with USW Secretary-Treasurer and Washington wheat farmer Mike Miller and family, after the recent passing of his mother, Velda I. Miller, after a brief illness. Find service information and her obituary at http:// danekas.danekasfh.com/tribute/ details/190/Velda-Miller/obituary. html.

The team of USW technical managers at the Soft Wheat Quality Laboratory and Tarik Gahi, Milling & Baking Technologist, USW/ Casablanca, spent the morning of Feb. 24 at the Soft Wheat Quality Laboratory, established

by USDA - Agricultural Research Service in Wooster, OH, 80 years ago. The Lab analyzes soundness and functionality of about 6,000 samples each year for public and private soft wheat breeding programs, is a partner in USW's Overseas Varietal Analysis program and conducts research projects aimed at improving various quality aspects of U.S. soft wheat varieties.

28 Rediscover RediscoverWH WHE AT | MARCH 2016 28 E AT | MARCH 2016

and bakers, were asked to help develop a wish list for the future of the wheat industry. Read the full article at http://www.worldgrain.com/articles/news_home/ World_Grain_News/2016/02/ Wheat_industry_weighs_in_with. aspx?ID=%7B0F188453-43E94A69-8BC5-7880C208C7F2%7D. IAOM to Host Fundamentals of Milling Courses. The International Association of Millers will once again hosts courses at the Ocrim’s International School of Milling Technology in Cremona, Italy.

Fundamentals of Milling I will

Maltby Market Analysis

Hello Kansas Wheat.

by Dan Maltby

The week ended poorly for wheat prices. The USDA’s annual Ag Forum doesn’t release official S&D’s for the 2016/16 crop year, but it does release some projections, basically derived from their educated guesses, rather than surveys or inspections, etc.

For wheat and corn, and beans too, these educated guesses indicate with fairly normal weather, USA grain prices will remain quite weak for at least another year. South American crops have progressed to the point where a true disaster is impossible, thus leaving those hoping for a big rally in the uncomfortable position of rooting for a calamity in the Northern Hemisphere.

That’s not impossible. We’ve seen it before. Russia’s wheat crop burnt up in 2010. The USA’s Corn Belt went through a drought in 2012. Canada had about 60% of a normal wheat crop in 2002. Does that mean one year in five a massive Northern Hemisphere disaster occurs? Probably, yes, on average. And that’s the problem, as averages allow 12 years of perfect weather followed by 3 years of poor crops.

And that seems to be the market mentality when I look at this table. Red fonts = new 11-week closing lows…Only MGEX spring wheat did not set new lows, although they are probably coming too: CLOSE

KWH16

KWN16

KWZ16

CH16

CN16

CZ16

WH16

MWH16

MWN16

SH16

02/26

$4.43

$4.65

$4.99

$3.55

$3.64

$3.78

$4.43

$4.89

$4.99

$8.55

02/19

$4.57

$4.77

$5.11

$3.66

$3.74

$3.87

$4.62

$4.93

$5.06

$8.78

02/12

$4.44

$4.65

$4.99

$3.59

$3.69

$3.82

$4.58

$4.85

$4.95

$8.73

02/05

$4.54

$4.73

$5.07

$3.66

$3.76

$3.89

$4.67

$4.91

$5.04

$8.68

01/29

$4.72

$4.92

$5.25

$3.72

$3.82

$3.93

$4.79

$5.00

$5.12

$8.82

01/22

$4.71

$4.93

$5.23

$3.70

$3.80

$3.92

$4.76

$4.97

$5.09

$8.77

01/15

$4.74

$4.94

$5.26

$3.63

$3.73

$3.85

$4.74

$4.97

$5.11

$8.79

01/08

$4.73

$4.92

$5.26

$3.57

$3.69

$3.83

$4.79

$5.01

$5.17

$8.65

01/01

$4.69

$4.89

$5.24

$3.59

$3.71

$3.83

$4.70

$4.93

$5.13

$8.64

12/25

$4.68

$4.88

$5.21

$3.65

$3.77

$3.89

$4.68

$4.95

$5.15

$8.73

12/18

$4.82

$5.03

$5.35

$3.75

$3.86

$3.97

$4.87

$5.06

$5.26

$8.93

12/11

$4.83

$5.03

$5.35

$3.75

$3.85

$3.96

$4.91

$5.08

$5.27

$8.74

This table shows no buy-signals. In fact, the opposite is true. The long-term bear market remains firmly entrenched, at least technically. And when we take a look at the expected fundamentals, I doubt we’ll see anything to change that conclusion, unfortunately for the USA farmer.

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 #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 1

Rediscover WHE AT | MARCH 2016 29

The bear market in corn, etc., is fairly obvious in this weekly continuous corn chart.

$3.50 is struggling to hold support, and if it caves, then $3.25 and $3.00 will offer even more grudgingly support…it’s hard to imagine corn under $3.00, even with $30 crude oil. And the Forum’s outlook didn’t really indicate $3.00 corn is coming. (Forum presentation slides are here, if you want to see them in more detail…) http://www.usda.gov/oce/forum/2016_speeches/Johansson_Outlook_2016_slides.pdf http://www.usda.gov/oce/forum/2016_speeches/Simone.pdf Here is what an initial USA corn S&D might look like: CORN USA year planted harvested yield production supply exports total use carryout stox/use USA $ farm price

2006/07 78.3 70.6 149.1 10,531 12,510 2,125 11,207 1,304 11.6% $3.04

2007/08 93.5 86.5 150.7 13,038 14,362 2,437 12,737 1,624 12.8% $4.20

2008/09 86.0 78.6 153.9 12,092 13,729 1,849 12,056 1,673 13.9% $4.06

2009/10 86.4 79.5 164.7 13,092 14,774 1,980 13,066 1,708 13.1% $3.55

2010/11 88.2 81.4 152.8 12,447 14,182 1,834 13,055 1,128 8.6% $5.18

2011/12 91.9 84.0 147.2 12,360 13,516 1,543 12,527 989 7.9% $6.22

2012/13 97.3 87.4 123.1 10,759 11,932 731 11,111 821 7.4% $6.89

2013/14 95.4 87.5 158.1 13,829 14,686 1,920 13,454 1,232 9.2% $4.46

2014/15 90.6 83.1 171.1 14,216 15,479 1,864 13,748 1,731 12.6% $3.70

2015/16 88.0 80.7 168.4 13,601 15,382 1,650 13,545 1,837 13.6% $3.60

FORUM 2016

2016/17 90.0 82.3 168.0 13,825 15,702 1,700 13,725 1,977 14.4% $3.45

I don’t know about you, but I personally first look at price projections…and a National Average Farm Price of $3.45 would “only” be 15c/bu less than this year’s NAFP. When we look at the futures table on page 1, current March corn futures are $3.55, and that about matches this year’s NARM of $3.60.

HOWEVER, we can see new crop corn (Z16) futures are $3.78, and March 2017 futures are not shown, but are $3.87, which means…one could say the USDA would not be surprised to see those deferred corn futures FALL ANOTHER 40c/bu. And as things usually extend more than “necessary” … a test of the $3.25 futures level in the long run cannot be ruled out. And that’s with a 168 bu/ac USA average yield. AND it is important to note that the lower price and increased carryout is with a 50 million bu export increase.

What if yield matches the 2014/15 171 bu/ac? What if it is a new record, maybe even 174 bu/ac? Or, of course, what if yield only hits 165 bu/ac, or 162 bu/ac? Or what if we get a drought, and only pop a 123 bu/a yield? These are my guesses: Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 2 30

Rediscover WHE AT | MARCH 2016

CORN USA year planted harvested yield production supply exports total use carryout stox/use USA $ farm price

2014/15 90.6 83.1 171.1 14,216 15,479 1,864 13,748 1,731 12.6% $3.70

2015/16 88.0 80.7 168.4 13,601 15,382 1,650 13,545 1,837 13.6% $3.60

GUESSES 2016/17 2016/17 90.0 90.0 82.3 82.3 168.0 171 13,825 14,072 15,702 16,088 1,700 1,800 13,725 13,805 1,977 2,283 14.4% 16.5% $3.45 $ 3.25 $

FORUM 2016

2016/17 90.0 82.3 174 14,318 16,335 1,850 13,855 2,480 17.9% 3.05 $

2016/17 90.0 82.3 165 13,578 15,595 1,650 13,675 1,920 14.0% 3.60 $

2016/17 90.0 82.3 162 13,331 15,348 1,600 13,625 1,723 12.6% 3.70 $

2016/17 90.0 82.3 123 10,122 12,178 800 11,825 353 3.0% 6.00

My guess is a 171 bu/ac yield takes March 17 futures to the $3.00 area relatively easily. A higher yield will break through $3.00.

You might argue that my price projections with yield reductions are too low, but we need to keep in mind two ideas: the world in general is burdened with large grain supplies and China especially wants to draw her massive supplies down by importing less, and secondly, the US dollar is quite strong, and is expected to stay that way.

What about wheat? KC March here; last time we’ll look at it. Good riddance I say.

Red line is the new weekly close; an 11 week low close. What a dog.

IF the Trend line could ever sustain a couple of closes above it, we could get a short-covering rally, but If has been such an elusive word.

Let’s take a look at projected fundamentals. The far right column is the Forum outlook.

Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 3

Rediscover WHE AT | MARCH 2016 31

USA ALL WHEAT year planted harvested yield carry in production imports total supply

2/9/2016

FORUM

2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 59.6 57.2 57.3 60.5 63.2 59.2 53.6 54.4 55.3 56.2 56.8 54.6 51.0 50.0 50.1 46.8 51.0 55.7 49.9 47.6 45.7 48.8 45.3 46.4 47.1 43.4 43.2 42.0 38.6 40.2 44.9 44.5 46.3 43.7 46.2 47.1 43.7 43.6 45.9 546 540 571 456 306 657 976 862 743 717 590 752 966 2157 2103 1808 2051 2499 2218 2207 1999 2252 2135 2026 2052 1992 71 81 122 113 127 119 97 112 123 173 149 120 125 2774 2724 2501 2620 2932 2994 3280 2973 3118 3025 2765 2924 3083

food seed feed/residual domestic use

910 78 181 1169

917 77 157 1151

938 82 117 1137

948 88 16 1052

927 78 255 1260

919 69 148 1136

926 71 132 1129

941 76 163 1180

945 73 370 1388

955 77 228 1260

958 81 120 1159

967 66 150 1183

977 66 200 1243

exports

1066

1003

908

1263

1015

881

1289

1051

1012

1176

854

775

850

total demand

2235

2154

2045

2315

2275

2017

2418

2231

2400

2436

2013

1958

2093

carryout

539

570

456

305

657

977

862

742

718

589

752

966

990

stox/use

24.1%

26.5%

22.3%

13.2%

28.9%

48.4%

35.6%

33.3%

29.9%

24.2%

37.3%

49.3%

47.3%

farm price

$ 3.40

$ 3.42

$ 4.26

$ 6.48

$ 6.78

$ 4.87

$ 5.70

$ 7.24

$ 7.77

$ 6.87

$ 5.99

$ 5.00

$ 4.20

The first thing that jumps out at me is the national average farm price of only $4.20, compared to this year’s $5.00 (prices were higher at harvest…and have gone straight down since the wheat was cut.)

Current KC March16 futures are only $4.42, and the current actual cash wheat price in Kansas is about $3.90. IF the basis stayed about the same, about -50, with the projected cash price of $4.20, then one could imply that $4.70 KC wheat futures are coming. Now you might be tempted to say “That’s good, as it means futures are going to rally 30c!” Well…KC March 17 futures are $5.12, which means deferred futures have another 50c downside.

Maybe the take away with a current farm price of $3.90, and a projected price of $4.20, wheat is cheap enough. Again, large world wheat supplies and a very strong US dollar…limit USA wheat export potential. UNLESS…USA corn or Russian wheat or Canadian wheat droughts out. If they don’t, sell rallies, and conserve your cash, as banks are not in a very good mood either.

Here’s the same chart with March17 futures overlaid, in blue. 70c above current prices. The only way to lock in that carry to pay for storage charges is to sell those March 17 futures.

Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 4 32

Rediscover WHE AT | MARCH 2016

Posted cash bids dropped 14c or so.

Date 02/26 02/19 02/12 02/05 01/29 01/22 Date 02/26 02/19 02/12 02/05 01/29 01/22 BASIS 02/26 02/19 02/12 02/05 01/29 01/22 Date 02/26 02/19 02/12 02/05 01/29 01/22

Dodge $3.78 $3.92 $3.79 $3.89 $4.07 $4.06 Concordia $3.92 $4.07 $3.94 $4.04 $4.22 $4.21 Dodge -65 -65 -65 -65 -65 -65 Concordia -50 -50 -50 -50 -50 -50

Date 02/26

Dodge $3.45

Colby $3.88 $4.02 $3.89 $4.02 $4.20 $4.19 Salina $4.03-$4.08 $4.17-$4.22 $4.04-$4.09 $4.14-$4.19 $4.27-$4.32 $4.26-$4.31 Colby -55 -55 -55 -52 -52 -52 Salina -40, -35 -40, -35 -40, -35 -40, -35 -45, -40 -45, -40

Goodland $3.84 $3.99 $3.86 $3.96 $4.14 $4.12 Hutchinson $3.81-$4.13 $3.95-$4.27 $3.82-$4.14 $3.92-$4.24 $4.10-$4.42 $4.09-$4.41 Goodland -58 -58 -58 -58 -58 -59 Hutchinson -62, -30 -62, -30 -62, -30 -62, -30 -62, -30 -62, -30

Protection $3.83 $3.97 $3.84 $3.94 $4.12 $4.11 Wichita $3.89-$4.11 $4.03-$4.25 $3.90-$4.12 $4.00-$4.22 $4.18-$4.40 $4.17-$4.39 Protection -60 -60 -60 -60 -60 -60 Wichita -54, -33 -54, -33 -54, -33 -54, -33 -54, -33 -54, -33

Scott City $3.77 $3.92 $3.79 $3.89 $4.03 $4.02 Ark City $3.88 $4.02 $3.89 $3.99 $4.17 $4.16 Scott City -65 -65 -65 -65 -69 -69 Ark City -55 -55 -55 -55 -55 -55

Sublette $3.73-$3.78 $3.87-$3.92 $3.74-$3.79 $3.84-$3.89 $4.02-$4.07 $4.01-$4.06

Protection $3.40

Scott City Sublette $3.40 $3.55

Sublette -70, -65 -70, -65 -70, -65 -70, -65 -70, -65 -70, -65

Here is a comparison to corn bids in Western Kansas:

Colby $3.27

Goodland $3.20

The Sublette corn bid is only 23c less than their wheat bid. IF corn futures would quit going down, eventually they could support wheat. But we already discussed why corn might not quit going down‌ Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 5

Rediscover WHE AT | MARCH 2016 33

IN the meantime, it is warm and dry in Wheat Country…and relief will be limited this week.

Looks like a tenth or less this week; maybe it gets better next week. As wheat greens up and starts growing, moisture requirements increase. Soon we’re going to need a quarter-inch a week, not just a tenth, or the wheat will go backwards.

The Forum fundamentals far right wheat column showed a national average USA wheat yield of 45.9 bu, a 2.3 bu/ac INCREASE this year. I guess we’ll soon see. I received a couple of emails from Montana this week. It’s dry up there too, and so is much of Saskatchewan and Alberta. But with the world sitting on almost 240 million metric tonnes of wheat, I doubt buyers are nervous just yet.

Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 6 34

Rediscover WHE AT | MARCH 2016

MORE than likely, these world ending stocks will be LOWER at the end of 2016-17. Indian stocks will decrease, the verdict is out on the Black Sea area, and it’s currently dry (but very early) in North America, although we know USA winter wheat acres are down about 7%.

This is KC July wheat, sitting around $4.64ish…

No buy signals, and new lows bring in new selling. But we’ll watch that trend line for clues, and ultimately the 200-day moving average will be key.

It might be an interesting spring/summer.

Or it might not; this might not be one of the “one in five years”. It might be great weather. If so, prices will not be great. That is what we have to expect.

Maltby Market Analysis is provided weekly to members of the Kansas Association of Wheat Growers via email. To become a KAWG member and subscribe, please contact Jordan Hildebrand at jhildebrand@ kswheat.com.

Kansas Wheat market update #210 danmaltby.riskmgmt@gmail.com 02/26/16 pg. 7

Rediscover WHE AT | MARCH 2016 35

Upcoming Events MAY 2016 • Hard Winter Wheat Tour, May 2, 2016 to May 5, 2016, - Wheat Quality Tours actually tour the wheat crops in the fields. These tours give you first-hand experience and understanding of the quality of this year's wheat crop even before it is harvested.

• Kansas Wheat Day, May 26, 2016, K-State Agricultural Research Center-Hays, 1232 240th Ave, Hays, KS 67601

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