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8 CapitalPress.com January 1, 2016 Bulging global wheat supply, strong dollar impact U.S. growers By MATTHEW WEAVER Capital Press Pacific Northwest wheat farmers face a record-large global supply and a strong U.S. dollar, but growing de- mand for the varieties they raise offers hope for higher prices, U.S. Wheat Associates representatives say. Increases in yields and har- vested acres pushed the world wheat supply to 946 million metric tons, up 3 percent from last year, according to the USDA World Agricultural Supply and Demand Estimate. “That means there’s a lot of wheat in the world, which means there’s a lot of cheap- er wheat available from other origins,” said Stephanie Bry- ant-Erdmann, a market ana- lyst for U.S. Wheat. The top five wheat export- ers — the U.S., the Europe- an Union, Canada, Australia and Russia — produced 328 million metric tons of wheat, which is 40 percent of global wheat supplies. They account for roughly 81 percent of wheat exports, according to U.S. Wheat. However, it’s the type of wheat Northwest farmers grow that provides them with an advantage, said Steve Mer- cer, vice president of commu- nications for U.S. Wheat. The market for soft white wheat and western white wheat is shifting from price-sensitive markets such as the Middle East to Asian markets, he said. Demand is still increasing in those growing markets, Mercer said. Low proteins in soft white wheat and west- ern white wheat — a blend of soft white wheat and club wheat — grown primarily in the PNW are “very precious,” Mercer said. Low protein is desirable in sponge cakes and confections produced in Asia. The last two or three years of drought have reduced the availability of low-protein wheat. “The drier it is, the wheat tends to get harder and con- centrate in the kernel, increas- ing protein levels,” Mercer said. As moisture improves, the supply of lower-protein wheat will increase, he said. PNW wheat organizations and U.S. Wheat also hope to boost soft white wheat as a blending wheat in Latin American markets. Custom- ers blend soft white wheat with U.S. hard red wheat to develop a better product for a lower price than competing spring wheat from Canada, Mercer said. “All those markets are growing, there’s a shift from mom-and-pop-type baker- ies to supermarkets, big box stores and supermercados,” Mercer said. The U.S. dollar is at a 12-year high against foreign currencies, which also puts American farmers at a disad- vantage to their competitors, Bryant-Erdmann said. For example, the dollar this week was worth 120 Japanese yen, up 20 percent from recent years. Ag Professionals Page An Exclusive Focus on Ag Business Product and Service Providers TRUCK SUPPLIES ORGANIC FERTILIZER IMPLEMENT MANUFACTURER BANKING SERVICES AG EQUIPMENT PARTS DRAINAGE TRACTOR WORK WINERY SURPLUS BEDDING SAWDUST ATTORNEY For information on how to include your business, call your sales rep or: 800-882-6789 • www.capitalpress.com 1-4/#13