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Trade Visit to Demonstrate U.S. Wheat Competitive Advantages to Venezuelan Millers
July 27, 2016
ARLINGTON, Virginia — Quality control and purchasing managers from three Venezuelan flour mills will visit North Dakota, Nebraska, Kansas and Ohio July 31 to Aug. 6, 2016, to learn more about the value of working with the U.S. wheat supply chain. With funding from USDA’s Foreign Agricultural Service, U.S. Wheat Associates (USW) is sponsoring this trade team in cooperation with the North Dakota Wheat Commission, Nebraska Wheat Board, Kansas Wheat Commission and Ohio Small Grains Marketing Program.

Chad Weigand, USW Assistant Regional Director for Mexico, Central America and the Caribbean, said U.S. wheat exports to Venezuela are not as strong as they once were, in part because increased government intervention and limited access to U.S. dollars have forced millers there to make cost a primary buying decision.

Venezuela imports durum, high protein spring wheat and soft red winter wheat. However, current market conditions there have given Mexican durum a competitive advantage. Canadian western red spring wheat has only recently come up in price to near parity with U.S. hard red spring (HRS) wheat, but the high U.S. dollar value continues to favor Canadian origin export prices. For the vibrant cookie and snack market in Venezuela, soft red winter grown in eastern Canada continues to compete with U.S. soft red winter (SRW).

Participants on this team represent some of the largest mills in Venezuela, but they do not have significant knowledge of U.S. wheat quality, its marketing system or federal inspection services.

“With key decision makers like these, we have to demonstrate why performance and value is worth more, but it is very difficult for our staff to conduct activities in Venezuela,” said Weigand. “By coordinating with our state wheat commissions, however, we can bring these customers to the United States to see our production and export system at work. That first-hand experience will help increase their confidence in U.S. wheat.”

Weigand, who is based in USW’s regional office in Mexico City, is leading the team, which includes Jenny Villasuso, Purchasing Manager for MONACA, the second largest milling group in Venezuela. Laura Paz is Purchasing and Quality Manager for Pastas Capri in Caracas, one of Venezuela’s largest pasta producers. Violeta Rosales is Purchasing Manager for Molinos Hidalgo, which operates a mill in Catia La Mar.

USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of U.S. wheat.

2016 Venezuelan Milling Executive Team – Members

Jenny Villasuso
Purchasing Manager, MONACA

Laura Paz
Purchasing and Quality Manager, Pastas Capri

Violeta Rosales
Purchasing Manager, Molinos Hidalgo

Chad Weigand
Assistant Regional Director, U.S. Wheat Associates, Mexico, Central America and Caribbean

2016 Venezuelan Milling Executive Team – Trip Highlights

With North Dakota Wheat Commission
· Observe production, storage, transportation and marketing of HRS (dark northern spring) wheat including farm and country elevator tours
· Overview of U.S. and global HRS and durum supply and demand situation
· Overview of HRS and durum breeding program and developments in quality
· Learn about educational programs and short courses at the Northern Crops Institute

With Nebraska Wheat Board
· Discuss role of grain trade in U.S. export system
· Learn about HRW breeding program and developments in HRW quality
· Demonstration of wheat quality testing and equipment at National Manufacturing Co.

With Kansas Wheat
· Observe advanced wheat research and breeding methods at the Kansas Wheat Innovation Center
· Learn about educational programs and short courses at IGP International
· Overview of U.S. and global HRW supply and demand situation

With Ohio Small Grains Marketing Program
· Observe production and exchange ideas at Siemers Milling operation
· Observe production, storage, transportation and marketing of SRW wheat including farm and country elevator tours

Online Conference Maintains Valuable Wheat Export Connections in Venezuela

With the advantage of proximity to U.S. Gulf ports, Venezuela was a relatively stable buyer of U.S. wheat for many years. In fact, U.S. Wheat Associates (USW) helped establish ESLAMO, The Latin American Flour Milling School, in 1994 in Venezuela, which demonstrates USW’s longstanding commitment to building relationships with millers. In recent years, the deteriorating political climate and economy and the resulting challenges of providing trade service and technical support have eroded U.S. wheat’s share of Venezuela’s market. Yet the customers there still represent a good market with potential to grow should the country stabilize. The pivotal question became how to stay engaged with them.

In addition to activities such as the 2016 Venezuelan Milling Manager Team, USW uses funding from the USDA’s Foreign Agricultural Service Market Access Program (MAP) and the Foreign Market Development (FMD) program to meet with customers at the annual Latin American Millers Association (ALIM) conference. Still the situation prevented USW from holding an annual U.S. wheat crop quality seminar in Venezuela, an event that is critical to help millers stay interested in U.S. wheat and understand how to get the best value from their imports.

In October 2015, USW turned to online technology and its past relationships to hold its first crop quality “webinar” with Venezuelan customers. USW’s regional staff based in Mexico City worked with staff at ESLAMO in Puerto Cabello to set up the conference and invite customers. Nearly 30 customers representing seven of the largest milling companies in Venezuela participated in the webinar at ESLAMO. The out-of-pocket cost to hold the webinar, funded by MAP, was less than $1,700.

USW also leveraged partnerships with its members and experts from the United States to develop the webinar. Presenting via the internet from the USW Mexico City office, Dr. Rebecca Regan, Director of the Wheat Quality Laboratory at Kansas State University, covered quality information for HRW and SRW classes. Claudia Carter, Executive Director of the California Wheat Commission, presented quality information for HRS and durum classes. Dr. Andrew Ross from Oregon State University presented quality information on SW for the Venezuelan webinar.

Feedback from the participating millers was quite positive and USW plans to hold a second crop quality webinar for Venezuela in November 2016. With the potential to import as much as one million metric tons of U.S. wheat, continuing to invest judiciously in this nearby market is a smart choice. Though relatively high U.S. wheat export prices and an unfavorable exchange rate continued to pressure U.S. exports to Venezuela in 2015/16, one of the largest buyers did import U.S. SW and hard white (HW) wheat for the first time. In addition, with average annual U.S. wheat imports of nearly 543,000 metric tons over the past five years with an estimated value of $151 million per year, USW’s annual MAP and FMD investment of less than $60,000 is generating a solid return to farmers and the U.S. wheat supply system.
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