Rediscover Wheat - May 2016

TM

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

MAY 2016

INSIDE THIS ISSUE

Should Farmers Share More?

Consumers Say Yes Mapping wheat ancestors' genomes to implement valuable traits Kansas Wheat Yield Contest

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In This Issue :

TM

Volume 3 • Number 4 www.rediscoverwheat.org The official publication of

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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Wheat Tour 2016 releases final projection Should Farmers Share More? Consumers Say Yes Recipe: Jalapeno Cheddar Wheat Hamburger Buns Wheat Foods Council Mapping wheat ancestors' genomes to implement valuable traits

9 Recipe: Mountaintop Biscuits 10 Kansas Wheat Yield Contest 2016 12 IGP Stakeholders News Brief 14 News from the National Association of Wheat Growers 22 News from U.S. Wheat Associates 34 Maltby Market Analysis 40 Upcoming Events

T

Wheat Tour 2016 releases final projection

he 2016 Hard Winter Wheat Tour was uplifting for the participants because calculated yields were higher than anticipated, disease pressure was lower than expected, and the three days of the tour had some of the best weather so far this spring.

The three-day average was 48.6 bushels an acre, nearly a 13 bushel increase from last year.

The official tour projection for total production numbers of hard red winter wheat to be harvested in Kansas is 382.4 million bushels.

This number is calculated based on the average of estimated predictions from tour participants who gathered information from 655 fields across the state.

“There are less acres planted this year but we are seeing wheat become a higher managed crop than in the past; that's allowing us to see higher yields,” said Justin Gilpin, Kansas Wheat CEO. “One thing that was a little surprising was how many fields had been treated with fungicide to help with stripe rust,” said Gilpin.

“Last year stripe rust became a big yield inhibitor in Kansas, so

farmers should be commended for taking steps to control the disease this year.”

The Hard Winter Wheat tour is sponsored by the Wheat Quality Council. This year's tour hosted 83 participants from across the globe in 23 vehicles while traveling across the state on six routes. For more information about what participants saw statewide, follow #wheattour16 on Twitter.

Even though the crop is about 10 days to two weeks ahead of average, harvest still won’t begin until early to mid-June. A lot can happen during that time, and none of it is good. The wheat still needs additional moisture and cool temperatures to realize that yield potential.

The last time yield reached 48 bushels per acre was in 2003, but at that time 10.5 million acres were planted to wheat. Planted acres this year are the lowest since 1957 at 8.5 million.

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Should Farmers Share More?

Consumers Say Yes.

By Julia Debes

W

ith wheat harvest quickly approaching, eyes all over the world are watching the Kansas crop. This includes consumers, who consistently report that they want to hear from the farmers who produce the foods they eat.

“There’s nothing quite as personal as the food we consume and feed our families,” the Center for Food Integrity (CFI) stated in its most recent research report, which detailed how farmers

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and food companies can meet consumer desires for more information on how their food is produced and processed.

Since 2007, the Center for Food Integrity (CFI) has conducted research on consumer trust as related to the U.S. food system.

Their 2015 research report, titled “A Clear View of Transparency and How It Builds Consumer Trust,” builds on three years of research into how consumers

perceive food system transparency and what farmers and industry groups can do to more effectively communicate with consumers in a meaningful way.

ISO: More Transparency and Engagement CFI explored transparency as related to six different subjects: food safety, impact of food on health, environmental impact, labor and human rights, animal well-being and business ethics.

According to CFI’s research, consumers rated food safety and impact of food on health as top priorities for information. As stated in the report, that data includes ingredients, allergens, preservatives and if ingredients were derived from GMO seed.

In all categories, consumers wanted the ability to engage with food companies – not only by having information provided in easy-toaccess ways like a company website, but also by having the ability to dialogue on issues with companies.

Just behind food companies, consumers ranked farmers as second in all six categories when asked who has the responsibility to demonstrate transparency. In particular, farmers and food companies were virtually tied in responsibility for disclosure of environmental impact.

Continuing a Positive Trend Over the last eight years of study, CFI stated a larger percentage of consumers reported having access to information about food production and safety. Still, less than 30 percent of consumers overall strongly agreed with the statement “I have access to all of the information I want about where my food comes from, how it is produced and its safety.”

To take these results a step further, CFI analyzed how this desire for information and engagement can turn into social outrage in situations like a food illness outbreak. CFI determined two elements contribute to triggering social outrage: “a high level of concern about the issue and a strong belief that the issue will have a personal impact, or impact vulnerable populations like children and the elderly.”

CFI also examined the most effective ways for farmers and food companies to manage these social outrage situations. The report stated transparency plays a key role and broke down the concept into seven elements: motivation, disclosure, stakeholder participation, relevance, clarity, credibility and accuracy. CFI pointed out that motivation, or acting “in a manner that is ethical and consistent with stakeholder interests” is particularly important for consumers who perceive big companies – like commercial farms or large food companies – as “motivated more by profit than public interest.”

Whether a food company is responding to a recall or illness outbreak or a farmer is simply trying to answer questions about the environmental impact of his operation, the report results boil down to one basic concept: “It’s simple: If you increase transparency, you will increase trust.”

For more information, read the full CFI 2015 report at http:// kswheat.com/sites/default/files/ cfi-2015-consumer-trust-researchbooklet.pdf.

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Jalapeno Cheddar Wheat Hamburger Buns Ingredients 1 cup King Arthur 100% Whole Wheat Flour 3-3 1/4 cups King Arthur Unbleached Bread Flour, divided 1 (1/4 ounce) package rapid rise yeast 1 3/4 cups water 1/4 cup extra-virgin olive oil 1 1/2 teaspoons salt 1 tablespoon finely minced green jalapeno pepper 1 tablespoon finely minced red jalapeno pepper 1 3/4 cups shredded sharp Cheddar cheese, room temperature, divided 3/4 cup grated Asiago cheese, room temperature, divided 1 large egg, beaten with 1 tablespoon water 2 tablespoons cornmeal, divided

Nutrition Information Makes 16 buns. One bun provides approximately 376 calories; 13 g protein; 55 g carbohydrate; 3 g dietary fiber; 10 g fat (4 g saturated); 27 mg cholesterol; 138 mcg folate; 3 mg iron and 360 mg sodium.

KWC Test Kitchen Tip: Wear plastic gloves to handle peppers.

Use a mini food processor to finely chop jalapeno peppers.

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Directions 1. In bowl of mixer, combine whole wheat flour, 2 1/2 cups bread flour, and yeast.

2. Heat water and olive oil to 120ยบ to 130ยบF. Add to bowl mixture; beat 2 minutes on medium speed.

3. Add salt, green and red jalapeno peppers, 1 1/2 cups Cheddar cheese, 1/2 cup Asiago cheese and enough of the remaining bread flour to make moderately soft dough.

4. Knead dough by hand or with dough hook 5 to 8 minutes.

5. Cover dough in bowl, let rest 10 minutes (replaces first rise in 2-rise recipes).

6. Divide dough into 16 equal balls. Flatten balls with rolling pin to 4 inches in diameter. Place on baking sheets that have been dusted with cornmeal. Cover; let rise in a warm place until double.

7. Preheat oven to 400ยบF. Brush bun tops with egg wash and sprinkle with remaining Cheddar cheese and Asiago cheese.

8. Bake 20 to 25 minutes or until golden brown. Remove buns from pan. Cool on wire rack.

Statement Regarding Glycemic Index and Lung Cancer Study.

Wheat Foods Council Encourages a Whole Diet Approach to Health The latest study to associate glycemic index with disease risk was published in the March issue of Cancer Epidemiology, Biomarkers and Prevention. The study involved 1,905 newly diagnosed lung cancer cases in nonHispanic white people and a control group of 2,413 healthy non-Hispanic white people. The study found a higher “association” between people eating diets in the highest quintile (20%) of glycemic index and an increased risk of lung cancer.

Association and causation are not the same thing: association means that there’s a tendency for one factor to be linked to another but does not mean that one thing causes another, a point that is often misunderstood.

For example, many heavy smokers who develop lung cancer tend to be coffee drinkers. Therefore, there’s an “association” between coffee and lung cancer cases but drinking coffee doesn’t “cause” lung cancer (smoking does) (REF: http://www.fasebj.org/content/29/1_Supplement/906.28.short).

The glycemic index has been used as a marker of carbohydrate quality since first being defined in the early 1980’s. Like many diet quality indexes, it falls far short of telling a complete story.

“The glycemic index has never been a reliable indicator of carbohydrate or diet quality,” notes Corrie Whisner, Ph.D., of Arizona State University. For example, higher glycemic index foods (including carrots, sweet potatoes, and whole wheat bread) have been associated with a reduced risk of disease. To exclude foods based only on their glycemic index alone would mean reducing important nutrients such as fiber and beta-carotene. In addition, the glycemic effect of specific foods like pasta or bread depends on the other meal components since these foods are not eaten alone. The amounts of protein and fat eaten with carbohydrates change the rate of absorption and glycemic load. Whisner noted, “An association between glycemic index and disease doesn’t tell the whole story which is probably more about what is missing in the diet (fiber, nutrients, fruits and vegetables, healthier fats, etc.) than what has been eaten.”

A better indicator of diet quality is following a food-oriented approach like the one suggested by MyPlate, the DASH diet or a Mediterranean Diet. All three of these dietary patterns have been shown to reduce overall chronic disease risk. In addition, when considering any dietary pattern or food, it’s important to realize that eliminating one type of food or group can have unintended consequences on the rest of the diet and the health of our gut bacteria. For example, if pasta is excluded from the diet, B vitamins, iron, fiber and folate are also reduced unless great care is taken to replace them with other foods. In addition, many people consume marinara (tomato sauce) and other vegetables with pasta, and this impacts risk of disease as well.

About the Wheat Foods Council The Wheat Foods Council is a nonprofit organization formed in 1972 to help increase public awareness of grains, complex carbohydrates, and fiber as essential components of a healthful diet. The Council is supported voluntarily by wheat producers, millers, bakers, and related industries. For more information, visit the WFC website, www.wheatfoods.org.

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Mapping wheat ancestors' genomes to implement valuable traits

Wild relatives of wheat contain valuable traits for wheat breeding

By Audrey Schmitz, Kansas Wheat Communications Intern

I

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

Kansas wheat farmers are funding research into this resiliency through their investment in the Kansas Wheat Commission.

Eduard Akhunov, associate professor in plant pathology at Kansas State University, has been dedicating his time to creating markers for wheat ancestor species genomes to identify valuable genes, like these, which could improve wheat’s resiliency.

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

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

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

According to Akhunov, they characterize a diverse collection of wild ancestors and relatives 8

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of wheat in collaboration with colleagues from the Wheat Genetics Resources Center, Department of Agronomy and the KSU Integrated Genomics Facility.

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

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

According to Akhunov, molecular markers are used to mark variations in genome sequences of DNA. These markers allow researchers to pinpoint exactly where in the genome the exact gene for a specific resistant or high-yielding trait is located, much like symbols you’ll see on a map differentiating hospitals from tourist attractions. If researchers find the marker in a genetic sample, they know that the gene is present, long before it would have been expressed when planted in a test plot.

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

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

“Starting next year, we will start putting plants developed using some of these sequenced ancestors into the field,” said Akhunov.

“With our K-State collaborators we will start phenotyping them for drought, disease resistance, and for all the traits. This kind of data will help us to identify genes that control these traits.”

Mountaintop Biscuits Ingredients 3 cups all-purpose flour 2 tablespoons granulated sugar 4 1/2 teaspoons baking powder 3/4 teaspoon cream of tartar 3/4 teaspoon salt 3/4 cup vegetable shortening 1 beaten egg 1 cup low-fat milk

Directions 1. Preheat oven to 450 degrees F. 2. Stir flour so it is not packed from being in container. Measure dry ingredients and level off.

Sift flour with sugar, baking powder, cream of tartar, and salt into medium bowl.

3. Cut in shortening, with pastry blender or 2 knives (used scissors-fashion), until mixture resembles coarse meal.

Nutrition Information

once. Stir with fork just long enough to make a soft dough that forms a ball.

Prep Time: 35 minutes Bake Time: 12 minutes Yield: 12 2 1/2-inch biscuits

5. On lightly floured surface, knead lightly about ten times.

Roll or pat dough to 1-inch thickness using as little flour as possible. Cut straight down into dough with a 2 1/2-inch biscuit cutter, being careful not to twist cutter.

Nutrition Per biscuit: 257 cal, 14 g fat, 19 mg chol, 557 mg sodium, 28 g carbo, 1 g fiber, 4 g pro, 50 mcg folate.

6. Place 1-inch apart on ungreased cookie sheet. Bake 12 to 15 minutes.

4. Combine egg and milk, and add to flour mixture all at Rediscover WHE AT | MAY 2016 9

Open to any Kansas wheat farmer, ages 18 and up!

Yield Contest Awards Win up to $1,750!

First place winner in each region wins $1,000. Additional cash awards may be presented by corporate sponsors. Awards will be presented at the Kansas State Fair in September.

Win an additional $500 for using a wheat variety from one of our sponsors: Any winner that uses a Kansas Wheat Alliance variety will receive an additional $500 award (sponsored by Kansas Wheat Alliance).

Any winner that uses a Plains Gold variety will receive an additional $500 award (sponsored

by Plains Gold).

Any winner that uses an Agripro variety will receive an additional $500 award (sponsored

by Syngenta/Agripro).

Any winner that uses a Limagrain variety will receive an additional $500 award (sponsored

by Limagrain Cereal Seeds).

Any winner that uses a WestBred variety will receive an additional $500 award (sponsored

by WestBred/Monsanto).

Participants may enter the optional Quality Initiative, by collecting a one-gallon sample of 10

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seed at harvest and sending it to the Kansas Wheat Commission.

The sample will be graded and analyzed for various quality components. The sample with the highest overall quality, mill and bake scores will receive $250.

2016 Kansas Wheat Yield Contest Rules Contest Deadlines The official Kansas Wheat Yield Contest Entry Form must be postmarked by June 1, 2016.

A Management Form, Harvest Rules, and a Harvest Report Form will be mailed to the contestant prior to harvest. These forms must be postmarked by July 8, 2016.

Contestant Qualifications Eligible classes of wheat for the 2016 Yield Contest include Hard White winter and Hard Red Winter wheat only. Contestant must be a certified FSA owner/ operator of the entry plot. A copy of the FSA Form 578, including farm summary, must be submitted with the contest entry form.

Contestants may enter more than once, but each entry must be submitted on a separate entry form. Partnerships can enter under the partnership, if the partnership holds a membership.

Contestants must be 18 years old at the time of entry.

Kansas Wheat directors, employees and spouses are prohibited from entering the contest.

Entry Fee A $50 entry fee is required. This fee will be used to defray the cost of hiring a Third Party Verifier at harvest. Members of the Kansas Association of Wheat Growers will receive one free entry.

Contest Regions The contest covers three regions of Kansas; it is open to dryland fields only.

Dryland: Any field that has not received any supplemental water since the last harvest or during the growing season.

Region 1 (Eastern Kansas): Any field located in Kansas east of Washington, Clay, Dickinson, Marion, Harvey, Sedgwick and Sumner Counties.

Region 2 (Central Kansas): Any field located in Kansas between the Eastern Region Boundary and east of Norton, Graham, Trego, Ness, Hodgeman, Ford and Clark Counties.

Region 3 (Western Kansas): Any field located in Kansas west of Phillips, Rooks, Ellis, Rush, Pawnee, Edwards, Kiowa and Comanche counties.

Field Qualifications

Farm Credit Services officer

A complete field of 5 or more continuous acres, planted in the wheat seed variety named on the entry form, will be designated as the contest field. The contest field must be designated on an aerial map. The aerial map must be included with the Harvest Report.

Bank Ag Loan Officer

Supervisor Eligibility Qualifications A Third Party Verifier (supervisor) must witness the harvest of the contest plot, oversee all calculations and field measurement. The supervisor must be present during the harvesting, weighing, moisture testing and reporting to the Kansas Wheat office. The entrant is responsible for mailing the information.

Note for the 2016 Contest: Beginning in 2013, contestants were to solicit their own supervisor. This requirement will continue with the 2016 contest.

A supervisor cannot be related to the contestant, an employee, an employer, a manager or consultant of the contestant or their farm.

He/she cannot have financial or direct business ties to a company that sells agribusiness supplies, i.e. totally independent.

Call the Kansas Wheat office if you are unsure if an individual qualifies to be a supervisor.

Qualifying supervisors include: FFA Advisor Vocational Ag Instructor County Extension Agent or Assistant Natural Resource Conservation Service senior staff Farm Service Agency CED/Loan Officer

Private Crop Consultant

Participants may enter the optional Quality Initiative, by collecting a one-gallon sample of seed at harvest and sending it to the Kansas Wheat Commission.

The sample will be graded and analyzed for various quality components. The sample with the highest overall quality, mill and bake scores will receive $250.

College of Ag instructor Crop Insurance Agent/Adjustor Retired Individual with listed job title Harvesting Rules and Reporting Results Harvest operations are to be witnessed by supervisors designated on the entry form.

Combine grain hopper is to be inspected and empty before harvest begins. A minimum of 5 acres are to be harvested; however the weight from the entire field may be taken, if desired.

The quality evaluation is conducted at the ADM Milling Quality Laboratory in Overland Park. ADM and the Kansas Wheat Commission sponsor the Quality Initiative.

Prior to harvest, the Kansas Wheat Commission will send collection bags to participants.

Judging

Weight shall be verified by official elevator scale tickets.

Nothing else will be accepted.

Moisture percentage and foreign matter must be recorded on the scale ticket. Yield must be adjusted to 12% moisture by using this formula (to nearest 0.01 bushel): Final Yield = (weight / plot size / 60 lbs) x (1 – (moisture/100)) ________________________

1 – (12 / 100)

Foreign matter in excess of 1% will be deducted from the yield, as stated on the scale ticket.

What to Send in After Harvest Send to Kansas Wheat Office by July 8, 2016:

Judging will take place at the Kansas Wheat office in Manhattan, Kansas, during the week of July 25, 2016. All entrants will be checked for accuracy.

Judges’ decisions are final.

Contest Winners

Contestant with the highest score will win in each category.

Awards Cash awards will be given by Kansas Wheat. First place winner in each region wins $1,000.

Additional cash awards may be presented by corporate sponsors.

Awards will be presented at the Kansas State Fair in September.

Harvest Form Official Elevator Scale Ticket Aerial Map of Field Management Form Quality Initiative Rediscover WHE AT | MAY 2016 11

April 2016

STAKEHOLDER NEWS BRIEF Moving the Mission

Jay O’Neil

The fun continues at the IGP Institute. I completed the annual two-week IGP Institute Grain Purchasing course, with participants from seven countries (Argentina, Brazil, Colombia, Haiti, Turkey, Saudi Arabia and the United States).

It is a pleasure to work with our international customers to share our knowledge of Kansas and U.S. crops, and make new friends in the process.

We also received a visit from Phibro Animal Health representatives who brought some of their key customers from Mexico.

Meanwhile, Carlos Campabadal was busy hosting a United States Soybean Export Council (USSEC) webinar for ANFACA (Asociación Nacional de Fabricantes de Alimento para Consumo Animal) in Mexico, participating in the Pet Food Forum in Kansas City, and attending the USSEC Feed Manufacturing Animal Nutrition workshop in Trinidad.

Also, Brandi Miller and the distance education team hosted four GEAPS/K-State professional development courses for 130 participants. In addition, Brandi hosted research associates from the Institute of Technology (FINS),

On April 27 our communications team met with stakeholder communication partners to share new ideas and create opportunities for overlap within the individual programs. There was also a guest speaker from K-State’s Division of Communications and Marketing present to address the topic of communications in the digital era with which we live in today. The next meeting is set for October.

We are fortunate that everyone enjoys their work at the IGP Institute and is willing to put in the extra hours. We know that it is an excellent cause and well worth the effort to show our support for the Kansas grain producers and the international cooperators with whom we work closely.

Regards,

Jay O’Neil IGP Institute Senior Economist; Grain Marketing and Risk Management Curriculum Manager

In the Spotlight

Trainings and Activities

• Mill Manager

Courses and activities held in April.

• Grain Purchasing

• Resident of Argentina • Participant in the Grain Purchasing course

Ricardo Navilli

University of Novi Sad, Serbia and a Chinese delegation from Henan University of Technology along with four Chinese flour millers. She also supported Food Safety Preventive Controls Alliance (FSPCA) for an Animal Food pilot course in Kansas City, Missouri.

“I’ve gained an understanding of all the possibilities that are out there to manage risk. I enjoyed the practicality of the course overall.”

• GEAPS 510 – Grain Facilities Planning and Design I • GEAPS 541 – Developing and Effective Safety Culture • GEAPS 552 – Materials Handling II • GEAPS 525 – Management of Insect Pests

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

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Marketing Minute

by Lisa Moser In an effort to maximize collaboration, the IGP communications team invited our stakeholder communications partners to meet on April 27 for an idea swap and discussion about opportunities for coordinated communication outreach. Joining us in person and virtually were representatives of the U.S. Wheat Associates, Kansas Wheat Commission, WISHH (World Initiative for Soy in Human Health), Kansas Soybean Commission, Kansas Grain Sorghum Commission, U.S. Grains Council and the Kansas Department of Agriculture.

Each group shared their specific communications goals and the methods they are using to best accomplish them. Through our discussion we learned about greater opportunities to partner on broadcast efforts with our Kansas commodities. We also discussed the potential to develop a series of videos that would feature Kansas commodities from planting to harvest to the end product.

Following our discussion, Ashley Martin, director of marketing for the K-State Division of Communications and Marketing presented a talk on Sound Bite Communications in a Digital Era. She shared with us ways to make our messaging more concise and targeted.

The next meeting will be planned for October 12, 2016.

From left: Lisa Moser, Kelly Hannigan, Pat Damman, Jordan Hildebrand, Marsha Boswell, Brad Parker, Heather Lansdowne, Kerry Wefald and Pat Hackenberg.

Participants of the Grain Purchasing course traveled to Portland, Oregon as part of the course field trip (top) and in the classroom (bottom).

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

• Hosted the United States Soybean Export Council (USSEC) Webinar for ANFACA (Asociación Nacional de Fabricantes de Alimento para Consumo Animal) – Mexico.

• Participated in the Pet Food Forum in Kansas City, Kansas.

• Participated in the USSEC Feed Manufacturing and Animal Nutrition Training for the Caribbean Poultry Industry in Port of Spain, Trinidad.

• Hosted a field trip to Portland, Oregon.

• Hosted a field trip to export facility and the Federal Grain Inspection Service (FGIS) Tech Center in Kansas City, Missouri.

• Attended and spoke at meeting at the Kansas Department of Agriculture with visitors from Japan for the commodity check-off program.

• Hosted Chinese Milling delegation.

• Held annual KSU/GEAPS Strategic Planning Meeting.

• Supported Food Safety Preventive Controls Alliance (FSPCA) for Animal Food pilot course in Kansas City, Missouri.

• Attended U.S. Wheat/National Association of Wheat Growers joint meeting in Washington, D.C. • Hosted U.S. Wheat officer visit.

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News from : NAWG Weekly Updates April 8, 2016 Senate Committees Review Farm Bill Programs, Funding Needs The Senate Agriculture Appropriations Subcommittee held a hearing to discuss the opportunities available to military veterans who return to civilian life with a desire to explore farming and agriculture as a way to transition into their post-military careers. USDA has in the past funded similar efforts in the form of farm loans to help and encourage veterans to purchase the land necessary to begin small-scale farming, and to further educate them regarding conservation programs, financial and business planning, and risk management.

The hearing featured testimony from USDA’s Military Veterans Agricultural Liaison Lannon Baccam as well as by witnesses involved in programs which work to incorporate veterans into agriculture, including the Soldier Agricultural Vocation Education program in Kansas, and the Central Oregon Veterans Ranch.

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The Senate Agriculture Subcommittee on Rural Development and Energy also held a hearing to review USDA Rural Development programs authorized in the Farm Bill and to get input from industry stakeholders about how the programs have been working. USDA Rural Development Undersecretary Lisa Mensah testified during the hearing and indicated that the Department administers a loan portfolio of $212 billion across its portfolio of business, energy, housing, and other programs.

She highlighted the impact that programs like the Value-Added Producer Grant Program have had in assisting young and beginning farmers in starting a business and discussed the regional approach the Department has taken to spur economic growth through initiatives like StrikeForce and Promise Zones. Members of the Subcommittee also raised the issue of counties containing both very rural and high population density areas not being eligible for beneficial programs. A second panel featured testimony from

the President of the Iowa Farm Bureau, the head of the Iowa Renewable Fuels Association, and the President of Dakota Turbines in North Dakota. They discussed the importance of renewable energy programs authorized in the Farm Bill, and areas where improvements could be made. Video of the hearing, as well as testimony, can be found at http://www.agriculture. senate.gov/hearings/usda-ruraldevelopment-programs-and-theireconomic-impact-across-america.

USDA Releases Prospective Plantings Report On March 31, 2016, the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service (NASS) released its most recent version of its Prospective Plantings report, estimating the anticipated planted acres for the upcoming crop year. The report indicates that winter wheat is down about 8 percent from last year at 36.2 million acres; spring wheat is estimated to be down 14 percent at 11.3 million acres and Durum is estimated to be up 3 percent at 2 million acres. In aggregate, the

NASS report estimated that all wheat would be down 9 percent from last year at 49.6 million acres. In addition to wheat, the Prospective Plantings report estimates that corn acreage will be up 6 percent at 93.6 million acres, soybean acreage to be down less than 1 percent at 82.2 million acres, and cotton acres to be up 11 percent at 9.56 million acres. The most recent NASS Crop Progress report estimates the winter wheat crop conditions for 18 selected states for the week ending April 3.

That report estimates 10 percent of the crop to be “Excellent” and 49 percent to be “Good.”

A breakdown of the estimated conditions by state can be found at http://www.usda.gov/nass/PUBS/ TODAYRPT/prog1516.pdf.

The trend of declining wheat acres over the past three decades is alarming. Beyond the normal planting fluctuations that will occur with low commodity prices, wheat productivity hasn’t kept pace with other crops or with production in other countries.

Rather than allow this trend to continue, NAWG has initiated several initiatives designed to increase productivity and the competitiveness of wheat in production agriculture. This year, the National Wheat Foundation (NWF), which is the charitable arm of NAWG, launched the nation’s first National Wheat Yield Contest in over 20 years.

This competition is intended to drive innovation in the wheat industry, facilitate knowledge transfer between growers, urge experimentation with new technologies, and identify top wheat producers in each state.

The farmer leaders of NAWG and NWF have also launched the development of a National

Wheat Action Plan (NWAP).

Through an extensive stakeholder input-gathering process, the NWAP is intended to serve as a catalyst to increase public and private wheat research and improve productivity and farmer profitability, and reverse the decline in wheat acres of the last 30-plus years. And finally, through NAWG’s farmer-led board of directors, its policy committees are continually analyzing policies affecting agriculture, including the effectiveness of the 2014 Farm Bill.

because it doesn’t advocate for or against specific legislation. Instead, the billboard encourages people to write to their lawmakers to tighten restrictions on farmland proximity to waterways. A copy of the Senators’ letter to EPA can be found http://www.epw.senate.gov/ public/_cache/files/cceb3e31-b5004785-81fa-41d6341e5e39/epagrant-inhofe-roberts-letter-040516. pdf.

Senators Roberts and Inhofe Request Investigation into EPA Billboard

NAWG Environmental Policy Advisor Keira Franz participated in Field to Market’s Information, Communication and Engagement Committee. The committee discussed the ongoing work of the fieldprint projects and tools needed to encourage participation and undertake new projects as well as recognizing existing participation.

The group also discussed other sustainability efforts underway and their potential compatibility with Field to Market (FTM). NAWG is a long-time member of FTM and NAWG Vice President David Schemm currently serves as one of three grower representatives on the FTM Board of Directors.

Schemm participated in the FTM Technology Committee meeting. For more information on Field to Market: The Alliance for Sustainable Agriculture and to use the Fieldprint Calculator to gather feedback on your agricultural operation, go to https://www. fieldtomarket.org/.

Senator Pat Roberts, Chairman of the Committee on Agriculture, Nutrition and Forestry, and Senator James Inhofe, Chairman of the Committee on Environment and Public Works have filed a request to the EPA’s Office of Inspector General (OIG) for an investigation into the potential misuse of funds for advocacy billboards in Washington state. The billboards seem to have been funded by an EPA grant to the Northwest Indian Fisheries Commission which was used to pay a PR and lobbying firm to execute an advocacy campaign which claims that “unregulated agriculture is putting our waterways at risk.”

Given regulations covered by the Antilobbying Act, the EPA’s role in funding a lobbying campaign against farmers, particularly the lack of transparency in the source of that funding, would be in conflict of regulations prohibiting the spending of federal money on political and lobbying activities.

The EPA states that the campaign has not broken prohibition on lobbying with federal funds

NAWG Participates in Field to Market Meetings

Educational Session Videos from 2016 Commodity Classic Now Available With record-high attendance, the 2016 Commodity Classic in New Orleans was one of the most successful in recent years.

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Complete with more than two dozen educational sessions included in admittance, the tradeshow is the largest farmer-led, farmer-focused convention and trade show in the country, hosted by various commodities and featuring exhibits from some of the country’s largest commodities, equipment manufacturers, and ag organizations. Videos from the educational sessions are now available in a general library, which also includes the video from the General Session, featuring an appearance by the U.S. Agriculture Secretary Tom Vilsack and a roundtable discussion of important issues facing the agriculture industry. NAWG Immediate Past President Brett Blankenship also spoke at the General Session. For attendees who couldn’t attend all the sessions they wanted, or those who want to refresh their memory, these videos are an excellent resource for education, professional development, and sharing of industry information.

The videos are available at http://commodityclassic. sclivelearningcenter.com/index. aspx?PID=12052 and require attendee’s badge ID for access.

NAWG Still Accepting Applications for Internships The deadline for application to NAWG internships is May 1st, 2016, which ensures eligibility for the summer 2016 internship. NAWG internships are an excellent opportunity for university sophomores, juniors, and seniors to experience highpaced policy work on behalf of the wheat industry, and to assist the governmental affairs and communications departments with social media, press releases, 16Rediscover RediscoverWH WH | MAY 2016 16 E EATAT| MAY 2016

and other advocacy related work. Interested applicants should be interested in pursuing an agriculture-related degree and be excellent writers. More information and instructions for how to apply can be found http:// www.wheatworld.org/wp-content/ uploads/2016-NAWG-InternshipProgram-Description.pdf.

April 14, 2016 NAWG Continues Call for Immediate Congressional Action on TPP NAWG and 17 state wheat grower associations joined a wide coalition of agricultural organizations in urging Congress to act quickly on the TransPacific Partnership (TPP). In a letter to U.S. Speaker of the House Paul Ryan, Senate Majority Leader Mitch McConnell, House Minority Leader Nancy Pelosi, and Senate Minority Leader Harry Reid, NAWG emphasized to Congress the urgent importance of passing TPP. “Every day of inaction on TPP means that U.S. wheat farmers are missing out on new economic opportunities, and without enactment, our farmers are at a competitive disadvantage to countries that already have bilateral agreements in place with other countries participating in the TPP,” said NAWG President Gordon Stoner.

FY 2017 Agriculture Spending Bill Advances in House Subcommittee The House Agriculture Appropriations Subcommittee considered and approved its version of the FY 2017 Agriculture Appropriations bill. The spending

bill would allocate $21.3 billion in discretionary spending, which is $451 million below the FY 2016 enacted level and $281 million below the President’s budget request. It does not include any specific provisions cutting Title 1 farm programs or crop insurance. However, the bill unfortunately contains cuts to several conservation programs that receive mandatory funding through the Farm Bill.

Specifically, the bill would cap the Conservation Stewardship Program (CSP) at 8 million acres for FY 2017 enrollment (down from 10 million acres), and it would cut funding from the Environmental Quality Incentives Program and the Watershed Rehabilitation Program.

Beyond conservation, the bill provides $2.85 billion for agricultural research programs, covering both the Agricultural Research Service (ARS) and the National Institute of Food and Agriculture (NIFA) budgets.

For the Agriculture and Food Research Initiative (AFRI) competitive grants program, the President had requested a doubling of funding from the $350 million FY 2016 enacted level to $700 million ($375 million in discretionary spending and $325 million in mandatory spending), but the Committee rejected the inclusion of new mandatory spending. The bill bumps up discretionary spending by $25 million to $375 million.

Additionally, there is language included in the bill prohibiting the Farm Service Agency (FSA) from closing FSA county offices as well as from permanently relocating county employees if that relocation would result in two

or fewer employees, without first notifying and receiving approval from Congress.

Within the budget for the Food and Drug Administration, which is contained in the same Appropriations bill, there is a provision allocating $3 million for consumer outreach activities to promote understanding and acceptance of agricultural biotechnology and biotechderived food products and animal feed.

Senate Ag Committee Advances CFTC Reauthorization Bill The Senate Agriculture Committee considered and approved legislation that would reauthorize the Commodity Futures Trading Commission (CFTC). The bill, entitled the “Commodity End-User Relief Act,” contains a number of provisions intended to aid agricultural hedgers who use futures and swaps to manage risk. NAWG joined with a broad coalition of agriculture and agribusiness associations in supporting the legislation. During the markup, the Committee considered an amendment from Ranking Member Debbie Stabenow (MI) that would’ve instituted a fee-for-service that would’ve exempted farmers and ranchers; however, that amendment was rejected by the Committee on a 9-10 vote.

In his opening statement, Chairman Pat Roberts (KS) remarked, “Overall, the mark before us today addresses this regulatory overreach and provides much needed clarity and relief for our folks on the ground as well

as putting in place appropriate customer protections in the wake of the disasters of M.F. Global and Peregrine Financial.”

Legislation to reauthorize the CFTC has already been approved in the House of Representatives.

The next step in the process would be consideration by the full Senate.

GE Mosquitos May Be Key to Eliminating Zika A promising solution to the Zika virus has been developed by the private sector, led by the Oxitec unit of Intrexon Corporation, in the form of a GMO mosquito with a modified gene that will cause its offspring to die before transmitting the disease. The technology, which was first approved in Brazil, is pending approval in the United States. With no vaccine as of yet to fight the Zika virus, which is now present in multiple Central American countries, the pressure to find a solution has led research scientists to utilize genetic engineering, a hot topic in agriculture currently. The use of GE technology in battling public health crises demonstrates the benefit of utilizing safe and proven technologies to combat disease and expand food production to achieve global food security. NAWG supports the pending approval by FDA of the environmental assessment and encourages the release of the GE mosquitos under an investigational new animal drug exemption. In addition, pesticides used to treat for mosquitos are an important tool in fighting the Zika outbreak and NAWG supports continued availability

and access to a variety of pesticides for crop protection and residential use.

NAWG Officers Participate in Monarch Collaborative and Crop Insurance Meetings NAWG President Gordon Stoner was in Washington, D.C. to meet with representatives of crop insurance companies and to discuss the importance of defending the federal crop insurance program from Congressional efforts to cut funding. Crop insurance is one of the vital topics moving towards the development of the next Farm Bill and NAWG is dedicated to preserving crop insurance for the benefit of wheat farmers across the country. Additionally, NAWG Secretary Ben Scholz traveled to Minneapolis, MN for the steering committee meeting for the Monarch Collaborative. The Monarch Collaborative works to preserve the habitats and migration routes of the monarch and collaborates with the farming community and agriculture organizations to support a sustainable monarch population, while increasing crop productivity and reducing environmental impacts. Find out more about the Monarch Collaborative https://www.keystone.org/ our-work/agriculture/monarchcollaborative/.

Final Deadline for National Wheat Yield Contest in Two Weeks The FINAL deadline for the National Wheat Yield Contest (NWYC) is May 1. For the first time in twenty years, the National Wheat Foundation is hosting the NYWC to promote the quality Rediscover E AT 2016 RediscoverWH WH E AT| MAY | MAY 201617 17

of U.S. wheat and demonstrate U.S. wheat growers’ ability to utilize technology to grow excellent wheat. The contest aims to encourage innovation in the agriculture industry, promote the transfer of ideas, technology, and knowledge between growers, and drive development of new and beneficial technologies. In order to enter you must be a member of a recognized state wheat grower organization, or of the National Association of Wheat Growers (NAWG) if entering from a state where no recognized wheat grower organization exists.

Successful WheatPAC Auction at Commodity Classic NAWG’s WheatPAC auction at Commodity Classic in New Orleans in March was highly successful, with funds raised through tickets sales and the auction items, which included such prizes as 75 hours of tractor use given by Case IH and a duck hunting trip given

by Monsanto. The event, highly attended by state wheat grower organization members and industry stakeholders, featured dinner and a silent and live auction. The funds raised at the event will be used to contribute to the campaigns of candidates for federal office who prioritize advancing the wheat industry.

April 21, 2016 FY 2017 Appropriations Work Underway The House Appropriations Committee considered and approved its versions of the FY 2017 Agriculture and Energy & Water Appropriations bills. For the Agriculture spending bill, the legislation would provide $21.3 18 Rediscover RediscoverWH WHEEAT AT| MAY | MAY2016 2016 18

billion in discretionary spending, which is $451 million below the FY 2016 enacted level and $281 million below the President’s budget request. The bill report specifies that several NAWG and National Wheat Improvement Committee (NWIC) priorities were included. Specifically, the U.S. Wheat and Barley Scab Initiative would receive an additional $2 million in funding over the FY 2016 enacted level and the Small Grains Genomic Initiative would receive an increase of $1 million. As funding for these programs has been flat in recent years, these increases are significant and show the importance of farmer and researcher engagement with Congressional leaders.

Additionally, full funding for the Market Access Program (MAP) and Foreign Market Development (FMD) program was left intact.

During the markup the Committee considered a number of amendments, though none was targeted at Title 1 farm programs or crop insurance. However, there was an amendment considered to strip the provision providing $3 million in funding to educate consumers about biotechnology; that amendment did not succeed.

The next step for the bill would be consideration by the full House of Representatives. The Senate Appropriations Committee is also expected to take up its own version soon.

Energy & Water Appropriations bills for fiscal year 2017 are also moving forward in both the House and the Senate. The House Appropriations Committee approved a bill that would restrict funding for the implementation of the Waters of the U.S. (WOTUS)

regulation by the Army Corps of Engineers and prohibits permits for the discharge of dredge or fill material from normal farming activities and construction or maintenance of farm or stock ponds. The Senate Appropriations Committee approved bill does not contain similar provisions, but a related WOTUS amendments offered during Senate debate on the appropriations bill was not approved.

House Members Write to EPA Demanding Explanation of What’s Up Campaign The EPA admitted that the billboards which appeared in Washington state blaming farmers for pollution to waterways, should never have been funded, but House members are now inquiring as to why the EPA funded the whatsupstream. com website, violating federal laws regarding lobbying and advocacy funds. Following the revelation that the EPA has committed similar violations with its advocacy campaigns supporting the Waters of the United States (WOTUS) regulation, inquiries are being made as to why a campaign that urges constituents to contact their legislators was being funded by EPA, which is federally prohibited from using federal funds for advocacy purposes. The website for the whatsupstream.com campaign features a button directing visitors to send a pre-formed letter to legislators, asking them to support more regulation of agriculture land and waterways. Participation in such lobbying efforts is in conflict with the EPA’s prohibition from funding publicity or propaganda for advocacy. Senators Inhofe and Roberts recently also

sent a letter to the EPA Office of Inspector General (OIG) requesting an official audit and investigation into the campaign, and the House Committee on Agriculture is conducting an oversight investigation of EPA grant management. Several House members, led by Representative Newhouse, have now signed on to another official letter, condemning the EPA’s actions in engaging in funding advocacy efforts which go against the entities the EPA seeks to regulate.

Wheat Growers Sign on to EPA Letter Regarding Chlorpyrifos The National Association of Wheat Growers (NAWG) and other agriculture organizations have signed on to a letter to Administrator Gina McCarthy of the EPA, asking for a postponing of a Scientific Advisory Panel (SAP) meeting which would convene in order to change the regulatory endpoint for the pesticide chlorpyrifos. The pesticide chlorpyrifos is a widelyused and widely-tested chemical which has been proven to be safe and effective for commodities, specialty crops, and public health uses. If the EPA succeeds in changing the regulatory endpoint of the chemical, it will bypass the current regulatory process and fail to adhere to current policies, while only relying on a single epidemiological study, for which the Agency does not possess the underlying data. This change would cost farmers necessary crop protection tools, and negatively impact producers’ ability to protect crops and maintain their competitive position in domestic and foreign markets. NAWG and the other organizations requested that the EPA postpone the

meeting until further attention can be given to the validity of the change, both for matters of federal transparency, and to respect the established regulatory process which has been in place for decades.

NAWG Comments on APHIS Notice of Intent Regarding Biotech Definition Following APHIS’s publication of their Notice of Intent (NOI) to prepare an Environmental Impact Statement (EIS) for proposed rule changes governing the introduction of products of biotechnology, NAWG has formally registered its comments on the NOI. The NOI outlines APHIS’s intent to re-define the term “biotechnology”, which includes expanding it to include new breeding techniques. NAWG does not support APHIS in the definition change. NAWG also provided comments on four rule change options listed by APHIS in the NOI. Of the four options, NAWG outlined its support for a phase-in approach of Option 2, “analyze first, regulate second”, whereby the agency would conduct a risk analysis before determining whether the product should be regulated. NAWG supports Option 2 because it will potentially streamline the process for a product toward a commercial path. The other options included 1) no change 2) wide-scale increased regulatory oversight and 3) withdrawing the current rule, 7CFR part 340, altogether. NAWG believes these three options would hurt producers, cause unnecessary costs, and burden researchers and technology providers. NAWG encourages engagement with stakeholders prior to the release of the rule by USDA APHIS.

NAWG Still Accepting Applications for CEO Position – Deadline May 2 NAWG is still conducting its national search for a candidate to replace Jim Palmer, who is stepping down at the end of May, in the chief executive officer position at NAWG. The deadline for applying is May 2, at which time the Search Committee will select candidates to participate in two rounds of interviews taking place in Washington, D.C. and Denver, CO. The ideal candidate will be someone with substantial experience in agriculture and farm policy analysis who will provide leadership to the organization to ensure the optimum achievement of NAWG’s objectives. Information on how to apply, and the materials required, can be found at http://www. wheatworld.org/about-us/nawg-isnow-accepting-applications-forceo/.

NAWG Board Member from Ohio Passed Away Shawn Ehlerding, of Port William, OH, passed away on Saturday, April 16, 2016. A grain grower and cattle showman, Shawn was an enthusiastic and passionate member of the Ohio Corn and Wheat Growers, serving on their board and on the current NAWG board. He is survived by his wife and two children, as well as many other family members and friends. NAWG offers our condolences to Shawn’s family.

His presence and leadership will be missed.

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Wheat Quality Council Executive VP Retiring after 25 Years Ben Handcock, Executive Vice President of the Wheat Quality Council, is retiring after 25 years with the Council.

The Wheat Quality Council is now seeking someone to fill Handcock’s place in the Executive VP position, and is accepting applications until May 31. The candidate must have a passion for wheat with proven industry leadership. Further information regarding the job and how to apply can be found at http://www. wheatqualitycouncil.org/2016/ ExecutiveJobDescription.pdf.

April 28, 2016 Vilsack Applauds Paris Climate Agreement as Progress One hundred and seventyfive world leaders, including the U.S., signed the Paris Climate Agreement, a historic document which aims to slow the rise of greenhouse gases, such as carbon dioxide, which have been linked to the dangerous warming of the Earth. Initially approved in December in Paris by world leaders, the treaty has now officially been signed by the U.S., establishing a long-term and durable framework to reduce global greenhouse gas emissions and move industrial countries into a future of sustainability.

Agriculture Secretary Tom Vilsack hailed the signing of the agreement as a demonstration of the U.S.’s commitment to take real action on climate change, saying “America’s farmers, ranchers, and forest landowners have a track record of coupling extraordinary productivity gains with natural resource stewardship, which positions them 20Rediscover RediscoverWH WHE AT | MAY 2016 20 E AT | MAY 2016

well to contribute to the climate solutions called for in the Paris Agreement.” In December, as the treaty was being negotiated in Paris, NAWG Environmental Policy Adviser Keira Franz participated in a side event coordinated by Field to Market: the Alliance for Agriculture Sustainability to discuss the sustainability of wheat production and the conservation efforts that wheat farmers are taking to maintain economic viability while protecting the environment. Secretary Vilsack stated that climate-smart strategies put in place by the Paris Agreement will boost productivity and improve global food security.

NAWG, USW Continue to Press for Canada Grain Grading Changes Following Release of USDA Report National Association of Wheat Growers (NAWG) President Gordon Stoner and U.S. Wheat Associates (USW) Chairman Brian O’Toole sent a letter to Canada’s Minister of Agriculture, Lawrence MacAulay, and Minister and International Trade, Chrystia Freeland, continuing to press the Canadian government to reform its grain grading system, which unfairly minimizes the quality of U.S.-grown wheat. As both Stoner and O’Toole farm in states bordering Canada, they have personal experience with this situation.

Under the Canada Grains Act, when a U.S. farmer transports his wheat across the border to Canada with the intent of selling at a local elevator, that wheat will automatically be deemed feedquality without any regard for the actual quality of the grain. To take a closer look at the impact of this policy, Congress last fall included a provision from Senator Heidi

Heitkamp (ND) in legislation to reauthorize the Grain Standards Act requiring the U.S. Department of Agriculture to conduct a study about the policy barriers facing U.S. farmers in countries that don’t provide reciprocal grading.

The study, which was released this spring, breaks down the grading system employed there and describes how such a system leads to a de facto requirement for segregation of grain in the Canadian bulk handling system. Additionally, the report raises concerns about whether Canada is meeting its trade commitments through the use of this system.

Through the letter, NAWG and USW compare the use of this grading system to the arguments that were used by Canada in the recent Country of Origin Labeling (COOL) dispute. Specifically, the Canadian grain grading system affords less favorable treatment for imported wheat as compared to domestically-grown wheat, which aligns closely with Canada’s argument that the U.S. COOL program led to a lower price being paid for Canadian livestock; at the end of the COOL dispute, the World Trade Organization ultimately ruled in Canada’s favor.

NAWG President Speaks to Ag Media at NAFB Event NAWG President Gordon Stoner was in Washington, D.C. to attend the annual National Association of Farm Broadcasting (NAFB) Washington Watch. The event’s Issues Forum provided an opportunity for most of the major commodity and general farm organizations to be interviewed by the farm broadcasters in attendance. The National Association of Wheat Growers and U.S. Wheat Associates (USW)

represented the U.S. Wheat Industry with Stoner, USW Vice Chairman and Maryland grower Jason Scott, and several policy staff. Stoner interviewed with Jim Wenger of KFRM Radio of Kansas, Spencer Chase of AgriPulse, and several others, about topics as diverse as defending the crop insurance program for wheat growers, Farm Bill implementation, and the National Wheat Yield Contest. Also discussed was the Trans-Pacific Partnership (TPP), of which NAWG and USW are both key advocates and on which NAWG continues to press Congress to move quickly. NAWG’s participation with U.S. Wheat Associates in the NAFB event is further demonstration of NAWG’s dedication to driving wheat growers’ stories to the forefront of the agriculture media.

NAWG Writes In Support of ArcadiaBio NIFA IWYP Grant Request

farmers. NAWG supports efforts to expand wheat research, viewing increased knowledge of wheat varieties and disease prevention as key to moving the wheat industry forward.

House Agriculture Subcommittee Holds Next Hearing in Focus on the Farm Economy Series The House Agriculture Subcommittee on Biotechnology, Horticulture, and Research continued the Focus on the Farm Economy series with a House hearing on the positive and negative factors impacting the cost of production for farmers and ranchers. The third in the series, the hearing examined the state of the farm economy and heard testimonies from witnesses who provided insight

into the policies which affect farm efficiency, productivity, and profitability. The Subcommittee heard from witnesses from several agricultural organizations, including the National Council of Farmer Cooperatives, CropLife America, and more. Subcommittee Chairman Rodney Davis commented on the oversight of government agencies which implement burdensome policies and regulations, threatening the productivity of the farm economy and creating challenges for producers with no scientific or factual benefit to food safety or production. The witnesses covered topics such as the Market Access Program, the importance of biotechnology, and crop protection, addressing regulatory issues which adversely impact agricultural production for farmers and ranchers.

National Association of Wheat Growers (NAWG) President Gordon Stoner wrote a letter of support for Arcadia Biosciences in their application for the National Institute of Food and Agriculture’s (NIFA) International Wheat Yield Partnership (IWYP) Program grant.

The grant will provide funding for efforts to support the Wheat Initiative, which is committed to coordinating wheat research in the areas of genetics, genomics, physiology, breeding and agronomy internationally. NAWG supports Arcadia’s success in their pilot genome editing experiments to develop an editing tool with wider utility to a greater proportion of the wheat breeding community.

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News from : April 7, 2016 U.S. Farmers Respond to Market Signals

By Stephanie Bryant-Erdmann, USW Market Analyst After three consecutive record crops, the International Grains Council (IGC) expects world wheat production for the 2016/17 marketing year to decline to 713 million metric tons (MMT), down 3 percent from 2015/16. Unusually warm, dry weather constrained winter wheat planting in India, Ukraine and Russia, and an extended drought has hindered winter wheat productivity in Morocco, where IGC estimates a 40 percent decline in production year over year. According to USDA‘s March 31, 2016, Prospective Plantings report, U.S. wheat farmers also planted fewer winter wheat acres and intend to plant the smallest spring wheat area since 1972.

USDA estimated total U.S. planted area for the 2016 harvest at 49.5 million acres, down 9 percent from 2015 and 13 percent below the 5-year average of 57.3 million acres. The report reduced winter wheat planted area by an additional 390,000 acres from 22Rediscover RediscoverWH WH E AT| MAY | MAY 2016 22 E AT 2016

USDA’s January estimate to 36.2 million acres, down 8 percent from 2015.

Oregon, southeastern Washington and parts of Idaho where soft white (SW) production is centered.

USDA also updated its hard red winter (HRW) planted area estimate to 26.2 million acres, down one percent from the previous estimate. A delayed soybean harvest prevented some wheat seeding, and farmers decided not to plant as much wheat because cash prices were so low. If realized, HRW planted area will be down 10 percent from 29.0 million acres planted for 2015. Soft red winter (SRW) planted area also decreased from the previous estimate to 6.60 million acres with the biggest declines occurring in southern states. Farmers there have taken a hit three years in a row from untimely rains at harvest that hurt quality and resulting income.

The Drought Monitor also shows that Kansas and Oklahoma, which grew nearly half of the total U.S. HRW crop in 2015, are very dry.

As of April 7, 2016, 93 percent of Kansas and 73 percent of Oklahoma were abnormally dry or experiencing moderate drought.

In addition to the dryness, U.S. winter wheat growing areas are experiencing large temperature fluctuations. After falling below freezing on March 27 and April 1 to 2, temperatures reached 80°F in Texas, Oklahoma and Kansas this week.

USDA expects white wheat acres — planted in both winter and spring — to reach 4.02 million for 2016, down 3 percent from 2015 and lower than the 5-year average of 4.21 million. After three consecutive years of drought, much needed rain fell in the Pacific Northwest in December and January. However, the U.S. Drought Monitor shows dry conditions are developing again in

However, the U.S. winter wheat crop is still in better condition than last year at this time. As of April 5, USDA rated the winter wheat crop at 59 percent good to excellent, compared with 44 percent at this time in 2015. USDA rated just 7 percent of the crop as poor or very poor, down from 16 percent last year.

“The wheat crop is developing two to three weeks ahead of schedule, which makes it extremely vulnerable to a late spring freeze, something that is not uncommon in Kansas,”

noted Kansas Wheat Commission Vice President of Research and Operations Aaron Harries. “The wheat is in relatively good shape across the state, but we are really going to need rain here in the next few weeks. We’ve had a lot of wind and warm weather, which sucks the moisture out of the topsoil very quickly.”

The northern U.S. plains are also experiencing warm, dry conditions, which could allow farmers to begin planting early this year.

“We’ve seen some spring wheat planted already, and in the next week or two most farmers will be in their fields if the weather holds.

It looks like it will be an early planting season again this year, which is good for wheat and could produce additional acreage,” said North Dakota Wheat Commission Marketing Specialist Erica Olson.

According to USDA, U.S. spring wheat planted area will decline to an estimated 11.3 million acres, 14 percent less than in 2015 and the lowest planted spring wheat area since 1972, if realized. The estimate includes 10.7 million acres of hard red spring (HRS), which faces strong competition from pulses and durum that have garnered higher returns this marketing year.

As Olson explains, “Other crops, especially peas, lentils and durum show higher returns than spring wheat, which makes them more favorable crops this year. Corn acres are expected to increase as well. These price trends are cyclical and next year a different set of crops will come out on top.”

USDA expects U.S. durum planted area to rise to 2.00 million acres, up 3 percent from 2015 despite a 28 percent decline

in Desert Durum® area. USDA expects North Dakota farmers to plant 10 percent more acres to durum for 2016, which more than offsets the planted area loss in Arizona and California.

Driving the decline in U.S. wheat acreage is a net return for an acre of wheat that dropped 25 percent between 2014/15 and 2015/16, while per acre input costs declined only 8 percent in the same time period. USDA expects this trend of decreasing returns on wheat to continue in 2016/17, with returns falling 17 percent from 2015/16 levels. Yet input costs are expected to rebound slightly. Due to the decreases in planted area, IGC pegged 2016/17 U.S. wheat production at 53.9 MMT, down 3 percent from 2015/16. As always, weather will be the wildcard.

New Market Signals May Forecast U.S. Wheat Buying Opportunity Attentive buyers may have noticed that recent stories about the world wheat market are starting to sound a bit different.

IGC predicts a 3 percent decline in world production for the 2016/17 marketing year. Australian farmers are concerned about dry conditions. Bad weather during winter and spring sowing is likely to reduce the harvest in Russia, Ukraine and Romania.

Wheat production is expected to decline by as much as 40 percent in Morocco.

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U.S. wheat farmers are also clearly acting on the market signals to grow less wheat. Farm gate prices are well below the cost of production at the same time U.S. export prices remain higher than competing sources. As USW Market Analyst Stephanie BryantErdmann reported above, total U.S. wheat planted area for 2016 could be down 9 percent from last marketing year according to USDA’s “Prospective Plantings” report. Moreover, as she also noted, USDA expects the trend of decreasing returns on wheat to continue in marketing year 2016/17.

While potentially bullish signals are buffered in part by the abundant global supplies and a favorable first U.S. crop conditions report, they may indicate the beginning of the end for the now three-year decline in U.S. wheat prices.

“For a buyer, it is much more reassuring to cover supply needs at incrementally lower prices than it is to be chasing a market that is heading up,” said USW Vice President of Overseas Operations

Vince Peterson. “These low prices are not sustainable, so this could be the best opportunity to make purchases of high-quality U.S. wheat at the lowest levels in what could be a long time.”

Wheat Industry Trade Priorities Included in USTR National Trade Estimate

There are additional factors that may signal increased demand for U.S. wheat, including late season rain that significantly hurt wheat quality in Brazil and in its primary wheat supplier, Argentina. World Grain magazine reported Feb. 1, 2016, that Brazil likely will have to increase imports and, depending on the supply of milling quality wheat in Argentina, U.S. wheat is still a viable option for its millers.

When it turns to the United States, Brazil buys HRW, usually in July and August.

Last week marked the annual release of the National Trade Estimate (NTE) to Congress by the Offices of the U.S. Trade Representative’s (USTR). The NTE report is a 474-page- list of trade barriers facing U.S. companies and producers. It documents a range of trade barriers, including Sanitary and Phytosanitary (SPS), technical and market access restrictions. USW submitted a host of concerns to USTR on October 28, 2015. Read the full submission at http://www. uswheat.org/policyStatements/ doc/2CB30669202BA4 EA85257EF4007BCCD6/$File / UPDATED%20US%20Wheat%20 Associates%20-%20Full%20 NTE%20 Submission%20 -%20Oct%2028% 202015. pdf?OpenElement.

Customers can track U.S. wheat cash, futures and export prices and read the USW Price Report posted every Friday at www.uswheat. org/reports/prices or, for more information, contact their local USW representative. To monitor crop and weather conditions in the United States and around the world, visit http://bit.ly/zpVuxr.

By Dalton Henry, USW Director of Policy

The report highlights a few major accomplishments from 2015, including completion of TransPacific Partnership negotiations and the U.S. ratification of the Trade Facilitation Agreement — the first multilateral trade agreement in the WTO’s 20-year history. Beyond the successes of the past year, the report also lays out a roadmap of future work for USTR. Numerous wheat industry priorities made the listing, two of which are highlighted here.

A new addition to the 2016 report was China’s administration of their tariff-rate quota (TRQ) system, which Chinese millers and USW have repeatedly identified

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as a major hurdle in expanding the use of U.S. wheat in China.

The report stated, “Market access promised through the tariff-rate quota system set up pursuant to China’s WTO accession agreement has yet to be fully realized.” Each year China completely uses the portion of the TRQ allocated directly to flour millers. However, the portion held by the state is not fully utilized and almost never reallocated as required by the WTO agreement.

China is not the only country where a TRQ keeps out potential wheat exports. Nearly two decades ago, Brazil committed to a 750,000 ton duty-free TRQ. The NTE report notes that Brazil never opened the TRQ, and therefore has imported no wheat under it. Without either ad hoc access, which Brazil opened in 2013 and 2014, or a functioning TRQ, Brazilian millers must pay a 10 percent tariff to purchase supplies anywhere outside of the Mercosur trade bloc. That leaves the United States, Canada and others at a significant price disadvantage.

These two barriers are just a preview of the issues listed by USTR. Read the full NTE report at https://ustr.gov/about-us/ policy-offices/press-office/pressreleases/2016/march/us-traderepresentative-announces-new.

USW will continue to work with our partners to pursue resolutions to these barriers that hinder our customer’s ability to purchase U.S. wheat.

Celebrating Long, Loyal Partnerships

By Steve Mercer, USW Vice President of Communications It is important at times to step back from the day-to-day challenges of our work to reflect on what is truly important. The week of April 12, USW, its state wheat commission members and wheat farmers have two very special opportunities to do that with its customers when they celebrate the 60th anniversary of the USW office in Japan and the 50th anniversary of the USW office in Taiwan.

“I believe we can all be quite proud of the partnerships U.S. wheat farmers and our organization have formed with our Japanese and Taiwanese customers,” said USW President Alan Tracy. “Over all these years, our relationship has been built on highly ethical practices, full transparency and a commitment to the best interests of our end-use customers. We are very pleased to toast these milestones with them, thank them again for their loyalty and then turn as we must, confidently, to the future.”

Perhaps the greatest testimony to the enduring strength of these relationships is the fact that such sophisticated wheat milling and food industries have relied on U.S. wheat for so long. Japan has purchased significantly more U.S. wheat than any country in the world, certainly when counting total imports over these 60 years, as well as in most individual years.

It is also humbling to say that Taiwan has relied on U.S. farmers as its primary wheat supplier with

constant loyalty.

Hundreds of flour milling and food industry representatives will join more than 20 U.S. wheat farmers, state wheat commission executives, state and USDA Foreign Agricultural Service officials and USW colleagues at celebrations in Tokyo and Taipei.

It is important to recognize the Idaho Wheat Commission, the Montana Wheat and Barley Committee, the North Dakota Wheat Commission, the Oregon Wheat Commission and the Washington Grain Commission for their sponsorship.

Wheat Letterwill share highlights from these special celebrations in the April 21, 2016, issue.

Minnesota Wheat Farmer Visits Asia

By Jonathan Knutson; Reprinted with Permission by AgWeek Like other wheat growers, Greg LeBlanc wants to raise a highquality, high-yielding crop. And like other growers, the Crookston, MN, farmer understands the importance of selling what he raises to foreign customers.

That is why LeBlanc participated in a recent trade mission to Japan and South Korea, two key markets for U.S. wheat.

“You get to talk to buyers oneon-one. You get to know what they like, what they are concerned about. You get to know how the systems works,” he says of the trip, which took place March 3 to 12.

The trip was sponsored by U.S. Wheat Associates (USW), which develops export markets for U.S. RediscoverWH WHEEAT AT| |MAY MAY2016 2016 25 25 Rediscover

wheat. It is a big mission: about half of the nation’s wheat crop is exported.

LeBlanc, a director of the Minnesota Wheat Research and Promotion Council, was joined on the trip by wheat farmers from Idaho, Oregon and Washington.

They went first to Portland, OR, where USW has its West Coast office, and where ships destined for Southeast Asia are loaded with wheat. Though Japan and South Korea often are associated with rice consumption, consumers in the two countries eat more wheat than rice.

“Consumers in these two countries are really concerned about GMOs,” LeBlanc says. “We have to consider what they want, not just what we want.”

LeBlanc says the Japanese, as well as the South Koreans, emphasize cleanliness and sanitation at their mills and processing plants.

After leaving Japan, the trade team spent another three days in South Korea, visiting the country’s largest fried noodle manufacturing facility, touring mills and meeting with the Korea Flour Mills Industrial Association.

After Portland, the trade team spent three days in Japan, visiting government officials, millers, bakers and others involved in the grain trade. Japan, like South Korea, gets most of its wheat from the U.S., Canada and Australia.

In Japan, however, a government agency buys wheat, which is then dispersed to mills. In South Korea, millers buy the grain themselves.

LeBlanc was struck by how modern South Korea is, particularly Busan, population 3.6 million, and the country’s second largest city beyond Seoul.

The Japanese like U.S. spring wheat, but are concerned that U.S. farmers are planting varieties favoring high yields at the expense of quality, LeBlanc says.

The city, once known as Pusan, was included in the Battle of the Pusan Perimeter, a crucial battle in August and September 1950 between North Korea and United Nations forces. The battle marked the end of North Korean advances and led to an eventual stalemate.

“I told them that we have a couple of varieties in Minnesota that have helped to bring the quality back up,” LeBlanc says.

“They were happy to hear that.”

GMOs a concern. He also found that the Japanese, as well as the South Koreans, worry about GM food, or food from plants that have been modified genetically.

While there is no GM wheat now, the U.S. wheat industry says it is needed.

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“It’s almost like walking in a U.S. city,’ he says of Busan.

The Guinness World Records web site lists Busan as home to the world’s largest department store.

His suggestions. LeBlanc also grows corn and soybeans. In the past, he represented Minnesota soybean growers on trade trips to Cuba and China.

It is often said that foreign customers of U.S. ag products emphasize personal contact with the people with whom they’re doing business. LeBlanc says his

trip to Japan and South Korea is proof of that.

“One-on-one relations are so important. They (foreign buyers) want to see the source. They do not want to talk with the people who are selling the product. They want to talk to the people who are raising it,” he says.

His suggestion to other U.S. agriculturalists who journey overseas to promote their crops: “Have pictures of your farming operation. Have pictures of your family. Those are the two things they really want to know. That is what it is important to them,” he says.

Wheat Industry News Condolences. USW was saddened to learn of the sudden death of Jerry Kress, Idaho wheat farmer and a long-term friend of the U.S. wheat industry on March 23. Jerry served as USW Chairman in 1998/99 and was inducted into the Eastern Idaho Agricultural Hall of Fame last month. “His steadfast leadership during a difficult transition for USW and the wheat industry is noted and he will be missed,” says USW President, Alan Tracy. Our thoughts are with his family.

NAWG Announces CEO Stepping Down. The National Association of Wheat Growers (NAWG) announced Jim Palmer has decided to step down as its chief executive officer effective May 31, 2016. “Jim has been a tremendous and tireless advocate of the U.S. wheat grower specifically, and the U.S. wheat industry in general, during his tenure as our CEO,” stated NAWG President Gordon Stoner,

a Montana wheat grower. USW thanks Jim for his service to the U.S. wheat industry and wishes him the best in the future. For more information, visit http:// www.wheatworld.org/newsevents/2016/04/nawg-is-nowaccepting-applications-for-ceo/.

Global Wheat Breeding Provides Billions in Benefits, CIMMYT Study Shows. Almost half the world’s wheat land is sown to varieties that come directly or indirectly from research by a longstanding, global network of crop scientists, according to a new report by CIMMYT. Published to coincide with CIMMYT’s 50th anniversary, the new report tabulates and analyzes the pedigrees of 4,604 wheat varieties released worldwide from 1994 to 2014, based on survey responses from public and private breeding programs in 66 countries. Read the full report at http://www. oklahomafarmreport.com/ wire/ news/2016/04/00121_CIMMYT ReportWheat04062016_111446. php#.VxD8d9QrLcs. Wheat Marketing Center Advanced Asian Technology Course. This hands-on course is scheduled for June 6 to 10, 2016.

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

IGP Institute Announces Two Milling Courses. The first course, Managing Mill Balance and Control, scheduled for June 7 to 10, 2016, will focus on the front half of the milling process with optimizing breaks and purifiers. The second course, Milling Practices to Improve Flour Quality, scheduled for June 14 to 17, 2016, will focus on the milling process and flour quality management. Course instructor

Shawn Thiele encourages participants to stay for both courses as each covers important components in the milling process. For more information and to register visit www. igpevents.grains.ksu.edu.

April 21, 2016 Large Carry-In Stocks Represent Opportunities for Buyers

By Stephanie Bryant-Erdmann, USW Market Analyst A perfect storm of low domestic prices, an abundant supply of wheat, a strong U.S. dollar and slow export demand hit U.S. wheat farmers in 2015/16. For their downstream and overseas customers these conditions represent the chance to take advantage of a rare trifecta of low futures prices, low basis and cheap ocean freight.

Marketing year 2015/16 has been one for the wheat record books.

Despite record global consumption, a third year of record global production resulted in record global ending stocks, which pushed wheat futures markets to 5-year lows. In 2015/16, Chicago Board of Trade (CBOT) soft red winter (SRW) nearby futures averaged $180 per metric ton (MT), down 8 percent from 2014/15 and 26 percent lower than the 5-year average. Kansas City Board of Trade (KCBT) hard red winter (HRW) nearby futures averaged $177/MT compared to $218/MT in 2014/15 and 33 percent below the 5-year average. Average Minneapolis Grain Exchange (MGEX) hard red spring (HRS) nearby futures were 32 percent below the 5-year average in 2015/16 at $191/MT, $27/MT lower than 2014/15.

The low futures prices encouraged U.S. farmers to store a substantial portion of their 2015/16 production. On March 1, USDA’s Quarterly Grain Stocks estimated on-farm wheat stocks at 8.71 million metric tons (MMT), up 15 percent from this time last year. Farmers are holding large stocks of wheat on their farms and off-farm in commercial storage facilities. USDA estimated off-farm inventory accounted for 69 percent of total U.S. stocks and expects 2015/16 U.S. wheat ending stocks to total 26.6 MMT. If realized, this would be the largest volume of ending stocks since 1987/88 according to USDA’s April World Supply and Demand Estimate update.

The large wheat stocks and their location, combined with U.S. oil prices that fell to lows not seen since the 2008 financial crisis, pressured basis (the difference between the cash prices offered at export elevators and the relevant futures price) for all U.S. wheat classes to multi-year lows.

In the April 15 USW Price Report, estimated average nearby basis for 11.5 protein HRW out of the Gulf was $29/MT, down from $44/MT on the same date in 2015 and 5 percent lower than the 5-year average. SRW estimated average nearby basis was $26/MT, 18 percent lower than the 5-year average of $33/MT. Estimated nearby basis for 14.0 protein HRS from the Pacific Northwest (PNW) was $39/MT, compared to $84/MT last year. Soft white (SW) 10.5 max protein estimated nearby basis was $44/MT, 56 percent lower year over year. The USW Price Charting Tool provides visual representation of basis and futures price movements.

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While the FOB cost of U.S. wheat is lower right now due to the lower futures prices and basis, it is also cheaper to transport that wheat across the ocean. The Baltic Dry Index, a composite of the three sub-indexes — Capesize, Supramax and Panamax — that provides an assessment of the price of moving raw materials by sea, fell 51 percent in the first 9 months of the marketing year to a record low of 290. This decline was due to excess bulk capacity and the sudden decrease in demand for raw goods from China noted in the Dec. 17, 2015, issue of “Wheat Letter.”

Adding to the U.S. wheat’s price competitiveness, the U.S. dollar has depreciated 44 percent against the Australian dollar, 7 percent against the Canadian dollar and 9 percent against the Russian ruble since Jan. 1. The depreciation of the U.S. dollar against these currencies allows for more competitive U.S. wheat prices, as demonstrated by the April 10 Iraq tender where U.S. wheat was the lowest priced origin.

While it is difficult to know when or if prices have hit bottom, the current situation in the United States is certainly unusual.

With the U.S. dollar weakening against key competitor currencies, notably those of Australia, Canada and Russia, it may be a good time to look at forward contracting the different segments of the supply chain.

For questions about forward contracting or any portion of the U.S. wheat marketing system, please contact your local USW representative.

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USW Staff and Stakeholders Attend Canadian Global Crops Symposium

By Dalton Henry, USW Director of Policy Working with partners around the world on shared missions has been a core function of USW throughout its history. That principle applies whether those partners are wheat growers, customers or even international market competitors. An example of this collaboration was on display last week in Winnipeg, Manitoba, at the third annual Canadian Global Crops symposium. USW and some of its stakeholders joined more than 250 professionals from the Canadian wheat and grain value chains at the symposium to tackle the big topics facing our industry.

The conference, appropriately themed “Innovation: Opportunity and Challenge,” focused on the application of technology in agriculture and resulting effects on the entire value chain. The broad category of advanced plant breeding techniques, including technologies such as CRISPR-cas9 and TALEN, both commonly referred to as “gene editing,” garnered particular attention.

Two seed companies provided detailed explanations of these processes and their applications in breeding programs. Compared to the lengthy process of cross-breeding and its random results, advanced breeding technologies are allowing more precise improvements in plant breeding, in many cases without producing transgenic plants.

Grain handling companies and government regulators also provided perspective on the new

technologies, including how regulators view the processes and potential challenges that may result from uncoordinated governments’ regulations.

USW supports a review process that facilitates industry discussions such as these to ensure compatibility between all governments’ efforts on these new technologies.

During the symposium, the International Grain Trade Coalition (IGTC) held strategy and general sessions. The IGTC includes non-profit trade associations, councils and corporate stakeholders interested in working to support trade in grains, oilseeds and other bulk agricultural products. The organization has multiple working groups that focus on finding solutions to trade irritants and informing discussions on global trade in grains, including expanding the use of electronic documents and harmonization of phytosanitary measures. A number of U.S. and Canadian companies and grower organizations, including USW, are active IGTC members and support its work to better facilitate trade for both our producers and customers around the world.

It is through platforms such as these that both Canadian and U.S. grower organizations are able to work together for the advancement of the entire industry and better serve the needs of the customers we share around the world.

Cubans and U.S. Grain Trade Officials Meet to Discuss New Opportunities

products to Cuba pays the shipper more due to of the cost of compliance with U.S. trade laws.

By Ben Conner, USW Deputy Director of Policy

Businesses exporting wheat should be able to make a judgment based on their assessment of political risk. They do it all the time. There needs to be enough trust to ensure the price risk to U.S. exporters is minimized. The arrival of Cuban grain trade officials on U.S. shores demonstrates that Cubans want to reach a position of mutual trust.

A team of Cuban agriculture and trade officials visited the United States to explore the U.S. grain production system at the invitation of the U.S. Grains Council, which asked USW to present information about U.S. wheat trade at a meeting with the officials in Washington, DC. The Cuban team included representatives from the Ministry of Agriculture, Ministry of International Trade and ALIMPORT, the government agency in charge of grain imports. The group met with wheat farmers from Kansas, Texas and Maryland along with USW staff including Regional Vice President Mitch Skalicky, based in Mexico City. The discussion centered on issues that impede U.S. wheat exports to Cuba. Following meetings in Washington, DC, the Cuban team travelled to Maryland, Missouri and Louisiana to learn more about U.S. grain production, trading and processing.

This was an important opportunity ultimately because trade relationships based on mutual trust may be forged even though political barriers exist. Today, there are still requirements that Cubans must pay cash in advance of receiving U.S. agricultural exports. That requirement does not exist for any other country. In fact, these regulations make all business in the Caribbean more difficult.

A baker or miller in a nearby country wanting to sell their

Ojalá — hopefully — this U.S. visit by Cuban agriculture and trade officials is a sign of a brighter, more trustworthy future between the people of these two countries that are so close, yet so far apart. If trade and regular interaction with farmers and agribusinesses to the north is given the opportunity to flourish, that day may come sooner For those interested in more information on the potential of U.S. trade with Cuba, see the U.S. International Trade Commission report released at https://www. usitc.gov/press_room/news_ release/2016/er0418ll582.htm.

Celebrating Productive Partnerships from Generation to Generation

By Steve Mercer, USW Vice President of Communications Anniversaries serve as a pivot point for people and organizations to celebrate successes, contemplate challenges and turn toward future opportunities. This was foremost on the minds of 24 representatives of USW and five state wheat commissions who recently joined their customers at special events in Tokyo marking

60 years with a U.S. wheat promotion office in Japan and in Taipei marking 50 years with an office in Taiwan.

To celebrate these enduring partnerships, the Oregon Wheat Commission, Washington Grain Commission, Idaho Wheat Commission, Montana Wheat and Barley Committee, North Dakota Wheat Commission, Nebraska Wheat Board, Minnesota Wheat Research and Promotion Council and USW sponsored a reception in Tokyo’s Palace Hotel April 11 and dinner at Taipei’s Sherwood Hotel April 13. The U.S. delegation also met separately with government officials, flour millers and wheat food processors in both countries, as well as grain handlers in Japan and the China Grain Products Research and Development Institute (CGPRDI) in Taiwan.

In Japan, USW Chairman Brian O’Toole, a wheat farmer from Crystal, ND, joined several other members of the delegation to meet with grain procurement officials in Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF). The ministry carries out all wheat purchases, then sells the wheat to Japanese flour mills. The Japanese grain trade acts as intermediaries between MAFF and overseas sellers and OMIC, Ltd., provides testing and inspection services.

O’Toole told the officials that while he was not around to witness the opening of an office by the Oregon Wheat Growers League 60 years ago, “I can honestly say that my family, and all U.S. wheat farmers, continue to benefit from that historic day.”

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Mr. Akira Karasawa, DirectorGeneral, Crop Protection Bureau, at MAFF thanked the delegation for all of the professional attention and personal recognition from USW and U.S. wheat farmers to MAFF and its staff. The relationship has weathered some storms, he said, but has remained productive over the years and should remain so in the future.

Farmers represented by the Oregon Wheat Growers League and other state organizations in the PNW eventually formed Western Wheat Associates in 1959, which merged with Great Plains Wheat to become USW in 1980. Today, USW’s Tokyo office includes Country Director Wataru “Charlie” Utsunomiya and Program Assistant Sadako Ishida, who has served in her position for more than 37 years. Japan has purchased significantly more U.S. wheat than any country in the world, certainly when counting total imports over these 60 years, as well as in most individual years.

“The five states in our delegation represent farmers who grow all of the soft white and much of the hard red spring and hard red winter wheat that Japan imports,” said USW President Alan Tracy addressing members of the Flour Millers Association of Japan.

“Meeting the demand for high quality wheat here in Japan gave successive generations of U.S. wheat farmers the opportunity to expand into other Asian markets.

We thank you for your loyalty and pledge continued loyalty to you as suppliers.”

In turn, Mr. Masao Shimojima, President of Nitto Fuji Four Milling and Flour Millers Association Chairman, 30 Rediscover RediscoverWH WHE AT | MAY 2016 30 E AT | MAY ‑2016

congratulated the delegation on the 60th anniversary and “the great relationship Charlie Utsunomiya, his predecessors and many others in the United States have developed with our industry.”

Some delegation members later visited Nitto Fuji and its port facilities to see workers unload U.S. HRW and “western white” wheat from a bulk vessel. Others visited the impressive Yamazaki Bakery. In separate meetings, the entire delegation met with managers from Nisshin Flour Mills, which owns Miller Milling in the United States, and Nippon Flour Mills.

Nisshin President Mr. Nobuki Kemmoku said his company depends on U.S. farmers for a safe, secure and reliable wheat supply and looks forward to continuing this “stable partnership.” Mr. Kemmoku also offered an official toast to the anniversary celebration at the reception.

After a generous greeting by Mr. Takehiro Fujiwara, who heads wheat procurement at Nippon, USW Secretary-Treasurer Mike Miller, a wheat farmer from Ritzville, WA, said there is great respect for Japan as a customer.

“Because of this partnership, as a kid on the farm I was taught that a lot of the wheat we harvested would end up on the tables of Japanese consumers,” said Miller. “Now my generation is doing everything we can to make sure our wheat keeps flowing to Japan.”

More than 250 Japanese industry guests, including several honored executives and members of Japan’s baking trade media,

joined the U.S. delegation and USW colleagues at the gala reception. A highlight came when David Miller, MinisterCounselor for Agricultural Affairs from the U.S. Embassy greeted the guests and read a letter of congratulations from U.S. Ambassador Caroline Kennedy.

“We would have no market in Japan without the contributions of our valued Japanese partners in the importing, milling, baking and food processing industries as well as the Japanese government,” said Miller. “It is because of the dedicated hard work by all of you in this room that today we have this vibrant and valuable market for American’s wheat farmers.”

Moving on to Taiwan, the crossgenerational good will flowing from a 50-year relationship with flour millers, scientists and food professionals was almost immediately evident. At their first visit in Taiwan to the CGPRDI in Taipei, the U.S. delegation observed the statue of the institute’s late founder Mr. YuShiu Miao. Later the same day, at the celebration dinner, his son, Matthew F.C. Miau, Chairman of Lien Hwa Industrial Corporation, remembered his father talking about how collaboration with U.S. wheat farmers helped CGPRDI grow.

CGPRDI has maintained a close working relationship with USW in developing 4,000 to 5,000 new grain food products and training about 150,000 baking and food service students. As he observed the next generation of baking students working a practical lesson at the institute, Brian O’Toole made the connection between farmers at home, USW

associates past and present and their customers.

“This is it. Right here,” he said.

“This is worth all the hard work on all the combines in the United States.”

Mr. Kuen-Ho Shih, CGPRDI President, thanked the delegation for their role in building a successful and trusted wheat flour milling and foods industry in Taiwan. He specifically thanked recent USW colleagues.

“For many years, USW’s Director Mr. K. H. Lu and Mr. Ron Lu have strongly supported our work and we appreciate that very much,” said Mr. Shih.

Ron Lu joined USW more than 33 years ago and has served as USW Country Director since 2008. His Taipei colleagues include Ms. Shu-ying “Sophia” Yang, Asian Products and Nutrition Technologist and Ms. Serena C. Wu, who has served as Office Manager for more than 38 years and plans to retire later in 2016. In addition, Ms. Fiona Lee, who joined the staff as Executive Secretary/Accountant on April 1, assisted the team and delegation.

“Perhaps the ultimate measure of our work with U.S. Wheat Associates has been our mutual support of the Taiwan Baking Contest Committee,” said Mr. Charles H.S. Ching, CGPRDI Chairman. The committee, including USW and CGPRDI, helped train and send a Taiwanese team for the first time to the prestigious World Bakery Cup in 2008 that earned a bronze medal.

Another bronze followed in 2012, and this year Taiwan’s baking team won a silver medal.

Taiwan’s flour milling companies, today represented by the Taiwan Flour Mills Association (TFMA), established CGPRDI with an aim to promote wheat products. When the delegation met with TFMA, its Chairman Mr. Tony I. T. Chen assured the partnership between TFMA, the Taiwan Bakery Association and CGPRDI with U.S. wheat farmers would continue for many years.

“Our millers and consumers prefer products made with flour from U.S. wheat,” he said. “Even this year, with plenty of wheat stocks and a strong U.S. dollar, your share of our market remains strong.”

Reflecting the power of cooperation, he continued, is the fact that consumption of wheat foods in Taiwan has now surpassed that of rice, despite the fact that Taiwan produces no milling wheat.

“I am struck by the strong connections in this industry and its tremendous commitment to quality,” answered Alan Tracy.

“Over the past 50 years, Taiwan’s wheat flour and food industry has come farther than any other country in building demand for a diverse range of high quality wheat foods and we thank you for your efforts.”

Among the guests at the 50th anniversary celebration dinner on April 13 was Mr. Kin Moy, Director of the American Institute in Taiwan. Mr. Moy noted that the anniversary coincides with the year of the horse, a fitting metaphor for the commemoration.

“The horse represents strength and endurance, much like the wheat trade between the United States and Taiwan,” he said. “I want to thank all of the people here today and from the past for their partnership and success.”

The connections to the past came alive later, following a delightful ceremony and dinner, when Mr. Chi-kuan Chung, General Manager of the Hsia Fha flour mill was looking at the program booklet. He stopped, looked up and said to the people at his table that there, in a photograph representing the technical training provided by USW, was his late father.

USW Vice President of Operations Vince Peterson had the honor to close the celebration events in Japan and Taiwan.

Thanking the customers and the international grain trade for its critical role, Peterson pivoted to the future in his concluding remarks.

“We realize that our wheat farmers can only be successful if our customers are equally successful.” He said. “So tonight, we invite you to join us on the next portion of this journey together.

We have had decades of proven work together that makes us, collectively, a unique force in our ability to address and surmount any change or challenge that might come before us. Thank you for joining us to commemorate the past and to re-dedicate our efforts to make the future even brighter and more successful for you and for U.S. wheat farmers.”

A list of the people and organizations in the U.S. delegation is included in the online edition of “Wheat Letter.”

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Oregon Wheat Commission Dale Case, Commissioner

Matt Weimar, Regional Vice President, South Asia

Walter Powell, Commissioner

Steve Mercer, Vice President of Communications

Blake Rowe, CEO

Erica Oakley, Programs Manager

Washington Grain Commission

Commercial

Mike Miller, Chairman (USW Secretary-Treasurer)

Augusto Bassanini, President and CEO, United Grain

Damon Filan, Commissioner

Sebastian Degens, Director of Marine Business Development, Port of Portland

Patrick Capper, Special Assistant to the Director, Washington State Department of Agriculture Glen Squires, CEO Idaho Wheat Commission Jerry Brown, Commissioner Blaine Jacobson, Executive Director Montana Wheat and Barley Committee Leonard Schock, Commissioner (USW Past Chairman) Ron de Yong, Director, Montana Department of Agriculture Collin Watters, Executive Vice President North Dakota Wheat Commission Brian O’Toole, Commissioner (USW Chairman) Greg Svenningsen, Commissioner Neal Fisher, Administrator U.S. Wheat Associates Alan Tracy, President Vince Peterson, Vice President of Overseas Operations Steve Wirsching, Vice President, West Coast Office Director 32Rediscover RediscoverWH WH E AT| MAY | MAY 2016 32 E AT 2016

Mike Spier, Southeast Asia Representative, Columbia Grain Japanese Executive Millers Return for Annual U.S. Wheat Tour On the heels of a momentous event celebrating 60 years with a USW office in Japan, a team of four senior executives from Japan’s leading milling companies will travel to the United States to continue building upon that legacy. As a part of USW’s market development activities, the trip includes stops in Oregon and Washington, DC from April 28 to May 4, 2016.

“Japan is a loyal U.S. wheat customer because our relationship is built on mutual trust and our commitment to the best interests of our end-use customers,” said USW Vice President and West Coast Office Director Steve Wirsching. “But as with every relationship, it is important to keep the lines of communications open and to demonstrate full transparency in our practices.

This trade team visit is essential to that mission.”

USW collaborated with the Oregon Wheat Commission to organize and host this trade team.

The Oregon Wheat Growers League (OWGL) established the first overseas U.S. wheat export office in Tokyo in 1956 and in that same year, the first team of Japanese millers visited the United States to learn observe U.S. wheat production, quality and marketing. Over the years, bringing trade teams to the United States has become a tradition and for well over a decade, this particular activity has become an annual trip for Japanese executive millers. Often the team extends its traditional trip to the PNW to include a visit to Washington, DC. During its visit to Oregon, the team will follow the wheat through the supply chain from farm to shipment, demonstrating at the each step the U.S. wheat industry’s commitment to quality and efficiency. Their time will include meetings and tours with the Federal Grain Inspection Service (FGIS) and Louis Dreyfus export terminal. Once in Washington, DC, the team will shift its focus to trade policy and get an overview of the U.S. and global wheat market situation.

They will also discuss modern farm management systems, dietary trends and views on competitive markets.

“Japan is an essential market for U.S. producers, purchasing 3.2 MMT of wheat annually, making it the single largest buyer of U.S. wheat in the world.

Japanese consumers demand high quality and expect a consistent and reliable supply of wheat food products,” said Wirsching. “At the 60 year anniversary event, the head of the Japanese Millers Association explained that U.S. wheat accounts for six percent

of the daily caloric intake of the average Japanese consumer.

That is a vivid illustration of the success of this partnership and how much is required from our farmers and wheat supply system.”

Wheat Industry News New Wheat Line Eliminates Discoloring in Foods. Minimizing gray discoloring in foods such as fresh noodles, breads and refrigerated biscuits may soon be possible thanks to a new white hard wheat breeding line developed by USDA scientists.

Plant geneticist Bob Graybosch, at the Agricultural Research Service’s (ARS) Grain, Forage, and Bioenergy Research Unit in Lincoln, NE, developed a wheat that has no polyphenol oxidase — an enzyme present in all plants that causes discoloring. Read the full article at http://www.seedquest.com/ news.php?type=news&id_ article=76004.

Join the Wheat Food Council’s “On the Road” Virtual Bus Tour of America. Since wheat foods are the delicious vehicle for countless foods, site visitors can “hop on the wheat bus” and take a virtual culinary tour of America, exploring regional, iconic, unusual, traditional and delicious wheat-based foods.

Individuals and organizations may submit additional content. Join the tour and learn more at www. ontheroadwithwheatfoods.com.

Nominations Open for the World Food Prize. Known as the “Nobel Prize for Food and Agriculture,” the World Food Prize is a $250,000 award created by the late Dr. Norman Borlaug. This international honor recognizes the accomplishments

of individuals who have advanced human development by increasing the quality, quantity or availability of food in the world.

The nomination procedure, due on May 1, is now available in six languages. For more information, visit www.worldfoodprize.org/ nominate.

held executive positions at MinnDakota Yeast Company, Anheuser Busch’s Industrial Products Division, and Edwards Baking Company. Read more information visit http://blog.aibonline.org/aibfood-safety-news/2016/4/15/aibinternational-announces-changesto-their-board-of-trustees.

North Dakota State University Selects New Spring Wheat Breeder. NDSU recently selected Andrew Green, a Ph.D. candidate in agronomy (planting breeding) at Kansas State University, as its next spring wheat breeder.

Green will graduate in May and start his new position in July. In addition to his forthcoming Ph.D. degree, he also holds a master’s from Virginia Polytechnic Institute in plant breeding and a bachelor’s from Truman State University in agricultural science.

Green has extensive experience working in the wheat breeding world, having worked for three wheat breeding programs during his time as a student. Read the full announcement at http:// www.agweek.com/news/northdakota/4012261-andrew-greenselected-ndsu-spring-wheatbreeder.

Wheat Marketing Center Advanced Asian Technology Course. This hands-on course is scheduled for June 6 to 10, 2016.

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

New AIB International Chairman. John Riesch, President & CEO, Lesaffre Yeast Corporation and Red Star Yeast Company was elected Chairman of AIB’s Board of Trustees April 15. As Chairman, he will provide leadership for the board and guidance for the direction of AIB International as a whole. Riesch has 30 over years of experience in the food and baking industry and has served on the AIB International Board of Directors and Executive Committee for the past seven years. He previously

Register Now for the BuhlerKSU Executive Milling Course.

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

Rediscover RediscoverWH WHEEAT AT| |MAY MAY2016 2016 33 33

Hello Kansas Wheat.

Maltby Market Analysis

by Dan Maltby

The Wheat Quality Council’s 2016 Hard Winter Tour begins Monday, May 2. This event generates the first official USDA crop production estimate of the 16/17 HRW (studies consistently show a very high correlation between the Crop Tour’s Thursday estimate and the USDA’s May estimate.) Of course the final crop production estimate of the Small Grains Summary in late September may be very different from the initial May estimate, but make no mistake, this Crop Tour is a big fundamental deal.

What are they going to see this week? This map indicates virtually the entire US HRW Belt picked up an inch of rain last week:

Thus, more than likely, this first estimate is going to surprise everyone, in one regard…It’s too bad acreage is down so much this year, otherwise we would be looking at a BOOMER. When the final estimates roll in Thursday, it will be anti-climactic, because social media, especially Twitter’s #croptour16 will let everyone in on a little secret…this crop LOOKS great.

Oklahoma, Kansas, Colorado and Nebraska will all weigh in, but frankly, I’m expecting big yield potentials.

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 #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 1 34

Rediscover WHE AT | MAY 2016

Big yields, with less acres…let’s take a look. The LAST 3 columns are various 2016/17 scenarios: PLANTED WINTER WHEAT ACRES (1000 ac) 3/31/2016 acres 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2016/17 2016/17 KS 10,000 9,800 10,400 9,600 9,300 8,400 8,800 9,400 9,500 9,600 9,200 8,500 8,500 8,500 CO 2,550 2,150 2,500 2,150 2,600 2,450 2,300 2,350 2,300 2,750 2,400 2,200 2,200 2,200 NE 1,850 1,800 2,050 1,750 1,700 1,600 1,520 1,380 1,470 1,550 1,490 1,350 1,350 1,350 OK 5,700 5,700 5,900 5,600 5,700 5,300 5,100 5,400 5,600 5,300 5,300 5,000 5,000 5,000 TX 5,500 5,550 6,200 5,800 6,400 5,700 5,300 5,700 6,200 6,000 6,000 5,000 5,000 5,000 SD 1,550 1,450 2,100 2,050 1,700 1,350 1,650 1,320 1,300 1,210 1,420 1,150 1,150 1,150 ND 310 200 465 630 580 330 400 750 215 870 200 140 140 140 MT 2,150 1,950 2,240 2,600 2,550 2,050 2,250 2,300 2,000 2,500 2,350 2,250 2,250 2,250 CA 495 450 500 680 615 660 620 610 620 490 400 400 400 400 total 30,105 29,050 32,355 30,860 31,145 27,840 27,940 29,210 29,205 30,270 28,760 25,990 25,990 25,990 USA winter wheat 43,230 42,409 39,461 36,609 36,609 36,609 HARVESTED WINTER WHEAT ACRES (1000 ac) est. est. est.

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2016/17 2016/17 9,500 9,100 8,600 8,900 8,800 8,000 7,900 9,000 8,450 8,800 8,700 8,134.5 8,075.0 8,038.0 2,200 1,900 2,350 1,900 2,450 2,350 2,000 2,170 1,630 2,350 2,140 2,024.0 2,002.0 1,961.7 1,760 1,700 1,960 1,670 1,600 1,490 1,450 1,300 1,140 1,450 1,210 1,282.5 1,282.5 1,096.3 4,000 3,400 3,500 4,500 3,500 3,900 3,200 4,300 3,400 2,800 3,800 4,000.0 3,750.0 3,584.9 3,000 1,400 3,800 3,300 2,450 3,750 1,900 3,000 2,350 2,250 3,550 2,700.0 2,700.0 2,958.3 1,490 1,150 1,980 1,890 1,530 1,300 1,590 1,210 670 1,080 970 1,069.5 1,046.5 785.6 285 180 445 550 545 320 375 730 200 555 190 133.0 131.6 133.0 2,100 1,920 2,190 2,420 2,420 1,950 2,190 2,170 1,900 2,240 2,220 2,160.0 2,092.5 2,125.5 300 250 240 400 330 360 420 310 345 180 160 240.0 216.0 160.0 24,635 21,000 25,065 25,530 23,625 23,420 21,025 24,190 20,085 21,705 22,940 21,744 21,296 20,843

KS CO NE OK TX SD ND MT CA total

HARVESTED WINTER WHEAT ACRES/PLANTED ACRES (1000 ac) est. est. est.

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2016/17 2016/17 95.0% 92.9% 82.7% 92.7% 94.6% 95.2% 89.8% 95.7% 88.9% 91.7% 94.6% 95.7% 95.0% 94.6% 86.3% 88.4% 94.0% 88.4% 94.2% 95.9% 87.0% 92.3% 70.9% 85.5% 89.2% 92.0% 91.0% 89.2% 95.1% 94.4% 95.6% 95.4% 94.1% 93.1% 95.4% 94.2% 77.6% 93.5% 81.2% 95.0% 95.0% 81.2% 70.2% 59.6% 59.3% 80.4% 61.4% 73.6% 62.7% 79.6% 60.7% 52.8% 71.7% 80.0% 75.0% 71.7% 54.5% 25.2% 61.3% 56.9% 38.3% 65.8% 35.8% 52.6% 37.9% 37.5% 59.2% 54.0% 54.0% 59.2% 96.1% 79.3% 94.3% 92.2% 90.0% 96.3% 96.4% 91.7% 51.5% 89.3% 68.3% 93.0% 91.0% 68.3% 91.9% 90.0% 95.7% 87.3% 94.0% 97.0% 93.8% 97.3% 93.0% 63.8% 95.0% 95.0% 94.0% 95.0% 97.7% 98.5% 97.8% 93.1% 94.9% 95.1% 97.3% 94.3% 95.0% 89.6% 94.5% 96.0% 93.0% 94.5% 60.6% 55.6% 48.0% 58.8% 53.7% 54.5% 67.7% 50.8% 55.6% 36.7% 40.0% 60.0% 54.0% 40.0% 81.8% 72.3% 77.5% 82.7% 75.9% 84.1% 75.3% 82.8% 68.8% 71.7% 79.8% 83.7% 81.9% 79.8%

KS CO NE OK TX SD ND MT CA total

YIELD (bu/ac) KS CO NE OK TX SD ND MT CA total USA PRODUCTION KS CO NE OK TX SD ND MT CA total USA HRW % of USA HRW

yield est. est. est.

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2016/17 2016/17 40.0 32.0 33.0 40.0 42.0 45.0 35.0 42.0 38.0 28.0 37.0 45.0 41.0 37.0 24.0 21.0 40.0 30.0 40.0 45.0 39.0 34.0 25.0 38.0 37.0 45.0 41.0 37.0 39.0 36.0 43.0 44.0 48.0 43.0 45.0 41.0 35.0 49.0 38.0 45.0 42.0 38.0 32.0 24.0 28.0 37.0 22.0 31.0 22.0 36.0 31.0 17.0 26.0 32.0 28.0 26.0 32.0 24.0 37.0 30.0 25.0 34.0 26.0 32.0 29.0 30.0 30.0 32.0 28.0 27.0 44.0 36.0 48.0 55.0 42.0 49.0 42.0 50.0 39.0 55.0 44.0 55.0 48.0 44.0 39.0 44.0 50.0 41.0 48.0 55.0 37.0 55.0 43.0 49.0 44.0 51.0 48.0 44.0 45.0 43.0 38.0 39.0 37.0 48.0 41.0 39.0 43.0 41.0 41.0 45.0 42.0 41.0 72.0 58.0 80.0 85.0 80.0 80.0 85.0 85.0 80.0 80.0 70.0 82.0 80.0 70.0 37.74 32.48 38.36 40.55 38.94 43.47 37.10 41.34 37.21 43.0 40.8 48.0 44.2 40.4 47.30 42.6 42.5 47.0 44.2 42.5 production est. est. est.

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2016/17 2016/17 380.0 291.2 283.8 356.0 369.6 360.0 276.5 378.0 321.1 246.4 321.9 366.1 331.1 297.4 52.8 39.9 94.0 57.0 98.0 105.8 78.0 73.8 40.8 89.3 79.2 91.1 82.1 72.6 68.6 61.2 84.3 73.5 76.8 64.1 65.3 53.3 39.9 71.1 46.0 57.7 53.9 41.7 128.0 81.6 98.0 166.5 77.0 120.9 70.4 154.8 105.4 47.6 98.8 128.0 105.0 93.2 96.0 33.6 140.6 99.0 61.3 127.5 49.4 96.0 68.2 67.5 106.5 86.4 75.6 79.9 65.6 41.4 95.0 104.0 64.3 63.7 66.8 60.5 26.1 59.4 42.7 58.8 50.2 34.6 11.1 7.9 22.3 22.6 26.2 17.6 13.9 40.2 8.6 27.2 8.4 6.8 6.3 5.9 94.5 82.6 83.2 94.4 89.5 93.6 89.8 84.6 81.7 91.8 91.0 97.2 87.9 87.1 21.6 14.5 19.2 34.0 26.4 28.8 35.7 26.4 27.6 15.2 10.5 19.7 17.3 11.2 918.2 653.9 920.4 1006.9 889.0 981.9 745.7 967.5 719.3 715.5 804.9 911.7 809.3 723.5 929.8 682.079 961.588 1035.24 919.939 1018 780 1000 747.4 738.7 826.913 941 834 755 98.8% 95.9% 95.7% 97.3% 96.6% 96.5% 95.6% 96.8% 96.2% 96.9% 97.3% 96.9% 97.0% 95.8%

The far right column is probably what most guys were expecting. Reduced acreage, with yields same as last year. It pops a Kansas crop of 297.4, and a Colorado at 72.6; all USA HRW of 755 mil bu.

The second column from the far right is same planted acreage, with slightly better harvest percentage of planted, and very good yields. Kansas climbs to 331, Colorado is 82, and the USA HRW is 834 million bu.

The third column from the far right uses big yields with a big harvested percentage…KS = 366, CO = 91, all USA HRW = 941mil bu !! Omega. Oklahoma, Texas and Nebraska, and South Dakota and Montana all contribute in a big way too.

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 2

Rediscover WHE AT | MAY 2016 35

In other words, even though planted acres were down almost 3 million acres, good conditions can make harvested acres drop only 1.2 million acres, and if I’m correct about the yields…we could easily be looking at an INCREASE in total USA HRW production.

The bad news is the market is NOT trading that. Maybe the market is trading the second scenario, about an 834 all USA HRW crop, and the best way that an 834 crop is not bearish is…the market expects Brazil to buy at least 2.5 million tonnes of additional USA HRW this marketing year. The far right column shows an 825 all USA HRW production, with exports of 317 milbu, yielding a USA HRW carryout in 2016/17 of 455 mil bu.

The second column from the right is only a 760 crop, with exports of 270 million bu, and thus a 447 carryout.

US HARD RED WINTER WHEAT year 2000-01 2001-02 2002-03 2003-04 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 carry in production imports total supply

2016-17

458 846 0 1304

411 766 1 1178

363 620 0 983

188 1071 0 1259

227 857 1 1085

193 930 0 1123

215 682 1 898

165 956 1 1122

138 1046 2 1186

254 926 2 1182

385 1006 1 1392

387 783 0 1170

317 998 18 1333

343 747 19 1109

237 739 10 986

294 827 6 1127

428 760 8 1196

428 825 8 1261

food seed feed/residual domestic use

375 32 93 500

364 34 68 466

377 37 74 488

378 35 109 522

382 33 87 502

370 33 77 480

366 37 50 453

397 35 15 447

385 35 63 483

361 32 34 427

359 32 -3 388

404 33 19 456

404 33 171 608

370 34 22 426

370 32 20 422

395 29 50 474

395 31 53 479

405 31 53 489

exports

393

349

308

510

389

428

280

536

447

370

617

397

382

446

269

225

270

317

total demand

893

815

796

1032

891

908

733

983

930

797

1005

853

990

872

691

699

749

806

carryout

411

363

187

227

194

215

165

139

256

385

387

317

343

237

295

428

447

455

stox/use

46.0%

44.5%

23.5%

22.0%

21.8%

23.7%

22.5%

14.1%

27.5%

48.3%

38.5%

37.2%

34.6%

27.2%

42.7%

61.2%

59.7%

56.5%

IF yields push records in The HRW Belt, and KS pops out a 366, and CO produces a 91, and the USA total is anywhere close to 940…we have a serious new ball game.

And that is what makes me most nervous about this megaphone formation shown on this KC July daily chart. Megaphones always mean a big move is coming.

Which way is this move coming? And that question, if you are a wheat producer really means, can this thing go lower again?

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 3

36

Rediscover WHE AT | MAY 2016

This long term chart suggests $4.50 better hold, or $4.00, or worse, $3.50 is not impossible. But…

But maybe that Wheat Tour sees things differently, and estimates KS and CO yields are no better than last year’s 37 bu.ac, and thus the USA HRW crop is indeed only a 760, and we can forget about this fundamental scary nonsense, and get back to things we like to talk about, like “massive short-covering”, or even better…” funds going long!”.

It could happen. This week’s futures table shows EVERY OTHER grain is forcing funds out of short positions.

CLOSE

KWN16

KWZ16

KWN17

CN16

CZ16

CN17

WN16

MWN16

MWZ16

SN16

04/29

$4.79

$5.18

$5.47

$3.92

$3.95

$4.10

$4.89

$5.47

$5.66

$10.30

04/22

$4.74

$5.10

$5.37

$3.76

$3.81

$3.97

$4.67

$5.33

$5.53

$9.96

04/15

$4.68

$5.04

$5.35

$3.82

$3.88

$4.07

$4.60

$5.28

$5.48

$9.64

04/08

$4.71

$5.05

$5.34

$3.65

$3.75

$3.95

$4.60

$5.30

$5.52

$9.25

04/01

$4.89

$5.23

$5.49

$3.58

$3.70

$3.89

$4.76

$5.38

$5.59

$9.26

03/25

$4.83

$5.16

$5.40

$3.75

$3.87

$4.03

$4.63

$5.23

$5.46

$9.18

03/18

$4.80

$5.14

$5.40

$3.72

$3.86

$4.02

$4.63

$5.18

$5.42

$9.04

03/11

$4.93

$5.25

$5.51

$3.70

$3.83

$3.98

$4.76

$5.24

$5.47

$9.02

03/04

$4.78

$5.11

$5.38

$3.64

$3.78

$3.94

$4.61

$5.05

$5.31

$8.85

02/26

$4.65

$4.99

$5.24

$3.64

$3.78

$3.95

$4.52

$4.99

$5.24

$8.70

02/19

$4.77

$5.11

$5.37

$3.74

$3.87

$4.03

$4.67

$5.06

$5.30

$8.85

02/12

$4.65

$4.99

$5.26

$3.69

$3.82

$4.01

$4.63

$4.95

$5.21

$8.82

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 4

Rediscover WHE AT | MAY 2016 37

WHY NOT KC? Obviously, the market is not trading a 760 all USA HRW crop. They are trading something bigger, and that is actually some good news. It says the Wheat Tour is going to need a bigger estimate than a 331 KS crop, or an 82 CO crop to set this back fundamentally.

Now don’t get me wrong. This market needs demand. Real additional demand, from Brazil, and maybe the Saudis, and Iraq would be great too, OR ELSE…this wheat market will ignore the higher corn and beans and MGEX and Chgo wheat markets prompting funds to cover. In soybeans, funds covered their shorts, and went long. Funds are long soybeans. Here is a July bean chart, showing what that looks like…

The blue line is $9.18. Look back in the table. $9.18 was the third blue font number in beans. Funds had completely covered their shorts by that third blue weekly close. The next blue font number, $9.26, was the first week of the funds going long. They will add to their long position on every higher weekly close.

The bad news, of course, is when the rally loses steam, sell-stops will appear. Anyways, it’s fun to see a market when buy-stops rock on. Can that happen to KC wheat?

Show me the demand. That would be the easiest way.

The corn column shows corn has had 2 blue font weeks. The third one, a weekly (Friday) close above $3.92 on the July would do it. And then another blue number after that gets funds into the first phase of going long. And in the face of all these corn acres being planted, that is interesting.

Corn weekly export sales were 2.2 million tonnes this week.

This agweek story says this was a 4 year high, and raises the possibility that the corn sold to “unknown destinations” is actually going to Brazil! And that is truly amazing. http://www.agweek.com/crops/corn/4020123-us-corn-export-sales-hit-4-year-high We saw on April 20 that Brazil had dropped their import tax on non-Mercosur trade bloc (South America) origins. Looking back…that was more “interesting” than I thought.

South American corn production estimates have been dropping, due to hot, dry weather in Brazil and flooding in Argentina.

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 5

38

Rediscover WHE AT | MAY 2016

This is a Dec corn chart, in line format, and in a weekly time frame. It helps see the numbers from the futures table easier…the blue line is $3.88. from the 4/15 Friday close.

Here’s a more standard look at Dec corn; daily time frame, and a candlestick format…

The purple line is the 200-day moving average; the blue line is the same $3.88 line…

It’s a tricky chart, unfortunately, making producers, who I assume are longs… nervous, BUT also most certainly making end-users, whom I assume are NOT covered for very long, also extremely nervous.

If Brazil takes a million tonnes of US corn, and USA corn growing weather goes south this summer, this thing could go ballistic.

IF is a very big word…if I was long corn, and had planted more corn…I’d keep my eye on that 200-day moving average.

Very interesting.

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 #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 6

Rediscover WHE AT | MAY 2016 39

Can beans drag KC wheat higher? Doubt it. Can corn drag KC wheat higher? We’ve seen that happen before.

Anyways…a couple of weeks ago I said I’d be bullish wheat with 2 closes above $5.00 and staying above the 200-day moving average. The chart is back on page 3.

Posted cash bids are on average up a nickel; I converted the bids against the July, shown below. The USDA has been donating some low protein (10 protein) HRW to Ethiopia, and I think this will ultimately be a half million tonnes of needed business, especially for low protein. Whenever I talk to wheat breeders, they always want to talk about “farm management practices”, which somehow I always think they mean their wheat varieties respond to fertilizer. When I talk to farmers, sometimes they admit they are tempted to “cut back on inputs” in times of low prices, such as these. For the record, the Saudis and Iraq generally require a 12 protein or better. I think Brazil takes an 11.5. The point is that millers everywhere are pickier than ever, and that has to be kept in mind if a guy grows wheat for a market other than going to a feed lot. Of course if corn keeps moving higher, a lot more wheat will go to a feed lot than currently expected…

My opinion is the Ethiopian biz may be why the basis bids are higher in some, but not all, areas.

The K/N spread is about 13c, so if the basis rolled to the N at something other than -13 or -14c, I colored it red for lower, and blue for higher.

Date 04/29 04/22 04/15 04/08 04/01 03/25 03/18 03/11 Date 04/29 04/22 04/15 04/08 04/01 03/25 03/18 03/11

Dodge $3.90 $3.87 $3.83 $3.85 $4.03 $3.97 $3.95 $4.08 Concordia $4.00 $3.97 $3.93 $3.95 $4.13 $4.07 $4.05 $4.23

Colby $4.09 $3.97 $3.93 $3.97 $4.15 $4.09 $4.07 $4.21 Salina $4.15-$4.20 $4.12-$4.17 $4.08-$4.11 $4.10-$4.13 $4.28-$4.31 $4.22-$4.22 $4.20-$4.20 $4.38-$4.38

Goodland $3.95 $3.91 $3.87 $3.90 $4.07 $4.06 $4.04 $4.19 Hutchinson $3.96-$4.25 $3.93-$4.22 $3.89-$4.18 $3.91-$4.20 $4.09-$4.38 $4.03-$4.30 $4.01-$4.30 $4.14-$4.43

Protection $3.95 $3.92 $3.88 $3.90 $4.08 $4.02 $4.00 $4.13 Wichita $4.08-$4.30 $4.05-$4.26 $4.01-$4.18 $4.03-$4.20 $4.21-$4.38 $4.03-$4.32 $4.13-$4.30 $4.26-$4.43

Scott City $3.95 $3.88 $3.84 $3.85 $4.03 $3.97 $3.94 $4.08 Ark City $4.00 $3.97 $3.93 $3.95 $4.13 $4.07 $4.05 $4.18

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 7

40

Rediscover WHE AT | MAY 2016

Sublette $3.99-$3.99 $3.87-$3.92 $3.83-$3.88 $3.85-$3.90 $4.03-$4.08 $3.97-$4.02 $3.95-$4.00 $4.08-$4.13

BASIS 04/29 04/22 04/15 04/08 04/01 03/25 03/18 03/11 Date 04/29 04/22 04/15 04/08 04/01 03/25 03/18 03/11

Dodge -89 -75 -75 -75 -75 -75 -75 -75 Concordia -78 -66 -66 -66 -66 -66 -66 -60

Colby -70 -65 -65 -63 -63 -63 -63 -62 Salina -63, -58 -51, -45 -51, -47 -51, -47 -51, -47 -51, -51 -51, -51 -45, -45

Goodland -84 -71 -71 -70 -70 -66 -66 -64 Hutchinson -82, -53 -70, -41 -70, -41 -70, -41 -70, -41 -70, -41 -70, -41 -69, -40

Protection -84 -70 -70 -70 -70 -70 -70 -70 Wichita -70, -48 -58, -36 -58, -41 -58, -41 -58, -41 -58, -41 -58, -41 -57, -40

Scott City -84 -75 -75 -75 -75 -75 -75 -75 Ark City -78 -66 -66 -66 -66 -66 -66 -65

Sublette -80, -80 -75, -70 -75, -70 -75, -70 -75, -70 -75, -70 -75, -70 -75, -70

Bring on that Wheat Tour. I think it will be a big number. But as Corn is driving this Grain Train, the market can (probably) take it.

Kansas Wheat market update #219 danmaltby.riskmgmt@gmail.com 04/29/16 pg. 8

Rediscover WHE AT | MAY 2016 41

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