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CapitalPress.com
Friday, March 27, 2020
Kenya opens market for Pacific Northwest wheat
Area in
detail
USDA announces new
agreement
AFRICA
ETHIOPIA
Ilemi
Lake
Triangle
Turkana
UGANDA
PORTLAND — A new
market is opening for wheat
farmers in Oregon, Wash-
ington and Idaho.
After 12 years of nego-
tiations, Kenya has agreed
to lift its prohibition against
U.S. wheat exports from
the Pacific Northwest, the
USDA has announced.
As part of the agree-
ment, the agency’s Animal
and Plant Health Inspec-
tion Service, or APHIS,
will work with producers to
increase crop surveillance
for flag smut, a seed-borne
and soil-borne fungal dis-
ease that poses no human or
animal health risks but can
reduce wheat yields by as
much as 50%.
Greg Ibach, USDA
SOM.
KENYA
Lake
Victoria
Nairobi
TANZANIA
EO Media Group File
Wheat is harvested near Lexington, Ore. A new trade
deal with Kenya will allow more wheat from the Pacific
Northwest to be exported to that African nation.
undersecretary for mar-
keting and regulatory pro-
grams, said Northwest
farmers now have full
access to the Kenyan wheat
market, valued at nearly
$500 million annually.
“This action proves our
commitment to securing
fair treatment and greater
access for U.S. products in
the global marketplace,”
Ibach said in a statement.
Flag smut affects primar-
ily dryland winter wheat,
grown predominately across
Eastern Oregon, Washing-
ton and Idaho. Spores can
survive for at least four
years in the field. Symptoms
of infected plants include
stunted growth, twisted
and distorted leaves and, in
severe cases, no grain head
development.
The disease has been
found periodically in U.S.
wheat since the early
N
Mombasa Indian
Ocean
200 miles
Capital Press graphic
1900s, according to the
USDA, though it has been
controlled through the use
of treated seed, crop rota-
tion and modern produc-
tion practices. Chemical
seed treatments are the most
effective method of con-
trolling flag smut, research-
ers at Oregon State Univer-
sity say.
Amanda Hoey, CEO of
the Oregon Wheat Growers
League and Oregon Wheat
Commission, said the deal
Wheat price outlook filled with uncertainty
Uncertainty skews
timing of China
buying U.S. wheat
Judge: Ranch’s grazing
preference expired with permit
By MATEUSZ PERKOWSKI
Capital Press
By MATTHEW WEAVER
Capital Press
SPOKANE — The wheat
market will be full of uncer-
tainties for the foreseeable
future, a Washington Grain
Commission board member
says.
“Coronavirus is obvi-
ously leading the charge,”
Ty Jessup, an industry rep-
resentative, said during his
market outlook presentation
at the commission meeting
March 12. “We’re in a dif-
ferent realm now. This is
something that’s uncharted
territory. Where’s it going to
go? I have no idea.”
Grower wheat-selling is
essentially zero, and demand
is light, Jessup said.
Jessup said wheat prices
have dropped 20 to 30 cents
per bushel over the last
month. That’s not all due to
the virus, he said. There are
other factors.
“There’s a lot of uncer-
tainty in the industry,” Jes-
sup said.
He’s not sure what the
future price range could be.
The virus may delay Chi-
na’s purchase of wheat fol-
lowing the new trade agree-
ment with the U.S. Jessup
said the expectation is that
China will still buy wheat,
but the timing may be
“skewed.”
“The longer this event
changes things in the world,
it’s just going to push it
back,” he said.
Matthew Weaver/Capital Press
Ty Jessup, industry representative for the Washington Grain Commission, speaks
during a board meeting discussion March 12 in Spokane. Regarding coronavirus
and its effects on markets, Jessup says, “We’re in a different realm now.”
The industry didn’t really
expect China to begin pur-
chasing until the second half
of the year, with new crop,
Jessup said.
Jessup is marketing man-
ager for HighLine Grain
Growers in Waterville,
Wash.
Jessup also pointed to a
large global supply of wheat.
Australia is expected to
have a 40% bigger crop as
farmers there enter planting
season.
Current production pro-
jections for the Black Sea
region are 82 million tons in
Russia, with the possibility
of reaching 85 million tons,
which Jessup said would set
a record.
Ukraine’s crop may be
down a little, but 95% is rated
“good to excellent,” he said.
Glen Squires, CEO of the
commission, said the wheat
price received by Washing-
ton farmers is typically 20
to 45 cents above the aver-
age nationwide price. It’s
been holding about 96 cents
higher. That’s “unusual,”
Squires said.
The U.S. average wheat
price received is $4.55 per
bushel, while Washington is
at $5.51.
He pointed to lower prices
nationally for hard red win-
ter wheat, while Washing-
ton farmers are boosted by
demand for soft white wheat,
a market class grown primar-
ily in the Pacific Northwest.
Squires uses the figures as
a way to gauge the commis-
sion’s budget. He expects it
to be down about $500,000
compared to last year, due to
lower winter wheat yields.
The state’s wheat production
dropped from 153 million to
142 million bushels, he said.
The annual assessment
on wheat is 0.75% of the net
receipts at the first point of
sale. The annual assessment
on barley is 1% of the net
receipts.
“The average price so far
is about the same,” he said.
The commission will
finalize its annual budget
during its May meeting.
And coronavirus impacts
on wheat prices?
“Who knows?” Squires
said. “I have no idea.”
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Uganda, since they both
use Kenya’s port facili-
ties. Between the two coun-
tries, Hoey said they import
about 1.6 million metric
tons of wheat a year.
“Even if we saw a 5%
rise in the market share, it
could be worth over $20M
to the U.S. wheat industry,”
she said.
Steve Mercer, a spokes-
man for U.S. Wheat Associ-
ates in Arlington, Va., said
the industry supports con-
tinued free trade negotia-
tions with Kenya, which
could provide a model for
other African countries to
follow.
“Africa is a fast-growing
continent, but one that the
U.S. has had limited oppor-
tunity for trade negotiations
with,” Mercer said. “A high
standard (free trade agree-
ment) with Kenya should
open the door for additional
African countries to pursue
two-way trade negotiations
with the U.S.”
An Oregon ranch’s “pri-
ority” access to neighboring
public lands in Idaho expired
along with the landowner’s
grazing permit, regardless of
who now operates the prop-
erty, according to a federal
judge.
The ruling affirms a deci-
sion by the U.S. Bureau
of Land Management that
“threatens to subvert the entire
system of public land live-
stock grazing,” according to
cattlemen’s groups tracking
the dispute.
The dispute relates to the
“preference” for grazing per-
mits provided to private
“base” ranches that neighbor
federal property.
In this case, the 1,900-acre
Hanley Ranch near Jordan
Valley, Ore., once served as
the “base property” for access
to public grazing allotments
on 30,000 acres of BLM land
across the state border in
Idaho.
However, the federal gov-
ernment refused to renew the
landowner’s grazing permit
due to an “extensive record
of noncompliance,” such as
“trespass on the public lands
by grazing cattle in excess of
approved numbers.”
The
ranch’s
owners,
Michael and Linda Lee Han-
ley, leased the base property
to their daughter and her hus-
band, Martha and John Cor-
rigan, who requested a trans-
fer of the property’s “grazing
preference” to them.
However, the BLM deter-
mined the base property’s
preference was extinguished
along with the grazing per-
mit for the Trout Springs and
Hanley Fenced Federal Range
allotments. In 2018, the Corri-
gans challenged the agency’s
decision in federal court.
The Corrigans argued this
“new disappearing preference
theory” violates the Taylor
Grazing Act, a foundational
1934 law governing pub-
lic rangeland management,
as well as the BLM’s own
regulations.
According to their com-
plaint, the grazing prefer-
ence or priority is attached to
the ranch property itself and
serves “a separate and differ-
ent function” than the graz-
ing permit, which regulates
the activities of specific peo-
ple and their livestock.
The BLM has conflated
the two concepts in a way that
“leads to irrational results,”
such as potentially terminat-
ing a property’s grazing pref-
erence if the landowner leases
the ranch to someone who
doesn’t qualify for a grazing
permit, the plaintiffs argued.
In other words, “the owner
of the base property will have
lost the grazing preference
independent of any of his own
actions, without any notice
or process,” according to the
Corrigans.
The Corrigans were joined
in their arguments by the
Owyhee Cattlemen’s Asso-
ciation and the Idaho Cat-
tlemen’s Association, which
filed a legal brief claiming that
BLM’s “new interpretation
turns a fundamental aspect of
the Taylor Grazing Act on its
head.”
The federal agency’s deci-
sion in this case “effectively
destroys the concept of graz-
ing preferences” and could
“devalue private lands across
the West” for ranches whose
owners don’t get permits
renewed for whatever reason,
the groups argued.
“Even if a rancher has a
permit that is not renewed for
reasons that do not stem from
improper livestock manage-
ment (e.g., non-use or changed
resource conditions), there is
the threat that his grazing pref-
erence will disappear, creating
a penalty without an offense,”
their brief said.
The Western Watersheds
Project, an environmental
group, intervened on behalf of
the government to argue the
grazing preference was prop-
erly canceled to protect pub-
lic lands from “further grazing
abuses.”
The plaintiff’s under-
standing of grazing prefer-
ences would basically cre-
ate an “indefinite entitlement
or property-based right” that
would undermine environ-
mental protections, since
ranchers would always be first
in line for a permit regardless
of their conduct, the environ-
mental group said.
U.S. District Judge Lynn
Winmill ultimately sided
with the federal government
and environmental group,
ruling that grazing prefer-
ences cease to exist when per-
mit renewals are denied for
non-compliance.
If the Hanleys had simply
sold the ranch with the graz-
ing permit in good standing,
the preference would still have
been attached to the base prop-
erty, the judge said. However,
failing to comply with the per-
mit’s conditions means the
preference is also lost.
“A preference is not some
self-contained privilege that
needs to be separately can-
celled with notice and a hear-
ing,” Winmill said. “It is
instead a privilege to renew a
permit — once the permit is
not renewed due to noncom-
pliance, the preference disap-
pears at the same moment the
permit disappears.”
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with Kenya provides new
opportunities for Oregon
growers. The vast majority
of Oregon wheat, between
85% and 90%, is exported.
“We need as many open
markets as we are able
to secure for our wheat,”
Hoey said. “The acceptance
of export phytosanitary
inspection and certification
provides access to a market
restricted to Oregon grow-
ers for more than a decade.”
Kenya imports much of
its annual wheat supply,
since domestic production
only supports about 10% of
the country’s overall con-
sumption. Most imports
come from suppliers such
as Russia, Ukraine and the
European Union. The U.S.
currently provides only 5%
of Kenya’s wheat imports,
or about 120,000 metric
tons.
The deal struck between
APHIS and Kenya also has
an impact on U.S. wheat
being sold into landlocked