The Times - Serving Waitsburg, Dayton and the Touchet Valley

WAITSBURG - In his recent "Crops" column, Waitsburg writer and mar- ket analyst Gary Hofer noted that concerns over ge- netically engineered wheat found in an Oregon field are receding into recent memory.

"No further presence of GMO wheat has been detected despite vigorous investigation," he wrote in his column published in the Times on July 11. And "Pa- cific Northwest white wheat growers are at least able to think about something other than the Monsanto GMO wheat controversies."

But if growers here are no longer shaken up by the discovery that sent fear into the hearts of government officials in three big Asian trading partners - Japan, South Korea and Taiwan - they still have the jitters.

"Farmers here have been watching it very closely," said Scott Yates, commu- nications director for the Washington Grain Com- mission in Spokane. "It's been huge. There is no doubt about it."

The scare on both sides of the Pacific began on May 29 when the U.S. Department of Agriculture's Animal and Plant Health Inspection Service announced that an unapproved variety of genetically-engineered glyphosate-resistant wheat was found in a sample taken from a farm in Oregon. The variety was the strain Mon- santo grew in test plots in 16 states from 1996 to 2005.

GMOs, whose acronym stands for "genetically modified organisms," are shunned or outlawed in most other countries around the world after some stud- ies linked them to adverse health effects, ranging from allergies to cancer and kid- ney damage.

In the immediate wake of the announcement, Japan, one of the state's largest trading partners put a ban on soft white wheat from the Northwest, followed a few days later by South Korea, which suspended trade in the commodity. Taiwan also considered such a suspen- sion. The predictions were dire.

"All wheat produced in the U.S. will now be heavily scrutinized - and possibly rejected - by other nations that traditionally import U.S. wheat," columnist Mike Adams wrote for Natural News.com, a con- sumer choice site owned by a Taiwan corporation.

Yates said the contro- versy was the biggest to rattle the industry since the Karnal bunt quarantine in 1996.

"This has never hap- pened in the wheat industry before," he said about the discovery of a GMO that had previously only oc- curred in rice and corn. Soft white wheat prices hover around $7.70 per bushel, down $1.85 from the same time last year, though many other factors go into the ups and downs of commodity prices.

But as historic as the recent GMO discovery might be, new developments point to a possible resolution of the issue by the fall, when Japan is expected to put a new testing protocol in place for soft white and may relent to political overtures to drop its ban, Yates said.

"We're optimistic they'll come back in the market relatively soon," he said, declining to speculate on an exact time frame. "We may have this in our rear- view mirror before harvest is over."

Despite the rise of such big economies as China and India, Japan remains one of the dominant trading part- ners for the state of Wash- ington, in part because of its purchase of wheat grown in southeast Washington and other areas east of the Cascades.

In 2012, Japan and Ko- rea together bought half of all the soft white wheat grown here, according to the commission. Yates pointed out that soft white offers a unique ingredient for the country's beloved noodles, sponge cakes, tempura bat- ter and steamed bread.

Shortly after the GMO controversy broke out, trad- ers in Japan looked hard for a viable substitute, but in the end, Japanese producers could only rely on its stored inventory of Northwest white wheat to meet the demand.

"They need this wheat to make their products," Yates said.

The GMO controversy served to remind growers in the region, who sell 90 per- cent of their grains overseas, just how dependent there are on overseas markets and in particular Japan, he said. "We recognize once again how important Japan is to our state's economy, but it's (normally) never far from our minds."

But with the rise of emerging markets such as China, Japan isn't the ace in the hole when it comes to trade. Although China is now the world's largest pro- ducer of wheat, the quality of its grain isn't quite like that of other producers like the U.S. and Australia, ac- cording to some observers.

And when it has a bad harvest, guess whose door it comes to knock on? China's recent announcement that its crop failures have prompted it to buy an additional four million metric tons of wheat from the United States has turned into the market trend eclipsing the GMO contro- versy for attention, Waits- burg's Hofer wrote.

"The numbers (out of China) certainly sound very good and in a negatively trending market, the de- mand is enough to at least support wheat prices a bit, preventing a much uglier seasonal low from taking shape," he concluded.