Texas, Oklahoma and Arizona Wheat Farmers Travel to Morocco, Italy and Israel on USW Board Team
March 04, 2016
ARLINGTON, Virginia — Every year, U.S. Wheat Associates (USW) sponsors opportunities for farmer directors on the USW board or state wheat commission staff to travel to overseas markets for U.S. wheat. The intense, regional “board team” visits help participants observe the day-to-day work of USW’s overseas offices and connect them to their customers and industry stakeholders.
“Board teams help build personal connections between our overseas customers and U.S. wheat farmers,” says USW Vice President of Overseas Operations Vince Peterson. “U.S. wheat is the world’s most reliable source of high quality wheat, and part of that reputation comes from the people who grow it. We consistently hear how much the customer appreciates getting to know the farmer.”
This year, USW Program Manager Erica Oakley will lead a North Africa and European Board Team to Morocco, Italy and Israel in early March. The team includes Michael Edgar, a Desert Durum® farmer and merchandiser from Yuma, AZ, and a current USW director representing the Arizona Grain Research and Promotion Council; Ken Davis, a wheat farmer from Grandview, TX, and a current USW director representing the Texas Wheat Producers Board; and Michael Peters, a wheat farmer from Okarche, OK, and the secretary/treasurer of the Oklahoma Wheat Commission.
The team will first meet at the USW Headquarters Office in Arlington, VA, and with USDA Foreign Agricultural Service officials as orientation before traveling overseas. Over three days in Morocco, the team will meet with government contacts, tour a couscous plant and two durum mills, and meet with the Moroccan Miller’s Federation and the Moroccan Importers Federation. The team will then travel to Italy, accompanied by Regional Director Ian Flagg and Marketing Specialist Rutger Koekoek from the USW Rotterdam Office on tours of multiple pasta plants and semolina mills. In Israel, on the last leg of the trip, the team and Koekoek will visit the Port of Haifa, two mills and a bakery.
Both teams will post regular travel updates and photographs, and will report later this year to the USW Board of Directors. Follow their progress on the USW Facebook page at www.facebook/uswheat and on Twitter at @uswheatassoc.
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2016 North Africa-Europe Board Team – Participants
Kenneth R. Davis
Texas Wheat Producers Board
Ken Davis has been farming and ranching for more than 43 years in Johnson, Hill and Ellis Counties in Texas. After graduating from the Texas Christian University Ranch Management Program, Davis began KD Farms, which he owns and operates with the help of his family. Davis’ farming operation includes wheat, cattle, corn and sorghum in addition to a custom trucking business.
Davis has spent thirteen years serving as an elected board member on the statewide Texas Wheat Producers Board and Texas Wheat Producers Association. In 2006, Davis was selected to represent Texas wheat growers on the USW Board of Directors.
In addition to his service in the wheat industry, Davis serves in a leadership role on several regional and local organizations including serving as a past president of the Blackland Income Growth Program. He has also served as a director of the Federal Land Bank of Hillsboro, Texas Land Bank, First Financial Bank of Cleburne and the TCU Ranch Management Alumni Boa rd. Davis is a long-time supporter of the Texas Farm Bureau organization where he once served as the chairman of the State Young Farmer and Rancher Committee.
Arizona Grain Research and Promotion Council
Michael Edgar is a native of the Imperial Valley of Southern California. He grew up in a farming operation near El Centro that produced wheat, cotton and alfalfa and fed cattle. Edgar earned an associate’s degree in business and entered the grain business in 1979. He has engaged in all facets of the business during his career, with an emphasis on Desert Durum® wheat. These include: trading in cash and futures markets; contracting grain production for domestic and export markets; developing and servicing export markets; contracting for truck, rail and ocean transportation; management of grain variety breeding programs; and managing grain seed businesses.
Edgar has been employed by Barkley Seed, Inc. in Yuma, AZ since 1988, and has served as President since 2014. The company operates facilities in Central and Western Arizona and in the Imperial and Central Valleys of California. It produces and sells certified seed of proprietary varieties of Desert Durum wheat, hard red wheat and barley, and specializes in contracting production of identity-preserved grain for domestic and export markets.
He is a member of both the Arizona Grain Research and Promotion Council and the California Wheat Commission. He recently served as USW Chairman, and also serves on the board of directors for the Southern Seed Association, and is a past president of the Seed Trade Association of Arizona. Edgar lives in Yuma with his wife, Janice. He has three young adult children and five grandchildren.
Oklahoma Wheat Commission
Michael Peters is a farmer and rancher from Okarche, OK. Peters and his father currently raise 3,500 acres of hard red winter (HRW) wheat and, during the winter, graze the wheat with stocker cattle. Peters also grows canola as a rotation crop to help clean the ground from other winter grasses. He and his sons have a small cow herd.
Peters’ educational training includes the Oklahoma Credential Director Training, CHS New Leader Forum, CHS Director Development Training, IGP Flour Milling Course, National Wheat Foundation and the WILOT Program (Wheat Industry Leaders of Tomorrow).
Peters is a member of St. John’s Luthern Church where he served as Church President and currently serves on the Board of Elders. He is President of his local co-op Board, owned by CHS, the largest co-op in the United States. Peters is a member of the Okarche Rural Fire Fighters' Association Board and he currently serves as Secretary for the Oklahoma Wheat Commission.
Michael and his wife, Linda, have two teenage boys, Connor and Tyler.
U.S. Wheat Associates Team Lead
Erica Oakley, Programs Manager, leads responsibility for coordinating team-based activities, customer training programs and special events in the United States. Oakley is also responsible for management of U.S.-based consulting assignments, planning and managing USW Board Teams to visit overseas markets, and is involved with planning and implementing USW’s international conferences.
Before joining USW, Oakley was with Humanitas Global, where she managed programs in food and nutrition security, food sustainability, agriculture and public-private partnership development. She has also worked at AED and Futures Group, both based in Washington, DC.
A native of North Carolina, Oakley holds an undergraduate degree in international studies from Meredith College, Raleigh, NC, and an international relations master’s degree from Utrecht University in The Netherlands. Erica and her husband, Kit, live in DC with their two cats, Tigger and Hobbes.
The U.S. Wheat Industry in Morocco, Italy and Israel
Participants in this 2016 USW Board Team will visit wheat buyers, millers and food processors in countries within two USW marketing regions: Morocco is in USW’s Middle East, East and North Africa (MEENA) region; Italy and Israel are in USW’s European Union region. USW manages these regions from offices in Cairo, Egypt, Casablanca, Morocco, Rotterdam, The Netherlands, and Moscow, Russia. Ian Flagg, who joined USW in 2009, is the Director for both regions and is based in Rotterdam.
USW works in these regions and countries directly with end users and importers to help them strengthen commercial links with U.S. export companies through trade serving and technical assistance activities and by facilitating trade visits to the United States. Active membership in regional and international trade and industry organizations is also important to link prospective wheat buyers to the right exporters.
In Morocco, the Team will learn that annual per capita wheat consumption averaging 260 kilograms or more than 570 pounds is among the highest in the world. Morocco produces a significant amount of wheat, but must import about 2 to 4 million metric tons* (MMT) of wheat and durum per year depending on domestic production. Traditional bread and durum wheat products are subject to complex government subsidies and controls that favor domestic supplies, lower priced imports and culturally relevant supplies, such as French wheat for baguettes.
The United States and Morocco have solid diplomatic ties and a free trade agreement but the government’s influence on wheat and durum food production seldom favors purchasing U.S. wheat. Current market factors have pushed U.S. wheat prices above competing supplies in nearby Europe and the Black Sea region and the value of the U.S. dollar adds additional cost.
However, a 2013 USW study confirmed that there is growing interest in lower protein flour for cake, cookies, wafers and crackers, as well as in strong gluten flour for hamburger buns, pizza flour and frozen dough industrial baking market segments in Morocco. U.S. soft red winter (SRW) wheat fits the emerging low protein segment and hard red spring (HRS) fits the strong gluten segment. The Team will discuss how USW plans to use technical and marketing support to help create a preference for U.S. SRW and HRS for these growing niche markets.
USW will continue providing trade services to Morocco’s Office of Cereals (ONICL) to help them stay informed about the U.S. wheat marketing system, the value of intrinsic wheat qualities and the most economical blends of U.S. wheat with competitor and local wheats. In meetings with U.S. government officials in Washington, DC, at the start of the trip and with Moroccan officials and customers, the Team will dig into possible changes to the Morocco-U.S. free trade agreement that may open the market to increased U.S. wheat and durum sales.
Western Europe is a growing market for imported high protein spring wheat for blending and improving local crop milling and baking quality; and for durum wheat for both quality and quantity purposes. Among EU nations, Italy has imported an average of more than 210,000 MT of U.S. HRS wheat per year recently and as of Feb. 11 in marketing year 2015/16 (June to May) has already imported more than 310,000 MT of HRS. U.S. durum exports to Italy are also up the past few years, with 2015/16 sales currently at 383,000 MT.
The price spread between U.S. HRS and high protein wheat grown in Europe, including parts of Italy, is a key determining factor for U.S. HRS wheat exports to Italy. Yet Italian millers continue to emphasize the importance of superior gluten quality that supports demand for HRS. USW continues to monitor how U.S. HRS compares to EU and Canadian high protein wheat and reports to U.S. spring wheat breeders about comparable performance. This is very important because EU high protein wheat quality has improved, though not yet to the level of U.S. HRS.
As one might expect, pasta quality is king in the Italian market. In response to the high expectations, U.S. durum breeders are releasing northern durum varieties with higher gluten index values and the trade is investing in gluten index testing and segregation capabilities. As a result, the gluten index values of U.S. northern durum have improved notably since 2012. Because Desert Durum® is grown under irrigation in the very stable environment of the desert southwest, it has consistently strong gluten index values, which is highly appreciated by Italian pasta processors. Relative supply and prices between northern durum, Desert Durum and Canadian durum also affect supply origin decisions by Italian millers.
On behalf of U.S. wheat farmers, USW continues to maintain contact with an expanding number of wheat and semolina mills in Italy. For example, the USW Rotterdam regional office produces a regular newsletter in Italian offering market and quality information needed to tender for the best quality U.S. wheat at the best prices. The Team will also learn how USW plans to invest more of its resources in Europe on markets like Italy that have shown preference for U.S. HRS and durum.
Wheat production in Israel is relatively small. The majority of the arable land is used for high-value products like fruits, flowers and vegetables. Relatively low wheat production levels seem to be a trend, as dry conditions and lack of irrigation limit the size of the domestic wheat crop below levels seen in earlier years.
The Israeli government influences the pricing of the national wheat crop by linking its price to U.S. hard red winter (HRW) futures and the use of local wheat by the millers to a prorated release of import licenses for milling wheat. The United States was the dominant milling wheat supplier until 2000, but U.S. volume has been declining since then due to increasing competition, mainly from Russia and Ukraine.
Kosher requirements dictate that in a given year wheat has to be planted before Passover to be recognized as kosher in the same year. There are very limited sources of wheat exports around the world where 100 percent of new crop wheat meets kosher requirements; these areas are usually restricted to the U.S. HRW areas and some southern EU countries. In other cases, wheat has to be stored identity preserved under supervision, either at origin or in Israel, until spring of the next year before it can be used by Israeli mills. In Israel, the security reserves can be used to rotate wheat in and out to meet the kosher standards requirement.
Imports of HRW are up significantly in Israel in marketing year 2015/16 (June to May) as its industry responds to the current exceptional value in the class, low freight rates and the confidence that farmers are able to produce excellent quality HRW that performs well in local end products. The Team will be able to discuss the market factors that affect current and future U.S. HRW demand.
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