The U.S. is one of the top exporters of wheat globally. U.S. farmers produce about 1.9 billion bushels of wheat every year. Almost half of all the wheat grown in the U.S. is destined to be exported. So, international trade is critical to U.S. wheat farmers. They have a strong and trusted advocate working in more than 100 countries: U.S. Wheat Associates (USW).

As representatives of the U.S. wheat industry,  USW develops, maintains and expands international markets to enhance wheat’s profitability for U.S. wheat producers and its value for their customers. Operating as a non-profit organization, USW also provides critical information about U.S. wheat crop and market conditions to wheat producers, buyers and end-users.  “USW does not buy, sell nor process wheat, but the organization helps make it easier for everyone else who does,” underlines Mr. Darren Padget, Chairman of U.S. Wheat Associates.

Wheat harvested areas have been on a downward trend for many years in the U.S. “However, with input from farmers and even overseas customers, our public and private wheat breeders are doing great work to keep improving yields and quality,” says U.S. Wheat Chairman. 

Mr. Padget is a fourth-generation farmer in Oregon’s Sherman County, with a dryland wheat and summer fallow rotation currently producing registered and certified seed on 3,400 acres annually. Previously, Padget held positions on the Oregon Wheat Growers League board of directors and executive committee for seven years, serving as president in 2010. He chaired the NAWG Research and Technology Committee and served on the Mid-Columbia Producers board of directors, for which he was an officer for 10 years. 

In an interview with Miller Magazine, Chairman Padget gives insights into the U.S. wheat industry.

Could you please give some information about U.S. Wheat Associates (USW)? What is the mission and objective of your Association?

U.S. Wheat Associates (USW) is the export market development organization for the U.S. wheat industry. The organization promotes the reliability, quality, and value of all six U.S. wheat classes to wheat buyers, millers, bakers, food processors, and government officials in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance wheat’s profitability for U.S. wheat producers and its value for their customers.” 

Funding for the organization starts with U.S. wheat farmers who contribute a small portion of their wheat sales to state wheat commissions that promote the crop at home and abroad. Money, goods and time contributed to USW from 17 state wheat commissions qualify USW to apply for cost-share grants from the USDA’s Foreign Agricultural Service. 

USW does not buy, sell nor process wheat, but the organization helps make it easier for everyone else who does. It is important to note that USW takes no funding from commercial grain companies. Instead, USW is proud to represent hard-working farm families that produce an abundant supply of wholesome milling wheat.

USW has an impactful motto: “Dependable people, reliable wheat”. Could you elaborate on the meaning of this motto?

As I mentioned, USW represents wheat farm families like mine who share a strong legacy of commitment and partnership to produce the highest quality wheat and to take care of our land for generations to come. We produce enough wheat every year to fill American tables and still have enough to supply a big share of the world wheat trade. I think we have shown buyers they can depend on American wheat farmers to do the right things.

I wish I could share all the reasons why we are such reliable wheat suppliers, but here are a few. First, our export supply system is the most efficient in the world and is regulated by federal government rules. Our wheat is inspected independently and certified to meet tender specifications by the Federal Grain Inspection Service. U.S. law protects the sanctity of all export contracts and forbids export tariffs. Finally, USW representatives provide no-cost trade service and technical support that adds exceptional value to all U.S. wheat imports. 

How has the COVID-19 pandemic affected the wheat markets? What are the impacts of the pandemic on US wheat exports?

I have to say that COVID-19 has not affected wheat markets much at all, except for the fact that the restrictions have prevented me, other USW officers, board members, and USW staff from working face-to-face with customers. I miss that contact very much. This forced us to turn to Zoom and Teams and other online services to conduct our trade and technical support programs – but it has also allowed us to reach more customers or, more specifically, reach more members of our customers’ staff. In fact, we have made more than 13,000 customer contacts through online activities since restrictions started in March 2020.

COMPETITION FOR EXPORT TRANSPORTATION CAPACITY

What are the major challenges for the US wheat industry?

In one word, I would say competition. By that, I mean competition here in the United States for the planted area on farms and for export transportation capacity with other crops, especially corn and soybeans. Those other crops in most years offer more profit per hectare than wheat. In Kansas, for example, there is more area planted to corn every year than wheat. Soybeans are now grown well into North Dakota. As a result, U.S. wheat planted area has been on a downward trend for many years. However, with input from farmers and even overseas customers, our public and private wheat breeders are doing great work to keep improving yields and quality. And I want to add that breeding is all done using conventional, not GMO, methods. In fact, there is a lot of progress in research on hybrid wheat – something that could help increase wheat’s profit potential on the farm.

Across the U.S. agricultural system, most of the corn, soybeans, wheat and other grains are transported to the export market by rail. This system is very efficient, with incentives to move grains like wheat to export terminals as quickly as possible. But wheat has to compete for that limited rail car capacity. USW and other organizations are studying comparative rail rates for different agricultural products and working with the National Association of Wheat Growers to provide information that the group can use to help federal agencies and Congress see that increased rail competition is good for U.S. agriculture and our global customers.

There are other challenges, of course. For example, up in the Pacific Northwest where my family farms, there is a potential threat to the locks and dams on the river transportation system we rely on to move soft white wheat to export terminals.

Nearly half of the United States is experiencing one of the driest years they have seen. How the U.S. wheat harvest is progressing? Could you also share prospects for the 2021/22 season with us?

The drought across the northern tier of U.S. states, the Pacific Northwest, and into a large area of Canada’s western provinces definitely brought the 2021 crop to maturity ahead of normal. Winter wheat harvest will be complete in early August and spring wheat harvest could end before September starts. In its July report, USDA estimated all wheat production at 47.5 million metric tons (MMT), which is down from 49.7 MMT in 2020. Our hard red winter and soft red winter wheat production are both expected to be up, but the lower yields from the drought will reduce our hard red spring, durum and soft white wheat production. 

Because of higher prices and lower supplies compared to other exporting countries, USDA also expects U.S. exports to be down for the current marketing year (June 2021 through May 2022) to 23.8 MMT compared to 27.0 last year.

Do you think Russian wheat export taxes would undermine the competitiveness of Russia on the international market? Do Russian restrictive measures give the US an advantage in the market?

I do not think any of us can accurately predict if Russian government policies will stay the same or change, so I would not want to speculate about the impact of the export tax. I do want to say that any importer should be cautious about contracting for Russian wheat. Their government’s policies are unpredictable and they have demonstrated that it will intervene in commercial transactions when and how it wants, sometimes without respect to contract sanctity.

The grain market could be described as relatively predictable a few years ago. However, the market is bracing for additional uncertainties beyond its own dynamics. Price volatility makes planning for farmers difficult. How do you protect American farmers from market volatility?

The public-private partnership between U.S. wheat growers and the U.S. government is a unique and effective model. There have been several studies conducted by objective public universities showing that the investment in export promotion – the work that USW does – provides a substantial return on investment to farmers. I have seen this at work with our USW staff around the world. I mentioned that most of the soft white wheat class that my neighbors and I grow is bound for export channels. I am very happy knowing that we have very competent people working in the interest of farmers to help buyers and end-users understand the real value of our wheat. 

Our wheat prices are set by the marketplace based on the futures markets and the cost to move the wheat to export locations. We cannot control that. But by constantly working to maintain or expand demand for U.S. wheat, the USW organization supports farmers like me every day.

Consumer awareness in health, origin, environment, climate change and animal welfare has been increasing. What role do farmers play in the dynamic human food industry?

We know that to help feed a hungry, growing world, we have to produce more and better quality wheat in ways that are better for the environment. If I could, I would like consumers around the world to know how far these family farms have come. Our family started our farm in North Central Oregon in 1905. That legacy to pass the farm down to the next generation means everything to us. And that is only possible if the previous generation cares for and improves the land and is economically successful. That is true sustainability and I believe we practice it just as our ancestors did when they were caring for the farm.

Is there anything you would like to add?

If you would like to know more, please visit USW’s Vimeo channel to see a video about my family's farm in Oregon as well as additional background on the organization and its work.