Highlights from the NDWC Annual County Reps Meeting

Wheat leaders from across the state were recently updated on issues relating to spring wheat and durum during the North Dakota Wheat Commission’s annual meeting for county representatives. Presentations featured at the meeting can be found online (as PDFs) at www.ndwheat.com – click on the ‘wheat growers’ link, then ‘meetings and events.’ Scroll down for a listing of presentations.

Wheat Market & Prices
The current market upswing is being driven by a combination of three catalysts according to Mike Krueger, grain marketing advisor with the program “The Money Farm.”  Krueger pointed to growth in world consumption over the last decade that has outpaced production, the surge in biofuels usage, and investor cash flow into commodity markets as prominent market factors. Krueger also indicated that a number of issues point to good pricing beyond the next harvest.

NDWC Marketing Specialist Erica Peterson pointed out that export sales took off at a tremendous pace at the start of the 2007-08 crop year which began June 1. Throughout the summer and fall near record high weekly sales were seen, and up through September average weekly sales were around the 40 million bushels mark. Peterson says sales should back off from the high levels seen earlier in the crop year, but will still have enough consistent sales to keep ahead of USDA projections. U.S. hard red spring wheat purchases are ahead of last year in all major export countries with the exception of Japan, who had record purchases of 61.5 million bushels in 2006-07. HRS exports are 10-20 percent higher in the Philippines, South Korea, Dominican Republic and Taiwan. Even bigger increases are seen in Venezuela and Mexico, with sales to Venezuela at 15.9 million bushels compared to 9.5 million last year and sales to Mexico at 19 million compared to 4.4 million.

She pointed out that wheat stocks in four of the five major wheat exporters are all lower, and world wheat stocks are expected to continue at the lowest levels in 25 years. World wheat usage has exceeded total production in 8 of the last 9 years, resulting in the low stock levels being seen.

Peterson reports wheat acres will definitely be up in the coming year worldwide, but speculates at what level. “Current estimates are ranging between 2 and 5 percent,” she says. “With good yields, world production could reach 23.5 to 24 billion bushels, but whether that is enough to replenish stocks is the question.” Production in 2007 was 22.1 billion, and the current record production was set in 2004 at 23 billion bushels.

Short Stocks Equal Exciting Times
The next few years will be exciting times for wheat producers, but hold some challenges as well according to Dr. Bill Wilson, professor of agri-business and economics at North Dakota State University. Wilson predicts that the current market conditions may result in changes to the wheat and durum industries, possibly evolving toward the increased use of stock holding and contracting as ways to manage risk. High values in competing crops is driving the high prices of HRS and durum, says Wilson. “Durum and spring wheat prices have to be high to make them competitive relative to new competing crops, which are mostly soybeans, canola, all the types of peas and malting barley.”

Whole Grains Still Hot
Revisions to the Dietary Guidelines in 2005, recommending “half our grains be whole,” are still having impacts on products. The growth in whole grain food products remains high in 2007, following the 107 percent increase from 2005-06. As of September 2007, 1,422 new whole grain products have hit the market, on pace with the 1,493 launched by year end 2006. Companies are continuing to target a more health conscious consumer. Whole grain research is currently providing some compelling evidence according to Marcia Scheideman, president of the Wheat Foods Council. Scheideman sites that research indicates whole grains have positive health affects for people suffering from asthma, diabetes, blood pressure, gum disease, weight management, cancer, cardiovascular disease, and inflammation, not to mention all types of gut health.