We'd Like To Mention

By Gregg Hillyer, Editor in Chief, with contributions by Emily Unglesbee, DTN Staff Reporter

It's easy to take wheat for granted. The tough, versatile grain crop has never generated the research money and media attention of corn and soybeans. Add a growing gluten-free movement, low-carb diets and interest in other trendy ancient grains, and you have one overlooked, underappreciated commodity.

We hope to change that attitude with this issue, a special section on the wheat industry and the hard, unseen work that goes into "bringing home the dough" each year.

Take a peek into a lab full of scientists who stress-test the hard winter wheat varieties grown in this country and decide which ones are fit to make the breads and rolls that fill our grocery shelves.

Catch up on the National Wheat Yield Contest, now in its fourth year, which is inspiring growers to push yields to new heights while keeping their feet grounded in the need for high-quality grain (only Grade 1 and Grade 2 wheat can compete). This year's contest brought in a record 397 entries from 29 states. The Great Plains confirmed its reputation as the country's breadbasket, with nearly half the entries coming from the Dakotas, Kansas, Nebraska and Oklahoma. Western growers gave us a glimpse of wheat's genetic potential, with three farmers from Colorado, Idaho and Washington topping 200 bushels per acre.

And, the next time you bite into that perfect pie crust or dig into your favorite biscuits and gravy, remember the humble grain and hard-working industry that brought it to you.

- Emily Unglesbee

WHEAT WOES COURTESY OF CHINA

The ag community is applauding the recent signing of a phase one trade deal between the U.S. and China. Prior to the agreement, China has consistently used tariff rate quotas to restrict grain imports, and that policy has severely affected U.S. grain exports, particularly for wheat. A recent University of Illinois study shows if China hadn't used such policies to restrict trade, imports of U.S. wheat could have been 83% higher in 2017. That's a value of $324 million, explains Bowen Chen, the study's lead author.

Tariff rate quotas establish two tiers of tariffs for grain commodities, with a lower tariff (1%) for in-quota imports and a much higher tariff (65%) for out-of-quota imports. The system is intended to allow some access for imports at a low tariff rate, while the second-tier tariffs provide protection for domestic commodities. Under the tariff rate quotas agreement, China is obligated to import certain quantities of grain at the lower tariff. However, the U.S. contended in its successful complaint to the World Trade Organization that these obligations weren't fulfilled, and that China's imports of corn, wheat and rice were far below in-quota quantities.

Chen's team obtained trade data for grain commodities from 2013 to 2017, using information from a United Nations database and China's Ministry of Commerce. They also looked at domestic price data published by the Chinese Ministry of Agriculture. Overall, the researchers concluded that China's 2017 grain commodity imports could have been $1.4 billion higher without the tariffs.

Chen explains China has used the tariff rate quotas to stabilize domestic prices and restrict imports.

"The restrictions make foreign commodities more expensive and give more incentive for domestic producers. China wants to feed itself and be less dependent on other suppliers," he explains.

The new phase one trade deal stipulates that tariff rate quota administration not be used to prevent the full utilization of agricultural tariff rate quotes. Hopefully, that will mean good news for all U.S. grain exports to China, including wheat.

- Gregg Hillyer

> Write Gregg Hillyer, 2204 Lakeshore Dr., Suite 415, Birmingham, AL 35209, or email gregg.hillyer@dtn.com.

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