Press Release

The Oklahoma Grain and Feed Association is a voluntary trade organization of the state's grain and feed industry organized in 1898. We represent over 90% of all grain handling facilities within the state. Hard Red Winter wheat is our number one crop, with this year's estimated harvest to be in excess of 160 million bushels.  We appreciate this opportunity to comments on behalf of our members and their wheat producer customers.

In the Federal Register, Vol. 77, No. 70 dated Wednesday, April 11, 2012, it is stated that based on data from over 100,000 official export and domestic inspection samples, there would only be a 5% reduction in U.S. No. 1 if SHBN had been the grade determining factor given the proposed reduction.  IF your data is correct, the 5% figure would disproportionately affect Oklahoma and Texas as evidenced by the data below taken from GIPSA official sample results of Oklahoma rail shippers.  This is not biased data, "selected" or "hand-picked" data, or any other type of special grade determining situation.  These are actual grading results from an "official" inspection agency.  To allege otherwise that this is not factual or is biased data is totally erroneous.  (Go to table at the bottom of this article.)

Furthermore, Shipper "A"'s records show that prior to 2009, had the proposed SBHN change been in effect, in seven out of ten previous years their shipments would have graded No. 2 instead of No. 1 with SHBN being the limiting factor.

Plains Grains Inc. (PGI) is a regional marketing/informational entity for the U.S. hard red winter wheat producing areas.  Oklahoma is part of PGI.  They do a significant amount of grading and testing of samples throughout the region.  An analysis of the past three years data, 2009-2011, shows that Oklahoma averaged 20% higher SHBN that the four other HRW wheat producing states of Texas, Kansas, Colorado and Nebraska.  In 2009 alone, Oklahoma SHBN was 35% higher and in 2011 29.5% higher. 

Given the above information . . . How can your data be so much different than these "official" sample results?  Was any Oklahoma data included in your sample size? If so, what percent of the total?  How can you imply that only 5% will be affected?

It seems fairly obvious that this proposed change will have an adverse effect on Oklahoma wheat producers and shippers.  The "one comment from a wheat market development organization" contained in the Federal Register recommending this change apparently does not represent  the interests of Oklahoma and North Texas wheat producers and grain elevators.

This same "wheat market development organization" further says that foreign millers have often suggested this change be made to help improve the value of wheat being purchased.  A foreign buyer can specify any quality of wheat they need.  All they have to do is specify it in their tender and pay the price. Foreign buyers of U.S. wheat always have and probably always will ask for better specifications with no additional cost to them. Additionally, there has been NO evidence presented by either the "wheat market development organization" or GIPSA to support the assumption that this change will increase exports or result in an increase in net profits to producers or handlers.  The overall impact on Oklahoma wheat producers will NOT be positive.

While it is a fact that most wheat is traded on a No. 2 grade basis, removing such a significant amount from the No. 1 category due to the SHBN grade determining factor will severely limit the
grain elevators ability to market the wheat crop to meet the No. 2 specification.  What this change will do, in effect, is pretty much remove a significant amount of Oklahoma wheat from ever being graded No. 1. 

We believe that SHBN for the most part is an environmental issue, which more often than not, hot dry winds affect the crop at a most critical time in its development causing the kernels to be shrunken.  Dr. Brett Carver, Regents Professor and Endowed Wheat Chair at Oklahoma State University says "We (wheat breeders) can control or manipulate genetics to some degree. What we (wheat breeders) cannot control are environmental influences unique to the southern Plains that can override genetic factors. Unseasonable high temperatures, accompanied by windy and dry conditions during the latter stages of kernel filling disrupt the flow of photosynthate to the grain and wreak havoc on kernel morphology.  The visual effect is a shrunken or shriveled feature on the kernels that would ordinarily appear appropriate to the HRW class. The environmental factors occur with greater frequency in areas where kernel filling occurs under more stringent (hotter) conditions relative to the inherent capability of the crop, i.e., The Southern Plains of the USA.

It is very important that the U.S. Grain Standards represent the ENTIRE wheat industry and not just a select few areas. Regional differences in grain production/quality should not be penalized.  The U.S. Grain Standards should represent the average of all the quality factors necessary to achieve a good quality product. This change will make a large percentage of Oklahoma wheat not capable of export quality specifications to buyers and will reduce the value significantly in years when the quality may not be the best.  It will put Oklahoma grain firms and wheat producers at a distinct disadvantage. 

We think it is extremely short sided of the "wheat market development organization" to recommend this change, and for GIPSA to implement it given its negative impact upon the Oklahoma wheat industry. This proposed change is NOT an improvement for all concerned.  It certainly is not an improvement for the Oklahoma wheat producer and grain elevator industry.  Again, we appreciate the opportunity to comment on this issue and therefore request that this proposed change in the SHBN grade factor NOT be adopted.

This article was written by Joe Neal Hampton, President and CEO of the Oklahoma Grain and Feed Association, Oklahoma Agribusiness Retailers Association and Oklahoma Seed Trade Association, trade organizations that represent the interests of the state's grain, feed, seed, fertilizer, ag chemical, and ag retail industries.