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Highlights from the 2002 Prairie Grains Conference The 2002 Prairie Grains Conference, held at the Alerus Center in Grand Forks, involved the Minnesota Association of Wheat Growers, Minnesota Barley Growers Association, and the Northland Community Technical College (Thief River Falls, Minn.) Farm Business Management Program. Monsanto Official: Most Processed Foods Already Biotech Bozeman said that biotech is already a mainstay in many other applications of people’s lives, including over 130 medicines and vaccines, with hundreds of other pharmaceuticals in clinical trials. Biotech is also used in animal healthcare, environmental cleanup—using microorganisms to clean up waste—and industrial processes; biotech used to reduce the impact of processes in cleaning, textile and paper industries (see table on page 31). He stressed that Monsanto will not commercialize Roundup-Ready wheat—which has been under research and development for about 20 years—until the market is ready for it. When it is commercialized, it would be segregated in a “closed-loop, variety specific system.” The Roundup-Ready wheat would be milled and used domestically, at least for the first few years of its release, he said. Bozeman said that Monsanto and other biotech researchers, public and private, are developing other genetically-enhanced wheat characteristics, including: • Fusarium resistance • Starch modifications for softer bread crumb • Extended shelf-life • Improved mouth feel after freezing and thawing • Improved breakfast cereal crunch/less soggy • Low-calorie bread, biscuits, pasta • Reduced Glycemic Index. Insulin elevated by a food is calculated by a clinical rating system called The Glycemic Index. Bioengineering food, particularly fast foods and snack foods, would transform high glycemic, fattening foods into low glycemic, healthier foods, resulting in desirable health benefits, particularly for diabetics. • Gluten-free wheat to help people with Celiac Disease (gluten intolerance). • HMW glutenins—Enhanced protein for stronger dough and improved bread baking. • Antioxidant wheat. According to Kansas State University, wheat’s antioxidants are important because they combat “free-radicals,” which are charged particles produced within the body that contribute to heart disease, cancer, diabetes, cataracts, even wrinkling. High antioxidant levels help “mop up” free-radicals. Wheat’s antioxidants are found in orthophenols, a chemical component in wheat. Boosting the levels of orthophenols in wheat may also boost the grain’s ability to combat cancer and other negative health effects, by simply including wheat in a daily diet. Expect Mild Winter, Delayed Snow Osborne said that precipitation next summer will depend greatly upon the total snowfall received this winter. Areas that stay drier over the winter are likely to stay on the dry side into next summer. “Otherwise, expect weather next summer to continue to be (turbulent) and widely variable,” he said. There are several long-range weather prediction sources on the Internet, including the U.S. Drought Monitor at the University of Nebraska http://drought.unl.edu/dm/ and the National Weather Service Climate Prediction Center www.cpc.ncep.noaa.gov/ . “Take long-range estimations for what they’re worth, they’re just outlooks, but they do give some idea about what large-scale computer models are indicating about cycles,” Osborne said. “New Golden Age Of Conservation” Despite Bullish Market Conditions, ’03 Spring Wheat Acres May Remain Flat Still, Krueger does not expect spring wheat acres to increase much in 2003. The migration to corn and soybeans will continue in the Red River Valley, and durum and barley will limit spring wheat expansion further west. Hard red winter wheat acreage will be up from a year ago, but cool conditions last fall limited plant development in some areas, and drought in the Plains remains a threat as well. World supply/demand numbers remain favorable for wheat, corn, and soybeans, as grain consumption has continued to increase, while world supply has faltered for wheat and corn and remained flat for beans. World Wheat MMT World Coarse Grains MMT
World Soybeans MMT
Then why haven’t prices responded? Supplies from other sources are a key reason. Demand in the soybean market is tempered by buyers eying the size of the South American crop. China has been exporting corn, and selling it cheaply. “That’s really hurt our business in the Pacific,” Krueger said. In the case of wheat, production shortfalls in the five major exporting regions of the world (U.S., Canada, Australia, European Union, Argentina) has been offset by big jumps in production in Russia, Ukraine, and eastern Europe. “Almost bushel for bushel, the decline in the production of the five major exporters was made up for by production in the Former Soviet Union and Eastern Europe,” said Krueger. “Most of that wheat is not hard wheat, and a lot of it is feed wheat. But the market says it’s wheat, and what they’ve been doing is selling at prices as much as a dollar below U.S. prices, to anybody and everything.” The former Soviet Union in particular has been a market spoiler. Krueger said that their increase in exports since 2000 has been about 600 million bushels—that increase in wheat in the world marketplace is nearly the same as the amount of hard red winter wheat produced in the U.S. last year. Krueger said he visited with a flour miller earlier this winter from El Salvador who had unloaded wheat from Russia. “He said he was happy with it, and that he might buy some more. The former Soviet Union has been expanding port facilities in the Black Sea, and needs dollars badly. They don’t care much about the price. World wheat trades in dollars, and they want the currency.” Production technology in the former Soviet Union and eastern Europe is still poor, however, and wheat production there remains highly weather dependant and sporadic. Thus, they can’t be relied upon as consistent milling quality wheat suppliers. While demand for high protein wheat has become more elastic than it used to be, in part because some mills have become more adept at using lower protein wheat, a short supply of milling wheat can’t be ignored. “The ultimate question in the wheat market is when will it be crunch time to buy what’s left in feed wheat and milling wheat?” Krueger said. “The marketplace here wants evidence that this tightness in supply is going to bring business back to us, and I think we have to see that before the wheat market heads higher again.” The grain markets are currently undervalued, and given bullish supply/demand numbers, Krueger advised growers to wait for market rallies, watching for strength in their local basis and if cash sales are needed, selling grain in storage and using market strategies such as call options to take advantage of rallies. Consult with a grain marketing advisor, local grain elevator, or marketing group facilitator for more details on grain selling strategies and recommendations appropriate for managing current prices.
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That’s how USDA-NRCS Chief Bruce Knight described the new farm bill’s earmarking of $13 billion over the next six years to conservation
programs. Knight, a former staff member of the National Association of Wheat Growers, was a keynote speaker at the Prairie Grains Conference.
He stressed that conservation programs will be more practical and have more local control and management. He said that proposed rules for the new $2 billion Conservation Security Program will be released for public
comment early this year. With a 90-day comment period, and final rules and training to be implemented after that, some conservation and ag leaders speculate that the
CSP program might be limited in scope in 2003, or that signup might take place in 2003 for on-farm conservation practices to begin implementation in the fall of 2003 or 2004.
