News from the Minnesota Association of Wheat
Growers for Monday, May 1,  2000

GLICKMAN SAYS EXPORT SALES WOULD INCREASE 2 BILLION WITH CHINA PNTR
Speaking to members of the American Chamber of Commerce in Beijing, USDA Secretary Dan Glickman suggested that failure to grant China permanent NTR had the potential to "badly fracture" already strained US-China relations.  Moreover, Glickman indicated China would likely join the WTO regardless of the US permanent NTR vote, while denying the two-way liberalization of trade would do "nothing" to improve China's human rights situation.  According to a newswire source, Glickman further speculated the US agriculture sector could expect to see export sales to China increase by $2.0 billion per year over the next five years if permanent NTR was passed.  One newswire article quoted Glickman as saying, "Rejecting PNTR as a form of protest against some of the policies of the Chinese government in my judgment is not constructive as it will not protect a single Chinese dissident or increase the wages of a single Chinese worker".

NEW CUSTOMERS FOR U.S. WHEAT
Assisting in the development of growing markets is one of the more exciting opportunities at U.S. Wheat Associates, and it's especially gratifying to see those markets for U.S. wheat take shape. Although Bahrain traditionally buys from the AWB, this year they purchased U.S. wheat.  Kuwait, another AWB customer, bought U.S. wheat for the first time since the 1995 marketing year.  Sudan, as reported in the last edition of the Wheat Letter, has made its first purchase of U.S. wheat in a decade. We also have the first purchase in several years from Swaziland and from Tanzania.

PROSPECTS FOR CHINA'S WHEAT CROP
Weather service sources indicate winter wheat conditions vary widely across east-central China this spring.  Significant plant growth and development is underway in the southern wheat producing areas, with wheat ranging from the boot to heading stage in one area, to mostly in the jointing stage in another area.  Sources suggest precipitation patterns have been inadequate for the provinces of Henan, Shandong, Jiangsu, Anhui and parts of Hubei, while Shandong and Henan have experienced the absolute "driest" conditions this winter.  One newswire service suggests nearly two-thirds of the wheat in China is "suspected" of being irrigated, leaving one-third of the crop vulnerable to dry conditions.  Furthermore, sources speculate continued dry conditions over the next two to three weeks could reduce nationwide production estimates by a few percentage points, but the lack of precipitation in mid-May would have much more far reaching effects.

RESPONDING TO STARVATION RISKS IN ETHIOPIA/HORN OF AFRICA
Eight million Ethiopians are currently at risk of starvation, according to the United Nations World Food Program (WFP). Weather-related famine-like conditions in southern Ethiopia and the Horn of Africa, including Sudan and Eritrea, have intensified, reducing prospects for crop planting and harvesting. If weather and planting conditions do not improve soon, a food aid crisis could spread within Ethiopia and the region. The total anticipated food aid need for the Ethiopians currently at risk is roughly 900,000 metric tons.

The USDA is working closely with the U.S. Agency for International Development (USAID) to respond to the severe drought and the looming humanitarian crisis. As of April 13, USDA has agreements in place to provide more than 288,000 tons of wheat to Ethiopia, both through the World Food Program and directly to the Ethiopian government. It is also providing food aid to other Horn of Africa countries through the WFP. USDA continues to look at requests for additional aid tonnage for Ethiopia.

The U.S. Government's Inter-Agency Working Group for the Horn of Africa recently approved a new appeal from USAID for 175,000 tons of additional Section 416(b) wheat for Ethiopia. This appeal will be considered at the next Food Aid Policy Council meeting. If approved, it is anticipated that this additional wheat will be covered under the 416(b) reserve currently being held for Ethiopia.

USDA LAUNCHES ON-LINE DIRECTORY OF U.S. FOOD AND AGRICULTURAL EXPORTERS
Agriculture Secretary Dan Glickman announced the availability of a new tool in USDA's campaign to increase agricultural exports. The new resource, an on-line directory of U.S. exporters of food, fish, fiber, and forest products, will help potential customers search for suppliers of specific U.S. products.

"Increasing exports is vital to the health of U.S. agriculture, but buyers frequently have trouble finding U.S. suppliers of the products they need," Glickman said. "This directory provides information to help importers find the products they want and promote them effectively to their customers."

Potential buyers can access the on-line directory of U.S. suppliers by logging onto the Foreign Agricultural Service Web site at http://www.fas.usda.gov/buying.html and selecting U.S. Products (Suppliers) On-Line.

WHEAT CROP CONDITION REPORTS AND WHEAT HARVEST REPORT
A newswire service article touts that US winter wheat conditions in Kansas and much of Oklahoma are still considered to be "very good".  It seems favorable crop conditions also exist in parts of southeastern Colorado and eastern sections of north Texas.  Meanwhile, sources suggest dryness concerns plague parts of Nebraska, northeastern Colorado, northwestern Kansas and the west half of north Texas.  Moreover, timely precipitation events are desperately needed in those areas.  Furthermore, sources indicate US hard red winter wheat is in the heading and flowering stage in central Texas, mostly in the boot and heading stages in north Texas and Oklahoma, and in the jointing and booting stage in Kansas.  Furthermore, crop observers anticipate that soft wheat conditions in the Midwest are in good condition, where soil moisture levels are adequate to abundant with temperatures in the mild to warm range.  Northern Plains spring wheat is being planted at a rapid pace, despite some dryness concerns in Montana, South Dakota and southwestern Minnesota.

This year's US hard red winter wheat harvest appears to be underway, as reports file in that US farmers have begun test cutting fields in the extreme parts of southern Texas.  Local observers anticipate low test weights, low yields, but exceptionally high protein content in the first country elevator receipts of new-crop hard red winter wheat.  According to local elevator sources, early indications of initial receipts have shown average moisture content of 10.9%, average test weight of 58.9 LBS/BU (76.77 KG/HL) and protein levels running about 14.5% to 15.0% (12% MB).  One source estimated early hard red winter wheat yields at around 12-20 BU/AC (0.8-1.34 MT/HA).

WHEAT REPLACING GM CORN AND GM SOYBEAN IN JAPAN
Japan, one of the world's most crucial export markets, has started to substitute non-genetically modified wheat in food products in place of corn or soy. Millers are reporting that it has become increasingly difficult to obtain non-GM corn or soy products so they have started to shift to otherraw ingredients.  Nisshin Flour Milling Co., for example, replaced corn starch, soy protein and soybeans powder that it had been using in 24 household products  including Tempura flour and cake mixes  with starch and protein from conventional wheat. Genetically modified wheat is not commercialized in the U.S.

In other GM news, the Japanese government announced that it will be conducting "mandatory safety tests" on genetically modified products before importing them into the country. The ministry said it will monitor imports at its quarantine stations nationwide.

Reactions in the U.S. to this latest announcement have been mixed. "This is yet another stumbling block to trade in biotech products," said economist Rich Pottorf of Doane Agricultural Services Co., a consultant to U.S. farmers. "The damage is not clear, but clearly it's not a positive development."  Larry Cunningham, ADM's senior vice president for corporate affairs.

ALGERIAN PURCHASES OF HRW SIGNIFICANT
In it's first purchase of hard red winter wheat in over a year, the Algerian Cereals Office (OAIC) purchased 75,000 MT of HRW from three different suppliers.  The wheat is intended for blending purposes in an effort to improve the bread making quality of lower gluten wheat imports.

The OAIC had avoided HRW purchases recently because of concerns about potential infestation and what they had perceived to be inadequate American controls.  While European traders lamented publicly that Algeria considered French wheat too expensive, intensive USW efforts also played a role. USW made several trade servicing visits to Algiers in late 1999 and early 2000, sponsored the OAIC quality control chief to the U.S. for training, and discussed infestation issues at length during a recent USW Crop Quality Seminar in Algiers.

AWB, PRIVATE TRADERS IN COURT NEXT WEEK
New England Agricultural Traders, a small private trader organization based in New South Wales is so opposed to the Australian Wheat Board's export monopoly that it is taking the state trading enterprise to court. AWB and NEAT will make first appearances in the Federal Court in Sydney on May 2 in a case which involves AWB refusing to allow NEAT to proceed with the bulk sale of durum to Italy and Morocco.

Sources in Australia report that the case complicates matters for AWB as a new government competition review gets underway.

QUOTES OF THE WEEK
 Just about every newspaper columnist and editorial writer has expounded on their views of the Elian Gonzales situation this week. Washington Post columnist Judy Mann discussed Congressional reaction.

"These are tough times in Cuba, primarily because the United States is continuing its pigheaded embargo instead of normalizing relations with President Fidel Castro."

In the New York Times this week, columnist Thomas Friedman asked "who should own U.S. Cuba policy?"

"One... hopes that now that Ms. Reno has ended the kidnapping of Elian by the Miami Cubans, the other hard-nosed lady in the cabinet, Madeleine Albright, will end the Miami Cubans' kidnapping of U.S. Cuba policy as well. Ms. Albright could start by relaxing the embargo on Cuba..."

While US Wheat Associates, (USW)  heartily agrees that agriculture and medicine need to be exempted from the Cuban embargo, it might be helpful to point out that it will take Congressional action to allow wheat sales to Cuba.