1

3103 10th Street, North Suite 300 Arlington, VA 22201

Tel: (202) 463-0999 Fax: (703) 524-4399
Wheat Letter
May 1, 2014

U.S. Wheat Associates (USW) is the industrys market development organization working in more than 100
countries. Its mission is to develop, maintain, and expand international markets to enhance the profitability of U.S.
wheat producers and their customers. The activities of USW are made possible by producer checkoff dollars
managed by 19 state wheat commissions and through cost-share funding provided by USDAs Foreign Agricultural
Service. For more information, visit www.uswheat.org or contact your state wheat commission. Original articles
from Wheat Letter may be reprinted without permission; source attribution is requested. Click here to subscribe or
unsubscribe to Wheat Letter.

In This Issue:
1. Annual Crop Tour Esti mate Low Yields for Kansas HRW Crop
2. Japanese Milling Executives Take Coast to Coast Look at U.S. Wheat Crop
3. U.S. Wheat Associ ates Welcomes Reli ef for Phi li ppines Flour Millers
4. Helping Our Customers Find Opportunity in a Changing World
5. U.S. Agricultural Science Organization Examines GMO Food Labeling
6. Wheat Industry News


Online Edition: Wheat Letter May 1, 2014 (http://bit.ly/1uaPUvf)

USW Price Report: www.uswheat.org/prices


1. Annual Crop Tour Esti mate Low Yields for Kansas HRW Crop
By Julia Debes, USW Assistant Director of Communications

Seventy-five representatives from across the worlds grain chain experienced firsthand the dry, cold, windy
conditions that have deteriorated the Kansas hard red winter (HRW) wheat crop this year on the HRW Wheat
Quality Tour. After three days and 587 stops across the entire span of the state, scouts projected an average
Kansas wheat yield at 33.2 bushels per acre, the poorest in 13 years.

Kansas farmers plant more HRW acres than any other state, representing about 32 percent of total U.S. HRW
seeded area on average. Tour participants projected total 2014 Kansas wheat production at 260.6 million bushels,
the lowest estimate since 2011. If realized, this would be the lowest production since 1996 when Kansas farmers
harvested a total 255.2 million bushels.

Overall, tour reports indicated the wheat crop across the state is behind normal crop progress, short and in need of
moisture soon.

Just 21 percent of the wheat crop was rated good to excellent as of April 28, according to the USDA National
Agricultural Statistics Service (NASS). Overall, NASS reported that 56 percent of the Kanas wheat crop was jointed
as of April 28, compared to the five-year average of 74 percent. Just 4 percent is headed, slightly behind the five-
year average of 9 percent.


2

Representatives from Colorado, Nebraska and Oklahoma also joined the tour to share perspective and estimates
from their respective states.

Darrell Hanavan, executive director of the Colorado Wheat Administrative Committee, projected an average
Colorado wheat yield of 32.0 bushels per acre on Tuesday, significantly more than the 2013/14 Colorado crop. For
Nebraska, Royce Schaneman, executive director of the Nebraska Wheat Board, also reported on Tuesday
improved wheat yields of 45.0 bushels per acre, above the states 10-year average of 41.4 bushels per acre.

Mark Hodges, executive director of Plains Grains, Inc., shared Oklahomas estimates with the group on
Wednesday. He predicted average production of 18.52 bushels per acre and total production at 66.5 million
bushels, well below last years 115 million bushels.

USDA will update overall U.S. wheat production numbers on May 9 in the World Agricultural Supply and Demand
Estimates report.


2. Japanese Milling Executives Take Coast to Coast Look at U.S. Wheat Crop

Five senior executives from Japans leading flour milling companies are travelling in the United States April 27 to
May 5 for a firsthand look at this years wheat crop, and to learn more about the reliable U.S. wheat supply system.
U.S. Wheat Associates (USW) regularly brings trade teams from Japan and other countries to the United States as
part of long-term market development activities.

USW constantly keeps Japanese millers and end-users aware of the merits of U.S. wheat, said USW Country
Director Wataru Charlie Utsunomiya, based in Tokyo. Teams like these allow USW to develop close working
relations and mutual understanding between U.S. wheat growers and Japanese millers and helps the millers know
they can rely on a steady supply of high quality wheat.

The team is visiting Washington, DC, Fargo, ND, Omaha, NE and Portland, OR. During meetings with wheat
farmers, USDA, grain industry representatives and university researchers, the team will discuss the U.S. wheat
supply and demand picture, including anticipated quality, availability and price.

In addition to discussing the crop outlook, the team will discuss innovation in wheat research, including traits
derived from biotechnology, and the role technology plays in growing more and better wheat with less impact on the
environment.

USW collaborated with the North American Export Grain Association, the North American Millers Association, the
National Feed and Grain Association, USDA, the Nebraska Wheat Board, the North Dakota Wheat Commission,
the Oregon Wheat Commission and the Northern Crops Institute to organize this trade team.


3. U.S. Wheat Associ ates Welcomes Reli ef for Phi li ppines Flour Millers

USW is very pleased that the Republic of the Philippines government has agreed to provide relief to flour millers in
the form of a provisional anti-dumping duty on Turkish flour imports. The governments decision sends a clear
signal that Philippine flour millers, an industry that employs thousands of workers, should be able to operate in an
open and fair trade environment.

USW has been a partner to the Philippine flour milling and baking industries for more than 50 years. We have long
supported competitive, open and fair trade environments and we continue to work in a transparent manner
representing U.S. wheat farmers with millers and baking associations in the Philippines. Our organization helps
them produce of some of the best baked goods in the world. That is why we publicly supported the claim from the
Philippine Association of Flour Millers Inc. (PAFMIL) that local flour could not compete with Turkish flour being
dumped into the market as well as the Association's petition for an anti-dumping duty.

3


The policies of the government of Turkey are fully responsible for the dumping of Turkish flour in the Philippines,
Indonesia and other South Asian nations. Turkey's highly protected wheat and flour market and complex inward
processing scheme create disruptive incentives for the Turkish milling industry to dump flour in export markets
regardless of price.

The Philippines government was correct in investigating PAFMILs claim against Turkish flour dumping. It also
correctly found strong justification to protect its flour milling industry.


4. Helping Our Customers Find Opportunity in a Changing World
By Steve Mercer, USW Vice President of Communications

Early in 2011, USW predicted that world wheat trade should at least double by 2050, even if total world wheat
consumption merely keeps pace with expected population growth. Our analysis showed that farmers produce
wheat primarily in temperate zone countries around the world, which will see slower population growth. This is in
sharp contrast to where demand for wheat will grow the fastest: in tropical and subtropical regions not conducive to
wheat production.

A little more than three years later, USW sees no slow-down in population growth in southern Asia, the Middle East
and Africa that would alter our conclusion. However, we may need to re-examine our analysis to consider the
impact of dramatic economic changes taking place in critical wheat importing regions and countries changes that
millers and wheat food processors must embrace for their businesses to continue to grow.

Demand for food is increasing most rapidly in developing countries where, experts suggest, a truly global middle
class is emerging. Some analysts predict the worlds middle class will grow to nearly five billion in 2030. The
Human Development Report 2013 by the United Nations Development Programme acknowledged this change as
The Rise of the South.

Some of the largest countries have made rapid advances, notably Brazil, China, India, Indonesia, South Africa and
Turkey, the report noted. But there has also been substantial progress in smaller economies, such as
Bangladesh, Chile, Ghana, Mauritius, Rwanda and Tunisia.

Having significantly more income to spend on food substantially influences the attitudes of people in this emerging
middle class toward the foods they choose.

As consumers become wealthier, they are also demanding products that are believed to enhance physical and
mental health and well-being, the consulting firm KPMG wrote in a 2012 report titled Expect the Unexpected:
Building Business Value in a Changing World.

Food today is medicine, Dr. John Izzo, a distinguished fellow at the EastWest Institute, said at a presentation on
April 11 to a group of U.S. agricultural marketing professionals. The growing middle class wants as much food as it
can get as long as it is guilt-free. And by guilt-free, I mean they want to know if the food is good for them, is it
produced in environmentally sustainable ways and are the farmers and workers who bring it to market being treated
fairly.

He added that the evidence shows these changes are taking place much faster in developing countries than they
did in the developed countries.

In a changing environment like this, organizations must adapt in order to maintain or grow their market positions. At
a conference April 10, I heard management and business performance consultant Ryan Estis put it this way: We
all have to view change through the lens of opportunity.


4

For example, increased demand for health and wellness products, coupled with raised awareness of
environmental and social issues, represents an opportunity for food companies to develop substantial new
markets, advised KPMG in its 2012 report.

USW and its educational partners are ideally prepared to help our customers produce the new, high quality wheat
food products demanded by the emerging middle class. We are also working to support research in new
technologies that will continue reducing the environmental impact of U.S. wheat production. Our long-term
commitment to customized service is ideally suited to the changes our customers face today and will face in the
future. Together, we can turn those changes into opportunities for growth.


5. U.S. Agricultural Science Organization Examines GMO Food Labeling

In the United States, several states, the U.S. Congress and food industry organizations are debating the question of
whether or not food labels should include mandatory label information if the food contains ingredients from
genetically modified (GM) crops.

A new study by the U.S.-based Council for Agricultural Science and Technology (CAST) reviews arguments for and
against labeling as well as experiences in countries that currently require GM labeling. The study also evaluates the
potential cost impact on food companies and consumers.

Conclusions in the report, titled The Potential Impacts of Mandatory Labeling for Genetically Engineered Food in
the United States, include:

No science-based reason to single out GM foods and feeds for mandatory, process-based labeling exists.
The paper cited 148 regulatory reviews by the U.S. Food and Drug Administration finding that GM crops
are equivalent to their conventional counterparts and that Japanese regulators independently reached the
same conclusions for 189 submissions they reviewed.

Mandatory labeling based on process abandons the traditional U.S. practice of voluntary marketing and
promotion of products with specific attributes, which currently provides consumers with non-GMO choices
in the marketplace.

A national mandate may violate international trade rules.

Potential cost increases will depend on what products might be included in a mandatory label requirement
and on the unknown reaction to such a change throughout the U.S. food supply chain.

The authors also call for better communication about this issue. They believe that legislators and consumers need
independent, objective information to help move the national discussion from contentious claims to a more fact-
based, informed debate.

To read the report, and other papers by CAST, visit www.cast-science.org/publications. Read more about USWs
positions on biotechnology at http://www.uswheat.org/biotechnology.


6. Wheat Industry News

New Cairo Office Phone and Fax Numbers. Effective May 1, 2014, the USW Cairo Office telephone
numbers will change to + (202) 2269-6631 and + (202) 2269-6632; the fax number will change to + (202)
2269-7722.

5

Cheerios

Maker Defends GM Ingredients. General Mills, Inc., the company that recently stopped using
corn starch and sugar from genetically modified sources in its original Cheerios brand oat cereal earlier this
year has defended biotechnology in its 2014 Global Responsibility Report. The report stated that the
company finds broad and deep global consensus among food and safety regulatory bodies that approved
GM ingredients are safe. Crops with GM traits, the report said, may also offer a solution to food insecurity
worldwide. Read more in Food Business News.

Al l Aboard Wheat Harvest Blog. It is almost time again to follow along with the U.S. wheat harvest. Once
again, High Plains Journal is bringing correspondents from the harvest trail to your inbox through the All
Aboard Wheat Harvest blog. Subscribe for updates at http://www.allaboardharvest.com.

WMC Cookie and Cracker Technology Short Course. The WMC will hold its Cookie and Cracker
Technology Short Course May 12 to 16, 2014. For more information or to register, visit
http://www.wmcinc.org.

IGP Milling Courses. The IGP will have its Basic Milling Principles Short Course June 3 to 6, 2014 and its
Advance Milling Principles Short Course June 10 to 13, 2014. For more information or to register, visit
http://www.grains.ksu.edu/igp/.

NCI Advanced Grain Procurement Course. The NCI in Fargo, ND will hold its Advanced Grain
Procurement Strategies Short Course May 19 to 23, 2014. For more information or to register, visit
http://www.northern-crops.com/.

Our Sympathy to past USW Chairman Jim McDonald (2002/03) and his family on the death last week of
his wife Bev McDonald.

Follow USW Online. Check out our page at www.facebook.com/uswheat for the latest updates, photos
and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter at
www.twitter.com/uswheatassoc, additional photos at www.flickr.com/photos/uswheat, plus video stories at
http://www.youtube.com/uswheatassociates.

Nondiscrimination and Al ternate Means of Communications
USW prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin,
gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who
require alternative means for communication of program information (Braille, large print, audiotape, etc.) should
contact USW at 202-463-0999 (TDD/TTY - 800-877-8339, or from outside the U.S., 605-331-4923). To file a
complaint of discrimination, write to Vice President of Finance, USW, 3103 10th Street, North, Arlington, VA 22201,
or call 202-463-0999. USW is an equal opportunity provider and employer.