Idaho Wheat Commission News

Idaho’s Agricultural Research Enhanced through Multi-Million Dollar Endowments from Idaho Wheat Commission and Limagrain Cereal Seeds

2012-01-06T16:20:00.000-08:00

The Idaho Wheat Commission today announced a plan to create two faculty research endowments with $2 million to the University of Idaho’s College of Agricultural and Life Sciences to support Idaho’s 4,500 wheat growers and their $766 million-per-year harvest.

In addition, Limagrain Cereal Seeds has agreed to collaborate with the college on breeding new wheat varieties for Idaho and the Pacific Northwest. Both Limagrain and the college will contribute germplasm, technology, and expertise to more rapidly develop varieties with improved productivity and tolerance to diseases and stress. To support this effort, Limagrain is also funding a significant endowment for cropping systems research and graduate training at the university.

“These partnerships clearly demonstrate the power of collaboration and the value that a land-grant institution like the University of Idaho can bring to our state’s economy,” said M. Duane Nellis, president of the University of Idaho. “We deeply appreciate the confidence that both the Idaho Wheat Commission and Limagrain Cereal Seeds have placed in our university.”
Limagrain Cereal Seeds and the university will share grain germplasm, which will “greatly increase varietal options for Idaho and Pacific Northwest wheat growers,” said Dean John Hammel of the College of Agricultural and Life Sciences.

“This public-private partnership is a win for all of us and especially for Idaho and the Pacific Northwest wheat industry,” said Hammel. “Today’s economic realities make it increasingly important for industries benefiting from our research to increase their support. The endowments our partners are establishing today are ensuring the future as they will provide ongoing and perpetual research funding. We applaud both the Idaho Wheat Commission and Limagrain Cereal Seeds for stepping up as willing partners.”

Developing new wheat varieties is not easy. It takes a dozen years to develop and test best new grain varieties.

“Future yield increases in wheat will be driven by research, said Gordon Gallup of Ririe, chairman of the Idaho Wheat Commission, which represents Idaho’s wheat growers. “Private breeders like Limagrain Cereal Seeds bringing new technology and new germplasm into the mix is going to give our public programs a significant boost. New technology will lead to greater yields and better profitability for wheat growers in Idaho and the Pacific Northwest.

“Wheat growers of Idaho are very aware of how important research is to our bottom line,” Gallup said. “If wheat is to remain competitive in our state and region, growers of Idaho must look to public/private partnerships, as well as requiring increased efficiencies in our public research programs.”

“These past few years we have seen severe cuts to our state universities’ budgets. Although cuts were necessary to balance budgets, those reductions have caused an erosion of our ability to fund research that is necessary to keep agriculture healthy,” Gallup added.

“Idaho’s wheat growers are hopeful that the State of Idaho will continue to invest in agriculture,” Gallup said. “We encourage other agricultural related industries to join in this effort to keep our land grant universities’ research programs healthy and productive.”

Donn Thill, director of the university’s Idaho Agricultural Experiment Station that oversees the institution’s statewide agricultural research, believes that, “by strategically combining our wheat germplasm with Limagrain Cereal Seeds’, new wheat varieties will be created for our growers that yield more wheat per acre, that are easier on the environment, more disease resistant, and more nutritious than what we could do working alone.”

Jim Peterson, vice president for research at Limagrain Cereal Seeds, sees this as “an exciting opportunity to build on the complementary strengths of the University of Idaho and LCS wheat programs.

“The university’s cropping systems research will help growers to better manage and capture value from new varieties that come out of the collaborative breeding effort,” Peterson said. The collaboration also brings a new international dimension to wheat research in Idaho and the Northwest. Limagrain Cereal Seeds is a new joint venture between the France-based Limagrain Group, the largest cereal seed company in Europe, and Arcadia Biosciences, a biotechnology company based in Davis, Calif.

This year, the Idaho Wheat Commission endowments will fund a wheat breeding and a wheat agronomist professorship, each located at the university’s Aberdeen Research and Extension Center. “Some of this endowment will enhance salaries of faculty already conducting research, an effort to stay competitive, to keep these professionals in Idaho,” Thill said.

Limagrain Cereal Seeds’ support for graduate training also is timely.
“Nationally, we’re facing shortages of experienced people in agriculture with these skills,” Thill said. “An important part of our job is training the next generation of crop scientists. These endowments will help us.”

As part of its commitment to the Idaho grain industry, the College of Agricultural and Life Sciences is reallocating resources and faculty positions to strengthen statewide cereal research and extension, areas hard hit during the severe economic downturn of the past several years.
These strategic and collaborative partnerships will enable the college to fill two cropping positions in the coming year, one each in Moscow and Aberdeen, along with a plant nutrition position. “These positions will provide important agronomic support to newly developed cereals and other crops,” Hammel said.

The small-grain cereal cropping system agronomist in Moscow will focus on northern Idaho’s dryland production systems including small grain cereals, peas, lentils, and oilseed with a value of $150 million annually to northern Idaho.

The plant nutritionist will focus on optimizing fertilizer use and placement in winter wheat to ensure environmental protection and sustainable crop production in both conventional and direct seed farming systems.

To further improve adaptation of new wheat varieties in northern Idaho, an area-wide extension educator position, located in Nez Perce County, will be filled to support cereal agronomic and yield test sites in northern Idaho.

In Aberdeen, “the cropping systems agronomist will provide much needed research and extension information in best management practices for wheat, barley, and crops grown with them in rotation,” added Hammel. Additionally at Aberdeen, a research entomology position will be refilled to develop extension and research programs in insect management for crops including small-grain cereals and potatoes.

The university’s College of Agricultural and Life Sciences operates research and extension facilities throughout Idaho to serve the state’s people and agriculture as part of its mission as a land-grant institution.

Projected Wheat Exports Are Lowered This Month

2011-12-16T09:12:00.000-08:00

U.S. wheat ending stocks for 2011/12 are projected 50 million bushels higher withreduced prospects for exports this month. Exports are lowered 50 million bushels with reductions projected for hard red winter, soft red winter, and white wheat.

Larger supplies in several major exporting countries and relatively strong domestic prices, supported by the tight domestic corn supply-and-use situation, are expected to limit opportunities for U.S. wheat in world trade.

Ending stocks for 2011/12, at 878 million bushels, are projected to be up 16 million from last year, but down 98 million from the recent high in 2009/10. The 2011/12 season-average farm price is lowered slightly to$7.05 to $7.55 per bushel compared with $7.05 to $7.75 last month.

A sharp increase in wheat supplies in Australia, Argentina, and Canada is expected to intensify competition for U.S. exports during the latter half of 2011/12. Global consumption is projected higher; however, global ending stocks also rise, putting additional pressure on wheat prices. U.S. wheat export prospects are reduced on increased competitor supplies and the slow pace of sales.

Educational Seminar on Snow Mold Offered to Idaho Wheat Growers

2011-11-17T05:30:00.000-08:00

Snow mold diseases of wheat are some of the most dramatic and devastating diseases of plants. In the Pacific Northwest, the snow molds are important in areas where snow falls on unfrozen or lightly frozen soil and persists for 100 days or more.

Snow mold diseases destroy the leaves and crowns of host grasses under snow. Following snowmelt, the leaves of plants with speckled snow mold are matted to the soils, and covered with a whitish gray fungal growth. Growing resistant varieties is the most effective and affordable control measure for snow mold.

The Idaho Wheat Commission will be presenting a web-based grower education seminar (webinar) to help educate Idaho wheat growers about Snow Mold diseases. The webinar will be approximately one hour. Participation is simple and free! Log onto the website at http://connect.cals.uidaho.edu/wheat (requires Adobe Flash Player which is installed on most computers) and enter your name as a participant.

Tuesday, November 22, 9:00 a.m. MST – Guest Presenter Tim Murray, Professor Dept. of Plant Pathology, Washington State University will discuss the disease development of snow mold, symptoms of the disease and the best methods to control the disease. Dr. Murray will also answer questions during the webinar and provide information on disease resistant varieties.

The webinar will be recorded and made available at www.idahowheat.org.

USDA Identifies Step Rust Resistant Wheat Varieties

2011-11-14T15:08:00.001-08:00

The Agricultural Research Service (ARS) of the U.S. Department of Agriculture said it has identified a number of stem rust-resistant wheat varieties and was retesting them to verify their resistance.

USDA scientists at the ARS Small Grains Research Unit in Aberdeen, Idaho screened more than 3,000 wheat landraces from the National Small Grains Collection against new races of the stem rust pathogen found in Kenyan wheat fields. Landraces with confirmed resistance were crossed with susceptible wheat to determine the genetic basis of the resistance.
The researchers’ goal was to find new genes for resistance to UG99, a rust strain that has the capacity to overcome many of the resistant genes used in the past 50 years. The work will help African growers now and will help suppress disease and reduce damage in developing countries, as well as prepare for the potential arrival of Ug99 in the United States.

Stem Rust-Resistant Wheat Landraces Identified

2011-10-25T09:04:00.000-07:00

U.S. Department of Agriculture scientists have identified a number of stem rust-resistant wheat varieties and are retesting them to verify their resistance. Stem rust occurs worldwide wherever wheat is grown. Over a large area, losses from stem rust can be severe, ranging from 50 to 70 percent, and individual fields can be destroyed.

Agricultural Research Service plant pathologist Mike Bonman at the agency's Small Grains and Potato Germplasm Research Unit in Aberdeen, Idaho, and his colleagues screened more than 3,000 wheat landraces from the National Small Grains Collection against new races of the stem rust pathogen found in wheat fields in Kenya. Landraces with confirmed resistance are being crossed with susceptible wheat to determine the genetic basis of the resistance.

ARS is USDA's principal intramural scientific research agency, and the research supports the USDA priority of promoting international food security.

Field trials in Kenya to screen for resistance are vital to this work, according to Bonman, who worked at the International Rice Research Institute (IRRI) for 9 years before coming to ARS. He is now working collaboratively with the International Maize and Wheat Improvement Center (CIMMYT) near Mexico City, and the Kenya Agricultural Research Institute (KARI).

Excellent procedures have been developed by CIMMYT and KARI personnel to promote rust disease in the nursery, enabling Bonman to evaluate which ARS accessions are resistant to rust. According to Bonman, CIMMYT facilitates the nursery and site logistics, and ARS helps with evaluating the level of rust development in wheat varieties.

The research team's goal is to find new genes for resistance to a rust strain called Ug99, because that strain has the capacity to overcome many of the resistance genes that have been used for the past 50 years. This work will help Africa's growers now and will help suppress disease and reduce damage in developing countries. It also will prepare the United States for Ug99 if the disease arrives here, according to Bonman.

Crowd favors dock expansion

2011-10-21T10:15:00.000-07:00

Idaho Wheat Commissioner Bill Flory made the Lewiston Tribune with his comments made at the hearing this past Wednesday (10/19) hosted by the U.S. Army Corps of Engineers regarding the proposed dock expansion project at the Port of Lewiston.

IGPA V.P. “Genesee” Joe Anderson also made public statements in support of the Port.

Crowd favors dock expansion By ELAINE WILLIAMS of the Lewiston Tribune

Businesses and groups supporting a dock expansion at the Port of Lewiston dominated a U.S. Army Corps of Engineers public hearing on the project.Representatives of Clearwater Paper, Avista and six farming organizations were among those who said they favored the project Wednesday during the meeting at Sacajawea Junior High in Lewiston.

About 20 of those speaking wanted the Port of Lewiston to proceed with plans to lengthen its 125-foot container dock by 150 feet. Roughly 10 were against it. The upgrade can't be done without a permit from the corps because the arm of the federal government has jurisdiction for any work in navigable waters of the U.S.One of the decisions the corps will make, likely by December, is whether it will require an environmental impact statement, a detailed analysis that would look at alternatives to the project.

People on both sides of the issue made arguments their stance was the best for the environment. Backers noted barging creates less air pollution than trains or trucks and reduces traffic congestion by reducing the number of semis on the road.

They also talked about the economic benefits of the port. Northern Idaho growers save anywhere from $1.6 million to $8 million a year barging wheat to Portland compared with the costs of rail, said Bill Flory, a Winchester farmer who serves on the Idaho Wheat Commission. That money gets spent in local communities, Flory said. "We need a port with a complete product mix of services."

Opponents asked for an EIS, noting the dock would be constructed in a spot that has less than 15 feet of water.Concerns about sediment collection are so intense the corps is spending $13 million to study how to protect Lewiston from flooding as the levels rise, said Brett Haverstick of Friends of the Clearwater.

A corps official couldn't immediately confirm anything about the study.Opponents also argued the longer dock would turn the port into more of a destination for megaloads that take up two lanes of traffic on roadways.

"This proposed expansion is a boondoggle that should be regulated to the dust bin," Haverstick said.Jerry Myers of Lewiston said stopping the extension wouldn't prevent megaloads from arriving in the Lewiston-Clarkston Valley.

Some megaloads are going through the Port of Wilma, just west of Clarkston, Myers said.Myers also noted the Port of Lewiston has been in the megaload business almost from its beginning. Some of the first oversized loads arrived in Lewiston shortly after slackwater in the 1970s, Myers said. They were steam dryers for tissue machines at Clearwater Paper.

TAIWAN FLOUR MILLERS SIGN $484 MILLION WHEAT DEAL

2011-10-03T08:46:00.000-07:00

The Taiwan Flour Mills Association (TFMA) signed a letter of intent to purchase up to 62.5 million bushels (1.7 million metric tons) of U.S. wheat over two years between 2012 and 2013 in Boise, Idaho, September 30. The signing ceremony was held at the Idaho State Capitol Building with Lt. Governor Brad Little.

Click on the link to view the video: http://www.ktvb.com/news/business/Idaho-Taiwan-sign-multi-million-dollar-trade-deal-130865633.html

USDA Projects Lower Grain Exports

2011-09-19T15:32:00.000-07:00

In the September 12 World Agricultural Supply and Demand Estimates (WASDE) report, USDA projected wheat, corn, and soybean total exports in the coming crop year (2011/12) to be 4.09 billion bushels, 12 percent lower than the 2010/11 crop year. U.S. corn exports for 2011/12 are projected to be 1.650 billion bushels, 10 percent lower than last year. The national average corn yield is forecast to be 148.1 bushels per acre, 16.3 bushels below the 2009/2010 crop year and the lowest since 2005/06. Corn use for ethanol is expected to be 5.0 billion bushels, a drop from last month’s projection of 5.1 billion bushels caused by higher corn prices and a weakening outlook for U.S. gasoline demand. Soybean exports are projected to be 1.415 billion bushels, 80 million bushels less than last year. Overall, WASDE production projections for the new crop of wheat, corn, and soybeans are 17.7 billion bushels, a 2 percent reduction from last year. This year’s crops have been adversely impacted by widespread disruptive weather that included extensive flooding and late-season droughts. On Thursday morning (September 15), an early freeze covered portions of the upper Midwest, including North Dakota, Minnesota, eastern South Dakota, northern Iowa, and parts of Wisconsin. Early frosts and prolonged freezing temperatures could impact crop development; final assessments will be made before the peak harvest season.

World Agriculture Supply and Demand Estimates

2011-09-14T13:49:00.000-07:00

Projected U.S. wheat ending stocks for 2011/12 are raised 90 million bushels this month with higher expected imports and lower expected food use and exports. Imports are raised 10 million bushels with larger supplies in Canada. Food use is projected 5 million bushels lower in line with revisions to 2010/11 based on the latest and final U.S. Bureau of Census mill grind estimates and reflecting reduced prospects for per capita flour consumption during calendar year 2011.

Exports for 2011/12 are projected 75 million bushels lower with larger supplies and exports expected for Canada and the EU-27. The season-average farm price for all wheat is projected at $7.35 to $8.35 per bushel, up from last month’s range of $7.00 to $8.20 per bushel supported by higher corn prices. Global wheat supplies for 2011/12 are projected 7.6 million tons higher mostly on larger beginning stocks in Canada and increased production for Canada, EU-27, and Ukraine. Beginning stocks for Canada are raised 1.3 million tons and production is raised 2.5 million tons, both reflecting the latest estimates from Statistics Canada.

EU-27 production is raised 2.3 million tons with increases for Germany, Romania, France, Spain, and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised 1.0 million tons based on the latest harvest reports. Other smaller production changes include 0.2-million-ton increases for both Brazil and Morocco, and a 0.2-million-ton reduction for Uzbekistan. World wheat trade is raised slightly for 2011/12 with increased imports projected for the United States and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU- 27 more than offset reductions for the United States and Turkey. Global wheat consumption is increased 1.9 million tons with higher expected wheat feeding in Canada, China, Morocco, and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/12 are projected 5.7 million tons higher at 194.6 million. At this level, global stocks would be up from 2010/11 and the second largest in the past decade.

Coping with Fusarium Head Blight in S. Idaho

2011-08-18T09:52:00.000-07:00

To view guest presenter Juliet Marshall's,
"Coping with Fusarium Head Blight in S. Idaho" webinar, click on the following link

http://connect.cals.uidaho.edu/p66203709/

Ms. Marshall explains several factors that may substantially be increasing the risk of Fusarium Head Blight. Key factors include environmental conditions, corn, and the increased aggressiveness of Fusarium Crown Rot.

Marshall described during the webinar how these factors have contributed to the incidence and aggressiveness of the disease in irrigated winter and spring wheat production in southeast Idaho.

Idaho Spring Wheat Production Decrease 5 Percent

2011-08-11T10:01:00.000-07:00

Based on conditions as of August 1, Idaho’s spring wheat yield is forecast at 76.0 bushels per acre, unchanged from the July 1 forecast and down 2 bushels per acre from 2010, according to the National Agricultural Statistics Service. Production of 45.6 million bushels from 600,000 harvested acres is down 5 percent from last year. Idaho’s winter wheat yield of 80.0 bushels per acre is up 1 bushel per acre from last month and down 2 bushels per acre from last year. Producers expect to harvest 770,000 acres of winter wheat with a total production of 61.6 million bushels, up 6 percent from last year.

For the United States, all wheat production, at 2.08 billion bushels, is down 1 percent from the July forecast and down 6 percent from 2010. Based on August 1 conditions, the United States yield is forecast at 45.2 bushels per acre, up 0.6 bushel from last month but down 1.2 bushels from last year. Winter wheat production is forecast at 1.50 billion bushels, up slightly from last month and up 1 percent from 2010. The United States yield is forecast at 46.3 bushels per acre, up 0.1 bushel from last month but down 0.5 bushel from last year. Spring wheat production is forecast at 522 million bushels, down 5 percent from last month and down 15 percent from last year. The United States yield is forecast at 42.5 bushels per acre, up 0.8 bushel from last month but down 3.6 bushels from 2010.

Governor Appoints Ned Moon to Idaho Wheat Commission

2011-07-08T05:30:00.000-07:00

Governor C.L. “Butch” Otter recently appointed Ned Moon of Heyburn, to the Idaho Wheat Commission (IWC). Moon will represent wheat growers in District III, which includes Canyon, Owyhee, Ada, Elmore, Camas, Gooding, Twin Falls, Blaine, Lincoln, Jerome, Minidoka and Cassia counties.

Ned, who grew up on a farm in Heyburn, is the marketing manager for Jentzsch-Kearl Farms, a 16,000 acre partnership growing potatoes, sugar beets, wheat, hay, and seed beans. He also is responsible for chemical and fertilizer inputs, handles all land leases, audits and government programs.

Moon earned a bachelor’s degree in Communications from BYU, and then entered the Air Force where he flew jets for over 10 years. In 1993 Captain Moon left the Air Force and returned to the Burley/Twin Falls area and started his own retail business. He also spent several years as the manufacturing manager for an agricultural chemical company prior to working for Jentzsch-Kearl Farms.

“Ned brings a wealth of marketing and business experience to the Idaho Wheat Commission,” said Gordon Gallup, Chairman Idaho Wheat Commission. “The commission and staff look forward to working with Ned and gleaning from his years of agricultural and business experiences. We are confident that Ned’s marketing knowledge will be a benefit to Idaho’s wheat producers.”

The new commissioner is looking forward to serving as well. “It’s both a privilege and an honor to be selected by the Governor to represent District III wheat growers,” said Moon. “Check-off dollars are grower dollars. My goal is to see that those dollars continue to be managed and invested in programs that will help improve profit margins for our wheat growers.”

Ned and his wife Mary have three grown children. He enjoys golfing, playing the piano and wood working.

Idaho Crop Progress Update

2011-07-07T11:19:00.000-07:00

USDA’s July 5, 2011 Crop Progress & Condition reports weather conditions improved significantly during the week ending July 3. Warmer weather advanced winter wheat headed to 76% which was a 26 percentage point improvement from last week. Spring wheat and barley headed improved to 27 and 23 percentage points, respectively. Most cereal grains are in good to excellent condition.

Winter wheat conditions continue to be favorable with 74% Good to Excellent, 14% Fair, 10% Poor and only 2% reporting Very Poor. Spring wheat conditions also look favorable with 85% Good to Excellent, 14% Fair and 1% Poor.
To view the entire USDA report click on this link: http//www.nass.usda.gov/id/

U.S. Crop Progress Update
USDA’s July 5, 2011 Crop Progress and Condition reported winter wheat conditions 36%Good to Excellent, 23% Fair, 19% Poor and 22% rated 22% Very Poor. Spring wheat conditions are favorable with 69% Good to Excellent, 27% Fair, 3% Poor and 1% Very Poor.
The spring wheat crop, however, is behind the 2010 crop in progress with 89 percent of the crop emerged, compared to 100 percent emergence in 2010 by this week of the year.
The five-year average for the crop is also 100 percent emergence by June 26.
To view the entire USDA report click link: http://usda.mannlib.cornell.edu/usda/current/CropProg/CropProg-07-05-2011.pdf

Idaho All Wheat Acreage Up 3 Percent

2011-06-30T10:07:00.000-07:00

Planted acres for all wheat in Idaho are estimated at 1.45 million acres, up 3 percent from 2010, according to the National Agricultural Statistics Service. Acres to be harvested for all wheat are expected at 1.38 million acres, up from 1.35 million acres the previous year. Idaho’s spring wheat seedings, at 620,000 acres, are down 2 percent from the 630,000 acres planted in 2010. Harvested acreage is set at 600,000 acres, a decrease of 15,000 acres from last year. Winter wheat seedings of 820,000 acres increased 9 percent from the previous year. Harvested acres are expected to total 770,000 acres, up 60,000 acres from 2010. Area planted to durum wheat is down 60 percent from last year at 8,000 acres, with 8,000 acres also expected to be harvested for grain.

Idaho's June 1 all wheat stocks in all positions totaled 18.0 million bushels, down 7percent from the 19.3 million bushels in storage June 1, 2010.

Nationally, all wheat stored in all positions on June 1, 2011 totaled 861 million bushels, down 12 percent from a year ago. The March – May 2011 indicated disappearance is 565 million bushels, up 48 percent from the same period a year earlier. Barley stocks in all positions on June 1, 2011 totaled 89.4 million bushels, down 23 percent from June 1, 2010. The March – May 2011 indicated disappearance is 48.8 million bushels, 17 percent above the same period a year earlier. Oats stored in all positions on June 1, 2011 totaled 67.6 million bushels, 16 percent below the stocks on hand June 1, 2010. The March – May 2011 indicated disappearance totaled 18.7 million bushels, compared with 17.7 million bushels during the same period a year ago. Corn stocks in all positions on June 1, 2011 totaled 3.67 billion bushels, down 15 percent from June 1, 2010. The March – May 2011 indicated disappearance is 2.85 billion bushels, compared with 3.38 billion bushels during the same period last year.

Schedule of Idaho Crop Tours/Field Days

2011-06-27T05:30:00.000-07:00

The University of Idaho will be conducting Field Days in numerous locations during June and July. Field Days provide an opportunity to learn about new wheat and barley varieties while providing growers a forum to ask UI Extension staff questions.

June 27 – Rimrock: UI Crop Tour, Winter/spring wheat, starts at 8:00 a.m. in Genesee. Contact: Lydia Clayton, (208) 799-3096 Iclayton@uidaho.edu

June 28 – Craigmont: Prairie Area Crop & Conservation Tour. Contact: Ken Hart, (208) 937-2311 khart@uidaho.edu. Hosted breakfast 7:00 a.m. Craigmont City Hall. Transportation provided, pesticide recertification and CCA credits available.

July 7 – Burley: UI Cereals Extension Field day, Contacts: Joel Packham (208) 430-7238 jpackham@uidaho.edu, Juliet Marshall, Juliet.marshall@uidaho.edu. Starts at 10:00 a.m. at winter cereal trials (150 N on Meridian Rd, N of Rupert), lunch provided.

July 14 – Rexburg: BYU-Idaho Contacts: Greg Blaser (208) 496-4527 blaserg@byui.edu Renae Zollinger (208) 496-4521. 35th Small Grains and Forages Field Day, ISDA and CCA credits available, lunch provided.

July 19 – Blackfoot: General Mills, Contact: Brett Wilken, (208) 243-0008, brett.wilken@genmills.com

July 20 – Swan Valley: Direct Seed Field Day, Contacts: Gordon Gallup, (208) 251-9552 gogallup@hotmail.com; Pat Dailey, (208) 334-2353 pdailey@idahowheat.org, Juliet Marshall, Juliet.marshall@uidaho.edu. Starts at 10:00 a.m., Gordon Gallup’s Farm, lunch provided.

July 20 – Ririe: UI Cereals Extension Field day with Bonneville County Grain Growers. Contacts: Matt Gellings (208) 524-4946 mjgellings@msn.com, Juliet.marshall@uidaho.edu. Starts at 4:00 p.m. Extension trials in Ririe at LDS Church Farm.

July 21—Aberdeen: UI Extension Cereals & Wheat Breeding Field day, 3:00 p.m. Twilight Tour: 100th Anniversary of Research & Extension Center. Contacts: Steve Love (208) 397-4181 slove@uidaho.edu, Jianli Chen (208) 397-4181 jchen@uidaho.edu, Juliet Marshall (208) 529-8376 Juliet.marshall@uidaho.edu.

July 27 – Soda Springs: UI Cereals Extension Field day with Caribou County Grain Growers. Contacts: Steve Harrison (208) 547-3205, sharrison@uidaho.edu; Scott Brown, (801) 557-5123, Sam Reed (208) 547-7020. Starts at 4:00 p.m. at Cid Cellen’s farm, dinner provided.

July 28 – Ashton: UI Extension Field Day with Jefferson/Madison/Fremont County Grain Growers. Contacts: Lance Ellis (208) 624-3102 ellis@uidaho.edu or Juliet Marshall, Juliet.marshall@uidaho.edu. Starts at 10:00 a.m. lunch provided.

Peruvian Wheat Buyers Get First Hand Look at Idaho Wheat Industry

2011-06-24T15:26:00.000-07:00

Executives directly involved in making wheat purchasing decisions for five flour milling and wheat food companies in Peru were in Idaho June 21 to 23. The team visited General Mills and Pendleton Flour Mills in Blackfoot. They also toured the U.I. Research Center in Aberdeen to learn about Idaho wheat varieties and their end use functionality.

Peru produces only a small amount of wheat and has imported an average of about 55.6 million bushels, or about 1.5 million metric tons, annually for the past five years. U.S. commercial sales to Peru have increased during each of the past three marketing years (June – May) and have grown from 20.8 million bushels in 2009/10 to about 36.8 million bushels in 2010/11.

The U.S. Wheat Associates is targeting Peru's artisan bread market, which has the highest level of consumption and more potential impact on U.S. wheat sales to Peru as a replacement mainly for Canadian spring wheat imports.

Idaho Winter Wheat Production Up 7 Percent

2011-06-14T13:18:00.000-07:00

Idaho's 2011 winter wheat production is forecast at 62.4 million bushels, unchanged from last month’s forecast, and 7 percent above last year's crop. This report is based on conditions as of June 1. The yield is forecasted to be 79 bushels per acre, unchanged from last month. Acres to be harvested, at 790,000, represent an 80,000 acre increase from 2010.

Temperatures across the state last week ranged from two to eight degrees below normal. All weather stations reported precipitation for the week. Idaho's winter wheat condition is rated 3% very poor; 8% poor; 12% fair, 63% good and 14% excellent. Spring wheat is rated 1% very poor, 3% poor; 20% fair; 66% good and 14% excellent.

Nationally, winter wheat production is forecast at 1.45 billion bushels, up 2 percent from the May 1 forecast but 2 percent below 2010. Expected area for harvest as grain or seed totals 32.0 million acres, unchanged from May 1. Based on June 1 conditions, the United States yield is forecast at 45.3 bushels per acre, up 0.8 bushel from last month but 1.5 bushels less than last year. Hard Red production is up 2 percent from a month ago to 777 million bushels. Soft Red production is up 2 percent from last month and now totals 434 million bushels. White production totals 240 million bushels, up 2 percent from last month. Of the White production total, 11.6 million bushels are Hard White and 228 million bushels are Soft White.

Idaho Wheat Commission Elects Officers, Sets Budget

2011-06-13T10:20:00.001-07:00

The Idaho Wheat Commission met May 31 and June 1 in Post Falls, Idaho to finalize the budget for FY 2012 and to elect officers. Gordon Gallup, Ririe, was elected as chairman. Bill Flory, Culdesac, was elected to serve as vice chainman.

Gallup grows wheat, barley, and alfalfa over 3,000 acres and has operated the family farm since 1975. He has been using direct seed tillage since 1985 and was instrumental in organizing and facilitating the IWC Direct Seed Workshops held for the past several years in Idaho Falls.

Flory manages a fourth generation, diversified grain farm raising wheat, barley, bluegrass, canola, and grass/alfalfa hay. He is a graduate of the University of Idaho. Flory has had extensive involvement with the Idaho Grain Producers Association and National Wheat Growers Associations, having served as president of both organizations.

FY2012 Budget

The IWC approved a budget of $2,207,379 million dollars for fiscal year 2011-2012, which covers programs in export and domestic marketing, research and information and education.

The commission increased its research budget this year due to continued reductions in funds from state and federal governments. The IWC continues to focus research dollars on variety development, which helps growers achieve the maximum yield and minimum input costs. Other priorities include research on new pests and diseases.

High Country Still Packing Lots of Snow

2011-06-10T05:30:00.000-07:00

Snow Surveyors from the Natural Resources Conservation Service recorded one of the deepest June 1 snowpacks ever measured in Idaho. This year's late season snows and slow snow melt provide more than enough water for users and create a potentially threatening runoff season, especially in the Upper Snake and Bear River basins.

"In an average year up to about two-thirds of the snowpack melts during April and May," said Ron Abramovich, Water Supply Specialist with Idaho NRCS. "More water in less time means the streamflow volumes will be much greater than normal."

Generally, streamflows were above average in May and the peaks on most rivers are still to come. Over 80 of 120 Snow Telemetry sites that automatically measure snowpack conditions around Idaho showed the June 1 snow water content levels at or near record highs.

"Hot temperatures or rain during this critical time period when the snow is receding and soils are saturated, will send a flush of water down many streams and generate big flows," Abramovich said. Streamflow forecasts reflect the unusually high June 1 snowpacks. The forecasts around the state range from a low of 120% of average in central Idaho to over 300% in the Bear River Basin.

For up-to-date information on specific areas, visit the NRCS web site: http://www.id.nrcs.usda.gov/snow/.

The full June Water Supply Report is posted on the website. For current snowmelt and streamflow relationship analyses information, view the snowstream graphs and streamflow graphs at: http://www.id.nrcs.usda.gov/snow/watersupply/peakflow.html.

Idaho Winter Wheat Production Up 7 Percent from Last Year

2011-06-09T08:51:00.000-07:00

Idaho's 2011 winter wheat production is forecast at 62.4 million bushels, unchanged from last month’s forecast, and 7 percent above last year's crop, according to the National Agricultural Statistics Service. This report is based on conditions as of June 1. The yield is forecasted to be 79 bushels per acre, unchanged from last month. Acres to be harvested, at 790,000, represent an 80,000 acre increase from 2010

Nationally, winter wheat production is forecast at 1.45 billion bushels, up 2 percent from the May 1 forecast but 2 percent below 2010. Expected area for harvest as grain or seed totals 32.0 million acres, unchanged from May 1. Based on June 1 conditions, the United States yield is forecast at 45.3 bushels per acre, up 0.8 bushel from last month but 1.5 bushels less than last year.

Hard Red production is up 2 percent from a month ago to 777 million bushels. Soft Red production is up 2 percent from last month and now totals 434 million bushels. White production totals 240 million bushels, up 2 percent from last month. Of the White production total, 11.6 million bushels are Hard White and 228 million bushels are Soft White.

Wheat Varieties with Herbicide Resistant Traits on the Increase

2011-06-09T05:30:00.000-07:00

Each year an increasing number of growers are choosing to plant public and private wheat varieties with a herbicide-resistant trait added to the germplasm. One example is CLEARFIELD wheat cultivars.

The trait available in the CLEARFIELD varieties is not a GMO. CLEARFIELD wheat cultivars carry a gene for resistance to the herbicide Beyond. To protect the longevity of the technology, growers and seed dealers agree to specific licensing terms and requirements before having access to the seed.

It makes no difference if the trait is added to private varieties (such as AP700CL) or public varieties (such as UICF Brundage, ORCF 103) it is the trait that is protected. Locally developed germplasm serves as the carrier to make the technology available to growers in a wide variety of environments. The cost of having that technology available means agreeing to the stewardship plan which helps reduce the risk of selection of Beyond resistant weeds and gene flow to related weed species.

Low Global Wheat Supply Leads to Higher Food Prices

2011-06-08T12:57:00.000-07:00

KTVB News Channel 7 featured Idaho wheat during its 10 p.m. newscast on Tuesday, June 7. Nishi Gupta reported that the price of wheat has gone up a dollar or two per bushel, but farmers aren't cashing in.

I've been farming 33 years, and I've never experienced this," said Meridian wheat farmer Drew Eggers.

The cooler weather has made Eggers wheat crop vulnerable to a disease called striped rust.

It turns leaves from green to yellow and red, preventing sunlight from getting to the plant and eventually stopping its growth.

Eggers planted 150 acres of wheat last fall. One percent of it is damaged from stripe rust. He'll spend several thousand dollars spraying it to protect the rest from disease."When the temperature is above 75 degrees you don't usually have stripe rust problems, but with this cool wet weather that we've had this spring," said Eggers. "It's become a problem in quite a few fields in southwestern Idaho."

While we've had wet weather, large wheat growing states like Kansas, Texas, Oklahoma and Nebraska are experiencing a drought. Russia, the world's largest wheat exporter, has put a ban on wheat exports due to its own lack of wheat supply. China and Canada are also struggling to grow the crop. All of those situations are leading to an increase in what we pay at the store.

To view the entire story click on the link: http://www.ktvb.com/news/Low-global-wheat-supply-leads-to-higher-food-prices-123435209.html

Wheat and Corn Outlook Remains Tight

2011-05-27T05:30:00.000-07:00

The Grain: World Markets and Trade report, published by USDA finds this could be another year of volatile prices with tight exportable supplies of corn and wheat. In contrast, the rice world supplies are relatively abundant.

Against the backdrop of low carry-in corn and wheat stocks, expectations of a large rebound in global exportable supplies now remain uncertain after delayed corn plantings in the United States, reduced U.S. winter wheat production, continued dryness in the EU, and wet conditions in Canada.

Global corn production is forecast up 52 MMT over last year, with the United States expected to account for half of the gain. However, nearly all of the growth in global corn consumption is expected to come from foreign demand, in countries such as Brazil, China, and Mexico. For wheat, the year-to-year gain in production is a more modest 21 MMT, with more than three-quarters of the rebound coming from larger expected crops in Russia, Ukraine, and Kazakhstan. As a result, production and consumption are expected to be in balance, compared to last year’s shortfall of 14 MMT.

Corn and wheat ending stocks in the exporting countries are up slightly year-to-year, leaving little supply cushion in the event of adverse weather impacting crops. For corn, the exporting countries are: Argentina, Brazil, and the United States. For wheat the exporters include: Argentina, Australia, Canada, EU, United States, Kazakhstan, Russia, and Ukraine.

Traditional Exporter Stocks Decline Again

2011-05-26T08:39:00.001-07:00

A key price factor for the world wheat market is the level of stocks held by traditional exporters: Australia, Canada, the EU, Argentina and the United States. Ending stocks are expected to tighten somewhat this year.

The biggest drop is in the United States, but stocks are still abundant. So far this year, the US has exported 33.4 MMT of wheat (46.6 percent higher than this time last
year), 32.1 MMT of corn (2.5 percent less), 37.5 MMT of soybeans (3.4 percent more), 2.8 MMT of sorghum (15.9 percent less) and 119.2 TMT of barley (30.0 percent more).

Slight increases are expected in Australia and the EU, partly offsetting the decline. Although stock levels are expected to recover in Russia and Ukraine, restrictive government export policies will continue to impact prices.

Idaho Crop Progress Update

2011-05-25T13:31:00.000-07:00

USDA’s May 23 Crop Progress and Condition report shows spring wheat seeding mostly complete. Northern and some parts of Eastern Idaho have continued to experience planting delays due to the cool, wet weather.

Winter wheat condition are rated 84% Good to Excellent, 15% Fair to Poor and 1% Very Poor. Spring Wheat is rated 75% Good to Excellent and 25% Fair to Poor.

Several locations across the state are reporting stripe rust in winter wheat -- Nyssa, OR, to Parma, Idaho, to Cassia County, Aberdeen, Bingham County, Idaho, American Falls, Power County, Idaho.

To view the entire USDA report click on this link: http//www.nass.usda.gov/id/

Farm States Continue to Suffer From Expanded Drought

2011-05-23T13:19:00.000-07:00

USAgNet reports today a dire drought that has plagued Texas and parts of Oklahoma expanded across the key farming state of Kansas over the last week, adding to struggles of wheat farmers already dealing with weather-ravaged fields.

Harvest in Kansas, the top U.S. wheat-growing state, is set to begin within weeks. But a report issued Thursday by a consortium of climatologists said the three most severe levels of drought spread across the state over the last week, with the most dire conditions concentrated in the key wheat-growing south-central and southwest parts.

According to Reuters, Kansas now has 50 percent of the state suffering severe levels of drought or worse, up from 41 percent last week. The Drought Monitor shows that just three months ago, less than 4 percent of Kansas was suffering severe drought or worse. The drought is eroding production potential at a time when every bushel counts.

Meanwhile, wheat harvest is underway and production is expected to be curtailed substantially because of the drought.

The U.S. Department of Agriculture on May 11 forecast that Kansas would harvest 261.8 million bushels of wheat this summer, down from 27 percent from a year ago. The Texas and Oklahoma wheat crops are forecast to fall more than 50 percent because of the drought, causing the overall U.S. winter wheat crop to be estimated as the smallest in five years.

Severe drought stress can be easily seen in many Kansas fields, which typically produce hard red winter wheat, the chief bread-making type.

Wheat futures prices have surged because of the production shortfalls. Chicago Board of Trade wheat futures have jumped nearly 20 percent over the last week and hit a three-month high this week on worries the drought will harm the U.S. wheat crop.

Idaho Crop Progress Update

2011-05-19T05:30:00.000-07:00

USDA’s May 16 Crop Progress & Condition reports spring wheat seeding has progressed since last week with 78% of the state planted, up from 66% last week, but still lagging below the five-year average of 90%.

The biggest problem area continues to be northern Idaho where only 52% is planted, up only modestly from last week and well below the five-year average of 90% for this time of year.

Winter wheat conditions continue to be favorable with 84% Good to Excellent, 11% Fair, 4% Poor and only 1% reporting Very Poor.
To view the entire USDA report click on this link: http//www.nass.usda.gov/id/

Cool, Wet Weather Gives Rise to Stripe Rust

2011-05-18T10:44:00.000-07:00

From Nyssa, OR, to Parma, Idaho, to Cassia County, Aberdeen, Bingham County, Idaho, American Falls, Power County, Idaho.

Expanding reports of stripe rust continue in commercial wheat fields. Affected fields include the varieties ‘Brundage’ soft white winter wheat, and ‘Malcolm’, soft white winter wheat, Stephens (SWW), and lower levels are being reported in Moreland (HRW), WB 528 (SWW), WB 470 (SWW), but it is expected that other susceptible winter and spring varieties will also begin to show symptoms soon. Stripe rust has also been found in the Aberdeen area on the University of Idaho’s research farm. The infected plants were at the jointing growth stage. New leaves were not yet showing infection; the disease was occurring on lower leaves likely as a result of an infection that started last fall. Infected plants that were covered by an insulating layer of snow carried the fungus through the winter and is the current source of the disease.

On the Aberdeen research station, Brundage had about 30% affected leaves throughout the plot, while Moreland about 5% of the leaves affected. Active and abundant spores were seen on infected plants. Stripe rust was prevalent throughout the winter wheat variety trials.

Resistant varieties should not need fungicide applications. Growers should scout all wheat fields and should never assume that resistant varieties will always be resistant, as the prevalent strains of the fungi can change, affecting different varieties.

The weather has been very conducive for infection and rapid spread. It is imperative to protect susceptible varieties with a fungicide as yield losses to this disease can be significant. Both strobilurin (Quadris, Headline) and triazole (Caramba, Tilt, Proline, Folicur, Prosaro) fungicides are equally effective in protecting against subsequent stripe rust infections, as are mixed mode-of-action fungicides (TwinLine, Quilt, Quilt Excel, Stratego). However, if stripe rust is currently in your crop, it is recommended that you include a triazole fungicide for the slightly curative activity.

Fungicide ratings for stripe rust from the mid-west are: Excellent = azoxystrobin (Quadris), pyraclostrobin (Headline), metconazole (Caramba), tebuconazole (Folicur), and fungicide mixes rated Excellent for stripe rust includes prothioconazole and tebuconazole (both found in Prosaro), and the strobiluron / triazole mixes line, Twinline, Quilt or Quilt Xcel. Rated very good was propiconizole (Tilt), and the mix of propiconazole and trifloxystrobin (Stratego). In the 2011 Pacific Northwest Plant Disease Management Handbook, Bumper was additionally listed for an effective foliar fungicide.

This information is provided only as a guide. Other fungicides may also be labeled and effective against stripe rust. Inclusion in this list is not intended as a product endorsement and exclusion from this list is not meant to imply other products are ineffective.

Additional information and pictures are available on the Cereals Extension website for southern and southeast Idaho: http://www.extension.uidaho.edu/scseidaho/disease/disease_index.htm

Net Farm Income Expected To Increase 20 Percent in 2011

2011-05-17T05:30:00.000-07:00

Net value added, net farm income, and net cash income—the three key U.S. farm sector financial indicators—are expected to improve in 2011. Net farm income (a measure of profitability that accounts for inventories and capital consumption), is forecast to reach $94.7 billion in 2011, up nearly 20 percent from the 2010 forecast, and the second highest inflation-adjusted value for net farm income in the past 37 years. Over the past three decades, the top five years for nominal earnings have occurred since 2004, attesting to the profitability of farming in 2000-2009.

Net value added, USDA’s measure of agriculture’s contribution to the U.S. economy’s production of goods and services, is forecast to rise by $18.4 billion (14.2 percent). Net cash income (a measure of the ability to pay bills and make payments on debt) mimics these increases and is projected to increase $7.3 billion (8 percent).

Farm Production Expenses Were Up During Past Year

2011-05-16T05:30:00.000-07:00

The April price index for U.S. farm production inputs increased 16 percent from a year ago. The USDA says higher prices for nitrogen, feed grains, diesel, and complete feeds more than offset lower prices for concentrates, supplements, and herbicides. Fertilizer prices showed the largest increases, followed by fuels.

Compared to April 2010, prices paid for fertilizer was up 34 percent. The increase can be attributed to nitrogen rising by 40 percent, mixed fertilizer by 33 percent, and potash and phosphate by 21 percent.

Fuels saw a 31 percent increase from April 2010. Diesel prices increased 37 percent, gasoline 31 percent, and LP gas 8.3 percent from the previous year.

Feed increased 29 percent from April 2010. Prices rose for all feed categories. Feed grains saw the largest increase, at 88 percent. Complete feeds were up 25 percent, hay and forages 24 percent, concentrates 11 percent, and supplements 6.4 percent.

Meanwhile, the national seed price index rose 18 percent from April of last year. Field crop seed prices were 19 percent higher, while grass and legume seed prices rose 4.3 percent from a year ago. U.S. chemical prices were unchanged from April 2010. Fungicides were up 4.2 percent and insecticides increased 1.8 percent, while herbicides were down 3.0 percent.

The U.S. prices paid index for machinery rose 5.7 percent from April 2010. The price indices for both tractors and self propelled machinery were up 6.8 percent, and other machinery prices increased 3.8 percent.

Idaho April Weather Brings Expectations for High Runoff

2011-05-13T05:30:00.000-07:00

April's cool, moist weather held off the snow melt and even added to the mountain snowpack according to the latest snow survey conducted by the Natural Resources Conservation Service. This summer's water supply is forecast to be plentiful for Idaho's water users but the spring runoff is expected to be high.

"The water supply analysis completed last week shows that April's precipitation and cool temperatures added significant amounts of water to the snowpack," said Jeff Burwell, Idaho State Conservationist. "While this contributes to an ample water supply, it increases concern over how the runoff season will unfold."

The whole state received above average precipitation in April. Precipitation ranged from 110% of average in regions of central Idaho to 250% of average in the Northern Panhandle. However, lingering cool spring temperatures delayed the snow melt creating a potentially threatening runoff season.

"Usually the mid-elevation snowpacks begin melting in April - at least 25% of the snowpack melts off," said Ron Abramovich, NRCS Water Supply Specialist. "Not this year. Below normal temperatures prevented snow melt in the mid-elevation range and kept the headwater streamflow levels below normal."

"The May 1 mountain snowpack is above average ranging from 125 to 190% of average. And, now there is a shorter runoff season," said Abramovich. "This means more streamflow in a shorter time period."

The timing and magnitude of peak streamflows depend on spring temperatures, consecutive hot days, non-freezing night temperatures, and if rain falls when the snow is melting. Reservoir operators across Idaho are drawing down reservoir levels to increase water storage space.

"Our current Water Supply Report forecasts river levels and volumes to be above average through the summer," Burwell added. "Whether you are a river runner or a water manager, expect extremely variable conditions."

View May's full report on snowpack, precipitation, runoff and water supply predictions at http://www.id.nrcs.usda.gov/snow%20
and click on the 'Water Supply' link.

Interior Releases Report Highlighting Impacts of Climate Change to Western Water Resources

2011-05-12T05:30:00.000-07:00

Secretary of the Interior Ken Salazar recently released a report that assesses climate change risks and how these risks could impact water operations, hydropower, flood control, and fish and wildlife in the western United States. The report to Congress, represents the first consistent and coordinated assessment of risks to future water supplies across eight major Reclamation river basins, including the Colorado, Rio Grande and Missouri river basins.

“Water is the lifeblood of our communities, rural and urban economies, and our environment,” said Secretary Salazar, “and small changes in water supplies or the timing of precipitation can have a big impact on all of us. This report provides the foundation for understanding the long-term impacts of climate change on Western water supplies and will help us identify and implement appropriate mitigation and adaptation strategies for sustainable water resource management.”

The report, which responds to requirements under the SECURE Water Act of 2009, shows several increased risks to western United States water resources during the 21st century. Specific projections include:

A temperature increase of 5-7 degrees Fahrenheit
A precipitation increase over the northwestern and north-central portions of the western United States and a decrease over the southwestern and south-central areas;
A decrease for almost all of the April 1st snowpack, a standard benchmark measurement used to project river basin runoff;
And an 8 to 20 percent decrease in average annual stream flow in several river basins, including the Colorado, the Rio Grande, and the San Joaquin.

The report notes that projected changes in temperature and precipitation are likely to impact the timing and quantity of stream flows in all western basins, which could impact water available to farms and cities, hydropower generation, fish and wildlife, and other uses such as recreation.

Follow the link to read the entire report http://www.doi.gov/news/pressreleases/Interior-Releases-Report-Highlighting-Impacts-of-Climate-Change-to-Western-Water-Resources.cfm?renderforprint=1&

Net Farm Income Expected To Increase 20 Percent in 2011

2011-05-11T10:40:00.000-07:00

Idaho Winter Wheat Acreage Up 11% From 2010

2011-05-11T10:13:00.001-07:00

The latest USDA Crop Production report showed Idaho's winter wheat acreage will grow to 790 thousand acres, up 11% from 2010. Idaho winter wheat production is forecast at 62 million bushels, up 7% over 2010. The yield per acre is forecast to be down slightly due to less favorable growing conditions. Total 2011 harvest in Idaho, combining winter and spring wheat, is currently forecast at 107 million bushel. Delays in spring planting in northern Idaho may cause this number to soften in the next NASS update.

The USDA Crop Production report for 2011 was released this morning, and it forecast total U.S. winter wheat production will fall slightly to 1.42 billion bushels, down 4 percent from 2010. Expected area for harvest as grain or seed totals 32.0 million acres, up 1 percent from last year. Based on May 1 conditions, the total U.S. yield is forecast at 44.5 bushels per acre, down 2.3 bushels from last year. Hard Red Winter, at 762 million bushels, is down 25 percent from 2010. Soft Red Winter, at 427 million bushels, is up 80 percent from last year. White Winter is up 3 percent from last year and totals 235 million bushels. Of this total, 11.7 million bushels are Hard White and 224 million bushels are Soft White.

To view the entire USDA report click on this link: http://www.usda.gov/nass/PUBS/TODAYRPT/crop0511.pdf

Farm Production Expenses Were Up During Past Year

2011-05-10T08:52:00.000-07:00

The USDA says higher prices for nitrogen, feed grains, diesel, and complete feeds more than offset lower prices for concentrates, supplements, and herbicides. Fertilizer prices showed the largest increases, followed by fuels. The April price index for U.S. farm production inputs, at 215, increased 16 percent from a year ago.

Compared to April 2010, the U.S. prices paid index for fertilizer was up 34 percent. The increase can be attributed to nitrogen rising by 40 percent, mixed fertilizer by 33 percent, and potash and phosphate by 21 percent.

The U.S. prices paid index for fuels saw a 31 percent increase from April 2010. Diesel prices increased 37 percent, gasoline 31 percent, and LP gas 8.3 percent from the previous year.

The U.S. prices paid index for feed increased 29 percent from April 2010. Prices rose for all feed categories. Feed grains saw the largest increase, at 88 percent. Complete feeds were up 25 percent, hay and forages 24 percent, concentrates 11 percent, and supplements 6.4 percent.

Meanwhile, the national seed price index rose 18 percent from April of last year. Field crop seed prices were 19 percent higher, while grass and legume seed prices rose 4.3 percent from a year ago. U.S. chemical prices were unchanged from April 2010. Fungi-cides were up 4.2 percent and insecticides increased 1.8 percent, while herbicides were down 3.0 percent.

The U.S. prices paid index for machinery rose 5.7 percent from April 2010. The price indices for both tractors and self propelled machinery were up 6.8 percent, and other machinery prices in-creased 3.8 percent.

From Farm to Port, Japanese Milling Executives Tour U.S. Wheat Industry

2011-05-04T13:23:00.000-07:00

A team of five milling executives from Japan is visiting the United States as part of an annual educational tour sponsored by U.S. Wheat Associates (USW). The team, which represents some of the largest and oldest milling companies in Japan, will travel across the country from Washington, DC, to Boise, ID, and Portland, OR, to gain first-hand knowledge of current winter wheat crop conditions as well as issues affecting overall wheat supply and demand.

The Japanese team will be in the United States May 3 to 10. In that time, they will have discussions with representatives from nearly every sector of the wheat industry on a variety of topics, including increasing investment in wheat research, soft white (SW) wheat supply and rising production costs.

“Our ability to meet Japan’s strict contract specifications keeps them as a steady customer of U.S. wheat,” U.S. Wheat Associates Japan Country Director Wataru “Charlie” Utsunomiya said. “Participation in a team like this one develops close working relationships and mutual reliance between U.S. wheat farmers and Japanese millers.”

U.S. wheat farmers have maintained this close connection since 1949, when the Oregon Wheat Growers League (OWGL) organized a trade delegation to Japan. Following that trip, a variety of marketing and educational activities were started in Japan to promote U.S. wheat, including a school lunch program and a “Kitchen on Wheels” that travelled through rural Japan from 1956 to 1960.

Since that time, Japan has purchased significantly more U.S. wheat than any other country, importing more than 133 million bushels per year on average for the last five years. Total U.S. wheat purchases now conservatively reach $700 million per year, more than 10 percent of total U.S. wheat exports. Japan imports significant amounts of hard red spring (HRS), hard red winter (HRW) and SW wheat for use in domestic products.

The Japanese milling industry suffered less damage following the devastating earthquake and tsunami this March than the nation’s feed mill industry. Most of Japan’s flour mills are located outside of the region struck by the disaster. The biggest difficulty following the disaster and continuing today is the supply of sufficient electrical power to operate the mills at full capacity.

Idaho Crop Progress and Condition

2011-04-20T11:38:00.000-07:00

Poor weather conditions continue to slow field progress throughout much of the state. The Twin Falls extension reports that some fields in the area have dried allowing planting of cereal grains.
Winter wheat condition is rated 1% Very Poor, 17% Poor to Fair and 82% Good to Excellent. Spring wheat planted is 35% completed compared to 28% at this time last year.

Nationally, the HRW crop continues to be of major concern. The USDA reported that 69% of the crop was in poor to very poor condition in Oklahoma, 68% in Texas, 48% in Colorado, and 42% in Kansas. The crop in the north is in better condition. In California 95% was reported to be in good to excellent condition, 75% in Montana, 66% in South Dakota, and 43% in Nebraska.

The SW crop is in excellent condition this year. The USDA reported 89% of the crop to be in good to excellent condition in Washington, 82% in Idaho, and 80% in Oregon.

The SRW crop appears to be in fairly good condition this year. The USDA reported 78% of the crop to be in good to excellent condition in North Carolina, 73% in Ohio, 71% in Missouri, 65% in Illinois, 58% in Indiana, and 57% in Arkansas.

The spring wheat planting season has kicked off. Most states are behind last year’s pace and behind the five year average, the exception being Idaho which is ahead of schedule.

NEW USDA INITIATIVE CAN HELP FARMERS DEVELOP OIL SPILL PREVENTION PLANS

2011-04-13T12:08:00.001-07:00

A new USDA initiative may help agricultural producers in Idaho comply with revised Environmental Protection Agency (EPA) regulations for on-farm oil spills.
The Natural Resources Conservation Service is accepting applications for the Spill, Prevention, Control and Countermeasure pilot initiative through May 20, 2011.

EPA’s revised Spill Prevention Control and Countermeasure regulations require agricultural operations to have an oil spill prevention plan in place. The USDA set up a pilot initiative for eight states, including Idaho, to help producers comply with the EPA’s SPCC regulations.

“An important part of the USDA mission is helping farmers and ranchers develop plans to protect human health and the environment, including assistance to comply with new regulations,” said Jeff Burwell, Idaho NRCS State Conservationist. “This new pilot initiative will help agricultural producers meet a new regulatory requirement designed to reduce the dangers of on-farm oil spills.”

For farms with aboveground storage capacity of more than 10,000 gallons of oil or oil products, the EPA requires that the SPCC plans be developed by a professional engineer. The NRCS initiative offers a set payment for producers that use a certified Technical Service Provider to develop a SPCC conservation activity plan that meets the EPA’s requirements.

To learn more about the Spill, Prevention, Control and Countermeasure regulation and pilot initiative, contact the NRCS office in your area. Find the one nearest you at http://www.id.nrcs.usda.gov/ and click the link “Find a Service Center” at the end of the list on the left side.

High wheat Prices Despite Abundant Exporter Stocks

2011-04-11T13:33:00.000-07:00

USDA's Grain World Markets and Trade reports in their latest circular that there is normally a strong inverse relationship between international wheat prices and stocks held by major exporting countries because they are mostly available for export to the world market. Global wheat prices, as reflected by Hard Red winter (HRW), have nearly doubled over the last year. The surge was initially fuelled by smaller crops and export restrictions in some major exporting countries, then concerns over available supplies of milling quality wheat. Prices are reflecting other factors, including a tight U.S. corn market, poor winter wheat crop conditions in the Unites States, and political unrest in North Africa and the Middle East.

Exporter stocks remain relatively high and are boosted almost 4 million tons this month. In fact, they are estimated to be 55 percent higher than during the price crisis of 2007/2008. Stocks are up this month on more supplies from key Southern Hemisphere countries, namely, Argentina and Australia, and less import demand, particularly from Russia. U.S. stocks are raised on lower foreign demand ans a result of greater competition from Australia.

March Precipitation Boosts Snowpack Across the State

2011-04-08T11:03:00.000-07:00

The Natural Resources Conservation Service's snow surveyors recently completed the April 1 snow measurements and found that March's above average precipitation ensures an adequate summer water supply for Idaho's numerous water users.

"With more snowy days than sunny ones in March, snowpacks increased measurably and now range from 100-140% of average for most Idaho basins," said Ron Abramovich, Water Supply Specialist with the Idaho NRCS.

Streamflow forecasts also increased. "With the good precipitation in March, most people would have thought the March streamflow volumes would be higher than they were," Abramovich said. "But most of the 60 plus stations that we use for water supply forecasting were in the 70-95% of average range."

That's because most of March's precipitation fell as snow in the higher elevations. Streamflow forecasts range from near average in the Salmon basin to 150-160% for southern Idaho's high desert rivers.

What does this mean for Idaho's water supply? Irrigation water supplies will be ample with most reservoirs holding enough supplies to last through the summer. Water is being released from some reservoirs to make room for the anticipated snow melt.

Most of southern Idaho's reservoirs will fill except for the large storage facilities such as Salmon Falls, Oakley and Bear Lake. However, their water users will still have adequate irrigation supplies based on current storage and projected inflows.

Abramovich added, "How the snow melts and fills our rivers and lakes greatly depends on spring air temperatures and rain." The three month extended forecast calls for wet, cool weather.

View the Webinar on EPA's Fuel Containment Rule

2011-04-07T10:40:00.000-07:00

If you were unable to participate in today's live webinar on "What You Need to Know About EPA's Fuel Containment Rule." Click on the following link to view a taped recording. http://connect.cals.uidaho.edu/p31474037/

What you Need to Know About EPA's Fuel Containment Rules Webinar

2011-04-05T08:50:00.000-07:00

The Idaho Wheat Commission and the Idaho Grain Producers Association will be presenting a web-based grower education seminar to help answer questions you may have about the SPCC program. The webinar will be approximately on hour. Participation is easy and free! Simply log onto the website at http://connect.cals.uidaho.edu/wheat April 7 at 8:00 a.m. MST -- Guest presenter Adam Lyman, Professional Engineer, "What You Need to Know About EPA's Fuel Containment Rules." If your farm stores, transfers, uses, or consumes oil or oil products such as diesel fuel, gasoline, lube oil, hydraulic oil, adjuvant oil, etc, be sure to participate in this informational webinar. Mr. Lyman will explain the SPCC program and discuss which farms are required to complete an SPCC Plan by EPA's deadline of November 10, 2011. Greg Weigel, EPA and Clint Evans, NRCS will also be available during the webinar to answer questions about the SPCC plan.

Idaho 2011 Prospective Wheat Plantings Increase

2011-04-04T12:29:00.000-07:00

According to the National Agricultural Statistics Service (NASS) Spring wheat plantings are expected to be 640,000 acres, 2 percent more than last year. Winter wheat seedings, at 830,000 acres, increased 11 percent from 2010. All wheat planted in Idaho is expected to total 1.49 million acres, up 6 percent from last year.

Other interesting planting news, Idaho farmers intend to seed 390,000 acres of field corn in 2011, up 22 percent from last year. If realized, this will be a new record high for Idaho.

Nationally, wheat producers intend to plant 58.0 million acres for the 2011 crop year, up 8 percent from the previous year. The 2011 winter wheat planted area is estimated at 41.2 million acres, up 10 percent from 2010 and up 1 percent from the previous estimate. Spring wheat growers intend to plant 14.4 million acres this year, up 5 percent from 2010.

World Wheat Supply, Demand, and Prices Webinar

2011-03-29T09:21:00.000-07:00

Learn the global factors behind this year's surge in exports and run-up in prices and gain current perspective on world plantings, production and prices. An educational webinar, with guest presenter Vince Peterson, U.S. Wheat Associates, Vice President of Overseas Operations. Click on the link to view the webinar: https://connect.cals.uidaho.edu/p89049794/

Idaho Wheat Commission Presents Web-based Workshops

2011-03-08T15:16:00.000-08:00

The Idaho Wheat Commission will be presenting a series of web-based grower education seminars (webinars). Each webinar will be approximately one hour. Participation is easy and free! Simply log onto the website at http://connect.cals.uidaho.edu/wheat
(requires Adobe Flash Player which is installed on most computers) and enter your email address as a participant.

March 10 at 9:00 a.m. MST – Guest Presenter: Dr. John Oades, U.S. Wheat Associates, Vice President West Coast Operations "Wheat Quality Needs in the Export Market." This was a popular presentation by Dr. Oades in this year’s Northern Idaho Cereal Schools. If you missed John’s presentation during Cereal Schools, be sure to log into this educational workshop.

March 22 at 8:00 a.m. MST – Guest Presenter Vince Peterson, U.S. Wheat Associates, Vice President of Overseas Operations “World Wheat Supply, Demand, and Prices.” Learn the global factors behind this year’s surge in exports and run-up in prices and gain current perspective on world plantings, production and prices.

April 7 at 8:00 a.m. MST – Guest Presenter Adam Lyman, Professional Engineer, “EPA’s Fuel Containment Rules and What You Need to Know.” If your farm stores, transfers, uses, or consumes oil or oil products such as diesel fuel, gasoline, lube oil, hydraulic oil, adjuvant oil, etc, be sure to participate in this informational webinar. Mr. Lyman will explain the SPCC program, which farms are required to complete an SPCC Plan, and what farmer’s need to do by EPA’s deadline of November 10, 2011.

UI Wheat Breeder Receives Grant to Study Climate Change on Wheat

2011-02-25T05:00:00.000-08:00

A $750,000 project to analyze the water and fertilizer use efficiency of 3,000 wheat and barley lines will occupy University of Idaho wheat breeder Jianli Chen for the next five years at the Aberdeen Research and Extension Center.
The project is part of a $25 million USDA-funded project led by University of California at Davis wheat geneticist Jorge Dubcovsky to develop new varieties of wheat and barley to help farmers prepare for climate change.
Chen’s preliminary research into drought stress supported by the Idaho Wheat Commission helped her to become a key part in the grant to do phenotypic screening for water and nitrogen use efficiency.
According to Chen, Aberdeen is the perfect location because the regions’ rainfall averages 10 inches a year, cereal grain production in southern Idaho relies on irrigation. Simulating drought conditions simply means turning off or reducing the water supply.
She will focus on the holdings of the National Small Grains Collection, which is maintained by the Agricultural Research Service at Aberdeen. The collection holds germplasm gathered by researchers worldwide since about 1897.
The project will be the first effort in the genebank’s history to measure the water and nitrogen efficiency of various wheat and barley lines in the collection.

Net Farm Income Forecast Up Nearly 20 Percent in 2011

2011-02-24T05:30:00.000-08:00

Net farm income is forecast to be $94.7 billion in 2011, up $15.7 billion (19.8 percent) from the 2010 forecast, despite a $20-billion jump in production expenses. The 2011 forecast is the second highest inflation-adjusted value for net farm income recorded in the past 35 years. Cash receipts are expected to increase 9.1 percent, with cotton, soybean, wheat, and corn receipts showing the largest gains.

The value of the farm sector's equity (net worth) is forecast to rise 6.8 percent in 2011. The estimated increase in farm sector equity is largely due to an estimated 6.3-percent increase in the value of farm business real estate. Farm asset values are expected to have the largest percentage increase since 2007. With modest increases in debt, inflation-adjusted equity should exceed 2007’s peak levels. The farm business sector's debt-to-asset ratio is expected to decline from 11.3 percent in 2010 to 10.7 percent in 2011, and the debt-to-equity is expected to decline to 12.8 percent in 2010 to 12.0 percent in 2011. This indicates that the farm sector’s solvency position remains strong.

Indemnity Fund Updates

2011-02-23T10:30:00.000-08:00

The Commodity Indemnity fund was established in 1989 and the Seed Indemnity Fund in 2002. Both were established as a consequence of financial failures by warehouses, commodity and seed buyers. Producers are encouraged to participate in the program so they can be protected against a warehouse failure. Licensees withhold and remit assessments to the Idaho State Department of Agriculture, which administers the program. Producers can sell to an unlicensed business inside or outside the state and do not have to pay in to the fund, but they also are not covered by the fund in such cases.

The current Commodity Indemnity Fund (CIF) balance at the end of January was $8 million dollars. The maximum fund balance set by law is $10 to $12 million. Bonded and licensed warehouses and commodity dealers withhold .002 of gross sales price paid to producers and remit the assessments to the CIF on a quarterly basis. There is also an assessment of a penny per cwt. on commodity withdrawn from storage, due at the time of withdrawal. A committee comprised of 6 producers and 3 industry representatives advises the Director of ISDA concerning the fund.

The Seed Indemnity Fund (SIF) balance was $4 million at the end of January 2011. The maximum fund balance set by law is $10 to $12 million. Bonded and licensed seed buyers withhold .005 of gross sales price paid to producers and remit to the SIF on a quarterly basis. Seed withdrawn from storage is subject to a penny per cwt. assessment due at time of withdrawal. A committee comprised of 7 producers and 2 industry representatives advises the Director of ISDA concerning the fund.
Producers are protected up to two years after sale or transfer of crop against nonpayment for up to 90% of the value of their crop if they sell or store with a licensed buyer. According to Dave Odgen, Warehouse Control program Section Manger, “It is a really inexpensive protection in a very volatile economy.” Producers can verify if a buyer is licensed by checking at http://www.agri.state.id.us/Categories/Warehouse/indexWarehouse.php
or by calling ISDA’s Warehouse Control at 208-332-8612.

Idaho wheat producers predict stable market amid Egypt unrest

2011-02-07T14:49:00.000-08:00

by Justin Corr
NWCN.com
Posted on February 4, 2011 at 5:02 PM

IDAHO -- The unrest in Egypt has some people worrying about their crops right here in Idaho, specifically, wheat.

Egypt is the world's largest importer of wheat. Meanwhile, Idaho is in the top 10 of states in the union for exporting wheat. So some of that crop that pumps hundreds of millions of dollars into the state economy depends on buyers that are right now in the midst of a possible revolution.

That raised concerns with Sam White, chief operating officer of the Pacific Northwest Farmers Cooperative. He's worried that changes in the Egyptian government could mean an anti-American shift, stopping all U.S. wheat imports into the country.

White told the Moscow-Pullman Daily News that, "We want that Egyptian demand, it's a vital part of the market...they buy a lot of wheat from the world, so it's vital they keep buying it."

However, producers in the area we talked to, weren't too worried.

"Given the global nature of Idaho wheat... well, U.S. wheat and Idaho wheat production in general, I think we'll be alright," said Travis Jones, Executive Director of the Idaho Grain Producers Association.

Jones says the demand for U.S. and Idaho wheat around the world remains strong.

"Worldwide, the demand for wheat is high," said Jones. "The supply of other major wheat-producing countries is down, due to weather conditions, mostly. But in Idaho, we're looking really good. In fact, our wheat will be up, or is expected to be up this year. And prices are good. So, there's a lot of optimism with Idaho wheat producers."

Jones believes whoever is in charge after the dust settles in Egypt will need Idaho wheat.

"There's a long history of a relationship there, not only with their government, but with some of their private industry," said Jones. "So we think we can get across those hurdles and keep this high quality Idaho wheat continuing over to the Middle East area."

Another reason local producers are optimistic is the demand there for the specific type of wheat grown here. Soft white wheat is the most popular wheat produced in Idaho. That type is used in flat breads, which are commonly eaten in Egypt.

Idaho produces over 100 million bushels of wheat each year. The state's 2009 wheat crop was valued at $512 million.

Columbia Free Trade Agreement Vital to U.S. Wheat Growers

2011-01-28T08:00:00.000-08:00

Columbia Ambassador Gabriel Silva, a guest presenter at the U.S. Wheat Associates winter meeting, provided an overview of Columbia’s growing economy and its importance to U.S. wheat growers. Colombia has the second-largest population in South and Central America and the Caribbean, and is the third-largest economy in the region.

Colombia is an important growing market with its imports nearly tripling in the past 7 years. Agricultural products, including corn, wheat and soybeans represent about 10% of total imports. Colombia imports 97% of the wheat it consumes. Until 2009, the U.S. was the main supplier of corn, wheat, soybeans and their products in Colombia with a peak of 76% of market share in 2007. However, in 2010 U.S. market share of these products fell to 27% and for the first time, U.S. lost its place as Colombia’s main supplier.

The U.S. Colombia Free Trade Agreement is crucial to the U.S. wheat industry to maintain sales and market share in an increasingly competitive trade environment. In 2009/10, Columbia was the eighth largest market in the world for sales of U.S. wheat. A fully implemented free trade agreement will immediately eliminate the country’s price ban system and remove tariffs on U.S. wheat imports upon implementation. This would level the playing field, ensuring U.S. products can compete in the Columbian Market.

U.S. wheat producers face an increasingly competitive and uncertain market in Colombia despite long-standing ties with Colombian millers, the U.S. wheat industry will continue to lose market share to Canada, Argentina and possibly the EU under implemented FTAs. Based on direct input from Colombia’s milling industry, at current prices, U.S. wheat producers across the country stand to lose up to $100 million in wheat sales every year if we must compete without a ratified FTA.

The U.S. wheat industry, along with other agricultural commodity groups, supports immediate ratification of the U.S./Colombia free trade agreement so U.S. producers can compete fairly in the Colombian market. Without the U.S./Colombia FTA, U.S. wheat growers and producers will face an uphill battle in this hard-fought and critical export market resulting in millions of dollars in losses of both exports and jobs.

2011 Cereal School Schedule

2011-01-27T07:23:00.000-08:00

The University of Idaho will be presenting eight cereal school events held across the state. These educational workshops provide wheat growers the opportunity to learn about insect issues, cereal disease updates, variety trials, weed control and a number of other important issues facing the wheat industry.

The Idaho Wheat Commission will be providing up-to-date information about the status of biotech wheat along with world wheat supply and demand numbers. Growers will earn 3 pesticide applicator recertification credits by attending a cereal school in their area.

Southern Idaho Cereal School Schedule
February 1 – Burley Cereal School, 9:00-3:00 p.m. Best Western Burley Inn
February 2 – Pocatello Cereal School, 9:00-3:00 p.m. Red Lion Hotel
February 3 – Idaho Falls Cereal School, 9:00-2:45 p.m. Red Lion Hotel
February 3 – Ashton Cereal School, 9:00-3:00 p.m. Trails Inn
February 4 – Preston Cereal School, 9:00-2:30 p.m. Robinson Building, Franklin County Fairground

Northern Idaho Cereal School Schedule
February 7 – Greencreek Cereal School, 7:30 a.m. – 12:15 p.m. Creencreek Community Hall
February 8 – Lewiston Cereal School, 8:00 a.m. – 1:30 p.m. Lewiston Elks Lodge
February 9 – Bonners Ferry Cereal School, 8:00 a.m. – 1:40 p.m. Memorial Hall Boundary County Fairgrounds

Inflation Strikes!

2011-01-20T09:46:00.000-08:00

The headline “Inflation Strikes!” probably caught your attention, writes Dr. Dave Kohl. Let’s take this issue a little bit further. According to Kohl, when the news media reports on inflation, core inflation is a docile 0.8 percent, well under the 1.0 percent ideal rate. Headline inflation, which includes food and energy, is 1.6 percent, below the 4.0 percent target - a 50 year average.

In Kohl's seminars many agricultural groups question these numbers. First, let’s go globally and examine the number two economy in the world, China. Overall, inflation is in the mid-4 percent range in China. Isolating food, the inflation rate is nearly 12 percent. Many in Chinese leadership are concerned with this high rate of food inflation, because it could result in social unrest and possible food shortages and hoarding.

For the agricultural industry, inflation is approximately 4 to 8 percent depending upon the segment and location in the country. For example, fuel, fertilizer, feed, cash rents, and, yes, the appreciation of land values, medical, and education costs are indicative of a higher inflation rate. So why such low rates of inflation in the general economy? This is the result of less expensive airline tickets, some consumer goods, and housing costs, which have been in a deflationary spiral.

It will be interesting to see what happens to interest rates. In the past sixty days, mortgage interest rates have increased over 60 basis points. Inflation in interest rates could be very detrimental to profit margins in farm businesses.

Idaho Winter Wheat Seedings Up 12 Percent

2011-01-13T15:14:00.001-08:00

Idaho’s winter wheat seeded area for the 2011 crop is estimated at 840,000 acres, up 12 percent from the 750,000 acres seeded for the 2010 crop, according to the National Agricultural Statistics Service.

Nationally, winter wheat planted area for harvest in 2011 is estimated at 41.0 million acres, up 10 percent from 2010 but 5 percent below 2009. Seeding began last August and during September was slightly behind the 5-year average. During October, seeding progressed slightly ahead of the 5-year average. More acres were seeded this year due to the early row crop harvest and higher prices. The winter wheat crop condition at the end of November was rated 47 percent good to excellent compared with 63 percent the previous year. Approximate class acreage breakdowns are: Hard Red Winter, 29.6 million, up 4 percent from 2010; Soft Red Winter, 7.76 million, up 47 percent from the previous year; and White Winter, 3.66 million, up 4 percent from 2010.

Volatility increases in world wheat market

2010-12-23T11:13:00.000-08:00

BOBBIE HINKLEY writes about the volatility in wheat markets published by Farm Weekly.

THERE is already a 25 million tonne deficit in the production of wheat under consumption demands globally.

That was the message from keynote speaker and vice president of overseas operations with grain traders, US Wheat Associates, Vince Peterson, when he discussed the conflict between long-term trends in world wheat production and consumption and examined global wheat decline over the last 30 years at last week's International Grains Conference.

Mr Peterson said the huge expansion of world plantings of more profitable crops, such as maize and oilseeds, over the past half century had come at the expense of the land area historically planted to wheat.

"This has produced competing and unsustainable trends looking into the future, as we look towards feeding the increasing world population as it grows from some 6.9 billion today and approaches 9.5b by mid-century," he said.

Mr Peterson questioned whether market forces should be left to dictate wheat production or whether doing that would only open the way for further price volatility.

The conversation surrounding global food security was started at the International Grains Council meeting in London in June and Mr Peterson believed long-term trends for the world wheat industry were headed in opposite directions.

One opposing factor was the wheat production land area and the other was wheat consumption trends around the world.

"We have to look at how those things come together on the path that we're on and we have to ask is that a pathway to stability in the marketplace or is that a pathway to increased and continued volatility?" Mr Peterson said.

"It begs the question, is the wheat market more sensitive and fragile than we first thought it was and I think the last six months has probably answered that question."

Over the last 20 years the global wheat market had been a relatively stable environment which was easily navigated with price and risk management strategies.

During that time (with exception to the 1995/96 season) wheat futures in the USA had a trading range of about $75 a tonne and growers thought the market was "volatile" when there was a drop of $75/t drop during that time frame.

In comparison Mr Peterson described today's global market as unpredictable, volatile and "absolutely hostile".

"Look at the five months in late 20007/08 when wheat prices went up $280/t in a five-month period in the US," he said.

"Following that, over a two-month period prices came down nearly $200/t.

"In June and July this year wheat prices rose $115/t over five weeks.

"The instability speaks to a worldwide problem."

Mr Peterson said the new American crop in May this year bought new hope to the American market because it was set to be the third of three record yielding crops in a row.

"We were going to be adding stocks to wheat and moving forward," he said.

"Growers thought they'd be giving it away because there would be so much wheat around."

Although this was the consensus Mr Peterson said "perception wasn't always a reality."

A review since May this year revealed Russia pulled out of the market, floods in Germany downgraded quality and up to 50pc of its crop was downgraded to feed which produced limited export capacity, there had been a similar situation in the northern plains of the USA and Canada at the end of spring and the east coast of Australia had suffered a similar fate.

"It has pushed us to the situation where we have record high prices but we have a 25 million tonne deficit in production under consumption this year," Mr Peterson said.

"Instead of growing stocks as anticipated in May, June and July, now we're going to be reducing world stocks."

The movement contributed to a 60pc rise in wheat prices during the five weeks from the end of June to the start of August.

"Let me draw your attention to last week," Mr Peterson said.

"Wheat prices have been sky-rocketing and have reached new highs at this range.

"We had a four-day price increase which is equivalent to 50pc of that old 20-year trading range that we saw year in year out.

"That's volatility."

The USA had lost 9m hectares of wheat land area over the last 15 years to corn, soybeans and other oilseeds.

"There's a deficit trend in wheat production and I don't see any abatement for it under the current price and profitability scenario of all the crops the world's producing," Mr Peterson said.

"One of the major reasons for that is the yield difference gains between corn and wheat over the time period."

Mr Peterson said wheat yields had improved in the USA about 1t/ha since 1970 and in the same time corn had doubled its production capacity from around 5t/ha to more than 10t/ha.

"You can imagine the profitability for the extra 5t/ha plus the high demand for it, that makes wheat the very poor cousin when it's looking to buy land from corn and soybeans," he said.

But Mr Peterson assured the conference that the USA wasn't alone in the scenario.

"Corn and oilseed production in Canada since 1960 has moved from almost zero to nearly 9m hectares today," he said.

"Wheat has declined from about 14m down to 9m over the last 25 years or so.

"It shows the same negative trend of wheat losing out to more profitable crops."

That trend had been repeated all over the world according the Mr Peterson.

"Since 1990 North America has collectively lost 14mha of wheat growing land, or about 40m tonnes of potential wheat production," he said.

"If we had that land area, with the market being so volatile, you could imagine the difference it could have made in the market today."

Wheat had traditionally been planted in two belts across the northern and southern hemispheres at about the 25th and 55th latitudes.

"If we look at wheat, corn, soybeans and oilseeds around the world we see some cropping patterns," Mr Peterson said.

"From about 1985 onward wheat has had a down trending land area devotion and this year's land area for wheat is exactly the same as 1968 so we've made precious little progress over time which is concerning.

"The area dedicated to corn has gone up by 60pc.

"Soybeans, canola, sunflowers and oilseeds all together have gone up 400pc.

"My premise is, as we go forward there may well be more land become available for planting wheat throughout Europe, like in Russia and the Ukraine for instance, but it might not necessarily come into wheat production and it will be subject to the same financial impact, returns, patterns and decisions as the rest of the world."

Mr Peterson predicted the world population would have increased to 9.3b people by 2050 and the majority of the growth would take place in less developed countries.

"In 1950 the world wheat consumption was 229mt compared to over 660mt today," he said.

"If we project this number out with the population growth, by 2050 the world consumption of wheat will be somewhere around 900mt.

"That's an increase of 240mt from today that has got to be filled somewhere and somehow.

"These are incompatible long-term trends and something has to stop."

The highest growth in population, the highest fertility rate and the highest world hunger figures fall in a latitudinal zone largely between the two wheat production latitudinal zones.

Mr Peterson believed if the world population was to reach 9.5b by 2050 there would be an increase in population of about 300m people in Latin America, one billion people in Africa and as many as 1.8b people in Asia.

"There's very little overlap in the population growth zones and the wheat producing zones except for a small part of northern Africa, the Middle East and northern Mexico," he said.

"The growing population is largely going to have to be fed by production in the other hemispheres.

"Trade volume will grow rather than production increasing in the tropical countries."

Mr Peterson said world trade hadn't really shifted largely over the last 30 years due to the EU and the former Soviet Union's internal trade patterns.

"By 2050 we're going to double world trade to about 250m tonnes of wheat which is a lot to move," he said.

"Everyone in the world including the USA, Canada and Australia will have a piece of the action."

World Wheat Trade May Double by 2050

2010-12-17T08:19:00.000-08:00

According to the recent U.S. Wheat Newsletter, world wheat trade may double or more by mid-century and the resulting pressure from rising demand will likely increase prices and volatility. That is the message U.S. Wheat Associates (USW) has shared with stakeholders at industry meetings across four continents since mid-November.

USW Vice President of Overseas Operations Vince Peterson discussed the question, “Wheat Outlook for 2010/11 and Beyond...Is it More Fragile than We Thought?” at several of those meetings, including the annual meeting of ALIM, the Latin American Assembly of Industrial Millers, in Cartagena, Colombia, a U.S. wheat producer meeting in Washington state and the 32nd session of the International Grains Council (IGC) in Perth, Australia, last week. USW President Alan Tracy also covered the topic at the Mideast and Africa District conference of the International Association of Operative Millers (IAOM), in Cape Town, South Africa. See Wheat Letter – November 18 for more information.

Nearly 700 people attended the IAOM meeting. Collectively, the attendees at these meetings represented about half of the world’s total wheat imports.

“This was an excellent opportunity to stimulate thinking and encourage buyers to develop closer ties with the reliable U.S. wheat industry in order to minimize future supply concerns,” Tracy said. “We started with a reminder that in spite of three record global crops and ample stocks, the Russian government’s export ban sparked an unprecedented supply and price shock.”

A broader view of the world wheat outlook reveals that such vulnerability stems from the fact that demand in regions that cannot grow much wheat is outpacing global production.

“Farmers are planting less wheat because feed grain and oilseed crops like corn and soybeans are more profitable,” Tracy said. “Higher yields offset some of this loss so wheat production is basically stable, but stable production will be inadequate to meet future demand.”

If consumption continues to grow with population alone, he said, global wheat production must increase 40 percent to 900 million metric tons (MMT) (33 billion bushels) by 2050.

“World wheat trade has been fairly stable,” Tracy added, “But a closer look shows trade is actually up by 250 percent since 1982 in less developed countries and the global trend is now moving up.”

Because wheat is grown primarily above and below the middle latitudes where population and consumption is growing, USW believes world wheat trade will have to more than double by 2050, to at least 250 MMT (9.2 billion bushels).

This is a key observation for private millers who import wheat, Tracy said.

“Production in wheat exporting countries will have to increase substantially, so wheat prices will have to rise relative to corn and other crops that compete with wheat for acreage. We’ll see more competition among buyers, more short supply years and even more price volatility,” he said. “Millers will have to put the same effort into managing risk as they put into managing their production processes, and our organization can help.

“The U.S. wheat industry has proven its commitment to supplying a wide range of high-quality wheat classes year-in and year-out,” Tracy said. “We back up that trust with trade and technical service as well as training opportunities. That is why developing a positive, long-term relationship with our reliable supply chain is a smart hedge against the challenges ahead.”

Click here (http://slidesha.re/e7F2ZZ)
to see Tracy’s complete presentation in this issue’s Online Edition. Click here to listen to an interview with Vince Peterson (http://twaud.io/q6kH) aired by the Australian Broadcast Company.

Wheat growers look for higher prices

2010-12-13T09:03:00.000-08:00

by Brad Carlson
Idaho Business Review

Idaho wheat producers are finding their crops being held at the docks.

Four Portland exporters handle about half of Idaho’s wheat exports.

“They are so busy with corn and soybeans, we are having trouble fitting wheat into their loading schedule,” Idaho Wheat Commission Executive Director Blaine Jacobson said.

“That has tended to push the price of wheat up as well,” he said.

To make as much money exporting wheat compared to corn and soybeans, the exporter needs to raise the margin, Jacobson said. That portion does not go back to the grower but ultimately boosts the worldwide price.

High consumption of wheat worldwide is increasing prices, he said. Higher prices this year helped farmers cover fixed costs, Jacobson said.

The Kansas City Board of Trade nearby wheat futures contract price was $8.27 1/4 per bushel Dec. 8 compared to $4.62 June 8 and $5.20 1/2 per bushel Dec. 8, 2009, said Shelia Summers, marketing vice president for the board. The price is a benchmark for hard red winter wheat used to make bread, she said.

“Wheat prices are up, and have been up since August when Russia put an export ban into place,” Jacobson said. Russia banned wheat exports as drought, heat and fires cut the crop by one-third from a year earlier.

Prices were depressed early in the year, when wheat stocks were their highest in nine years, he said. Prices increased sharply after Russia imposed the export ban and now are up 71 percent from their low point in the past year, he said.

Russia wasn’t the only challenged wheat producer.

“The Canadian crop and the Australian crop had their own problems,” Jacobson said.

Canada’s planted area was the lowest in 40 years and harvest dropped about 17 percent from a year earlier, he said. Weather problems at planting and harvest reduced quality, he said.

In Australia, quantity was high but quality was reduced by rains at harvest, Jacobson. Quality problems reduced Australia’s exports to Asia, “so Asia will import more from the Pacific Northwest,” he said.

Recently high corn prices kept wheat prices high, he said. Corn prices usually are about $3 per bushel but now are about $5 per bushel, he said. About one-third of the corn crop is going into ethanol production, he said.

“The ceiling price on corn is the base price on wheat because a certain percentage of wheat can go into the feed channels,” Jacobson said. “As the price of corn goes up, it pushes the base price on wheat up.”

About 4 percent of this year’s wheat harvest will be fed in stockyards.

U.S. Closing Columbia River to Barges, May Affect Wheat Exports

2010-12-09T08:07:00.000-08:00

Shipping on the Columbia-Snake River System, a major gateway to the Pacific Ocean for U.S. wheat and barley exports, will be halted until March as the Army Corps of Engineers replaces locks and dams built as long ago as 1957.

Barge traffic will be “effectively” stopped along a 365- mile (587-kilometer) stretch from tomorrow until March 18 as lock gates are replaced at the John Day, The Dalles and Lower Monumental dams, Army Corps spokesman Scott Clemans said. Five other dams will be repaired during the period, he said.

Traffic through the river-locking system is slowest during the winter, with five to 10 barges a day, Clemans said. Barges primarily carry grains, fuel and garbage. The four-month halt is unusual because shipping is normally closed for only two weeks a year for routine maintenance, he said. The U.S. is the world’s largest wheat exporter.

“We completely understand the impact this outage has on our navigation stakeholders, but if we do not replace these gates, these facilities eventually become unsafe to use,” Clemans said yesterday by telephone from Portland, Oregon. “The alternative to this planned, coordinated outage would be an unplanned emergency outage that might shut down the navigation locks and entire transportation system for maybe a year or more.”

The oldest of the dams, The Dalles, was built in 1957 and will be replaced with a new gate that weighs 1.5 million pounds (680 metric tons), Clemans said.

Rail, Trucks

The Pacific Northwest was second to the Gulf of Mexico for wheat exports last year, said Steve Mercer, a spokesman for U.S. Wheat Associates, an Arlington, Virginia-based trade group. The northwest ports are supplied by the river system, as well as by trains and trucks, he said.

Many importers have accelerated wheat purchases before the river closure to meet needs over the next three months, and others may rely on alternate transportation, Mercer said. Most northwest wheat exports go to Asia, Central America and South America, he said.

“The closure certainly may have an impact on getting wheat from point A to point B, but a lot of customers have bought ahead, and there are other ways to get it there other than barges,” he said.

The U.S. has exported 7.3 million tons of wheat out of Pacific Northwest ports in the marketing year that began June 1, Mercer said. Purchases have been ahead of last year’s pace as customers boosted buying before the river was closed, and as Russia’s export ban increased demand for U.S. supplies, he said. Russia, once the world’s third-largest exporter, has halted shipments through July 1 after drought this year ruined crops.

Prices for the grain have jumped 45 percent this year, touching a 23-month high in August. Wheat for March delivery closed at $7.84 a bushel yesterday on the Chicago Board of Trade.

Last year, the U.S. shipped 10.4 million tons of wheat through the Pacific Northwest, about 40 percent of total exports, Mercer said.

Written by Bloomberg reporter Whitney McFerron

Ag panel: More technology outreach needed as food demand rises

2010-12-08T15:25:00.000-08:00

Brad Carlson from the Idaho Business Review covered yesterday's Ag Panel Discussion on Biotechnolcy. The following article was published today.

Lab-to-field breakthroughs will play a key role in food production, so agriculture and its regulatory agencies will continue to deal with the sometimes-controversial approaches.

“The food industry in general is going to have to go through a second green revolution, if you will, to feed the number of people that need to be fed,” Idaho Wheat Commission Executive Director Blaine Jacobson said.

Food producers are challenged to meet growing worldwide demand. One challenge is to get the advancements into field, feedlot or dairy soon enough and on a lasting basis given environmental and other regulatory concerns that can arise, panelists at a recent roundtable discussion on ag technology said. The Idaho Business Review co-hosted with Holland and Hart the event Dec. 7 in Boise.

Seeds that have been genetically engineered to resist weed killer and drought, and use fertilizer more efficiently, benefit farmers. But ongoing litigation over weed-killer-resistant sugar beet seeds shows the industry must keep working on solutions that satisfy regulators and the environmental community as well as producers, panelists said. Opponents in the sugar litigation fear the seed traits would spread to other parts of the food supply.

Population gains, a decreasing supply of good farmland and reduced inputs drive the need for greater yield and efficiency, said Bob Zemetra, University of Idaho professor of plant breeding and genetics. Genetic work can improve prospects for this, but getting these seeds into widespread food production takes time. He said it probably will be 10 years before the U.S. sees transgenic wheat, a plant that contains a gene or genes which have been artificially inserted instead through natural acquisition, in the food supply.

Jacobson said adoption of genetically altered wheat probably will happen first in developing countries where need is high and drought tolerance could make more land viable. In the U.S., the industry wants a defined process of approval, he said.
Worldwide wheat production will have to double in 40 years to meet demand as populations increase and standards of living improve, he said.

There is a lot of arable land in the world, but much of it is costly to bring into agricultural production, “so we are where we are in what we can produce on,” said Dick Rush, U.S. Department of Agriculture Farm Service Agency director for Idaho.
Like other ag industries, the cattle industry must do more with less, Idaho Cattle Association Vice President Wyatt Prescott said. Science’s benefits to the industry include improved breeding programs, better treatments for illness, more efficient use of feed and an increase in desirable characteristics in animals. More public outreach and education is needed about how the U.S. food supply is developed and managed, he said.

Beet growers boosted yields, as prices stayed flat, largely because of technology, said Idaho Sugar Beet Growers Association Executive Director Mark Duffin. Weed control, traditionally done by hand, was a big problem the genetically engineered seeds helped solve in the last couple of years, he said.

Goldman Sachs Predicts High Crop Prices to Stay into 2012

2010-12-06T11:26:00.001-08:00

The current food commodities rally is to prove more sustained that the last, as strong demand mops up a big chunk of rising crop production, Goldman Sachs has said, forecasting "still historically high" prices in 2012.

While futures prices will be unable to maintain the current pace, they will remain well above levels before the latest rally kicked off in late June, the investment bank said.

Supplies will remain under pressure from firm consumption from biofuels plants and livestock farms, both in the US and emerging markets, with American soybean inventories potentially on course to fall to 4.0%, as a proportion of use, the lowest since the 1960s.

"Although we expect a supply response to the current tight balances in the 2011-12 crop year, the concurrent tightening across all major crop balances and the continued strong demand from feed and fuel will likely limit the recovery in inventories," Goldman said.

"As a result, our outlook for the 2011-12 crop year points to sustained elevated crop prices, and we introduce 2012 crop price forecasts only slightly below our 2011 forecasts."

Acreage battle

Soybean prices appeared the best-placed for gains, requiring a move "sharply higher" to some $14 a bushel to "limit acreage loss" in the US, the oilseed's biggest producer, in the spring and lift sowings in South America to meet resilient demand.

Forecasts for continued strong Chinese economic growth in 2011 and 2012 imply "further remarkable strength of Chinese soybean consumption, supported by rising protein consumption and surging animal feed [needs]," Goldman said, adding that South American demand was expanding fast too.

"In particular, biodiesel demand in Brazil is growing strongly, supported by the steady increase in required biodiesel mix into diesel."

Chicago soybeans for November 2011 delivery offered an "appealing entry level", the bank said, rating the contract a "buy".

'Strong feed demand'

Corn prices, which stood above $5 a bushel for less than nine months in the 2007-08 rally, were set to remain at some $5.85 a bushel into late 2011, and average $5 a bushel even in 2012.

"Our expectation for continued recovery in developing market and growth in emerging market protein consumption points to continued strong corn feed demand in 2011-12," Goldman said, noting that cattle placements on US feedlots had remained larger than expected, given firm feed prices.

Even if a tax credit on blending corn-based ethanol into forecourt fuel is rescinded at the end of this year, gasoline price forecasts suggest that biofuel groups will remain in profit as long as the grain does not top $6 a bushel.

Weakest link

Wheat faced the worst prospects of the big-three traded crops, facing "some supply response" in 2011-12 on the "return of normal weather and some acreage gains".

"We expect that still large inventories combined with the supply response to current high wheat prices will generate a small increase in stocks-to-use levels both at the global and US level," Goldman said.

"This outlook points to lower new crop wheat prices."

The bank forecast wheat falling from $7 a bushel next year to $6.25 a bushel in 2012.

However, Goldman added that a range of factors could potentially upset its forecasts, notably the impact of the ongoing La Nina weather pattern on South American crops, the course of US biofuels policy and the lifting, or implementation, of export bans.

Agronomic success: How to evaluate yield data from trials

2010-11-26T11:52:00.000-08:00

Written by: Robert Mullen, Ohio State University

Now that crop harvest is winding down, many companies that conduct field experimentation will be getting out and sharing their success stories, so how can you weed through the information to find the truth?

The first thing I often say as it relates to fertilizer products (but this likely extends to other agronomic products/practices) is “if it sounds too good to be true, it likely is.”

The first thing to look for when evaluating yield data from field trials is to look for some information regarding how field experimentation was done.

This does not require you to have a statistical background.

Simple questions like - “Was the study replicated?”, “How many locations were utilized?”, “Were there any locations that did not respond positively (environmental interactions)?”

To my knowledge, no agronomic practice (within reason) results in a yield increase every time it is evaluated. So if someone states, “we conducted field research on 50 fields, and we saw a yield increase every time,” be suspicious.

View split field research data cautiously. Back in 2006 we prepared a CORN Newsletter article that shared our concerns regarding the use of split field experiments to direct agronomic decisions (2006-37). Split field comparisons can reveal yield differences, but our ability to determine how confident we are that the differences are due to an actual treatment effect and not just shear random chance (or due to some other underlying factor) is negligible.

Inquire why a specific treatment resulted in a supposed yield difference. This can be critical. If the explanation does not make sound agronomic sense, then you have your answer as to whether or not it would be beneficial on your farm.

Along this line, determine if the salesperson is marketing something specific to your situation (soil test level, agronomic practice, insect pest, disease pressure, etc.) or just selling something that everyone should use. Many non-traditional approaches to nutrient supplementation can be beneficial, but they are only beneficial in specific instances. Are they telling you it works everywhere, or just under a certain set of circumstances?

Ag marketers/salespersons are important to the introduction of new products that you as a producer benefit from annually. Our goal at Ohio State Uni-versity is to provide you tools that allow you to make better decisions. Your ability to separate good information from a marketing ploy is simply another tool in your arsenal.

Forecast Trends Mixed For Wheat

2010-11-19T09:18:00.000-08:00

DTN's Bryce Anderson looks at weather trends and how its impacting wheat. The U.S. winter wheat crop is off to its weakest start in 20 years with a good-to-excellent rating in the mid-40-percent range.

Eastern Midwest wheat areas have a good chance for winter precipitation, but Plains wheat country has a less-favorable outlook. (DTN photo by Katie Micik)That's a far cry from the 64 percent good-to-excellent total put on by the crop a year ago. Ratings also indicate 17 percent of the winter wheat crop is rated as "poor" or "very poor" -- almost triple the 6 percent total of those two categories in November 2009.

While the wheat crop still has a long season to go, traders will look at the condition of the crop and upcoming weather trends as they evaluate what they think will happen to the world wheat supply.

DTN Analyst John Sanow noted that short-term fundamentals for world wheat supply and demand are bearish for immediate needs, but pose a question looking ahead to the second, third and fourth quarters of 2011. That places the overall wheat market weather factor at neutral.

Smaller world supplies than a year ago, due to drought in Russia and West Australia, along with flooding in Canada, bring an increased sense of urgency to the market's view of weather in U.S. wheat areas going into next year.

"Near-term fundamentals remain bearish for wheat, but traders will watch continued dryness in the Southern Plains closely along with other parts of the globe," Sanow said. "The market can ill-afford a large drop in world production for a second straight year. The situation grows less bearish longer-term, as indicated by the weaker carry in deferred futures spreads. This points to concern by the commercial side over future supply."

AgResource sees 2011 global wheat output rebound

2010-11-18T14:07:00.000-08:00

Reuters reported today that global wheat output could recover to 661.5 million tonnes in 2011/12, up from 639.8 million tonnes this year, mainly boosted by a rebound in production in the former Soviet Union, analyst AgResource said on Wednesday.

In its first estimate for next year's crops given to Reuters on the sidelines of a global grain conference, the analyst pegged the 2011 harvest for the 12 so-called "FSU" countries at 96.80 million tonnes versus 82.70 million in 2010. Of this, Russia would produce 52.3 million tonnes, up from 41.0 million tonnes this year after drought ravaged its crop, which prompted the country to close its door on exports. Despite the rise in output, global wheat stocks would fall to 156.29 million tonnes by June 30, 2012, against 169.88 million tonnes estimated at the end of the current campaign, AgResource President Dan Basse said.

The analyst pegged the 2011 corn production at an all-time record of 848.99 million tonnes, versus 818.52 million tonnes this year, due to a larger area sown in the United States and hopes that China would also expand production. He did not have
regional forecasts for corn output. World corn stocks were expected to fall next season, to 112.07 million tonnes versus 129.16 million tonnes in 2010/2011,
due to an expected spike in demand notably in China and Russia.

AgResource did not provide 2011 production estimates for other crops such as soybeans.

Wheat Condition Improves Slightly

2010-11-16T09:07:00.000-08:00

Eighty-seven percent of the nation's winter wheat crop had emerged as of Sunday, Nov. 14, according to USDA's weekly crop progress report. That's 9 percentage points ahead of last year and 2 percentage points ahead of the five-year average.

The condition of the wheat improved slightly from last week, with the amount of the crop rated good to excellent increasing by 1 percentage point. Keep in mind, though, there is no statistical correlation between fall ratings and final yield.

The following are highlights from weekly crop progress reports issued Monday by National Ag Statistics Service offices in individual states. To view the full reports from each state, visit http://www.nass.usda.gov/Publications/State_Crop_Progress_and_Condition/index.asp

Industry, Growers Push Seed Companies to Ramp up Wheat Research, Development

2010-11-15T09:51:00.000-08:00

Progressive Farmer Editor Kurt Lawton writes that wheat growers have pleaded for years for greater investment in public and private breeding programs and genetic improvements. Yet there has been little incentive to do so.

Growers are reluctant to buy certified seed and wheat continues to lose ground, literally, to corn and oilseeds in the United States.

Planted acres in 2010 dropped by 4.8 million acres from last year, bringing the total to 54.3 million acres -- the lowest total since 1971.

But it appears wheat farmers' pleas are finally being heard. "The good news is we've seen some major wheat research investments made last year and this year, and we're very excited," says Jim Bair, vice president of the North American Millers' Association (NAMA).

"For the first time in a long time, major private companies are working to develop both conventional and biotech varieties."

MOVES BY MONSANTO

The biggest efforts regarding improved wheat research have come from Monsanto. The biotech giant acquired Montana-based WestBred wheat breeding business in 2009.

In June 2010, they announced a partnership with Kansas State University, allowing both entities to share germplasm and technology.

In July, Monsanto and BASF announced they have nearly doubled their investment in an already established joint venture to develop biotech crops -- and have now included a focused effort in wheat.

And in August, Monsanto purchased a 19.9 percent share of Australia's leading wheat breeder and germplasm developer, InterGrain.

"We're obviously still concerned about wheat acres, as research doesn't bring immediate results. It'll be several years before we see yield improvement, with biotech wheat varieties probably not available for quite some time," Bair says.

"With the introduction of drought-resistant corn coming in the next few years into the drier areas of the High Plains where wheat has been best suited, we'll probably see acreage losses get worse before it gets better," he adds.

REGULAR VARIETAL IMPROVEMENTS FIRST

Monsanto's purchase of WestBred gives the company well-established and successful breeding programs in key geographic areas and in key classes of wheat, says Sean Gardner, global commercial wheat lead for Monsanto.

"While the introduction of biotech traits such as drought tolerance, nitrogen-use efficiency and higher yields will eventually be incorporated into the WestBred germplasm platform in the next decade, our short-term emphasis is to produce better varieties.

"We want to give growers more and better choices to improve their wheat profitability."

Monsanto will also explore herbicide-tolerant and disease-resistant biotech traits, but does not plan to further develop its first-generation Roundup Ready trait in wheat.

Gardner says a combination of factors led Monsanto back into the wheat business. "Much of the U.S. wheat industry value chain -- from growers to processors -- desire seed companies such as ourselves to invest in wheat.

"As we looked at the potential synergy between wheat and the biotech efforts we have going in corn ... we're confident we can provide products of increasing value to growers," he says.

The company has been busy working with WestBred to achieve better varieties more quickly using technologies that Monsanto currently uses in corn and other crops.

"We're getting very serious about adopting doubled haploid technology to dramatically shorten the variety development time. In fact, we plan to open a new doubled haploid wheat research facility in Wichita, Kan., over the next few months."

(Doubled haploids are genetically pure inbred plants, which can now be achieved in one year through special techniques, but which used to take five to eight generations to develop in the field. This cuts variety development time significantly.)

Along with doubled haploid technology, wheat breeders at Monsanto will expand their use of molecular marker-assisted selection to find and flag beneficial traits.

This also allows scientists to screen millions of data points with high throughput analysis technology -- like they are using in other crops. And their partnership with BASF will further improve their biotech work.

WHEAT GENOME WORK

The next big step coming within five years will be a complete mapping of the wheat genome -- which will usher in a new era of wheat improvement.

Recent announcements by a British research team who claim to have sequenced the genome of Chinese spring wheat as a reference variety is incomplete.

The International Wheat Genome Sequence Consortium says the claim is premature as the sequences have yet to be ordered, annotated and aligned so the position of the genes along the chromosomes is known.

Bayer CropSciences, Syngenta, Pioneer, Limagrain and others are focusing varied efforts in wheat. The industry is also seeing advanced plant breeding service companies start up.

One such company is Heartland Plant Innovations in Manhattan, Kan. -- a for-profit venture that will conduct contract research to help discover and commercialize new products for public and private research clients.

"Initially we're collaborating on research with Kansas State University and the University of Kansas to develop biotech solutions for wheat and sorghum, along with finding novel new products from native plants," says Forrest Chumley, president and CEO of the company. "We also plan to help private seed companies with specific biotech research services."

WHEAT MARKET HURDLES

Buying certified wheat seed every year is one hurdle the industry must overcome. "Our job is to provide varieties that add value to a wheat grower, in order to make our case for certified seed," Monsanto's Gardner says.

"Consistent use of certified seed tends to correlate with yield and profitability, which is why we see higher certified seed use in the Pacific Northwest and East wheat markets compared to lower use in the High Plains," he adds.

"Growers are not ideologically opposed to using certified seed. The decision is a reflection of best choices for each operation's business model. So we're optimistic that we will provide increased value."

U.S. 2011 Wheat Carryover Reduced

2010-11-09T14:01:00.000-08:00

Wheat carryover on June 1, 2011, was projected at 848 million bushels, down 5 million bushels from 853 million bushels forecast in October and down 128 million bushels, or 13%, from 976 million bushels in 2010, the U.S. Department of Agriculture (USDA) said in its Nov. 9 World Agricultural Supply and Demand Estimates.

USDA projected 2010-11 carryover numbers were below trade expectations of 869 million bushels for wheat.

U.S. all-wheat production was estimated at 2.208 billion bushels in 2010, down 16 million bushels, or 1%, from October and down 10 million bushels from 2.218 billion bushels a year earlier. U.S. 2010-11 wheat imports were projected at 110 million bushels, up 10 million bushels from October but down 9 million bushels from last year. Total wheat supply was projected at 3.294 billion bushels, down 5 million bushels from October but up 301 million bushels, or 10%, from 2.993 billion bushels in 2009-10, the USDA said.

Exports of U.S. wheat for 2010-11 were projected at 1.250 billion bushels, unchanged from October but up 369 million bushels, or 42%,from 881 million bushels in 2009-10.

The USDA projected domestic food use of U.S. wheat in 2010-11 at 940 million bushels, unchanged from October but up 23 million bushels, or 3%, from 917 million bushels in 2009-10, and seed use at 76 million bushels, also unchanged from October but up 7 million bushels from 69 million bushels last year. Feed and residual use was projected at 180 million bushels, unchanged from October and up 30 million bushels, or 20%, from 150 million bushels in 2009-10.

Total use was projected at 2.446 billion bushels, unchanged from October but up 428 million bushels, or 21%, from 2.018 billion bushels in 2009-10.

The average farm price of U.S. wheat in 2010-11 was projected to range from $5.25-$5.75 a bushel, compared with $5.20-$5.80 projected in October and with $4.87 a bushel in 2009-10 and $6.78 a bushel in 2008-09.

On a by-class basis, the USDA projected June 1, 2011, carryover of hard winter wheat at 323 million bushels, down 15 million bushels from October and down 62 million bushels from 385 million bushels in 2010. Soft red winter wheat carryover was projected at 183 million bushels, up 25 million bushels from October but down 59 million bushels from 242 million bushels in 2010.

Hard spring wheat carryover on June 1, 2011, was projected at 211 million bushels, down 21 million bushels from October and down 23 million bushels from 234 million bushels in 2010.

White wheat carryover was projected at 88 million bushels in 2011, unchanged from October but up 8 million bushels from 2010.

Durum carryover on June 1, 2011, was projected at 43 million bushels, up 6 million bushels from October and up 8 million bushels from 35 million bushels in 2010.

World wheat ending stocks for 2010-11 were projected at 172.51 million tonnes, down 2.51 million tonnes from October and down 22.89 million tonnes, or 12%, from 195.4 million tonnes in 2009-10. Global 2010-11 wheat production was projected at 642.89 million tonnes, up 1.45 million tonnes from October but down 39.81 million tonnes, or 6%, from 682.7 million tonnes the previous year. Global wheat use was projected at 665.79 million tonnes, up 2.48 million tonnes from October and up 13.16 million tonnes from 652.63 million tonnes in 2009-10. World exports were projected at 127.23 million tonnes, up 1 million tonnes from October but down 8.09 million tonnes,or 6%, from 135.32 million tonnes in the prior year.

“Global wheat supplies are projected slightly higher for 2010-11 as higher world production offsets lower carryin, mostly reflecting higher 2009-10 wheat feeding in China,” the USDA said.

Wheat Prices Go Up

2010-11-05T07:37:00.000-07:00

KTVB's Nisha Gupta covers the recent increase of wheat prices which have benefited Idaho wheat growers and Idaho's economy. In an interview with Farm Bureau's Jake Putnum, viewers learn how Russia's drought impacts wheat prices across the globe.
http://www.ktvb.com/news/Wheat-prices-go-up-good-for-farmers-bad-for-consumers-106733943.html

October U.S. wheat prices surge above $6

2010-11-02T09:45:00.000-07:00

Worldgrain.com reports the preliminary national average price received by farmers for all wheat in October was $6.08 per bushel, up 25¢ from $5.83 in September and up $1.61 from $4.47 in October 2009, the U.S. Department of Agriculture (USDA) said in its latest Agricultural Prices report.

The average price paid for winter wheat in October was $5.98 a bushel, up 18¢ from $5.80 in September and up $1.71 from $4.27 in October 2009. The average price paid for durum was $5.54 a bushel, up 84¢ from $4.70 in September and up 68¢ from $4.86 in October 2009. Spring wheat other than durum averaged $6.35 a bushel, up 35¢ from $6 in September and up $1.35 from $5 in October 2009.

Wheat Research Takes Coordinated Effort

2010-10-29T12:49:00.000-07:00

Past investment into wheat research has given farmers new wheat varieties, disease and insect resistance and agronomic improvements, plus improved quality for millers and bakers throughout the world. For more than 50 years, Idaho farmers - and other wheat producers from across the nation - have supported research from land-grant universities and the USDA through each state's wheat checkoff program. In the last few decades, however, state and federal dollars towards wheat research have been dramatically reduced, leaving checkoff funds to pick up the slack.

Continued development of wheat varieties and technologies is crucial to the long-term viability of wheat production in the United States, and the effort has gained a boost with the recent entry into wheat variety and technology development by several private firms.

Sorting through research priorities from public and private entities falls at the feet of Jane DeMarchi, director of government affairs for research and technology for the National Association of Wheat Growers. DeMarchi joined NAWG in June, filling a new position dedicated to tracking current research, reviewing funding needs and developing research priorities throughout the entire wheat industry. NAWG has set a goal of increasing wheat yields for U.S. wheat producers at least 20% by 2018; to reach that goal, the collaborative efforts of private and public wheat researchers is necessary.

"We are looking for the private investment to be additive to the overall research picture," DeMarchi says. "We've done a good job of communicating to the technology providers what we'd like to see in future innovation for wheat. We have to make sure that all the research going on right now is directed towards moving the crop forward."

DeMarchi, who spoke to wheat growers at the annual Fall Meeting of NAWG and the U.S. Wheat Associates in Minneapolis last week, says many state wheat commissions have committed to working together on variety development and other research proposals. This is one step toward leveraging research resources; another is to bring the private firms into the fold.

"I do think there is an opportunity for greater collaboration between the researchers themselves or between states on a regional basis, to make sure that money spent is spent as efficiently as possible so that everyone can learn from the research that's being done," DeMarchi says. "We don't need every program doing everything. We need to focus where the best research is being done and then on a regional basis have people being able to take advantage of that."

Research priorities in coming years include the introduction of biotech traits to wheat varieties, an industry-wide effort to solve the Ug99 stem rust disease and continued yield, quality and agronomic improvement of varieties. These efforts require the combined effort of public and private, state and federal researchers and funds.

Cargill CEO Expects U.S. Grain Output to Rise in 2011

2010-10-27T05:45:00.000-07:00

Bloomberg reporters Andra Timu and Irina Savu write that the U.S., the world’s largest grain shipper, may increase production next year if weather conditions are favorable as farmers invest in fertilizers and high-quality seeds, Cargill Inc.’s Chief Executive Officer Greg Page said.

The 66 percent gain in corn prices from June lows and a doubling in wheat have bolstered U.S. farm revenue and will spur investment in technologies to increase output, Page said today in an interview from the southern Romanian town of Calarasi.

“Production in 2011 in the U.S., if we have good weather, I would expect it to increase based on the behavior of farmers, which is to purchase more fertilizer and be very careful to use the very best seeds,” Page said.

Rising farm income and spending contrasts with a slowing U.S. economy, where growth eased to an annualized 1.7 percent in the second quarter from 3.7 percent in the previous three months. While agriculture accounts for just 1 percent of the $14.3 trillion economy, the impact of surging prices may be 10 times more once spending on equipment, seeds, grain handling and food production are added, said Jason Henderson, an economist at the Federal Reserve Bank of Kansas City, on Oct. 18.

By contrast, the European Union grain harvest is estimated to fall 4 percent this year to 284.9 million metric tons, the bloc’s weather-monitoring unit said on Oct. 13.

Stable Demand

Grain consumption in Europe will be “quite stable,” Page said. “We have been impressed in many countries with the stability of the world’s diets in 2009 and
2010,” compared with other crisis periods, he said.

Grain prices rose this year as drought in Russia, flooding in Canada and parched fields in Kazakhstan and Europe ruined crops. Russia, once the third-biggest wheat exporter, banned overseas sales in August. Ukraine, the largest barley shipper, said Oct. 12 it would introduce grain quotas. Corn, wheat and soybeans jumped the most allowed by the Chicago Board of Trade on Oct. 8 after the U.S. Department of Agriculture predicted less supply.

“All the statistics are not completely compiled, but that reduction in production in Russia will probably represent far less than 1 percent of the world’s grain production,” Page said. “That small reduction in production has led to an enormous change in price.”

Cargill, the Minnetonka, Minnesota-based grain handler and the largest closely held company in the U.S., said Oct. 12 that its 64 percent stake in Mosaic Co. and farm-price volatility drove a 68 percent gain in profit in the most recent quarter.

Page, speaking at the opening of a grain-storage facility in Calarasi, said Cargill plans to expand its Romanian business and increase working capital at the unit to $100 million by 2015.

Those Amber Waves Are Fueling Exports

2010-10-26T05:45:00.000-07:00

Bloomberg Businessweek reporters Whitney McFerron, Jeff Wilson, Shruti Singh and Elizabeth Campbell write that just a few years ago, who would have guessed that farms would turn out to be a bright spot in the U.S. economy? Farmers were fretting about falling prices and mounting competition from Russia and Ukraine. Today drought has withered much of the Russian and Ukrainian crops, and the world needs more grain—and soybeans and pork—than ever. The best place to get it: the fertile soil of the U.S. Midwest and South, home to some of the most productive farms on earth.

In the first eight months of 2010, U.S. agricultural exports increased 14 percent, to $69.8 billion, from the same period a year earlier, according to the most recent U.S. Agriculture Dept. data. Joseph Glauber, chief economist for the USDA, says farm exports in the year that began on Oct. 1 may top the 2008 record.

This cornucopia is providing an unexpected boost to President Barack Obama's drive to double exports by 2015. China's need for cotton, pork, corn, and soybeans will make it the second-biggest U.S. agricultural trading partner in 2011, the USDA estimates. Shipments of farm products to China will total $15 billion, compared with Canada's $16.8 billion and Mexico's $14.6 billion. Corn prices are up over 60 percent since June, while wheat as much as doubled. "It's going to be the best year American farmers have had in two and a half decades," says Dennis Gartman, an economist and editor of The Gartman Letter in Suffolk, Va.

The cash that farmers are fingering in their pockets is boosting companies at home as well. While agriculture accounts for just 1 percent of the $14.3 trillion U.S. economy, the actual impact of surging prices may be 10 times more once spending on equipment, seeds, grain handling, and food processing is added, says Jason Henderson, an economist at the Federal Reserve Bank of Kansas City.

Sales of farm equipment are correlated to growers' cash receipts, which should increase 24 percent, to $118.4 billion, for major crops in the 2010-11 season, Ann Duignan, an analyst at JPMorgan Chase (JPM) in New York, said in an Oct. 8 report. That's good news for Moline (Ill.)-based Deere (DE), the world's largest farm-equipment maker as well as rivals Amsterdam-based CNH Global (CNH) and Duluth (Ga.)-based Agco (AGCO), she says.

Deere's per-share profit will more than double, to $4.25, in the current fiscal year, according to the mean estimate of eight analysts surveyed by Bloomberg. Cargill, the giant grain handler and food processor, said on Oct. 12 that thanks to price volatility and the performance of its affiliate, fertilizer producer Mosaic (MOS), profit for the latest quarter rose 68 percent.

Back in the 1980s, falling prices, record-high interest rates, and too much farmland bought on credit prompted a wave of farm bankruptcies. Now low interest rates are amplifying the boom, says Tom Neher, vice-president for AgStar Financial in Rochester, Minn. The bank issued twice as many farm-equipment loans as expected in a recent promotion. "I've seen more brand-new combines bought than I've seen for a long, long time," says Neher, who helps manage $2.1 billion in grain-related loans and leases for AgStar. "When you can get a machinery loan for 4 percent interest, that's about as low as it ever gets."

There are limits to how much cash will trickle down to the Main Streets of rural America, says Ernie Goss, an economics professor at Creighton University in Omaha: "You have fewer and fewer farms, and fewer and fewer farm families, so it hasn't spilled into small businesses like the drugstore or the shoe store." Farm prices have been supported by a lower dollar, which boosts exports, and not by rising domestic demand, says Goss. Small businesses "are mystified by all these reports about how wonderful the rural economy is. That's because they're selling in Greeley, Neb., and the farmer out there is selling in Beijing."

Still, the mix of foreign demand and a weak dollar is the best news farm country has had for decades. "It is a perfect situation for U.S. farmers, the best since the early 1970s," says Bill Adams, a trader at ACT Currency Partner, a currency and commodity specialist in Zurich. "There will be quite a few Cadillacs sold in the Midwest this Christmas."

The bottom line: Farm exports from the U.S. are rising fast. That's benefiting farm-equipment makers, fertilizer companies, and other suppliers.

Grainy Season: Engineering Drought-Resistant Wheat

2010-10-25T05:45:00.000-07:00

NPR's Dan Charles reports that wheat prices spiked this past summer as a record drought and heat wave wreaked havoc on Russia and ruined one fourth of the country's crops. Russian Prime Minister Vladimir Putin ordered a ban on exports of Russian grain. A self-propelled combine harvests a field in a village south of Moscow on Aug. 15.

Last summer's drought in Russia pushed wheat prices to their highest levels in years, and the fallout is a reminder of how much humanity depends on the rain. Now, scientists are searching for novel approaches to make wheat less vulnerable to drought.

Some efforts are trying to replace the genes that made possible the dramatic boost in wheat harvests in the latter half of the 20th century in India known as the Green Revolution.

Few people can see the accomplishments of the Green Revolution more clearly than Kulvinder Gill, who grew up in a village in India where, half a century ago, some predicted catastrophe because food production wasn't growing as fast as the population. "It was a common belief that this world is going to end because of the starvation," Gill said. "People are going to fight for food and kill each other."

But scientists such as Orville Vogel at Washington State University bred new varieties of wheat that included a mutant gene that kept the plant short. When you gave these plants lots of fertilizer and irrigated them, they didn't just get tall and fall over like ordinary wheat — they produced more grain. A lot more.

"These dwarfing genes came and almost tripled yields, at least in Punjab area," Gill said.

So Gill left his village in Punjab and became a wheat geneticist. He now occupies the Orville Vogel Endowed Chair in wheat breeding at Washington State.

Searching For A New Wheat Gene

And he's hoping to not only repeat what Vogel did, but improve on it. That's because the dwarfing genes of the green revolution — which are now in 90 percent of all the wheat that farmers grow around the world — have an unfortunate side effect, he says: They make it harder for the plant to thrive when water is scarce.

For instance, when it's dry, farmers have to plant seeds deeper because that's where the moisture is. "And these semi-dwarfs don't do too good pushing out of 6 inches of soil," Gill says.

So he's now on the hunt for a different and better dwarfing gene. He knows exactly what he's looking for: It's a mutation that already exists in corn and sorghum. It doesn't shrink the whole plant the way the green revolution genes do. Instead, it blocks the normal flow of a crucial growth hormone.

"So the plant reduces in height, but at the same time, the cob is bigger, the stem is thicker and stronger, and the plant looks great," Gill says.

To create this kind of wheat plant, Gill and a group of collaborators have treated thousands of seeds with a chemical that makes random changes in DNA. Now these mutant wheat plants are growing in the greenhouse, and Gill has to see if any of them have the one change he wants.

"It is very difficult to know at this point if the mutant is the one — the kind we are looking for," he says.

A Global Effort To Reprogram Crops

Gill's project is just one small part of a global campaign to reprogram crops genetically so they can survive water shortages. People are trying everything from low-tech traditional crop breeding to high-tech gene splicing.

One approach, somewhere in the middle, involves looking for useful genes in wheat's ancestors. Scientists are retrieving seeds from the refrigerated vaults of gene banks and taking a fresh look at those plants. Thousands of years ago, three of them somehow combined in the wild to form modern wheat.

David Bonnet, a wheat geneticist at the International Maize and Wheat Improvement Center based in Mexico, says scientists can re-create that merger in the laboratory.

"So we can go back and bring in more genetic variation for a whole range of traits, but certainly drought tolerance is one of them," Bonnet says.

But the approach that's getting most of the attention and most of the money these days is genetic engineering.

Agricultural giant Monsanto has inserted a gene from bacteria into corn and it says this variety yields 8 to 10 percent more under drought conditions. The gene is called a transcription factor — a kind of master gene that activates many others when the plant is under stress.

The company says if it gets a green light from regulators, it will start selling the corn within two years. Monsanto has also donated the gene to a group of government-supported research institutions in Africa that are starting greenhouse trials of corn-containing the gene this year.

The Potential Of Genetic Enhancement

In the scientific community, there's a lot of curiosity about the Monsanto product and some skepticism that it will work as advertised.

But many of them, including Mahyco, a leading seed company in India, also are looking for genes to splice into crops.

"In our program, we are looking at transcription factors from drought-tolerant crops — sorghum, acacia trees or other crops that are known to be drought-tolerant," says Usha Zehr, Mahyco's chief technology officer.

And geneticist Bonnet says there's no shortage of genes that seem like they might possibly help a plant use water more efficiently.

"We have access to quite a lot of candidates ourselves, and we think they have as much or more potential as what Monsanto has," he says.

Actually realizing that potential may become increasingly important as the globe warms up. Climate models predict that many parts of the world — including major crop-growing areas — will see more droughts in the coming years.

Tight Corn Supplies Drive Wheat Prices Higher

2010-10-22T09:16:00.000-07:00

Chad Weigand, USW Market Analyst reports in the recently released Wheat Letter that "Back in the July 21 issue of Wheat Letter, we wrote about world wheat prices surging with news of the Russian drought. We also suggested that it would be a good idea for wheat buyers to watch the corn market, noting that the run-up in wheat futures actually began after the U.S. Department of Agriculture (USDA) reported a tightening in corn stocks. An additional decrease in corn stocks from any future weather issues or continued demand growth from China could push corn prices higher and pull wheat along with it,” we said.

USDA’s corn market assessment in its Oct. 8 World Agricultural Supply and Demand Estimates (WASDE) has had exactly that effect on wheat prices. USDA surprised the trade by projecting 2010/11 U.S. corn ending stocks at 22.9 million metric tons (MMT), falling well below average trade estimates of 29.2 MMT. If realized, this would be a 47 percent decline from last year and the lowest level since 1996/97. Global ending stocks are also expected to decline, falling 11 percent from last year to 132 MMT. With the ever-growing corn demand projected at a record 835 MMT, the global stocks-to-use ratio stands at 16 percent, the second lowest level since 1974/75. The stock situation in the U.S., which accounts for roughly 40 percent of global output, is especially tight. USDA projects the U.S. corn stocks-to-use ratio at eight percent, the second lowest level on record.

The bullish reaction in corn has spilled over into wheat, a market that was already factoring in increased overseas demand for U.S. wheat. Corn supply and demand remains a major factor for wheat. In its daily “Commodity News for Tomorrow,” CME yesterday quoted an analyst saying, "The only reason that wheat is up is because corn is up. We don't have a shortage of wheat." Between the WASDE report on Oct. 8 and Oct. 20, corn futures prices climbed 12 percent to $5.73/bu and wheat gained nearly five percent. The CBOT December wheat contract closed at $6.83/bu yesterday. The spread between corn and wheat in the U.S. cash markets is even tighter. While feed demand for wheat could increase locally, if the spread stays narrow up to corn planting time in 2011, the long-term competition for acres between corn and wheat would take on more weight.

Writing for World Perspectives, Inc., this week, analyst Mike Krueger estimated that 2011 corn planted area will have to reach 95 million acres (38 million hectares), assuming a yield of 160 bushels per acre (about 10 metric tons per hectare), if U.S. ending stocks are to reach a more comfortable level of 33.0 MMT. This would translate to the largest corn planted area since 1944 and increase the chance that the 2011/12 and 2012/13 wheat crops will lose planted area to corn. Krueger is President of The Money Farm, a grain marketing advisory firm based in Fargo, ND.

Idaho’s All Wheat Production Up from 2009

2010-10-14T07:51:00.000-07:00

All wheat production in Idaho is up 9 percent from 2009 to 108 million bushels. The winter wheat yield, at 82.0 bushels per acre, is up 1.0 bushel from last year. Winter wheat production totals 58.2 million bushels from 710,000 harvested acres, up 3 percent from last year’s 56.7 million bushels.

The 2010 winter wheat production is estimated to be 76 percent white and 24 percent hard red. Spring wheat yield, at 79.0 bushels per acre, is up 2.0 bushels from a year ago. Idaho’s spring wheat production totals 48.6 million bushels from 615,000 harvested acres, up 19 percent from 2009’s 40.8 million bushels.

The spring wheat crop is estimated to be 50 percent white and 50 percent hard red. Yield for durum wheat is estimated to be 65.0 bushels per acre, down 16.0 bushels from last year. Durum wheat production in Idaho totals 1.30 million bushels from 20,000 harvested acres, down 320 thousand bushels from last year.

IGPA Leader Chosen for Prestigious National Program

2010-10-13T11:56:00.000-07:00

Idaho Grain Producers Association (IGPA) member of the Board of Directors, Robert Blair, was recently named as an Agriculture Fellow for the prestigious Eisenhower Fellowship program.

Blair was chosen as one of two farmers from a competitive nationwide pool of applicants for the 2011 program chaired by retired U.S. General Colin Powell. His work to tout the benefits of precision technology as a new frontier in production agriculture caught the attention of the Eisenhower Fellowship.

Blair, a family farmer from Leland, Idaho, serves as the Nez Perce County representative on the IGPA Board of Directors and chairs the Congressional, Legislative, Tax and Transportation Committee.

“The IGPA is extremely proud, but not surprised, of Robert’s selection”, said IGPA President Scott Brown. “Robert follows in the footsteps of IGPA past President Duane Grant who was also selected for this great program. We are fortunate to have such talented leadership among Idaho’s wheat and barley farmers.”

The stated goal of the Eisenhower Fellowship is to “engage emerging leaders from around the world to enhance their professional capabilities, broaden their contacts, deepen their perspectives, and unite them in a diverse, global community”.

Blair and the other selectees will travel on a 4-5 week individualized professional program to meet leaders in agriculture and related fields. Robert’s specific mission will be to engage and exchange ideas with South American nations regarding the benefits of precision agriculture.

For more information, contact the Idaho Grain Producers Association office at (208) 345-0706.

U.S. 2011 wheat carryover down 5% from September

2010-10-12T10:15:00.000-07:00

World Grain reports that U.S. wheat carryover on June 1, 2011, was projected at 853 million bushels, down 49 million bushels, or 5%, from 902 million bushels forecast in September and down 123 million bushels, or 13%, from 976 million bushels in 2010, the U.S. Department of Agriculture (USDA) said in its Oct. 8 World Agricultural Supply and Demand Estimates.

U.S. all-wheat production was projected at 2.224 billion bushels for 2010-11, down 41 million bushels, or 2%, from September but up 6 million bushels from 2.218 billion bushels a year earlier. Total wheat supply was projected at 3.299 billion bushels, down 39 million bushels, or 1%, from September but up 306 million bushels, or 10%, from 2.993 billion bushels in 2009-10, the USDA said.

Exports of U.S. wheat for 2010-11 were projected at 1.25 billion bushels, unchanged from September but up 369 million bushels, or 42%, from 881 million bushels in 2009-10.

The USDA projected domestic food use of U.S. wheat in 2010-11 at 940 million bushels, unchanged from September but up 23 million bushels, or 3%, from 917 million bushels in 2009-10, and seed use at 76 million bushels, also unchanged from September but up 7 million bushels from 69 million bushels last year. Feed and residual use was projected at 180 million bushels, up 10 million bushels, or 6%, from September and up 30 million bushels, or 20%, from 150 million bushels in 2009-10. Total use was projected at 2.446 billion bushels, up 10 million from September and up 428 million bushels, or 21%, from 2.018 billion bushels in 2009-10.

The average farm price of U.S. wheat in 2010-11 was projected to fall in a range of $5.20-$5.80 a bushels, up from $4.95-$5.65 in September and compared with $4.87 a bushel in 2009-10 and $6.78 a bushel in 2008-09.

On a by-class basis, the USDA projected June 1, 2011 carryover of hard winter wheat at 338 million bushels, down 11 million bushels from September and down 47 million bushels from 385 million bushels in 2010. Soft red winter wheat carryover was projected at 158 million bushels, down 21 million bushels from September and down 84 million bushels, or 35%, from 242 million bushels in 2010.

Hard spring wheat carryover on June 1, 2011 was projected at 232 million bushels, down 17 million bushels from September and down 2 million bushels from 2010.

White wheat carryover was projected at 88 million bushels in 2011, up 2 million bushels from September and up 8 million bushels from 80 million bushels in 2010.

Durum carryover on June 1, 2011 was projected at 37 million bushels, down 2 million bushels from September but up 2 million bushels from 2010.

Global 2010-11 wheat production was projected at 641.44 million tonnes, down 1.57 million tonnes from September and down 40.71 million tonnes, or 6%, from 682.15 million tonnes the previous year. Global wheat use was projected at 663.31 million tonnes, up 2.12 million tonnes from September and up 12.35 million tonnes, or 2%, from 650.96 million tonnes in 2009-10. World exports were projected at 126.23 million tonnes, up 200,000 tonnes from 126.03 million tonnes in September but down 9.09 million tonnes, or 7%, from 135.32 million tonnes in the prior year. World wheat ending stocks for 2010-11 were projected at 174.66 million tonnes, down 3.13 million tonnes from September and down 21.87 million tonnes, or 11%, from 196.53 million tonnes in 2009-10.

"Global wheat supplies for 2010-11 are projected 1 million tonnes lower, mostly reflecting lower production in the United States," the USDA said.

Alan Guebert: Gravest strategic issue you never heard of

2010-10-08T05:45:00.001-07:00

Before anyone smiles too broadly about today's grain prices, they might want to take a peek at fertilizer prices. If so, they'll discover, as DTN reporter Russ Quinn recently did, that the only price rising faster than either corn or wheat's is fertilizer.

“Six fertilizers have seen double-digit increases in price compared to one year earlier,” noted Quinn on Sept. 21. “Leading the (way) higher is DAP, which is up 48 percent, followed by anhydrous at 47 percent, MAP at 43 percent, UAN28 at 37 percent, UAN32 at 26 percent, 10-34-0 at 15 percent and urea at 10 percent.”

While no one is forecasting a return to the smash-mouth prices – $1,200 anhydrous and $1,000 potash – seen in 2008, the last high-grain price year, no one has ruled 'em out, either. After all, higher grain prices seem to breed higher fertilizer prices like tougher times seem to breed more bank robbers.

There are, however, two reasons for today's upward prices. First, rising demand because of previous cutbacks (largely due to those lunar, 2008 prices) and two years of wet weather that has washed most fertilizer reserves down the creek is kicking up demand, squeezing supplies and fueling prices.

The second factor is ever more basic: cartels. Like crude oil or water, fertilizer is increasingly a “name-your-price” game where a handful of super ag Big Boys control production, marketing and, to a great extent, pricing.

Four weeks ago this space examined the $38.6 billion hostile takeover attempt of Potash Corp. of Saskatchewan, Inc., a Canada-based firm that controls 30 percent of the world's potash production, by BHP Billiton. The deal remains in limbo.

While the wooing continues, though, BHP continues to claim that if it wins Potash it takes the firm out of Canpotex, the cozy export cartel between Potash and its two biggest North American competitors, Mosaic, a Cargill-run firm, and Agrium.

Think about that for a second. BHP pays $38.6 billion for a company that has a third of the world's potash reserves and a marketing plan – built largely on an export cartel – that has delivered a return on investment of 40 percent or so over the last three years and it's gonna' drop that incredibly profitable formula for something better?

What's better than a 40 percent ROI and an export cartel?

The phosphorus market, that's what, offers C. Robert Taylor, the Alfa Eminent Scholar and an ag economist at Auburn University. Taylor spent most of the past year examining the global phosphorus market and says that it “is the gravest strategic issue facing the United States that you never heard of.”

In short, writes Taylor for the Daily Yonder (http://www.dailyyonder.com), the severity of a phosphorus shortage in the next 20 years – at current usage rates, the U.S. supply “will be exhausted in 15 to 30 years” – might “flip from one that revolves around... oil reserves to one based on who owns, and controls, phosphorus reserves.”

Even more worrisome, notes Taylor, is that Morocco and China hold 60 percent of the world's known phosphorus reserves while the U.S., South Africa and Jordan hold most of the rest. Wisely, though, China, “has imposed a 100-175 percent tariff to curtail phosphorus exports, yet the U.S. continues to export to”– wait for it – “China.”

“Troubling, ain't it?” asks Taylor.

Moreover, “Trade in phosphorus is dominated by three corporations,” he continues, “Mosaic (Cargill), Potash Corporation of Saskatchewan and OCP, a Moroccan-sanctioned, privately traded monopoly.”

Gee, two of the same key players as the potash market. Hmm, maybe BHP wants Potash Corp. more for its phosphorus and that cartel than potash and the other cartel.

Either way, there's little doubt why the fertilizer kings are whacking you with higher prices now: because they can.

Alan Guebert: Phosphorus market: Gravest, strategic U.S. issue you’ve never heard of

2010-10-08T05:45:00.000-07:00

Before anyone smiles too broadly about the grain prices, they might want to take a peek at fertilizer prices. If so, they’ll discover, as DTN reporter Russ Quinn recently did, the only price rising faster than either corn or wheat is fertilizer.

“Six fertilizers have seen double-digit increases in price compared to one year earlier,” noted Quinn.

While no one is forecasting a return to the smash-mouth prices — $1,200 anhydrous and $1,000 potash — seen in 2008, no one has ruled ‘em out. After all, higher grain prices seem to breed higher fertilizer prices like tougher times seem to breed more bank robbers.

There are, however, two reasons for today’s upward prices.

First, rising demand because of previous cutbacks (largely due to those lunar 2008 prices), and two years of wet weather that has washed most fertilizer reserves down the creek. Both of these reasons are kicking up demand, squeezing supplies and fueling prices.

The cartels

The second factor is even more basic: cartels.

Like crude oil or water, fertilizer is increasingly a “name-your-price” game where a handful of super ag big boys control production, marketing and, to a great extent, pricing.

Four weeks ago, this space examined the $38.6 billion hostile takeover attempt of Potash Corp. of Saskatchewan, a Canada-based firm that controls 30 percent of the world’s potash production, by BHP Billiton. The deal remains in limbo.

While the wooing continues, BHP continues to claim that, if it wins Potash, it will take the firm out of Canpotex, the cozy export cartel between Potash and its two biggest North American competitors, Mosaic and Agrium.

Think about that for a second. BHP pays $38.6 billion for a company that has a third of the world’s potash reserves and a marketing plan — built largely on an export cartel — that has delivered a return on investment of 40 percent or so over the last three years and it’s gonna’ drop that incredibly profitable formula for something better?

What’s better than a 40 percent rate of investment and an export cartel?

Phosphorus vanishing

The phosphorus market, says C. Robert Taylor, the Alfa Eminent Scholar and an ag economist at Auburn University.

Taylor spent most of the past year examining the global phosphorus market and says that it “is the gravest strategic issue facing the United States that you never heard of.”

The severity of a phosphorus shortage in the next 20 years — at current usage rates, the U.S. supply “will be exhausted in 15 to 30 years” — might change priorities to “flip from one that revolves around… oil reserves to one based on who owns, and controls, phosphorus reserves.”

Even more worrisome, notes Taylor, is that Morocco and China hold 60 percent of the world’s known phosphorus reserves while the U.S., South Africa and Jordan hold most of the rest.

Wisely, China, “has imposed a 100 to 175 percent tariff to curtail phosphorus exports, yet the U.S. continues to export to China. Troubling, ain’t it?” asks Taylor.

Moreover, “Trade in phosphorus is dominated by three corporations,” he continues, “Mosaic (Cargill), Potash Corporation of Saskatchewan and OCP, a Moroccan-sanctioned, privately traded monopoly.”

Gee, two of the same key players as the potash market. Hmm, maybe BHP wants Potash Corp. more for its phosphorus and the cartel than potash and the other cartel.

Either way, there’s little doubt why the fertilizer kings are whacking you with higher prices now: Because they can.

Ukraine imposes quotas for grain exports

2010-10-07T12:46:00.000-07:00

Worldgrain reports the government of Ukraine accepted the decree on imposition of quotas for exports of grains from Ukraine in order to support the food security of Ukraine, declared Gregory Kaletnik, the head of the relevant committee on agrarian policy and land relations issues of the Verkhovna Rada of Ukraine, APK-Inform said on Oct. 6.

According to Kaletnik, acceptance of the decree will completely secure the requirements of the country in forages, and provision with bread products.

Market participants also said that the Cabinet accepted the decision on imposition of quotas for grain exports. The government is discussing the order of quotas distribution, including the variant of selling the export rights through auction trading.

Previously Nikholay Azarov, the prime minister of Ukraine, entertained the possibility of imposing a grain export quota system in Ukraine. After receiving the final data on grain stocks, the government planned to make a decision concerning the accepted volumes of grain exports.

Also, during the visit to Japan, Boris Kolesnikov, the vice-prime minister of Ukraine, announced that Ukraine would possibly impose grain export limitations. He said Ukraine should sell the grain export quotas through the auction.

Ag Exports at a Tipping Point

2010-10-07T05:45:00.000-07:00

DTN's Marcia Zarley Taylor reports on the precarious world stock situation -- particularly for corn -- could be the norm for global agriculture over the next decade, not the exception, speakers told 600 attendees at the annual Soya and Oilseed Summit being held here this week. But that fine balance between supply and demand spells good news for grain prices long-term and U.S. producers who act as the world's shock absorber in times of scarcity.

The world is used to turning to the U.S. in times of grain shortages and in order to keep fulfilling that role a world-class transport system is necessary. "The world is one short crop away from real tension in supply and demand," said Soren Schroder, CEO of Bunge North America when outlining his five- to 10-year vision for global ag exports and U.S. competitiveness. "God forbid we have one [short crop] in this country."

Not only could global corn stocks reach the tightest levels since 1995-96 this season, but USDA and other experts have consistently underestimated demand for soybeans in four out of the past five years. Some analysts believe that will set the stage for another acreage battle between those crops in 2011, much as it did in 2008.

Earning a reputation as a reliable export supplier sounds obvious, but consistent U.S. grain and soybean production has been critical to food security three times in less than a decade, Schroder added. He cited the U.S.'s ability to fill gaps when drought hit Argentine soybeans last year, Australian wheat in 2007/08 and the latest catastrophic damage to Black Sea wheat production this season. He expects current U.S. corn exports to match the 2007/08 record of 61 million metric tons due to surging global demand and the shortfalls in Former Soviet Union feed wheat supplies.

"The U.S. will increase its share of global exports over the next decade in corn, soybeans and wheat," Schroder said, adding that strains like the Black Sea region's 2010 drought could be the norm given shrinking stock levels globally.

Fueling this demand is that between 2000 and 2030, the world will add 770 million people to the middle class who earn $10 to $20 per day. That's the income segment that will spend more of its budget to improve its diet by consuming more meat, Schroder noted.

Bunge's Schroder expects China to boost net corn imports significantly, perhaps reaching 14 MMT by 2019-2020, up from nothing prior to 2009-2010. But instead of a gradual increase in demand, he sees the country's needs ramping up to possibly 10 MMT "very quickly" between now and 2015. Most of that new demand will need to be filled by the U.S. since its corn technology and infrastructure give it a competitive advantage in moving large volumes of grain to port.

Mike Steenhoek, executive director of the Soy Transportation Coalition, said he feels like "we're attaching a garden hose to a fire hydrant" given the volumes of grain and oilseeds that will be needed to meet world food demand.

At the moment, Americans aren't the world's lowest cost producers at the farm gate, but gain on Brazil and Argentina in low-cost transport, taxes and port handling. For example, Steenhoek says it cost $64.27 per ton to ship soybeans from Davenport, Iowa, to Shanghai, vs. $138.03 per ton from Mato Grosso, Brazil to Shanghai. That gives Americans almost $100 per ton advantage, when other costs are counted.

But no one in the grain industry is taking that advantage for granted. Some road and port improvements in Brazil could shave $30 per ton off Mato Grosso's export cost within the next three years. Meanwhile, parts of that U.S. infrastructure are fraying and in critical need of investment, Schroder and Steenhoek emphasized. More than 1,500 U.S. river barges have been taken out of service in the last decade while trade volumes grew, replaced by more efficient capacity. But the bottleneck is the nation's river locks which average 60 years of age, 10 years beyond their design life. Several on the Ohio River have experienced mechanical failures recently, Steenhoek added.

"The American river system needs investment and lots of it to do what we need it to do in the next 10 years," Schroder said. What's more he sees a need for more storage so both hemispheres can use rail systems year round, rather than congesting traffic just at harvest.

Prices will have to be above the historical average to meet the expected surge in global demand, Schroder added. "There aren't enough stocks on hand to match this growth cycle."

"Everyone feels a little bit on edge. With current stock levels [of corn, wheat and soybeans], we're only one crop away from real price pressure. And the buffer to match demand is getting smaller," Schroder said.

Oregon-Idaho Grains Convention

2010-10-06T10:31:00.000-07:00

The Idaho Grain Producers Association (IGPA) and the Oregon Wheat Growers League (OWGL), along with wheat and barley producers from throughout the Pacific Northwest will converge upon the Doubletree Lloyd Center Hotel in Portland, Oregon for this year’s Oregon-Idaho Grains Conference. The theme of the December 1-3 Conference is “Keys to Success – Partnerships, Education and Networking”.

The wheat and barley industries in Idaho and Oregon are undergoing many changes and continual challenges due to a number of issues including: increased input costs, crop insurance reforms, extreme volatility in the global grain marketplace, radical changes to federal farm policy, and increased regulatory pressure on farming operations. These topics among many others will be addressed by a wide variety of top notch speakers.

Keynote speakers for the Conference include:

Jim Miller, USDA Undersecretary for Farm and Foreign Agricultural Services.
Undersecretary Miller oversees the administration and operations of federal farm payment, trade, and crop insurance programs for the U.S. Department of Agriculture. Mr. Miller served as president of the National Association of Wheat Growers (NAWG) in 1987. He will discuss the development of the 2012 Farm Bill and the USDA’s administration of today’s top farm priorities.

U.S. Senator Larry Craig (Ret.), Idaho
With a combined 28 years in the United States Senate and House of Representatives, Senator
Larry Craig became recognized nationally as a voice of common sense advocating for conservative solutions to problems of our nation. A specialist in issues specific to the West, Senator Craig will provide his insight into the congressional elections results, including farm, energy, and environmental policy.

Damian Mason, Humorist & Entertainer
Keying off the theme, “Humor for the Heart of Agriculture”, Damian Mason has been a professional speaker, corporate event entertainer, and author since 1994. Damian brings his quick wit and a willingness to glean humor from all sources.

The public is welcome and encouraged to participate in the Conference. Full and single-day registrations are available. The annual Conference provides a terrific opportunity for the public and the agriculture industry to engage in meaningful dialogue regarding the top issues facing the grain industry.

Conference registration and full details can be accessed at www.idahograin.org or by contacting the IGPA office at (208) 345-0706.

Is it fair for land-grant universities to make deals based on their research?

2010-10-05T08:41:00.000-07:00

Columnist Ed Lotterman discusses the history of Land Grant Universities, their research contributions and future funding sources.

Substantial proportions of the cost of running land-grant universities like the University of Idaho still come from state and federal government, although the proportion is dropping in most states. Given this public funding, should these universities give away new technology they develop, or should they commercialize it in a way that maximizes their income?

The land-grant system has been facing that question for well over a decade now, but in the face of further declines in government funding, the issue is increasing in importance. Here in my home state of Minnesota we have what may seem like a brouhaha in a bushel basket over how the university is commercializing a new apple it developed. But it has important implications for the way we pay for and perform research and disseminate new technology in an era where taxpayers are less willing to foot the bill.

The specific issue is that university researchers developed a new apple, the SweeTango, that promises to be a big commercial success just like the Honeycrisp, one of its parent varieties also developed here 35 years ago.

The current controversy stems from the fact that the university signed an exclusive agreement with the state's largest apple grower to commercialize the new apple. That company in turn formed a marketing cooperative of 45 growers in five states and two Canadian provinces to grow and sell it.

Other orchards in the state also can grow the apple, but they face limits on how many they can grow and how they may sell the fruit. Some of these growers have filed a lawsuit alleging the exclusive deal violates federal and state laws and run counter to the historic mission of the agricultural research and extension system.
That system, consisting of land-grant universities, agricultural experiment stations and the federal-state-county cooperative extension service, has added tremendously to the wealth of our country over the past 148 years, belying the now-commonly held but erroneous view that government cannot create wealth.

Framers of the U.S. Constitution recognized that it was important to promote “the progress of science and useful arts” and, in Article 1, Section 1, gave Congress the power to issue patents and copyrights. But 70 years later, it was clear to many that even with these legal incentives to innovation, a free market would not produce economically optimal levels of technology research and dissemination. And so Congress passed the Morrill Act granting federal lands to states to fund colleges of “agriculture and the mechanic arts.” Ongoing federal funding for agricultural research and extension eventually followed.

All this took place before any formal economics of research and technology transfer. But these actions were fully congruent with modern theory. Much scientific research is what economists call a “public good.” That means without government action, it won't be produced in sufficient quantities for an economy to reach optimal efficiency.

This was particularly true for agriculture, because unlike for patentable machinery, it is impossible to keep new varieties of plants or new farming techniques from spreading to everyone. In the 1870s, if Corliss designed a better steam engine or Singer improved the sewing machine, these companies could get patents that allowed them to reap financial benefits from their research and engineering. But before the development of hybrids whose seeds did not reproduce the parent plant, any seed company that developed a new variety of corn would be unable to prevent corn growers from passing seeds from their crop on to other growers.

In any case, government support of agricultural research and extension fostered productivity growth that greatly aided overall economic growth in our country, just as it is doing for Brazil right now. Federal and state funds supported teaching, research and extension with new technology made available to all at no cost.
When we finally got around to funding basic and applied research in physics, chemistry and other fields, largely as a result of World War II, the Cold War and the space race, we found this also boosted productivity and economic growth. So did government funding of biomedical research. Our economy would have grown faster if we had started such government funding earlier.

But things have changed. We no longer are willing to fund many sorts of research at past levels. Some of this is justified by changed circumstances. Once corn was hybridized, farmers could not save their own seed for replanting; the private sector took over much corn breeding because it could charge enough for superior varieties to recoup research costs. The same is true for some genetically modified plants. But taxpayer reluctance to support the effort is another reason for the funding cuts.

This puts land-grant universities in a bind. The local university has more than a century of experience developing fruit varieties for cold regions. No private company matches that, and it's unlikely a private firm would spring up to tackle the task if the university terminated its program. The same is true for its research on wheat diseases and myriad other problems.

Changes in patent law allow developers of plant varieties to charge users for improved genetics. But once public institutions that still receive state and federal funds start to charge for technology they produce, questions of fairness inevitably arise that would not apply in transactions between two private companies.

USDA Announces 2011 Projected Crop Prices

2010-10-04T05:45:00.000-07:00

Growers who will purchase crop insurance for the 2011 planting season now know their basic level of coverage.

The USDA Risk Management Agency has announced the 2011 projected price for winter wheat and barley, fall canola and rapeseed and the Malting Barley Additional Value Price.

Winter wheat is projected at $7.12 a bushel. Winter barley is projected at $3.91 a bushel. Fall canola is projected at $0.183 per pound. Fall rapeseed is projected at $0.208 per pound.

Local Wheat Prices Mixed This Week

2010-10-01T09:17:00.000-07:00

Local wheat prices were mixed this week: SWW ranged from 10 cents lower to 10 cents higher; HRW ranged from 16 cents lower to 2 cents higher; and DNS ranged from 3 to 36cents higher.

U.S. wheat export sales last week for MY 2010/11 were well above trade expectations at 950.3 TMT, but were offset by a 490.5 TMT cancellation for MY 2011/12. Current marketing year sales were up 96% from the previous week and 7% from the prior 4-week average. Export shipments last week totaled 918.6 TMT, up 5% from the previous week and 40% from the previous 4-week average.

The EU approved 527 TMT of wheat export licenses this week, bringing their cumulative wheat export licenses for the marketing year to 5.3 MMT, compared to 4.2 MMT for the same period last year. Some traders are speculating that EU may be sold out of milling quality wheat stocks by the end of December.

The Buenos Aires Grain Exchange has pegged Argentine wheat production at 7.9 MMT, due to current dry conditions, compared to USDA’s current estimate of 12 MMT. Egypt purchased 220 TMT of hard wheat from the U.S. this week.

Exporter Wheat Supplies Meet Global Demand, But Prices Surge

2010-10-01T08:44:00.000-07:00

Wheat stocks in traditional exporter countries, (Argentina, Australia, Canada, EU and the United States), while lower than last year, are still the second highest in 5years. Ending stocks are larger this month for several reasons; 1) expanded supplies in Canada, and 2) quality deterioration in the EU means fewer exports but higher wheat prices increase domestic substitution of other grains in feeding. On the other hand, stocks are expected to decline 1.4 million tons in the United States due to increased export demand.

Wheat prices have surged 65 percent since the beginning of July, driven mostly by market uncertainty over supplies from the Black Sea region. The wheat crops in both Russia and Kazakhstan have been devastated by drought, while the crop in Ukraine also suffered from adverse weather conditions. Russia’s export ban and Ukraine’s export slow-down, combined with production shortfalls, have created uncertainty and contributed to market volatility. However, prices are still well below the record average price of $368/ton, reached in 2007/08.

Wheat Production Reported Down 2% From August

2010-09-30T08:51:00.000-07:00

USDA made some small changes in its August forecasts of wheat production in the small grains summary released in its Sept 30 Small Grains Summary Report.

All wheat production in 2010 is now estimated at 2.224 billion bushels, down 2 percent from the August forecast but still slightly above 2009 production. All winter wheat production is pegged at 1.485 billion bushels, HRW at 1.018 b bu, SRW at 238 million bushels and white wheat at 229 m bu. Other spring wheat production increased to 627 m bu, up from 584 m bu in 2009, and durum production totaled 111 m bu, compared to 109 m bu a year ago.

Barley is another small grain in production decline. USDA estimated production at 182million bushels, down 20 percent from 2009, even though average yield is projected at 73.6 bushels an acre, up slightly from last year. Like oats, the barley acres harvested were down 21 percent from 2009, the lowest level since 1882.

U.S. Wheat Exports Highest in 20 Years

2010-09-30T08:26:00.000-07:00

USAgNet reports the 2010 crop year is turning out better than expected for many U.S. producers, due to expanding demand for U.S. wheat which is pushing prices higher. USDA is currently projecting exports to reach 1.25 billion bushels, up more than 40 percent from the very low 2009 level and similar to 2007 when exports reached 1.26 billion. Still many analysts feel the latest estimate is conservative and anticipate final exports could rival the 1992 level of more than 1.35 billion.

As of mid-September, of U.S. wheat sales have reached 570 million, up nearly 60 percent from last year, and ahead of the pace needed to reach USDA's goal. Hard red winter and hard red spring have been the biggest benefactors so far. Hard red winter sales are at 265 million bushels, compared to only 125 million a year ago, as they have gained the most by the shift in demand from the Russian export ban. Recently, more competitive prices from French wheat into North Africa and some pullback in other markets, has slowed the weekly sales pace for the U.S., but demand is expected to remain as strong as our rail and export capacity allows.

The U.S. achieved strong yields nationwide on the 2010 crop and overall grade parameters on the hard red crops are high as well, despite below average protein levels on both the winter and spring crops for a second consecutive year. Comparatively, U.S. protein levels are still at the high end of the world wheat mix. USDA's latest production estimate is 2.26 billion bushels, about 50 million bushels higher than 2009, despite nearly 2 million fewer acres. A record national yield estimate of 46.9 bushels per acre is 2 bushel higher than last year. The stronger production and large carryover supplies from 2009 will push available supplies in the current marketing year to 3.3 billion bushels, up from 3 billion last year. Imports are expected to fall to 100 million bushels, compared to 119 million last year, and are likely to drop further, on weaker demand from U.S. millers for Canadian wheat due to a stronger Canadian dollar and a sharp drop in anticipated Canadian quality.

Total demand for U.S. wheat in the 2010 marketing year could exceed 2.4 billion bushels, higher than production and imports, supporting a net decline in year-end inventories. Domestic use is expected to grow to 1.19 billion compared to 1.14 billion last year. Food use accounts for 940 million bushels, up from 917 million in 2009, and feed use should rise marginally to 170 million bushels, compared to 149 million last year.

Year end inventories at the end of May 2011 will remain large at 902 million bushels, compared to a mere 306 million at the end of May 2008, but it is certainly more supportive to prices than earlier projections which had U.S. inventories exceeding 1 billion by the end of the marketing year. Average producer prices are expected to range from $4.95 to $5.65 per bushel, compared to $4.87 last year. Higher protein hard red wheat and higher grades of durum will average more, but the rise in world wheat prices has benefitted all classes. This should make for a strong profit year for most producers, especially when combined with above average yields.

Chicago wheat futures Wednesday slipped to 2-month low

2010-09-29T13:54:00.000-07:00

Xinhua News Agency reporsts that Chicago wheat futures Wednesday slipped to 2-month low thanks to improved condition for wheat planting in world's major producers. Soybeans also saw further drop while corns rallied on increased demands.

December wheat fell 0.2 cents, or 3.2 percent, to 6.835 U.S. dollars per bushel. November soybean shed 11 cents, or one percent, to 10.99 dollars per bushel. December corn gained five cents, or one percent, to 5.05 dollars per bushel.

Traders said the ongoing fundamental pressure for wheat mainly comes from improved conditions for winter planting in Russia and U. S. as well as favorable growing conditions in Australia and Argentina

According to weather forecasts, some regions in the west and south of Russia may enjoy 0.2 inch of rainfall on Thursday and eastern Ukraine may get one inch by Oct. 1

Gasoline climbed to a two-week high as a U.S. government report showed an unexpected decline in supplies while manufacturing accelerated for a second month in China, the second-biggest oil consumer. The rally in gasoline will help boost ethanol demand and usage of corn.

Hunger to Become Key Issue in Global Politics

2010-09-29T13:18:00.000-07:00

The prices of wheat and other agricultural commodities have risen yet again, following the already significant price increases of 2007 and 2008. According to the Humboldt Forum for Food and Agriculture, these are the early indicators of a latent food crisis, which will hit the world within the next ten years.

"If no decisive action is taken, the prices of key food commodities are likely to be 50 to 100 per cent higher by 2020 than they were at the turn of the millennium. This would dramatically increase the level of hunger and malnutrition, around the world," says Harald von Witzke, president of the Humboldt Forum for Food and Agriculture, an international think tank, headquartered in Berlin, Germany.

Over one billion humans are already malnourished. Every day, 16,000 children die as a result of malnutrition. Even a moderate increase in the price of food would significantly worsen the nutritional status of the poor, who typically have just $1.25 per day or less in purchasing power, with approximately 75 percent of that dedicated to food. This serious situation is set to worsen dramatically as our food needs look set to double in the first half of the 21st century.

According to von Witzke, sustained high food prices would not only lead to food riots, as they did in 2007 and 2008. They also have the potential to significantly increase international migration away from food insecure countries with agriculture becoming a key industry. "The world is running out of time. Both the poor countries and international development assistance have to take swift and decisive action. The neglect of agriculture must end."

Von Witzke's recommendations include investing in agricultural infrastructure and education, and making mineral fertilizer, cropping protection and modern seed varieties available to farmers in poor countries.

Big Equipment Purchases Blessed in New Tax Legislation

2010-09-28T09:49:00.000-07:00

DTN news reports a bill approved by Congress in late September revives the popular 50 percent bonus depreciation rule for new equipment that had been part of the emergency stimulus package in 2008 and 2009.

Farmers could harvest sizable tax write offs in a new small-business law, giving extra incentives for end-of-year equipment and truck purchases. The U.S. House approved the legislation Sept. 24, following Senate action earlier this fall, and President Barack Obama signed it into law Monday.

In an effort to jumpstart the economy, Congress raised the threshold on Section 179 expenses from the current limit of $250,000 to $500,000 for tax years beginning in 2010 and 2011. The terms apply to both new and used equipment.

In the past, this deduction phased out as eligible purchases exceeded $800,000, but the new threshold was raised to $2 million. With commodity prices rebounding, and crop yields relatively good, some farmers may be able to capitalize on the extra tax generosity. "Now a lot of grain can be reported as farm equipment on the tax return," said CPA Andy Biebl, a principal with LarsonAllen in Minneapolis and DTN's tax columnist.

The law also revived the popular 50 percent bonus depreciation rule for new equipment that had been part of the emergency stimulus package in 2008 and 2009, but the deal won't last long. The new legislation retroactively extends the 50 percent bonus back to qualified property acquired and placed in service since Jan. 1, 2010, but before Jan. 1, 2011. "This is supposed to be an incentive for taxpayers to buy equipment, but a lot of us can't figure out how effective that will be given that we are here in the last days of September," Biebl said. "It's a sign of the desperation out there."

New vehicles under 6,000 pounds also get a boost. The first-year deduction for a new auto will move from $3,060 to $11,060 and for a light truck from $3,160 to $11,160. Used vehicles purchased during 2010 continue to be subject to the lower caps.

Agricultural attorneys and accountants generally welcomed those new provisions, although with caveats. "Remember, many states do not couple with the federal government on the depreciation provisions," advised Roger McEowen, an Iowa State University agricultural law professor. "The restoration of bonus depreciation and the enhancement of expense method depreciation will further complicate return filing in those states" and may mean producers need to keep two sets of books.

One highly unpopular provision buried in the new tax law applies to landlords. Until now, owners of rental property operating as "passive" investors have been exempt from the requirement to issue a Form 1099 report on payments of $600 or more to service providers. Starting with payments made after 2010, if a landlord spends $600 or more for bookkeeping, painting, repairs or other services, he would be required to issue a Form 1099-MISC to both the IRS and the payee.

The new rules mean "taxpayers with land in the Conservation Reserve Program also would have to file information returns for payments made to farmers that, for example, provide mid-contract maintenance services on the land that totals $600 or more," McEowen said.

When several hundred tax practitioners attending a recent Iowa State University seminar heard the news, they gave a collective groan. "We may see a new industry pop up -- 1099 preparation," quipped Tom Lawler, a Parkersburg, Iowa attorney.

By Marcia Zarley Taylor,
DTN Executive Editor
and
Elizabeth Williams,
DTN Special Correspondent

DC Urban Wheat Field Reaches Members, Public, World Wide Web

2010-09-24T12:48:00.000-07:00

The wheat industry came together this week to show the public and Members of Congress the wheat chain from farm to fork at the second Urban Wheat Field.

Wheat Foods Council, a NAWG sister organization, sponsored the event, supported by wheat producers from around the country who flew in to guide visitors through the exhibit.

The display included a quarter-acre of live wheat in pallets, a full-sized combine, multiple demonstration flour mills, a mobile baking laboratory and areas for trade and nutrition education. The event was staffed by more than 60 growers and 20 state organization staff who came in for the festivities, as well as D.C.-based staff from NAWG and U.S. Wheat Associates and experts in the areas of milling, baking and nutrition.

The Field opened Thursday morning with a reception sponsored by NAWG and highlighted by House Agriculture Committee Chairman Collin Peterson (D-Minn.), who cut the ribbon alongside NAWG President Jerry McReynolds, a producer from Kansas, and Wheat Foods Council Co-Chairman David Moore, a producer from Texas.

In addition to Peterson, Members of Congress in attendance included Rep. Jerry Moran (R-Kan.); Rep. Adrian Smith (R-Neb.); Rep. GT Thompson (R-Pa.); and Sen. Michael Bennet (D-Colo.).

On Wednesday, as the Field was being set up, growers and staff from NAWG-affiliated state wheat grower organizations canvassed Capitol Hill with milling and baking colleagues, holding more than a dozen meetings with Congressional staff members who don't frequently hear from wheat growers. Also on Wednesday, Peterson and House Agriculture Ranking Member Frank Lucas (R-Okla.) sent a Dear Colleague letter to their fellow Members describing the event and urging attendance.

During the day Thursday and Friday, multiple school groups visited the field, guided by wheat producers from around the country.

NAWG officers and other spokespeople also talked with members of the media who visited the Field to get the once-in-a-lifetime shot of a combine in front of the Capitol and with many radio stations and newspapers back home. Media covering the Field in D.C. have included ABC and NBC affiliates, USAToday.com, Agri-Pulse and others.

What Will Happen to Estate Tax is Really Up in the Air

2010-09-23T13:17:00.000-07:00

The Farmer Stockman reports that there's been a lot of talk in Washington about what should happen to the estate tax. But American Farm Bureau Federation Tax Specialist Pat Wolff says that has not translated into action.

"Everyone here in Washington knows that unless Congress acts the estate tax will come back on Jan. 1 with only a $1 million exemption and a top rate of 55%, that's a tax level we haven't seen in 10 years," Wolff said. "Everybody agrees that something needs to be done before Jan. 1 but the debate is over what should happen, how much estate tax relief should be provided."

Since 2001 the estate tax exemption has been increasing as the rate decreased until it zeroed out at the end of 2009. However Congress didn't finish the job 10 years ago, leaving it to this Congress to keep the tax from reverting to pre-2001 levels.

Wolff says there is nothing certain about what Congress will and won't do. However the House of Representatives have already passed a bill that would set the exemption at $3.5 million with a tax rate of 45%.

"The Senate is where everything is gummed up, but the Senate is also where we think we can do better than the House," Wolff said. "Two very important Senators, John Kyl from Arizona and Blanche Lincoln from Arkansas, have agreed and are trying to get the exemption level up to $5 million."

Wolff says Farm Bureau would like to get rid of the estate tax altogether, but there are simply not enough votes to make that happen. Farm Bureau has stressed to Congress that estate taxes can hit farm families harder than other small business owners because 84% of farm assets are real estate-based.

Meanwhile, a new study has been released by the American Family Business Foundation that indicates as many as 1.5 million additional jobs could be lost if Congress allows the Federal Estate Tax to return next year. The report's author, Douglas Holtz-Eakin, former director of the Congressional Budget Office, says with fears of a double dip recession on the horizon, the last thing America needs is for Congress to threaten family-owned businesses with a huge tax increase, an increase that could put more jobs on the chopping block.

The study concludes that if the estate tax were reinstituted at a 65% rate, more than 1.6 million jobs would be lost. If Congress takes no action and the estate tax returns to the rate of 55%, between 1.4 million and 1.5 million jobs would be lost.

USDA Weekly Crop Progress

2010-09-22T05:15:00.000-07:00

Idaho Winter Wheat plantings have begun across the state. Southwest and Eastern Idaho are 36% completed while North and South-Central Idaho are about 15% completed.

Nationally winter wheat plantings were reported for the first time this growing season on Monday's USDA Weekly Crop Progress report.

Winter wheat was reported at 18 percent planted, compared to 22 percent at this time last year and a 21-percent five-year average. Spring wheat harvest increased slightly to 87 percent, 9 percentage points behind average.

"With spring wheat harvest slowly moving along and winter wheat planting behind last year's slow pace, this report should be considered slightly bullish," said DTN Analyst John Sanow.

Crop-killing frost hits Western Canada's wheat and canola fields

2010-09-21T08:41:00.000-07:00

The Vancouver Sun reported frost reached major wheat and canola growing areas of the Western Canadian province of Alberta Friday, likely killing immature crops and lowering their quality, but it spared most of the country’s biggest crop areas.

The killing frost, which Environment Canada said looks to repeat in a broader area on Friday night, threatens to exacerbate market jitters about global wheat supplies due mainly to severe drought in the Black Sea region.

Even though the frost was widely expected, it pushed up ICE Canada nearby canola futures1.4 percent early on Friday, with Chicago wheat, soybean and oat futures following up 1.7, 2.2 and 3.4 percent respectively.

Killing frosts reached north-central areas of Alberta that usually produce one-sixth of Canada’s canola and almost one-fifth of its spring wheat. But while the frost devastated some crops, many of those that absorbed the coldest temperatures were already mature enough to withstand much of the damage, said Stuart McMillan, crop and weather analyst at the Canadian Wheat Board, which markets Western Canada’s wheat and barley.

“I don’t want to sound the alarm bells to all the customers yet because there’s still going to be reasonable number of (high-quality) red springs and durum produced here,” he said.

Canola crops in the worst-hit regions are also less vulnerable to damage, said Murray Hartman, oilseed specialist for the Alberta government.

“It would be significant damage but it’s not extensive.”

Frost kills plants when temperatures fall below minus 2.2 degrees Celsius (28 degrees Fahrenheit). Temperatures reached several degrees lower than that level in many parts of Alberta for several hours.

The killing frost is right on time for Western Canada, however excessive rain this summer delayed crop growth and held the harvest to its slowest pace in six years, leaving immature plants vulnerable to frost damage.

Canada is the top exporter of spring wheat, canola and rapeseed and a key shipper of oats.

Vulnerable areas of southern Alberta and most of neighboring Saskatchewan missed the killing frost, said Environment Canada meteorologist Mike Russo.

In Saskatchewan, the top crop-growing province, only Kindersley reached minus 2.2 degrees Celsius or lower. The province of Manitoba did not receive significant frost.

The reprieve in those areas is only temporary, Russo said. Most southern areas of Saskatchewan will likely see temperatures of minus 2 to minus 5 degrees Celsius on Friday night, ending the growing season there. The frost will also likely move into southwestern Manitoba, Russo said.

Canada’s lower-quality crops should support prices of top-quality spring wheat, used in baking, and canola, which is mainly crushed for its edible oil, said Brian Wittal, owner of Pro Com Marketing in southern Alberta.

“The asking price is certainly going to be higher because we’re just not going to have it.”

Fall Wheat Weather Uncertain

2010-09-20T05:45:00.000-07:00

Bryce Anderson from DTN reports that in less than six months, the perception of world wheat supplies has reversed from abundant to borderline tight. Much of that switch is due to significant crop damage in Russia caused by historic drought this past summer.

A continued lack of moisture means that Russia's reduced wheat crop size could last another year. The Russia drought impact was twofold in wheat. First, it reduced available grain for food usage. Secondly, since much of the wheat grown in fields around the Black Sea is used for livestock feed, the drought shaved away part of the international feed grain supply as well. Thus, the Russia drought was bullish for the U.S. corn market as well as wheat.

Telvent DTN Ag Meteorologist Joel Burgio began tracking the Russia drought in April when he first identified Russia as an area of dryness. Since mid-June, Burgio saw the area turn progressively drier and hotter, which led to the sharply lower harvest.

"Just look at August," Burgio said. "Saratov in the Volga Valley had only one millimeter of rain -- 35mm below normal. Its average temperature was almost 15 degrees Fahrenheit above normal."

To make matters worse from a production standpoint, Burgio said September is bringing very little rain to the central Russia wheat belt. This lack of rain severely hinders planting of next summer's wheat crop, because of a lack of soil moisture to germinate the crop.

"We may see some scattered showers in the Volga Valley, but that's a skeptical chance," Burgio said. "Also, we have to remember that a chance for one rain event doesn't break drought, nor make the winter wheat crop. They've got a long way to go before they're out of the woods."

WHEAT MARKET ON EDGE

The Russia wheat moisture woes -- and the potential for the dry pattern to remain through the rest of this fall -- mean that the world wheat market will be on edge for a few months.

"Out of all the grains, wheat remains a true global commodity," said DTN Analyst John Sanow. "While supplies remain sufficient to meet current needs, the planting delays in Russia and the former Soviet Union will be watched closely," Sanow said.

Elsewhere in the global wheat scene, Argentina's wheat crop has benefited from some contra-seasonal rains in late August; and Australia's eastern wheat areas have benefited from a La Nina event in the Pacific Ocean. La Nina is the term used to describe an ocean temperature trend which is below normal and has a trade wind pattern blowing east to west.

"Australia has had a very typical La Nina relationship so far," Burgio said. "The eastern wheat belt is doing quite well. The only possible problem is that it's been too wet and on the cool side recently. This trend could slow down development. And West Australia could see some wheat losses due to dryness, but the eastern rains are making up for that."

Other major wheat areas are at least holding their own. Argentina's crop is benefiting from some surprising later-season rain. U.S. spring wheat harvest is going well. Canadian wheat producers have a slow harvest, but have avoided a complete crop failure despite an unfavorably wet and cool start to the season last spring. Plus some of the best hard red winter wheat production areas of the Southern Plains in the U.S. have favorable soil moisture for planting the crop which will be harvested in 2011.

Even with these countries' assistance, however, wheat supplies promise to be a question for some time.

"The commercial side of the (wheat) market seems nervous, indicated by the inverted deferred futures spreads in the Chicago, Minneapolis and Kansas City markets," said Sanow.

Farm Input Costs Going In the Wrong Direction This Year

2010-09-17T10:29:00.000-07:00

News of improved farm income numbers also reflect a rise in inputs.

While recent farm income reports showed a definite rebound over the last year, according to USDA Chief Economist Joe Glauber one farm income related statistic that also increased should not be taken as a good sign: the price producers paid for inputs.

"Certainly as the world economy has come back we've seen oil price rise again and that's had some effect," Glauber said. "And of course on the input side if you are buying feeder cattle or other sorts of things your costs up on that side as well."

Glauber says several categories with in the 2010 input forecast reflect an opposite trend from last year, especially when it comes to oil.

"In terms of cost side I think something buried in those numbers, we see that fuel costs are up about 22% from 2009," Glauber said. "So we saw those big drops in fuel prices, that was at least the one good news in the 2009 numbers, but they are up again."

Long-Range U.S. Wheat Export Prospects Rosy

2010-09-16T05:45:00.000-07:00

Pat Hill, DTN Markets Editor talked with Vince Peterson, U.S. Wheat Associates Vice President of Overseas Marketing for his perspective on the prospects for this year's exports, and what may lie ahead -- important questions for producers who are deciding how much winter wheat to plant in the coming weeks.

Peterson, who is presently in Brazil, responded by email.

DTN: U.S. wheat exports have averaged 27.7 MMT in the past 10 years, and only in 2007/08 did exports total 34 MMT. Is this jump in exports this year a one-off deal or the start of stronger long-term demand?

Peterson: This is a question that actually has a little more to it than just what sits on the surface with the elevated export year's numbers. Our ability to export and substantially increase exports over time is, at its root, subject to what our long-term prospects might be for wheat production.

This year, and probably next year for that matter, we have an export ability which has been enhanced. That is because growers have not been particularly happy with wheat prices the past two years and have, in many cases, chosen to store and carry wheat, rather than sell it. That put us into a large carry-in stock position (26.5 MMT or 973.6 million bushels, more than three times what were carried into the 2008 crop) plus a larger-than-average wheat crop (62 MMT this year versus about 58 MMT on a 10-year average).

In the end, with "bonus" stocks from Canada, we started with a total supply topping 90 MMT at the beginning of the year.

We use 32 MMT (on average) for food, feed and seed each year, so for this year, we can export 34 MMT (USDA's current number) or even more and only drop our ending stocks down by about 3 MMT (more if exports exceed 34 MMT). In this case, we'd still start 2011/12 (June) with another very adequate [supply], particularly as there is an incentive for farmers to plant more wheat based on current strong prices (this is especially true with soft red winter wheat). At the moment, I'd say the odds are quite good for the U.S. to have another very good export sales pace in 2011/12.

But, in the future, if we produce ongoing "average crops" of 58 MMT, use 32 MMT domestically and want to maintain stocks at a constant level, then we can expect to export about 25 to 26 MMT per year. To do more consistently means that we have to increase production beyond our "averages." Filling unexpected supply gaps as we are helping do with the Russian export ban will draw down stocks and create price volatility that is not pleasant for our customers or our farmers.

I am absolutely convinced that the world trends will be steadily increasing: a higher total demand for wheat and a demand for higher total world trade as we move out well out into the future. That means the opportunity exists for continually expanding exports from the U.S. as far out as we might imagine.

The problem with projecting that is that the U.S. share of expanding trade will depend upon our producing wheat in ever increasing quantities to match that demand and trade growth. Our 10-year production trend might be up very slightly (1 percent to 2 percent), which has been aided by some better yields in the more recent years as opposed to some of the drier times just a few years back. The fact is that wheat land area in the U.S. (and world-wide) has been decreasing for decades. Our (and the world's) ability to keep up with world wheat demand has only been achieved due to varietal improvements from traditional plant breeding and better, more efficient, farming practices that allows growers to increase yields and maximize productivity on fewer acres.

But the answer to the future will depend upon whether the U.S. (and most other origins) are able to buy land area back from corn and oilseeds. And if so, how will we do it? Higher prices are one answer, and that one is playing out this year. But long term, advanced technology almost has to play a part. Traditionally bred wheat has produced yield gains, but those are running far behind corn and oilseed gains (and therefore profitability), which have been able to take great advantage from biotechnology.

DTN: Ahead of the report, there were news stories speculating about further increases, with some mentioning prospects as high as 37 MMT. Do you see that as possible or likely? What might it take for the U.S. to have that much business?

Peterson: Yes. Ahead of the last report, some forecasters were expecting an increase in USDA's forecast to 34 MMT -- and they hit that one right on the head. At the same time, almost from the day the Russian government imposed the embargo on all wheat exports beyond August 15, forecasters have been bantering about the potential impacts of that event. I have seen projections ranging to as much as 36 to 37 MMT, and frankly, cannot discard that as out of the range of the possible this year.

But the Russian embargo is not the only reason for looking at the potential for higher U.S. export numbers this year. Germany suffered severely from rains throughout harvest. It would appear unlikely that little more medium and higher quality (protein) milling wheats will be exported from Germany. In fact, we have seen reports of French milling wheat moving to Germany and German feed wheat moving elsewhere in the EU. German milling wheat has been sold in recent years to many Middle East and African markets -- and it's possible that some advanced sales may have to be filled from other origins. The demand for high-protein North American wheat and durum in the EU to compensate also appears to be growing daily (U.S. spring and durum sales to the EU and positioning in the St. Lawrence has already reached 900,000 MT by Sept. 10 versus 600,000 MT total in the last marketing year).

While carry-in stocks were higher than expected and USDA forecasts higher production, the Canadian crop, which was already known to suffer in volume following the wet, late planting last spring, is now being plagued by rain (which is also slowing harvest in Montana and North Dakota). One [recent] weather forecast called for rain in Saskatchewan in the next 7 of 9 days. A further loss of good-quality milling wheat in the world supply total continues to support the U.S. export position this year.

The better crop in Eastern Australia seems to be about the only other bright spot this year, and Australia's ABARE pushed up its production forecast recently.

At any rate, there are still some variables to determine and play out, but we are still very early in the year. Very early. The last time the Russians pulled out of the export market (2007/08, when the U.S. did 34-plus MMT of wheat exports) Russia didn't impose prohibitive export taxes (which effectively closed exports) before they had already sold and exported 12 MMT for the year... this year they pulled the plug after something over 3 MMT.

India expects record wheat crop

2010-09-14T09:31:00.000-07:00

India, the world's second-largest wheat producer, said Friday it expects this year's wheat output to total a record 82 million tonnes as the country grapples with a grain storage problem.

India produced a record 80.71 million tonnes of wheat in the 2009-10 crop year, which runs from July to June, despite the worst drought in nearly four decades.
"If there is no terminal heat this year, output is expected to be 82 million tonnes," Agriculture Secretary P K Basu told the Press Trust of India.
Wheat output would be helped by India's bountiful monsoon, which has filled reservoirs to the brink, ensuring plentiful irrigation for the winter-sown crop, he said.

Basu did not comment on media speculation that record output could prompt the government to lift a ban on wheat exports as it grapples with problems storing the 60 million tons of wheat it already has in stock.
India's media has reported large-scale spoilage of grains due to insufficient warehouse storage space.

India had to import about seven million tonnes of wheat in 2006 and 2007 after poor harvests and has banned exports of wheat since early 2007 to boost domestic availability but now is dealing with a problem of plenty.
The Supreme Court ordered the government in August to distribute excess grain to the poor, saying it was "a crime to waste even a grain of food" as long as people were hungry.

Prime Minister Manmohan Singh replied this week the government would do all it could to provide affordable food to the poor but that it was "not possible in this country to give free food to all the poor people."
Analysts say massive investment is needed to modernise India's food supply chain and sharply reduce wastage.
pmc/bsk

Winter Wheat Harvest Coming to a Close

2010-09-14T07:52:00.000-07:00

USDA’S National Agricultural Statistics Service (NASS) reports that Winter Wheat harvest is near completion across the state. Few pockets in higher elevations are still harvesting. Several reports in North Idaho indicate rain and humidly are slowing cereal grain harvest. Franklin and Caribou county extensions reported frost which may have damaged wheat. NASS reports Winter wheat planting is 9 percent complete at the state level.

September USDA Estimates Confirm More Export Demand for U.S. and Canadian Wheat

2010-09-13T05:45:00.000-07:00

The United States Department of Agriculture (USDA) sees world wheat stocks for marketing year 2010/11 (June – May) increasing slightly in spite of evidence that production estimates for Russia and much of Europe fell again this month. The September USDA World Agricultural Supply and Demand Estimates (WASDE) report included another jump in U.S. wheat exports from 32.6 million metric tons (1.2 billion bushels) in August to 34 million metric tons (1.25 billion bushels). While the increase is somewhat below what some analysts expected, the new forecast is about 40 percent higher than USDA’s initial 2010/11 export estimate. U.S. wheat exports the past four weeks have generally exceeded trader expectations, including three weeks with sales of more than 1 million metric tons (about 36.7 million bushels). USDA’s forecast of average farmgate prices for wheat also increased slightly to $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month.

The report draws its conclusions from more information about the impact of the Russian drought and harvest rains in central and eastern Europe. Production for Russia is lowered 2.5 million tons (about 92 million bushels) based on the latest harvest results for the drought-affected central growing areas on top of the government’s announcement it plans to extend its export ban at least until the 2011/12 Russian crop is harvested. EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields and smaller production drops in other member countries. Although the reduction for Germany is small, the report said persistent rain in August reduced high quality milling wheat supplies, which should also increase demand for U.S. and Canadian wheat. USDA’s forecast for higher Canadian wheat exports (up 2 million metric tons) also factors in new information about higher than expected carry-in stocks and production.

USDA projected global wheat production will decline by 2.72 million tonnes to 643.01 million tonnes, an improvement on the average estimate by traders who saw a total harvest of 641.44 million tonnes. The report estimated world wheat stocks-to-use ratio at 26.8 percent, noted by Reuters this morning to be “well above 20.3 percent seen during 2007/08 when food short shortages and record prices sparked unrest globally.”

Wheat stakeholders should also be watching the U.S. corn supply and demand analysis carefully because bullish reports in the current situation could also pull U.S. wheat prices up. USDA’s forecast appeared somewhat more bearish than some analysts expected. USDA predicted lower stocks (1.1 million metric tons or 40 million bushels) based on increased ethanol use and slightly higher exports and a 1.5 percent drop in its production forecast. However, at 334.3 million metric tons, this would still be the largest corn crop ever produced in the United States.

Russia Lowers Grain Forecast Again, May Sell From Reserves After Drought

2010-09-10T05:30:00.000-07:00

Bloomberg reports that Russia cut again its grain-harvest forecast for this year and plans to sell from stockpiles if domestic prices rise in 2011.

The harvest will be 60 million metric tons this year or “possibly slightly more,” Deputy Agriculture Minister Sergei Korolyov told a conference in Moscow today. His estimate lowered the upper end of the ministry’s forecast, which had been 65 million tons.

Russia imposed a ban on grain exports, which Prime Minister Vladimir Putin said Sept. 2 will last at least until next year’s harvest, after the country’s worst drought in at least 50 years. The heat wave caused the government to slash the grain-crop forecast from the original estimate of 97.1 million tons, the same as last year’s output.

“If after the New Year, prices go up, the government will stamp this out through its intervention fund,” Korolyov said, referring to the 9.5 million tons of stockpiles accumulated in previous years to support farmers. “The government won’t allow prices to rise.”

The export ban, originally enforced from Aug. 15 to Dec. 31 to ensure domestic supplies, may be extended until November 2011, as the country normally completes its harvest in that month, according to Putin’s announcement.

Russian farmers are stockpiling grain, expecting higher prices, Sergei Levin, head of United Grain Co., the state-run trader, told the same conference.

‘Good Harvest’

Farmers may lose money if they hold on to their grain and the government starts selling from stockpiles, he said.

Russia’s next grain crop can’t be good when exports are banned and farmers have no incentive to plant, said Vladimir Petrichenko , an analyst at trader WJ Group.

“They have to allow exports, then there will be good sowing, then there will be a good harvest,” he said.

Russia was the world’s third-biggest wheat exporter in 2009-10 after the U.S. and Canada, according to the U.S. Department of Agriculture.

Russia may need to import as much as 6 million tons of grain in the current marketing year to meet domestic demand, according to Moscow-based researcher SovEcon.

The Agriculture Ministry said Sept. 2 the nation must produce between 85 million and 90 million tons of grain next year to ensure sufficient domestic supply.