PNW Journal

Inside this issue

Kernels and Chaff ........................ 2

Agronomy/Seed Update.............. 2

PNW Staff .................................... 3

Pulse Markets ............................. 3

Rollercoaster Rides ..................... 5

Year-end Wrap-up ....................... 6

The Best, The Challenge .............. 6

Seed Division News …………………..7

Annual Meeting Notes ……………...7

Market Update ........................... 8

Grain Operations…………………..…..8

A Moment with Mike.………………..9

We Are…An Employee View……...9

Did You Know-Traditions ............. 10

PNW and CoAg to merge on June 1st Yesterday, December 15th, the ballots were counted from both PNW and CoAg. For those of you reading this who are active members of PNW, Thank You for voting on the merger. Brian Schmidt with Jurgens & Co., P.A. was appointed by both the PNW and CoAg Board of Directors to count the ballots and he has certified that a Super Majority was attained from both Cooperatives. With the merger approved, both the board of directors and the employees are ready to move for-ward to make this merger a smooth and seamless transition. I would also like to personally thank everyone for the great year we experienced here at PNW. I hope your holidays are joyous. Remember the holiday season is about the family, so gather them around you! Thank you again for your support of your cooperative and to the people that you have entrusted to run it.

Happy Holidays!

Bill

December 16, 2016 Holiday Newsletter

It seems the older I get the quicker time goes by. It’s hard to believe 2016 is winding down already, but unlike the past few crop years, this year won’t be

forgettable. In fact, in terms of yield, 2016 will be remembered for a long time. Almost every producer I’ve talked to has stated they had the highest

whole farm yield they’ve ever cut. Our harvest intake blew away our previously highest intake year by 25 percent! Whether it was fall wheat, spring grain

or pulses; mother nature was kind to the Palouse in 2016. Even though grain prices are at or below cost of production, stronger pulse prices and high

yields hopefully helped you have a black number on the bottom of your farm’s balance sheet.

Looking ahead to 2017, we’re off to an amazing start! Our soil moisture profile is almost full and the winter wheat looks excellent. And meteorologists are

predicting a high probability of another wet year. It’s rare to have two similar crop years back to back, but if that is the case, what major problems arose

in 2016 that we may also see in 2017?

With wheat, the biggest weather impact was stripe rust and low falling numbers. Stripe rust has already been found this fall in summer fallow wheat just

to the West of us. Depending on how mild or cold the coming winter is, determines what inoculum load will survive the winter. More than likely, we’ll be

spraying wheat next April through June. With these low commodity prices, I’d suggest stocking up on Propiconazole or Tilt. It’s cheap and effective. It’s

always a challenge finding a weather window in the spring to spray your winter wheat, but one thing to note about 2016, if you sprayed your winter

wheat the first of April, you had to buy at least one or maybe two airplane tickets later for rust applications. Producers who sprayed wheat the end of

April or first of May tracked their wheat, but they got by with only one areal fungicide application or didn’t have to spray at all.

In terms of having another low falling number’s year, the chances are slim. Most of 2016’s low falling numbers was caused by LMA or late maturity alpha-

amylase which is extreme temperature swings occurring 26-30 days after pollen shedding or anthesis. Unfortunately, there’s no way to currently manage

for this quality defect. On a positive note, researchers have found resistant traits to LMA, so over time, breeders should be able select for resistance in

future releases. It’s going to take time however.

If you have hard red winter wheat in the ground or are planning to raise DNS, these steep protein discounts are not likely to go away. I’d highly recom-

mend soil and tissue sampling next spring. I’d also make sure your Nitrogen requirements are met for a yield goal similar to what we cut in 2016. As

spring gets closer, we should start seeing a more accurate long range weather forecast to help predict our yield potential. With a glut of low protein red

wheat in the bins, the market should reward your increased fertilizer costs. (Continued page 4)

Kernels and Chaff

Agronomy/Seed

2

The malt barley crop this past harvest was mostly a huge success. Production was well over the contracted tonnage and quality was very good. We have had some luck in finding markets for the excess malt this year. Although the excess market price is not as high as our original contract price, it is still ap-proximately $30/ton better than the current feed market. If you have not yet sold your excess malt please call Tom, David or myself for details. Our food barley program was also a great success. The quality of the barley was excellent and production was over the contracted amount. Today it looks as if our Japanese customers will once again be back to contract more tonnage this coming year. I hope to have the details of a new contract by the end of January. Falling numbers have definitely been the hot subject this year. As we ship grain out we are still fighting with low falling numbers. I have learned more about this subject than I ever thought I would. The machine that runs the test, how low numbers affect end-use products and what our customers of your wheat need and demand. I do know that the Tri-State wheat commissions are spending time and money to help identify the problems and hopefully solve these issues for future harvests. I would like to thank everyone who has called or stopped by the office to discuss this concern. I hope to report back in our spring newsletter with the findings of the wheat commissions studies. This year the Army Corps of Engineers will be conducting an extended river closure for lock and dam maintenance. The river system will be shut down from December 12, 2016, until March 20, 2017. We are planning to do some maintenance ourselves during this time at our SRT facility. For more de-tailed information on the closure please check out our website. www.pnw.coop. Speaking of our website it has a new and improved look. To get the most out of this site you will need to create your own private account with a username and password. That can be done by clicking on the word login on the top right-hand corner of our website. If you have problems please con-tact one of our offices and we can help you get signed up. With this past harvest, we have done our part in keeping McCoy Grain very busy. As of this writing, they have shipped 30 barges out of LCT, 26 barges out of SRT and 29 barges out of McCoy Central Ferry. They have also shipped 6 unit trains out of the McCoy rail facility. With the upcoming river closure, they have a very busy schedule of trains to load and ship out. They are currently planning to ship 4-5 trains every month with the river system shut down.

At this time I would like to thank each and every one of you that patronize your company. It is with your crops that we are able to store, process and market that help us bring value back to you. Thank You! I hope you have a Merry Christmas and Prosperous New Year.

- Sammie White, COO,

(208) 285-1141, sam@pnw.coop

PNW Staff

Your PNW staff is available to help you with

questions, provide information, and offer

suggestions:

Genesee Office 208-285-1141

Bill Newbry – bill@pnw.coop Sam White – sam@pnw.coop Don Himmelberger – don@pnw.coop Shawn O’Connell – shawn@pnw.coop Kim Storm – kim@pnw.coop Carol Jeffries – carol@pnw.coop Mac Reynolds – mac@pnw.coop Kattie Schmidt – kattie@pnw.coop Colfax Office 509-397-4381 Keith Becker – keith@pnw.coop Bob Holmes – bob@pnw.coop David Weitz – david@pnw.coop Tom Riedner – tomr@pnw.coop Craig Forsman – craig@pnw.coop Sherri Swan – sherri@pnw.coop Marla Heflin – marla.heflin@pnw.coop Meghan Startin – meghan@pnw.coop Laurel Meacham – laurel@pnw.coop Midtown—Genesee Field Staff 208-285-0371 Kyle Renton – kyle@pnw.coop Jerry Mraz – jerry@pnw.coop Mike Devoe – miked@pnw.coop Human Resources 208-285-0371 Tedi Roach – tedi@pnw.coop IT Tim Sloot—tim@pnw.coop Troy Gartner—troy@pnw.coop Field Staff—Colfax 509-397-4381 John Kromm – john@pnw.coop Jacob Gisler – jacob@pnw.coop Jake Gelineau – jake.gelineau@pnw.coop Processing Tom Jeffries – tom@pnw.coop Bob Teigen – bobby@pnw.coop Mark Teed – mark@pnw.coop Diane Quint – diane@pnw.coop Safety Wade Morris – wade@pnw.coop Quality Assurance Marla Uto – marla@pnw.coop Justin Podrabsky – justin@pnw.coop Website: www.pnw.coop

Pulse Markets

Markets: As we enter the Holiday season we typically see the activity for pulse sales slow considerably. This time of year the harvest in North America is done and we have a good idea as to the production of the vari-ous crops. Mexico and India are planting and are on the tail end of their planting season for the major pulses. Argentina and Australia are harvesting their crops. Growers, Traders and end users are trying to digest all the information to make sound decisions for this next crop year. Garbanzo Beans are being talked about as a pulse crop of choice for this next year. Strong world de-mand has kept values of Garbanzo Beans elevated this year in comparison to other crops and growers are taking notice. We will see a substantial increase in Garbanzo planted acres this year with the larg-est increase occurring in Montana and North Dakota. I expect the increase in planted acres will only be limited be seed availability. I know several companies in this region are talking about selling garb seed to growers in Montana and North Dakota. I anticipate the price will be very high and margins will be excellent. However, PNW will not be selling garb seed to these regions. We will promote within our own borders and with our patrons. We need to continue to promote our product from our region to the world. Depending on the variety of Lentils prices are steady to stronger. Pardina lentils have been steady over the last two months. We have found a level that trades for both the grower and end user. Adequate supply is keeping the lid on prices but we did not over produce so prices are not depreciating either. Green lentils is the variety were we are seeing the biggest increase in prices. Low quality this past year has created a premium for the #1 product. Green Peas continue to trade at the lower end of the price range. Over production and grower selling is keeping the lid on prices. At this time it is hard to see a significant price recovery in the next 3-6 months. Even with current prices we expect to see large planted acres again for the 2017 crop year. Eight cent peas are still better than four-dollar wheat in some regions of the U.S Processing: We continue to run 24 hours five days a week at most locations. The guys out in the warehouse are doing an incredible job. The flu has been going around and people calling in sick or coming to work when they are sick. They’ve been shorthanded, they have been cold and tired but they have been getting the job done. From all of us in processing we wish you and yours a Merry Christmas and Happy New Year.

- Shawn O’Connell, Specialty Foods Manager,

(208) 285-1141, shawn@pnw.coop

3

“First we’ll make snow angels for two hours, then we’ll go ice skating, then we’ll eat a whole roll of Tollhouse Cookie

-dough as fast as we can, and then we’ll snuggle.” - Buddy the Elf (Will Ferrell in Elf).

PNW Core Values

1. Food Safety

2. Integrity

3. Respect

4. Continuous improvement

5. Teamwork

6. Sustainability

With chickpeas, we saw an increase of Metalaxyll resistant Pythium and seed corn maggots. We’ve decided to add Inte-

go on all our large Kabuli chickpea seed for next spring. Intego is an oomycete class fungicide and will help control re-

sistant Pythium. It’s an extra $4/acre cost for seed but we feel it’s cheap insurance to control a real threat now found

common on the Palouse. A more uncommon threat is seed corn maggot. We estimated they impacted stands on about

2% of our chickpea acres in 2016. The warm spring created ideal conditions for the pest, and the fly is attracted to fields

where large amounts of CO2 is being released. If you have big volunteer next spring, please make sure to allow ade-

quate time from desiccation (Round Up) to seeding. Controlling the green bridge for rhizoctonia maybe just as im-

portant to control seed corn maggot.

I’ll always remember 2016 for the excellent yields we experienced. It was fun getting calls, texts and pictures of yield

monitors this past harvest on how good the yields were… amazing! Hopefully we can have a repeat in yields and if it’s

not asking for too much, add about a $1 to the wheat price!

Spring Seed Availability

We’re starting to take a few seed orders and the definite trend is dns, malt barley and chickpeas. We haven’t started

working on new crop enterprise budgets yet, but I would surmise those crops probably look the best! Hopefully by Feb-

ruary, we’ll have a better idea with new crop prices getting established, and a more accurate forecast on what our

weather may look like. We’re going to have two Spring Grower’s Meetings in February. The “Southern” meeting will

be at the Best Western in Moscow on Feb 15th. The “Northern” meeting will be at the Coeur D’Alene Casino on Feb

16th. Both meetings will mirror each other so please attend the location that’s best suited for you. Once again, we’ll

cover marketing, budgets and variety selection.

Spring grain – With the current board prices at or below the cost of production, there’s a lot of head scratching on what

to grow. Being diverse helps spreads your risks, so consider your early ground that may stress the soonest to a protein

wheat that may allow you to easily make protein. Whereas your high production ground to either a soft white or barley

where lower protein is desired.

For soft white wheat, we’ll have WB 1035CL2, WB 6121, WB 6341, JD club and limited Whit & Louise. If the forecast is

for another wet summer, later maturing varieties like WB 6341 and Louise are your best choice. However, early varieties

like Whit and WB 6121 will beat the heat 7 out of 10 years and yield the best. Since WB 6121 is truly the only sww that

has stripe rust resistance, it’s still my favorite because it keeps cost of production down.

For DNS, we’ll have WB 9518. This variety took about 95% of the acres this past year and we’ve decided to only carry it.

It has excellent yield and protein potential. Like WB 6121, it too has resistance to stripe rust. We’re not sure yet if we’ll

have a hard white program/market next spring. But if we do, we have WB Hartline available.

We should have malt barley contracts available by the grower meeting which will be either Copeland or Synergy. We will

again offer very limited contracts for Salute food barley.

Pulses – For peas, we’ll be offering Banner and Greenwood. The pea market is still soft to say the least, but what peas

that are moving have been the dimpled type peas. Next year we will have Hamptons available for commercial produc-

tion.

Chickpea prices have been hanging in there. The next

few months will determine how the Southern hemi-

sphere production will impact both demand and price.

For next spring, we’ll have Sierras, Sawyers, Troys and

Billy Beans. It all depends on contract prices to deter-

mine what direction to go, but I would grow large garbs

on your high producing ground and small garbs on the

more marginal ground.

Even though we saw ton lentil yields this year on the

Palouse, the wet summer in Canada hampered quality

and yields. We will have Pardinas, Morenas and limited “niche” lentils for those interested.

We will be sending out a spring letter with a more detailed description on yields and prices the first of March. But if

you’re comfortable in knowing what you’re going to plant next spring, please get your order in.

Last, I’m very thankful to be able to call the Palouse home and having a job with a great company. I truly am fortunate to

get to work with a great field staff and the awesome crew at the seed plants. They are a huge contributor for your

Coop’s growth and success. But most importantly, I have been able to create numerous life-long friendships with many

of you, our growers. Have a Merry Christmas and Great New Year!

Kyle Renton, Agronomy Division Manager,(208) 791-1116, kyle@pnw.coop

4

Agronomy/Seed Update (continued from page 2)

“Christmas is a season not

only of rejoicing

but of reflection.”

- Winston Churchill

2015/2016 WSU Spring Grain Results -

6 High fall Locations (2 year ave)

WB 6341 – 72 bu & 9.6% Protein

WB 6121 – 77 bu & 11.5% Protein

WHIT – 74 bu & 10.4% Protein

JD CLUB – 76 bu & 10.7% Protein

WB 9518 – 72 bu & 13.1% Protein

KELSE – 64 bu & 13.2% Protein

BULLSEYE - 67 bu & 12.2% Protein

PNW Key Strategies

Provide quality products

and information.

Provide quality customer

service

To differentiate ourselves

from the competition/

other co-ops.

PNW Mission Statement

PNW is a grower oriented

cooperative that will place

economic value and agro-

nomic resources in the

hands of it’s grower/

members and will provide

the domestic and interna-

tional marketplace with the

highest quality product

available.

2016 was quite the roller coaster ride, kind of up and down. The fall seeded wheat came through our mild winter in good shape. February was warm with one inch of rain and the wheat really took off. The first load of spring wheat seed rolled out of Chambers March 2nd, but it was a false start. Over the next three weeks I caught three inches of rain in my gauge. The first really nice day to farm was March 31st, and every sprayer in the countryside was moving, spraying roundup on all the volunteer green bridge that also came through winter in great shape. Seeding progressed through April and by mid-May was wrapped up. So far so good. The end of May and early June brought lots of calls about bare spots in chickpea fields. I burned through a box of gallon zip lock bags and spent my lunch money feeding the parking meters at WSU, taking bags of dirt and rotting seed to the third floor of Johnson Hall. Not just metalaxyl resistant pythi-um again, but another un-invited guest: seed corn maggots. What puzzled me was why there were so many of them-I was finding seeds with five maggots inside. I later learned the adult fly lays 250 to 400 eggs, so that explains the high populations in a relatively small area. It seems our warmer than normal soils and the attraction of freshly tilled under green bridge material created the perfect environment for the little buggers. As the summer progressed with near ideal weather it became apparent we had a bumper crop on the way. Our warehouse staff had their work cut out for them figuring out where to put it all, but they man-aged to get the job done. Things were looking up. And then down. Falling numbers and falling wheat prices. Seems like the good old Palouse has a way of evening things out. When things look bad it's going to get better, and when things are going good.... well, you know. Speaking of evening things out, I'd like to touch on crop rotations. With low wheat prices and high (for now) chickpea prices, it's tempting and maybe necessary in some cases to shorten your rotation to winter wheat /chickpea or even beans back on bean ground. I am a firm believer in longer rotations, and the benefits down the road could be worth more than chasing after last year's prices. When I think of crop rotations I am reminded of the old football analogy: if you gain three yards on every play you will never have to punt! Jumping off my soapbox and looking ahead, some meteorologists are predicting this winter and spring to be similar to 1995-96. Looking back at my records, we had four feet of snow and cold temps in Janu-ary '96 followed by rain and flooding in February. Spring work was late, cold, and wet followed by a hot dry June. Winter wheat yields were good, but the spring crops were below average. And prices? On August 15, 1996 Portland soft white wheat was $4.55 / bu and barley was $118 / ton. Peas were the 'bright spot' at 11 cents. Those were the good old days. I would like to thank all of you for your patronage and helping to keep your co-op strong. Working with our growers is the best part of my job, and I look forward to doing it again next year, whatever ups and downs it may bring. I would also like to thank our good neighbors at the Uniontown Co-op for staging our seed and storing pulse crops. Wishing you and yours a healthy and happy holiday season!

- Jerry Mraz, Crop Consultant, (208) 791-8076, jerry@pnw.coop

5

Rollercoaster Rides

“Christmas, my child, is love in action. Every time we love, every time we

give, it’s Christmas. ”

- Dale Evans

Well another Fall is behind us, snow has fallen, and it’s almost Christmas time on the Palouse. Harvest this fall went well for the most part. There were some of the best yielding wheat and pulses ever experienced on your farms this year, but instead of high protein issues you had to deal with low falling numbers. I empathize with you, especially when prices are so low. Someone cutting phenomenal yields with $8 wheat and taking a hit from FN wouldn’t be as devastating; but with $4 wheat, I know it really hurts. Many are hanging on from pulse crop revenue; I know some of you might be thinking about bumping up your pulse acres this spring. We are on track to have another full moisture profile going into the spring and we could have another great season for pulses. The only thing we need to keep in mind is twofold: remembering we are tradi-tionally in a three-year rotation in the Palouse, and considering whether the benefits of getting out of a rotation outweigh the consequences. As you know we use crop rotation to break up disease and pest cycles, mitigate nutrient loss, boost yields, and increase soil health and fertili-ty….is it worth it? That of course is up to you, to decide. We also need to think about managing green bridges for wireworm and seed corn maggot. They are both attracted to high levels of CO2 being released from the soil. This can occur from decomposing green plant material under the soil, such as when sprayed volunteer is not allowed sufficient time to dry out before being turned under. If you can wait, the flies will not be as attracted to your soils. Another thing to consider is attempting to wait as long as possible for higher soil temps to get your garbs seeded. The faster the crop can get out of the ground the better; we do not want to give pythium, wireworm, and seed corn maggot more time to eat on the seed. I want to thank all of you for your business and continued support. I feel very fortunate to have such great growers to work with! I have some warm Elmer Fudd hats and calendars, and have started to make my rounds this winter. Let me know when you have decided what you want to put in this spring. The sooner we can get the orders in, the easier life is on everyone involved. I wish you and your families a very Merry Christmas and a Happy New Year!

- Jake Gelineau, Fallon area Crop Consultant, (208) 553-8617; jake.gelineau@pnw.coop.

6

Year-end Wrap-up

The Best, the Challenge, and… Baseball! It’s Christmas time once again. I have always heard the years fly by the older you get. That is sure the truth! It seems like yesterday, I was

writing this letter for 2015. Last year we went on about how hot and dry it was. This year it was wet, as all of you know. It was probably the

best growing season I have seen in the six years that I have been here at PNW. We put the crop in early and received timely rains to get the

crop up and finished. I heard more than once this year, “these are the best crops our farm has ever seen.” Despite all the tremendous yields,

we were hit with low Falling Numbers and the price of wheat that has yet to come around. I believe this is what they call the lean years. It may

not be as fun as it was five years ago, but we are very fortune to live here on the Palouse. With the challenges we have, I believe we are still

lucky. There are places is this country that don’t always get the crop in, and when they do, the quality is less than par. If that doesn’t plague

them, they have thousands of miles to get their crop to market and all the freight concerns that come with that.

I have always believed it is the tough years that make a person the strongest. It forces us to adapt to the changes around us instead of becom-

ing complacent. It makes our minds work and come up with new ways to overcome problems. None of us would be here today if somebody

before us didn’t fight for what he or she believed in. So, to put a positive spin on this year, it will make you and your farm stronger. No one

said it would be easy; but when did anybody like easy?

It seems like everyone is asking me what to seed next spring already. My advice to them is to do what you know. I believe rotation is very

important to our cropping system and many have seemed to forget all the problems they incurred when they put the majority of the farm in

winter wheat. Many growers try to chase markets and more often, it ends up having the opposite effect to the bottom line. So again, I say do

what you know. If you grow garbs, be a garb grower. If you grow lentils, be a lentil grower. If you grow malt barley, be a malt barley grower.

And if you grow spring wheat, be a spring wheat grower. I’m not saying you shouldn’t switch it up from time to time; however if you do, do so

within reason. Base hits score points as well as homeruns, but the odds of a hitting a homerun are way tougher than hitting singles and dou-

bles.

I thank you for all your business and support and look forward to working with all of you again this year. Have a very Merry Christmas and safe

holiday season.

- Jacob Gisler, Crop Consultant, (208) 791-4090; jacob@pnw.coop

“I will honor Christmas in my heart, and try to keep it all the year.” - Charles Dickens

The fall 2016 seeding season wrapped up being a late one in a number of ways. We didn’t get off to a very fast start with seed orders this

fall due to the falling numbers issue, so we were a little gun shy about treating too much seed in advance. In a normal year (?) every effort is

made to have most of our treated storage filled by the middle of September so we have a good start to the season. Once the orders did

start rolling in, all the facilities were able to ramp up processing in order to supply you quality seed in a timely manner. Tracking our sales

numbers through the years gives us a good indication that the last half of September and the first week of October will be the busiest time

for the seed division. Looking back on the calendar for this year we started seeing the start of what was to be a rainy month around October

7th. Thankfully by that time we had the majority of acres seeded, but we continued to put out seed through the rest of the month into the

first part of November as weather allowed. The crews at all the facilities, along with field-staff and truck drivers all put in a lot of effort this

past fall to ensure we had another successful season.

Overall this fall we showed a 7.6% increase in total sales over the fall 2015 season with 72% of

sales being soft white winter, 22% hard red winter, and club wheat accounting for 6%. PNW’s

Trident Blend topped the white wheat, accounting for 22% of sales out the door. Even though SY

Ovation took a bit of a black eye with questions regarding falling numbers, it was still our number

2 seller at 11%. WB 1529 (8%), WB 1604 (8%), and UI Palouse CL+ (8%) rounded out the top five

in soft white wheat sales.

Keldin continues to be the hard red winter of choice with growers, accounting for a little over

49% of total hard red sales. Limagrain’s LCS Jet, a newer offering from PNW was number 2 at

around 27%, and Rimrock rounded out the top 3 with 15% of sales.

As mentioned before, the seed division had another solid year not only in sales figures but also in

the variety selection we have made available to you. Managing the nearly 30 different varieties / blend combinations we offered this fall

was no easy task, but thanks to the dedicated crew and your patience we were able keep varieties moving from facility to facility throughout

the season without any major problems. The seed division will continue to provide you with the best varieties and seed treatments available

in the marketplace and we hope our offerings will be of value to your operation.

If you have any questions for the seed division or field-staff, please don’t hesitate to call. All of us in the seed division thank you for your

patronage this past year and wish you a Merry Christmas and Happy Holiday Season.

- John Kromm, Seed Plant Manager, 509-397-4381, john@pnw.coop

7

Seed Division

PNW Annual Meeting Notes

The ninth annual meeting was held on November 4, 2016 with 224 guests in attendance. Chairman Jeff Hall called upon Marie Linehan to give the invocation for dinner. CPA Brian Schmidt of Jurgens & Co. presented the financial reports for the fiscal year ending May 31, 2016. Incumbents Frank Wolf of Uniontown (At Large District) and Jeff Hall of Colfax (Washington District), and Steve Granlund of Genesee (Idaho District) were all re-elected to the Board and maintain positions 4, 5 and 6. After the Annual Meeting the Board of Directors re-elected Jeff Hall as Chairman. Your current Board of Directors are as follows: Jeff Hall, Chairman Frank Wolf, Vice Chairman Aaron Gfeller, Secretary Ben Hermann, Director Rick Hood, Director Steve Granlund, Director Tim Freeburg, Director Greg Schultz, Director Jason Boyd, Director Clyde Conklin, Board Advisor Email your board members at board@pnw.coop.

- Kim Storm, Executive Board Secretary, kim@pnw.coop

“One of the most glorious messes in the world is the mess created in the living room on Christmas Day. Don’t clean it up too quickly.”

- Andy Rooney

Marketing Update

Wheat Markets:

So far marketing the 2016 crop year has been challenging to say the least. PNW growers are about 55% sold as we start the Christmas season. This is year 2 of

being 15-20% below a “typical” year. Without many pre-harvest sales, most have been hoping for a retracement back to those levels that have been lost since

harvest. This was another year to have taken advantage of the rallies ahead of harvest because once the northern hemisphere started cutting wheat, traders

recognized the record supply hitting the market and the futures prices plummeted $1.80 and cash wheat dropped $1.20.

For the third year in a row the world produced more wheat than ever before. Even though all winter wheat had an 8% reduction in seeded acres, the produc-

tion was the highest on record. Who’d think we would have perfect ‘growing’ conditions world-wide? Now to add to the downward pressure on the market,

southern hemisphere is in their own harvest with big yields. Argentina is projected for a +3.5 mmt higher crop . . . . . and the big Aussie crop is said to be

getting bigger – potentially 32 mmt, largest crop ever in Australia. Their average is roughly 24 mmt.

With the U.S. dollar steadily gaining in value to other currencies – which would normally have caused importers to shy away from US wheat purchases – it

hasn’t been as big a factor this year as countries are coming here for quality wheat to blend with. Since the global market is hungry for protein the values con-

tinue this year to trade higher for milling wheat versus the other varieties. HRW is now at a premium to SWW as well as DNS approaching $2/bu over SWW.

The US has even made some sales to China as of late, something we haven’t seen on the books for a while.

Looking Forward:

Bearish, Bearish, Bearish, that seems to be the only news out there. If I am still holding wheat, or want to sell for a profit the

wheat in the ground . . . . . . what the heck can I do?? Great question.

We are probably within 20-30 cents from the bottom. Why? Because the managed money traders are very close to their rec-

ord short and we are close to the loan rate for wheat. This puts a floor, fragile maybe, but a floor nonetheless. This move

creates opportunity for a technical rebound, but will it get us back to October values? That remains to be seen. What we can

do is set basis contracts and buy call options for those with 2016 crop wheat. This is the perfect opportunity to ride the tech-

nical wave the traders will create when they retrace to the upside, buying back their position. Basis contracts should be locked up if SWW basis gets back to

the +80 cent level.

Be looking for a spring rally to hedge your 2017 crop. We had that chance in October, so look for it again and take advantage of it. HTA’s and put options

should be executed once the future’s market reaches Cost of Production numbers. This strategy was very profitable for those last year. Why a spring rally?

The Midwest seeded the lowest acres of wheat this year since 1919. If we have just an average year or any ‘sniff’ of a drought or winter kill a rally will occur,

please take advantage. This will help reduce the huge supply of bushels out there but still need to chew through a couple record crops, so will limit the rally

somewhat. Remember don’t let the potential in the market blindside your protection. We wish you a Merry Christmas and a Bountiful New Year!

- Tom Riedner and David Weitz, Grain Marketers, (509) 397-4381

tomr@pnw.coop; david@pnw.coop

8

Grain Operations

As we are bringing 2016 to a close, I am once again thinking about the things I am grateful for this year. Number one again is my wife, for her

patience and understanding for the long hours that I put in throughout the year. Next would be working with all of you, the growers. Last but

not least, I am grateful to work with such a great group of people here at PNWFC and COAG.

Moving forward, things on the North side have been moving along steady. We have moved about 27 barges of wheat from the Snake River Ter-

minal since June 1. With the river being closed from now until March we will not be able to ship from the river terminals until then. We do have

room now but please be sure and talk with one of the marketers or myself if you have any home storage to move so we can advise you of the

best direction to go. We will still be doing quite a bit of shipping from out of rail terminals during the closure.

I hope you all have a Merry Christmas and a Happy New Year.

- Craig Forsman, Grain Operations Logistic Supervisor, 509-397-4381, craig@pnw.coop

Another different year has gone by, and as previous years, there has been some good and bad. The good news is pulse crops did very well. The bad news was falling numbers. Since I cover several areas, I will share my expe-

riences with pulses, people, and more. In Dayton, seeding went well, with most done in April. Pulse crops consisted of Billy Beans, Banners, along with some acres of black peas. Weather was excellent for the most part. In June, the dry areas received more rain than normal, leading to very good crop yields. There were very little insect problems, but we did see some virus in the garbs and peas. Winter peas did yield well, as did the spring greens and garbs; the quality of crops was excellent, and weed control good. Overall it was a great year for pulse crops. I would like to thank Mitch at NWGG in Day-ton for all their help in storage, the warehouse crews for getting our seed out, and the growers. It was great working with all of you! McCormick and Webb Ridges – Billy Beans had excellent yields and quality, with Greenwood peas being awesome on Webb Ridge. It is amazing what weed control and moisture can do. Many thanks to our Ridge growers! Worley – Sawyers, Billy Beans and lentils did good; Billy Beans and Sawyers were a little down from southern area yields. Thank you Worley growers! Rosalia – Crops included Sierras, Troys, and Banner Peas. Sierras did very well this year. To the first-time Sierra growers, I would like to say nice job! Weed control was good, which is very important for chickpeas. Moisture was suitable; seeding was early enough to get a good start. The Troys did well but little later maturing, but growers were able to get them cut in good shape. It can be very stressful at times with the weather and lateness of chickpeas, but all in all, it worked out well. Many thanks – you are great growers to work with! Bonners Ferry – Sawyers were some of the highest yielding we have had as a company. Beans do well in this environment; they were a good size bean with lots of pods. Billy Beans also did very well, with extremely good yields. Banners were grown for seed peas; excellent yields and size. Peas are a good fit for Bonners, and this year were cut before the rain. The garbs received a good dose of harvest rain, so they needed to get to Genesee to be dried (which worked out well). I would like to thank all the growers in Bonners; I enjoy working with you! Overall, 2016 was a great year for chickpea and pea yields; the garbs still have a good price range. I have had some calls for putting garbs back on garb ground. I tell the growers that is a bad idea; it will allow more disease to run through the field, such as Ascochyta Rabi. For the most part, there is currently good control, but that can change quickly. With wheat and barley prices low, we can hope things will change for the better. This is only a quick note; I could write 800 pages of what went on this year. I do look forward to working with all the growers; we do care about what goes on with your farm! A special note of thanks to all, and my best to you for a very Merry Christmas and New Year. I am looking for-ward to continuing working with our growers in 2017!

- Michael P. Devoe, Crop Consultant, (208) 790-2666, miked@pnw.coop.

9

A Moment with Mike

We Are...An Employee View

In a member newsletter last year, Bill shared information he had asked of the board: to provide words describing PNW and our members. As you recall, your board used words including Innovators, Farm Neighbors, Feeding the World, a Heritage, Reliable, Dependable, Family Farmers, and more (Bill’s favorite was We are the past, the present, and the future of agriculture). At our recent annual employee meeting earlier this month, I posed the same question to those in attendance: how would they describe PNW and what they do? Here are the responses: Team Family Quality Integrity Unique Viable Pride Industry Leading Friendly Passionate Growing Cooperation It’s refreshing to hear comments like these from our team members, as they work to serve you in their different capacities. Speaking of the past, present, and future, a quote from the Christmas movie, It’s a Wonderful Life comes to mind: “A toast to my big brother George: the richest man in town!” I see all of us, whether employed by PNW or valued members such as yourselves, as being rich: it can’t get any better than being part of a family-oriented company providing quality food to the world! My best wishes to all of you for a very Merry Christmas and wonderful and fulfilling 2017!

- Tedi Roach, HR Director, (208) 310-5703, tedi@pnw.coop

“We elves try to stick to the four main food groups: candy, candy canes, candy corns, and syrup.”

- Buddy the Elf (Will Ferrell in Elf).

117 W. Chestnut, Genesee, ID 83832

Phone: 208-285-1141

N. 204 Main, Colfax, WA 99111

Phone: 509-397-4381

www.pnw.coop

Did you know—Christmas Traditions around the World?

Most of us are familiar with Linus Van Pelt’s explanation of Christmas in the popular Charlie Brown Christmas: “And the angel said unto them, ‘Fear not: for behold, I bring unto you good tidings of great joy, which shall be to all people. For unto you is born this day in the City of David a Savior, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger.’ That’s what Christmas is all about, Charlie Brown.” We’re accustomed to seeing homes, trees and yards decorated with festive and colorful lights, decorations, and blow-up characters. Besides our traditions of singing carols, spending time with family (and food—can’t forget the food), people in other countries spend Christmas in various ways:

In Chile, the main meal is eaten Christmas Eve night: “asado” (BBQ) chicken, turkey & pork; a popular drink is “Cola de

Mono” (coffee, milk, liquor, cinnamon, & sugar).

The Finnish eat rice porridge and plum fruit juice for breakfast on Christmas Eve, & lutefisk (traditional) or leg of pork,

salmon, or turkey (contemporary) for an early dinner.

Guatemalans build their nativity scenes, called Nacimiento (or Belen) under their Christmas tree. After a meal of tamales, at midnight they light firecrackers or fireworks

to celebrate Jesus’ birth, followed with the opening of presents.

Many in Spain attend midnight mass (La Misa Del Gallo, or the Mass of the Rooster). Most eat their meal Christmas Eve of mushroom-stuffed turkey or seafood

(depending on their location). After the midnight service, they walk through the streets carrying torches playing various instruments.

St. Lucia Day is recognized in Scandinavian countries on December 13th, to celebrate a lady named Lucia, who brought light to a darkened land. Girls are selected in

Swedish & Danish towns to represent St. Lucia, dress in long white robes with red sashes, carrying candles. They will also wear wreathes of lit candles on their heads. Festivities also include singing, eating ginger snap cookies, & drinking glogg.

Australians spend their Christmas time in the sunshine (some on the beach!) as they barbecue ham, turkey, pork, or seafood.

Different countries recognize days such as Epiphany & Boxing Day.

Regardless of your tradition, may you & yours have a very Merry Christmas—Joyeux Noël—Vrolijk Kerstfeest— Hyvää joulua— Buon Natale—Frohe Weihnachten— Kala Christouyenna— Selamat Natal—Feliz Navidad!