2004 Wheat Industry Conference Highlights

International Trade, Low-Carb Diets, Biotechnology, and Upcoming Election Top Discussions

International trade, changing consumer perception about carbohydrates, biotechnology, and the upcoming presidential elections topped the agenda at the 2004 Wheat Industry Conference held January 24-28 in Atlanta, Georgia.

ND Farmer Elected NAWG President
Mark Gage of Page, ND was elected president of the National Association of Wheat Growers at its annual meeting held recently in Atlanta, Georgia.  Gage succeeds Texas farmer Tommy Womack as the president of NAWG. Joining Gage on the officer team are first vice president Sherman Reese of Oregon; second vice president Dale Schuler of Cater, Montana, and secretary-treasurer John Thaemert, Kansas.

Wheat Industry Consolidation Efforts Enter New Phase
The possible consolidation of U.S. Wheat Associates, the National Association of Wheat Growers, and WETEC (the Wheat Export Trade Education Committee) was discussed at the 2004 Wheat Industry Conference held in Atlanta.

The groups agreed to form a new committee to address the issue, and was given the charge to “work in good faith to resolve outstanding issues with the goal of reporting a plan of consolidation to the boards of each organization no later than July of 2005.” 

The committee will meet prior to March of this year to collect information from state wheat grower organizations and commissions and to establish a work plan. Committee members include one officer from each organization, three members of each organization’s board of directors, and the CEO of each organization as a non-voting member.  Representatives from the Prairie Grains region include Art Brandli, Warroad, Minn; Alan Lee, Berthold, N.D.; and Allan Skogen, Valley City, N.D.

International Panel Provides Views on Ag Trade
Trade leaders from around the world participated in a panel discussion at the 2004 Wheat Industry Conference held in Atlanta.

Siphiwe Mkhize, agronomist and doctor of sustainable ecology management from the South Africa Embassy, discussed that country’s goals for the World Trade Organization (WTO) meetings. He says South Africa would like to see elimination of the subsidy component of export credits, a reduction in the blue box levels, and disciplines to the green box that would ensure minimum distortions.

Jean Marc Trariex of the European Commission Delegation in Washington, D.C says that the recent reforms of the European Union’s Common Agricultural Policy (CAP) will help the EU during the WTO negotiations. He said that they have shifted their direct payments to single farm payments, which fall under the green box category. He stated that the EU’s goals are to have the amber box more disciplined than the blue box and eliminate all forms of export subsidies. The EU sees both export credits and food aid in the form of commodities as trade distorting. Furthermore, the EU feels that all aid should be made by local and regional cash purchases rather than commodity donation. He challenges the idea that the U.S. will provide less aid if it switches to a cash donation system.

Ron Krystynak of the Canadian Embassy, says trade has increased dramatically between the U.S. and Canada since NAFTA was implemented. The U.S. and Canada are each other’s largest agricultural trading partners. Canada’s top imports from the U.S. include vegetables, fruits, baked goods and pasta, processed grocery items and pet food/animal feed.

The U.S. top imports from Canada include beef, live cattle, pork, breads/pastry, and chocolate. When looking at grains, wheat, oats, barley and durum wheat are the top types of grains coming into the U.S. from Canada. Corn, soybeans, rice, canola and peanuts are the top U.S. crop going into Canada.

Jean-Pierre Langlois, a wheat farmer and administrator of the AGPB (a wheat grower association similar to NAWG) based in Paris, France, explained that that France is now developing an export promotion organization that will be funded by a program similar to the checkoff program. France exports 55% of its crop, while the U.S. exports approximately 50%.

Langlois also noted that while the U.S. uses a loan rate program that has no direct impact on its market, the EU has an intervention system that allows the government to buy wheat in order to maintain a certain price for the market. He feels that U.S. taxpayers fund the U.S. program via taxes, while the EU system places the cost on the consumer via prices.

What’s with all the color-coded boxes?
In WTO terminology, subsidies in general are identified by “boxes” which are given the colors of traffic lights: green (permitted), amber (slow down — i.e. be reduced), red (forbidden). In agriculture, things are, as usual, more complicated. The Agriculture Agreement has no red box, although domestic support exceeding the reduction commitment levels in the amber box is prohibited; and there is a blue box for subsidies that are tied to programs that limit production.

‘Great Grains’ Campaign to Help Battle Low Carb Diet Craze
Consumer adoption of low-carbohydrate diets has impacted U.S. wheat consumption substantially, according to Judi Adams, executive director of the Wheat Foods Council, a group funded jointly by producers through the wheat checkoff, as well as others in the domestic grains industry, to promote domestic consumption of wheat foods.

“The annual, per capita consumption of wheat in the U.S. is down by ten pounds which extrapolates to a 65 million bushel drop in domestic wheat sales,” said Adams, speaking at the 2004 Wheat Industry Conference held recently in Atlanta. “The drop has led to an average wheat price reduction of 12 cents per bushel.”

Adams says a proposed solution to help turn the tide of public perception is to increase public relations and advertising efforts to encourage a sensible, balanced diet.

“The wheat industry is near the bottom of all U.S. commodities for investment in this area,” says Adams.  “Even U.S. catfish and watermelon producers spend more money each year to advertise and promote their products to the domestic market.”

While a recent Gallup survey shows that consumer confidence in wheat-based products and their ability to deliver dietary requirements of folic acid is very high, those same consumers perceive starch and carbohydrates negatively.  According to the survey:

•  56% of Americans say a high fat, low carbohydrate diet will help them lose weight.

•  61% feel that high fat, low carbohydrate diets are safe

•  58% feel carbohydrates should be eliminated from the diet.

The Wheat Foods Council has organized a new “Great Grains” campaign in an attempt to put carbohydrates back on America’s plate. Adams says the campaign will have a look and feel reminiscent of a political campaign.  Strategies will include reinforcing the benefits of a healthy diet as laid out in the government’s food pyramid, and efforts to secure a strong position of wheat foods and grains in the newly redesigned pyramid.  Adams says the federal government will also be encouraged to take a more active role in encouraging a sensible, scientifically-sound diet for Americans.

Support Holding Steady for Biotech Crops
Linda Thrane, executive director of the Council for BioTechnology Information told attendees of the 2004 Wheat Industry Conference that worldwide support for biotech crops is holding steady, and the future for biotech is promising.

“Consumer research shows most concerns regarding biotech crops are centered around regulations and handling,” says Thrane.  “Using open-ended questioning in a consumer study, biotechnology didn’t even come up when asking consumers about their concerns regarding food safety.”

Thrane says survey data has also shown that consumers would favor biotech crops if long-term health and nutrition benefits could be proven.  She says nearly half of all Americans are ready to use diet-related products tailored to their specific health needs.

International opinion of biotech crops is stable as well, says Thrane. Countries that are most accepting of biotech crops include China, Mexico, Brazil and the U.S.

She says European opinions of biotech are still in flux, however.  “Information in the European media has been more balanced on the subject in the past year, and support for biotech research into new drugs or industrial purposes seems to be gaining momentum,” says Thrane.  “Support for biotech crops in the food supply, however, still remains low.”

Analyst Surveys Political Scene Going into ’04 Elections
National Journal columnist and political analyst Charlie Cook kicked off the 2004 Wheat Industry Conference in Atlanta with an entertaining and insightful view into the 2004 elections.  Cook is a well-known national analyst, having appeared on several programs on ABC, NBC, CBS, MSNBC, C-Span, CNN, and National Public Radio. 

He began with two fundamental principles that lay the backdrop for the political race: 

•  The country is still as evenly divided as it was in November of 2000. After pushing the “learners” into their respective parties - those who are independents but “lean” toward one party more than the other - Republicans account for 45.5% of voters nationally, and Democrats account for 45.2%.  State legislatures are similarly divided.

•  The country is strongly polarized. Democrats now hate Bush more than Republicans hated Clinton.

The war in Iraq and the state of the economy are the two most important factors going into November, and will overshadow any other factors, he observed.  If they turn positive, no one will beat Bush; if they turn negative, several candidates in the Democratic camp have a good shot at beating him.

He says the economy has changed significantly since the downturns in the 1970s and 1980s, making it more difficult to engineer recoveries.  Job losses in downturns used to be evenly split between cyclical (temporary job loss) and structural (permanent job loss) in the 1970s and 1980s, but the early 1990 downturn was 21% cyclical and 79% structural.  On top of that, new jobs being created are paying somewhere around 40% less than the jobs that were eliminated.

Cook believes that Republicans will control and probably strengthen their margin in the House, and may also increase their Senate margin. If the election were today, Bush wins; but Iraq and the economy will be dominant factors going forward and could throw the race either way, he predicts.

He strongly encouraged farmers to continue their work in Washington, presenting a united front on farm issues with other agricultural organizations.  Farmers have been able to amplify their voices in Washington because they’re effectively organized and look out for each other.

“The day you stop lobbying and talking to your elected officials will be the day things start going badly for you,” he says.  “Be diligent and never let up.”

Wheat, Sorghum Groups to Hold Joint National Meetings in 2005
Next year’s national wheat conference won’t be wheat alone: the National Association of Wheat Growers and the National Grain Sorghum Producers (NGSP) will hold their first joint conference. The North American Grain Congress set for Feb. 20-22, 2005, in Reno, Nevada will feature combined sorghum and wheat annual conferences.  Registration details can be found as the event draws near on the NAWG web site, www.wheatworld.org .