New market for Western Australian wheat, ARS scientists improve soil carbon calculations, IGC raises May grain outlook, Toepfer renamed ADM Germany

Philippines market opened for Western Australian wheat growers​

A newly inked partnership between CBH and Indonesian billionaire Anthony Salim will allow Western Australian farmers unprecedented access to a booming market for wheat in the Philippines, which has been dominated by the US until now.

Interflour, 50% owned by CBH, struck a deal to begin construction of a $30 million mill, which will produce an estimated 3,500 tons of flour a week for the Philippines market, according to The Western Australian​. The mill will be built in a free-trade zone on land that forms part of the former US base at Subic Bay under a 50-year lease signed by Interflour and Philippines authorities.

Interflour expects strong growth in demand for grain from flour and feed millers in the Philippines given its fast-growing economy and high rate of flour consumption (24kg per person each year), which is expected to rise with the standard of living. Moreover, Australian wheat imports to the Philippines are duty-free under ASEAN trade agreements.

The Philippines currently imports more than 80% of its wheat from the US as a result of the historically close economic, political and military ties between the two countries. But Interflour CEO Greg Harvey said the Mabuhay Interflour Mill will import about 120,000 tons of wheat each year, translating to about $35 million a year in revenue for the growers. 

Soil scientists improve soil carbon calculations​

Scientists at the US Department of Agriculture (USDA) have identified a possible source of error in calculating soil carbon.

Hero Gollany, a soil scientist at USDA research arm Agricultural Research Service (ARS) identified factors affecting the measurement of soil carbon sequestration, which is important in assessing how farming practices can reduce carbon emissions. Gollany used these findings to refine methods for assessing farming practices that retain carbon in the soil and thus mitigate carbon emissions that contribute to global climate change.

Rates of soil carbon retention, known as sequestration, are often measured by tracking changes in total soil carbon over time. But the "accrued" carbon is not actually sequestered in the soil until after the carbon becomes attached to soil mineral particles, which can take several decades. Until then, accrued carbon can easily be lost from the soil, because it is not bound to the soil particles.

Gollany and Washington State University​ soil microbiologist Ann-Marie Fortuna used data from a soil carbon field study to see how levels of a specific type of carbon called "light-fraction" carbon affected measurements. They found that carbon sequestration levels measured in the study included carbon from fine crop residue materials that passed through sieves during sample processing—carbon that had accrued in the soil, but was not yet sequestered via decomposition. Accrued carbon rates ranged from 13 to 19%, thus skewing efforts to use carbon data from the samples to model soil carbon sequestration levels.

IGC: Global grain up for May​

In its May outlook, the International Grains Council (IGC) raised its global forecasts for 2014-15 wheat and corn production.

Global 2014-15 wheat production was forecast at 699 million tons, up 5 million tons from its prior forecast but 11 million tons below record outturn of 710 million tons in 2013-14. Wheat consumption was forecast at 697 million tons, down 1 million tons from the prior forecast but up 7 million tons from a year earlier. Carryover in 2015 was forecast at 194 million tons, up 7 million tons from May and up 2 million tons from 2014.

“With average yields projected to retreat from last year’s record, 2014-15 wheat production is forecast to fall by 2% year-over-year,”​ the IGC said. “Supply and demand are expected to be virtually balanced, with stocks seen rising only slightly. Despite an upward revision this month, exporter stocks are forecast tighter than average. A mostly comfortable supply outlook and some concerns about a slowdown in demand pressured world export prices during June.”​ 

World corn production was forecast at 963 million tons in 2014-15, up 8 million tons from the prior forecast but down 9 million tons from 2013-14. Corn consumption was forecast at 950 million tons, up 3 million tons from the May forecast and up 12 million tons from the prior year. Carryover stocks were forecast at 180 million tons in 2015, up 8 million tons from May and up 13 million tons from 2014.

The increase in 2014-15 corn outturn mainly reflected improved prospects in China. World prices were under pressure during June, according to the IGC.

“Despite expanding demand, world ending stocks are forecast to increase for a fourth consecutive year,”​ the IGC said. “Inventories in China are growing and may account for almost half of the world total.”​

Toepfer becomes ADM Germany​

Germany's largest grain trader Alfred C. Toepfer International has been renamed ADM Germany GmbH by its new parent Archer Daniels Midland Co. Hamburg-based Toepfer’s name has been part of the global grains market for a century.

US agribusiness giant ADM announced in April it was buying the remaining 20% stake in Toepfer from France's InVivo for 83 million euros ($113.6 million). The name change took effect immediately.