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Visiting Caribbean Flour Millers Represent New Market Potential for U.S. Wheat
August 13, 2015
ARLINGTON, Virginia — It makes sense that Caribbean countries import most of their wheat from its nearby neighbor, the United States, but changes in the milling industry present new opportunities to reach even more markets in the region. Four current and potential wheat buyers from Guyana, Haiti, St. Vincent and Trinidad will travel the week of Aug. 16 to visit North Dakota, Nebraska, Kansas and Louisiana to learn more about U.S. wheat quality and its supply system. U.S. Wheat Associates (USW) is sponsoring this team visit in cooperation with its state wheat commission members and USDA’s Foreign Agricultural Service (FAS).

“These are senior managers in their milling operations, but they are either new to the industry or have a history of purchasing wheat from competing origins,” said Chad Weigand, USW assistant regional manager, Mexico City, Mexico, who will travel with the team. “The farmers, wheat merchandizers and federal grain inspectors the millers will meet on this trip will share many reasons why U.S. wheat should be their primary supply.”

Weigand said this visit supports an opportunity for growth and to overcome challenges in the region from new flour mills. The team includes a representative from a new mill in Haiti that started operating only in the past year, as well as a manager from St. Vincent whose mill will soon have to compete with a new mill on the island of St. Lucia that will likely use French wheat. His participation will allow him to discuss opportunities with suppliers to ship to multiple destinations in the Caribbean.

“Building knowledge and confidence in the U.S. supply system has been a successful strategy,” Weigand said. “We invited the general manager of a Trinidad flour mill who has been in the industry for just one year to participate in the team. And, based on several years of trade and technical service by USW, the Guyana executive on the team is transitioning to U.S. hard red spring (HRS) after purchasing Canadian spring wheat for many years.”

Weigand also noted that this will be the first USW-sponsored wheat buyer team to visit the new export grain terminal in the Port of Lake Charles, LA, now operated by the international commodities company Tradiverse. The Lake Charles facility, which includes a grain cleaning system, is the first new export terminal built in the U.S. Gulf tributary in 30 years.

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 (FAS).

2015 Caribbean Trade Team - Members

Mr. Roopnarine Sukhai
Managing Director, National Milling Company of Guyana

Ms. Mikaelle William
Operations Manager, Groupe HM (Caribbean Milling), Haiti

Mr. Elvis DeRiggs
Chief Operating Officer, East Caribbean Flour Mills, St. Vincent

Mr. Anson King
Financial Manager, National Flour Mills, Trinidad

Mr. Chad Weigand
Assistant Regional Director, U.S. Wheat Associates/Mexico City

U. S. Wheat Sales and Wheat Food Consumption in the Caribbean

USW’s Caribbean marketing region includes 17 island nations, three island groups and three countries on the South American continent that are members of the Caribbean Community Common Market (CARICOM). Because of the long-standing U.S. embargo, USW does not include Cuba in its Caribbean sub-region, but it is also served from USW’s Mexico, Central America and Caribbean regional office in Mexico City. Caribbean countries have imported an average of nearly 1.0 million metric tons (or about 37 million bushels) of U.S. wheat the last five years based on inspection reports from the Federal Grain Inspection Service. Most of that has been HRS but also includes 33 percent hard red winter (HRW) and about 25 percent soft red winter (SRW).

Wheat foods are considered staple items in the Caribbean and per capita consumption is among the highest in Latin America. Wheat foods include “pan de agua” (water bread) in the Dominican Republic, which is similar to French or Italian bread using the same basic ingredients, but the dough is put in a cold oven above a pan of boiling water. The bread continues to rise as the oven heats causing the crust to become thin and crisp. In France’s former colony of Haiti, people prefer baguettes, while people in Trinidad-Tobago like sliced pan breads.

With tourism such an important part of the region’s economy, wheat food consumption has increased as more and more retail food franchises selling hamburgers, pizza, donuts, muffins and bagels have opened. Demand for snack cakes, specialty breads, frozen dough, pre-mixes and other ready-to-eat foods is also growing wheat import potential.

While U.S. farmers supply about 80 percent of wheat imports into the Caribbean region, some importing countries have traditionally preferred Canadian wheat, including Guyana, for example. USW is working to displace Canadian sales there by demonstrating how the characteristics of U.S. wheat offer a higher return to flour millers.

In the past, Canadian wheat promoters strongly suggested that flour mills could expand production capacity without cleaning or tempering (adding water at the mill) by saying that Canadian Western Red Spring wheat is pre-cleaned at export elevators and has higher moisture content than U.S. wheat. In fact, by adding water to an optimum level for milling, U.S. wheat allows the mills to condition their grist to an ideal moisture that allows them to increase their flour yields and profitability.

USW has long supported the Caribbean Millers Association and first started challenging the Canadian wheat position in discussions with members of the association. Then, following a trade servicing visit by USW, a mill in Guyana (represented on the upcoming trade team visit to the United States) decided to construct a cleaning house. To support a transition to HRS, USW sent a consultant to the mill. In addition to technical assistance, the consultant showed the mill how to specify for reduced dockage in U.S. wheat tenders.

As a result, Guyana received its first commercial shipment of 6,800 metric tons (MT) of U.S. wheat in May 2013. The next marketing year, U.S. wheat sales to Guyana reached 20,300 MT, equal to a 50 percent market share. And in marketing year 2014/15, Guyana imported 30,100 MT of U.S. HRS, HRW and soft white (SW) wheat. Those exports are currently valued at about $7.5 million, returns that come back to farmers and the U.S. wheat industry from the Plains to the Pacific Northwest.

U.S. Wheat Sales to Caribbean
1,000 Metric Tons*

Crop Year
(June - May)
HRW
SRW
HRS
White
Durum
Total
2015/16
172.7
156.7
145.8
0.0
0.0
475.2
2014/15
304.3
224.1
346.3
0.0
0.0
874.7
2013/14
312.2
280.4
322.2
0.0
0.0
914.8
2012/13
427.8
270.6
309.1
0.0
0.0
1,007.4
2011/12
379.8
256.1
301.4
0.0
0.0
937.4
2010/11
256.3
251.9
358.1
0.0
8.7
875.0
2009/10
261.0
254.1
226.7
0.0
3.2
745.0
2008/09
336.8
235.9
323.0
0.0
0.0
895.8
2007/08
273.4
223.5
340.7
0.0
3.0
840.6
2006/07
158.6
248.5
421.1
0.0
6.5
834.7
Data current through August 6, 2015
Source: USDA - FAS - Weekly Export Sales Report (reported to FAS).

*One metric ton = 36.74 bushels

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