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February 23, 2018 CapitalPress.com Dry conditions may boost wheat prices Smaller yields would reduce ending stocks By MATTHEW WEAVER Capital Press SPOKANE — Wheat prices could go 50 to 60 cents per bushel higher if farms in the Southern Plains don’t get significant precipitation, a North Dakota marketing analyst says. Some parts of Oklahoma and Tex- as haven’t seen rain in four months, said Mike Krueger, founder of the Money Farm and a senior analyst for World Perspectives Inc. Krueger gave the economic fore- cast Feb. 7 at the Spokane Ag Expo and Pacific Northwest Farm Forum. The Northern Plains are also dry, with the annual rainfall in many ar- eas at its lowest level since 1991. That could trigger funds to jump into the marketplace and start buy- ing, Krueger said. Prices have no middle ground any more, Krueger said. They’ll either be very high or very low. “The problem of low prices isn’t because high prices killed demand,” he said. “High prices brought us more world acres, better farming practices pretty much every place on earth that a farm can afford to do it — farms began to maximize the best seed they could buy, the best fertilizer, chem- icals, fungicides, you name it,” he said. “That took place worldwide.” USDA expects Russia to export 1.2 billion bushels of wheat this year. Some in the U.S. have spec- ulated that the Black Sea region is close to reaching its capacity for the short term, but Krueger noted Russia has made significant investments in farming technology, transportation and port facilities. “We used to hear repeatedly how crummy their wheat was — people bought it because it was cheap, but Oregon farmer joins U.S. Wheat leadership Padget: Supporting organization ‘time well-spent’ By MATTHEW WEAVER Capital Press Matthew Weaver/Capital Press Fargo, S.D., consultant Mike Krueger delivers the economic forecast Feb. 7 at the Spokane Ag Expo and Pacific Northwest Farm Forum. “If you just take the edge off the top of these record yields, the picture can start to change relatively quickly.” Mike Krueger. marketing analyst we don’t hear so many complaints any more about quality,” he said. “But they need weather — it’s been highly unusual for them to have four or five record crops in a row.” Record global consumption has been offset by five record world crops, a strong U.S. dollar and cheap ocean freight rates, Krueger said. Competing countries can move their wheat or other crops at lower costs, he said. Potential “black swans,” or dif- ficult-to-predict events with big im- pact, include world weather, equity markets, trade negotiations; geopo- litical risks such as North Korea and large grain and seed company merg- ers. China holds 40 percent to 50 per- cent of the world wheat and corn supply. The reliability of those fig- ures and the crop’s quality are uncer- tain, Krueger said. He wondered about the possibil- ity of China overstating production and suddenly purchasing wheat and corn. Krueger also wondered if the U.S. could be headed for just two major crops, corn and soybeans, pointing to declining national acres for wheat, barley and oilseeds. But if good weather patterns change in big corn and bean produc- tion areas, he said, those crops may seem less attractive. Corn, soybean and wheat yields only need to go down a little bit to reduce ending stocks, he said. “We don’t need any of those armaggedon-type scenarios,” he said. “If you just take the edge off the top of these record yields, the picture can start to change relatively quickly.” Legislation would bolster seed indemnity law By SEAN ELLIS Capital Press BOISE — A bill intro- duced in the Idaho Legisla- ture would amend the state’s Seed Indemnity Fund law to require licensed seed ware- houses to submit an audited financial statement each year and provide proof of a mini- mum net worth. Warehouses currently have to provide an audited fi- nancial statement only during their initial license applica- tion. The change was recom- mended by an Idaho State Department of Agriculture industry advisory committee. The department administers the fund, which is designed to protect producers in case of a warehouse failure. The state’s seed and com- modity indemnity funds were established following some high-profile financial failures by warehouses in Idaho. “We just want to ensure the auditors have the ability to make sure there won’t be another failure,” said adviso- 7 Associated Press File Corn is unloaded at an elevator. The Idaho Legislature is consid- ering a bill that would increase the financial monitoring of grain elevator operators in the state. ry committee chairman Rich- ard Durrant. “We’re trying to protect the producers.” The Idaho-Eastern Or- egon Seed Association has concerns about the legisla- tion, and Food Producers of Idaho members last week held off taking a position on the bill until they receive in- put from IEOSA. Sen. Jim Rice, R-Cald- well, who introduced Sen- ate Bill 1207, said IEOSA’s concerns center on requiring an annual audited financial statement, and there has been talk about splitting the bill. “If the bill moves forward, it’s going to be amended,” said Rice, chairman of the Senate Agricultural Affairs Committee, where the bill was sent. Producers who deliver seed to a licensed warehouse pay a small assessment to help finance the fund. In the event of a warehouse failure, the fund covers 90 percent of a grower’s loss. Durrant, a warehouse owner, said an audited finan- cial statement costs $2,000 to $5,000 and requiring ware- houses to present one annu- ally is not too much to ask to ensure the state’s seed pro- ducers are protected. The bill also sets out spe- cific criteria that would allow the ISDA director to deny the issuance or renewal of a li- cense to a warehouse follow- ing a public hearing. Those criteria include the applicant having failed to make previous claimants whole due to a previous fail- ure, the applicant misrep- resenting material facts on the application or producers required to pay into the fund presenting relevant objec- tions. ISDA Director Celia Gould told FPI members the department is comfortable with the way the bill is writ- ten. “We put a lot of value in what our industry advisory committees say,” she said. “I look to them as kind of being my boss on these ... issues.” The seed fund balance is currently $8 million, while the commodity fund balance is $13 million. The state’s commodity fund statute already requires warehouses to provide an audited financial statement annually. The funds’ balances en- sure farmers can be reim- bursed quickly in the event of a warehouse failure, said former House Agricultural Affairs Committee Chairman Doug Jones, the author of both funds’ statutes. The seed fund’s advisory committee, which has seven producers and two industry members, was intentionally weighted in favor of growers because it was created to pro- tect them, he said. If the advisory board feels the changes are needed, “Then I think it’s important for agriculture to make this change that has been rec- ommended,” Jones told FPI members. Oregon wheat farmer Dar- ren Padget says the time was right for him to join the offi- cer team of U.S. Wheat Asso- ciates. His son is home on the farm and his wife supports the decision, Padget told the Cap- ital Press. “I’ve had the opportunity to host a few trade teams over the years, and I live in close proximi- ty to Portland, two hours away,” he said. “So I’ve seen Darren the work U.S. Padget Wheat’s done firsthand, and had the opportunity to trav- el overseas with them on the Asian crop quality tour. I think it’s time well-spent.” Padget will become U.S. Wheat secretary-treasurer at the organization’s June meet- ing in Seattle. U.S. Wheat is the overseas marketing arm of the industry. Trade issues such as the Trans-Pacific Partnership and North American Free Trade Agreement are top priorities, Padget said. Padget said he is impressed with U.S. Wheat and its staff. “There’s a lot of people that have been there for de- cades on behalf of the U.S. farmer,” he said. “It’s quite impressive.” A fourth-generation farmer in Grass Valley, Ore., Padget keeps a dryland wheat and summer fallow rotation, pro- ducing registered and certified seed on 3,400 acres. Padget previously held po- sitions on the Oregon Wheat Growers League board of directors and executive com- mittee, serving as president in 2010. He chaired the research and technology committee of the National Association of Wheat Growers and served on the Mid-Columbia Producers board of directors. Padget will go to South Korea with the Wheat Mar- keting Center in late March. Also at the U.S. Wheat meeting in June, Doug Goy- ings of Paulding, Ohio, will become vice chairman, and Chris Kolstad of Ledger, Mont., will become chairman. Current chairman Mike Mill- er, of Ritzville, Wash., will become past chairman. “It’s just a good organiza- tion that not a lot of members understand completely how it works,” Padget said. “I’ve got a lot to learn.” New Spokane Ag Expo director looks to continue success Capital Press SPOKANE — Heather Hamlin has been attending the Spokane Ag Expo since she was 9 years old. Next year, she’ll be in charge of it. Hamlin will take over March 1 as director of the Spokane Ag Expo and agri- business for Greater Spo- kane Inc., which sponsors the show. Current director Myrna O’Leary retires on March 30. Hamlin has been with GSI nearly three years, serving as director of investor relations. She grew up in Elk, Wash., and participated in 4-H, FFA, sewing, baking and raising sheep, goats and cows and was Pend Oreille County Fair Queen. Hamlin grew up on a 40-acre hobby farm, raising pigs and cows. Her in-laws still run a hobby farm in Elk. “It’s such a great show,” she said of the annual Ag Expo. “Our role on behalf of GSI is just to continue grow- ing it, making it fresh and fun every year.” “Ag Expo has been a sta- ple in the community for 41 years, it’s done a lot of great things,” said Expo assistant site manager Ryan Rodin. “We’re excited to bring in a new perspective and build on the great work that’s already taken place.” Rodin has assisted site manager Brad Hoyt for the past two years. Rodin said the goal is to find ways to draw more people to the event. 15 th Annual Orchard, Nuts & Vines Special Section Capital Press Agriculture Weekly will publish a Special Section featuring orchard, nut and vine articles and advertising on April 13, 2018 By advertising in this Special Section, you’ll be reaching our print and online readers in California, Idaho, Oregon and Washington who make the buying decisions for your product or service! Space deadline is March 16 th . 8-3/106 ROP-8-3-4/HOU 8-3/102 By MATTHEW WEAVER