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Articles of Interest- Friday, August 16, 2019

Articles of Interest- Friday, August 16, 2019

Podcast: Wheat Associates Hoping for Trade Deal with Japan

WNAX Radio – 08/15/2019

President Donald Trump has asked Japan’s Prime Minister to buy a huge amount of U.S. products including soybeans and wheat. U.S. Wheat Associate’s Steve Mercer says Japan has been and continues to be a lucrative market for U.S. wheat although his request is appreciated. He says Japan is a complex market because their flour millers ask their government to make any wheat purchases they need. He says the U.S. needs a bilateral agreement with Japan because by not being in the CTPP, U.S. products face higher tariffs than the countries in that deal. Mercer says U.S. negotiators understand the needs for U.S. wheat growers and that so far the bilateral talks seem to be going well. 

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IMO 2020 Challenging Wheat Trade Flows in Southeast Asia

S&P Global – 08/16/2019

A change in trading patterns emerged in the wheat market this year as long-haul freight rates got a boost ahead of IMO 2020, which kicks off at the start of 2020. Typically, with harvest pressure from the Black Sea at this time of the year, Australian wheat, which is at the tail end of its marketing year, is pushed to the sidelines, particularly in the Southeast Asian markets, where both the origins compete head-on. In the last few weeks, however, the opposite has been observed in the Southeast Asian feed market, with Australian wheat the preferred choice over and above Black Sea. On July 23 and 24, a major Australian supplier won six feed wheat businesses in the Philippines for September to December shipments as Black Sea was overpriced by $2-$2.50/mt CFR Philippines, after accounting for the 7% import tax. Meanwhile, the US Department of Agriculture has yet again cut its 2019/2020 Russian wheat production estimate by 1.2 million mt to 73 million mt on the back of recent dry and hot weather, which took a hit on winter wheat yields.

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Farmers ‘Profoundly Dissapointed’ by Trump’s Wheat Comments

Capital Press – 08/15/2019

The U.S. wheat industry is reacting with disappointment after President Donald Trump said that Japan, their No. 1 customer, doesn’t really want to buy their grain. According to White House transcripts, Trump made the comments Aug. 13 while speaking about energy during a campaign stop in Pennsylvania: “Many car plants — they’re coming in from Japan. I told Prime Minister Abe — great guy. I said, ‘Listen, we have a massive deficit with Japan.’ They send thousands and thousands — millions — of cars. We send them wheat. Wheat. (Laughter.) That’s not a good deal. And they don’t even want our wheat. They do it because they want us to at least feel that we’re okay. You know, they do it to make us feel good. A White House spokesman directed questions to USDA and the Office of the U.S. Trade Representative. Requests seeking comment were not returned. “The president was on a campaign speech and speaking, as he normally does, off the top of his head,” Chandler Goule, CEO of the National Association of Wheat Growers, told the Capital Press. “What’s most unfortunate, in my mind, is he was sitting here in the last couple months talking about how all our farmers in the United States are doing great, but yet, they’re not and they’re suffering.”

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Industry Leader Jimmie Musick of OK Remains Optimistic About Wheat’s Profitability Despite Market’s Challenges

Oklahoma Farm Report – 08/15/2019

Jimmie Musick, a diversified crop farmer from Sentinel, Okla., currently serves as the Immediate Past President for the National Association of Wheat Growers. In this capacity, Musick attended Wednesday’s joint-meeting of the Oklahoma Wheat Growers Association and the Oklahoma Wheat Commission in El Reno. He took a moment to speak with Radio Oklahoma Ag Network Farm Director Ron Hays during that event to discuss the current state of the ag economy and the impact it is having on farmers, offering some of his insights from his perspective as a national leader within the US wheat industry. “It’s really a challenge with prices right now,” Musick remarked. “We’re having lots of problems nationwide. But, farmers today are very market savvy and they’re very good managers – and I’m a little more optimistic than Kim Anderson is about the market. I think it’s a possibility that we’ll see a little spike in wheat prices.”

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Wheat Farmers Fear Extinction if Snake River Dams are Removed to Help Orcas

KUOW – 08/15/2019

In the southeastern corner of Washington state, wheat travels down the river, while salmon are trucked up around dams on the road. “And taxpayers pay for all of it,” said Sam Mace, with Save Our Wild Salmon. “Isn’t there some option of switching this around,” Mace asked, “the fish on the river and the wheat off the river?” In Western Washington, it could seem like a no-brainer: The orcas of the Salish Sea are hungry, because there are fewer and fewer of the salmon they depend on. Removing the four dams on eastern Washington’s Snake River would help the salmon that use the river to spawn — and thus the whales that eat the salmon. But the view from eastern Washington is different. There, the dams are important to the state’s wheat growers: fourth- and fifth-generation farmers who are worried about their future. Chris Shaffer is one of those farmers. He’s a fifth-generation wheat grower with a 5,000-acre farm near Walla Walla, in the heart of wheat country. He grows a variety of wheat called soft white. “It’ll go into steamed noodles and pastries, cookies, cakes,” Shaffer said. Wheat is one of the pillars of eastern Washington’s economy: the crop brings in $700 million. That’s more than any other, except apples. The vast majority of that wheat gets exported, most of it to Asia. The trick is getting all the wheat to Seattle and Portland so it can get shipped across the ocean. Some of it goes by rail, but more than half of it goes by barge, floating down the Snake River and then the Columbia River to Portland. Without the dams, the Snake River would be too shallow for barges, and Shaffer is worried that rail and truck aren’t good alternatives.

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Source: U.S. Wheat Associates