News from the Minnesota Association of Wheat
Growers for Wednesday, July 12,  2000

USDA ISSUED ITS SUPPLY AND DEMAND REPORT
USDA released its world supply and demand report this morning. To read the complete report, go to http://www.usda.gov/oce/waob/wasde/latest

KANSAS WHEAT HARVEST NEARLY COMPLETED
Statewide, wheat harvesting advanced to 99 percent complete, compared to 78 percent last year and 75 percent for the five year average, according to the Kansas Agricultural Statistics Service and the Kansas State University Research and Extension Service.

Statewide, an average of 6.0 days were suitable for field work. Topsoil moisture supplies are rated 15 percent very short, 32 percent short, 52 percent adequate, and 1 percent surplus. The subsoil moisture profile is rated 13 percent very short, 31 percent short, 54 percent adequate, and 2 percent surplus.

DRY WEATHER HITS IRAQ AGAIN
For two consecutive years, the farming land of Haditha, northwest of the capital, has witnessed very dry weather with almost no rain at all.

Farmers have abandoned their farms in this town and the surrounding district, once known for its high crop yield. One consequence of the drought, that has depleted fodder supplies and grazing land, is that Iraqi farmers are selling cattle and sheep in large numbers, bringing down the prices of beef and mutton.

"Iraq has been hit by the most severe drought ever recorded in the past 100 years," said Amir Khalil, the U.N. Food and Agriculture Organisation (FAO) representative in Iraq. Khalil said the drought was expected to destroy 75 percent of Iraq's harvest this year.

Statistics on crop production are a closely guarded secret in Iraq. Iraq needs more than three million tonnes of wheat to feed its population of 23 million each year.

AUSTRALIA TO CHANGE THEIR WHEAT PAYMENT SYSTEM TO REWARD FARMERS FOR PROTIEN AND CLEAN WHEAT
According to a local Australian farmer publication, the Australian wheat producer was introduced to a brand new AWB Ltd. pool payment system on Monday that will apply to this season's recently planted wheat crop.  Sources indicate the unnamed system will reward those who produce wheat with higher protein and fewer screenings than are required for the specifications of grades in the past.  Moreover, farmers whose crop narrowly failed to meet the criteria for a particular grade in the past, and who normally would have been subject to a severe discount, will only incur a "small" discount from now on.  Sources suggest the only potential losers in the new system, in terms of protein and screenings, are those producers whose wheat is of such poor quality that the AWB has trouble finding potential buyers for it.  Furthermore, AWB Ltd. officials indicate there are about 50 quality parameters which foreign customers are interested in, but to address all of the factors at the first point-of-sale would be far too complex for growers.  Thus, protein and screenings were the chosen factors due to the relative ease of working within the established guidelines.  Sources suggest, if the system proves successful, the AWB Ltd. hopes to extend the concept to a few other key quality parameters including test weight, moisture, falling number and sprout.  Meanwhile, AWB Ltd. officials indicate this new system is a way to combat the declining quality of Australia's domestic crop and the US' increasing competition in the Asian hard white wheat market.

CANADA URGES U.S. NOT TO BLOCK AG CREDIT TALKS
Canadian Agriculture Minister Lyle Vanclief urged the United States on Tuesday to stop blocking progress in talks aimed at establishing rules for the use of agricultural export credit guarantees.

Members of the 29-nation Organization for Economic Cooperation and Development (OECD) will meet again in Paris next week to work on the issue, Vanclief told reporters after a meeting with U.S. Agriculture Secretary Dan Glickman.

The talks are "stalled now because the U.S. has not been prepared to negotiate," he said. Competitors complain the United States' aggressive use of export credit guarantees gives U.S. exporters an unfair advantage in the world market.

For now, Canada remains concerned about the billions of dollars of additional assistance the U.S. government has provided its farmers in recent years, he said.

The generous aid packages have the potential to distort international trade by encouraging U.S. farmers to produce more than they otherwise would, he said.