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Korean Team to Survey Wheat Crops in Montana and Oregon
June 13, 2013
ARLINGTON, Virginia — Every summer, members of a crop survey team from South Korea traverse the Pacific Northwest for a firsthand look at the new wheat harvest. This year’s team was scheduled months before USDA’s Animal and Plant Health Inspection Service (APHIS) announced May 29 that it had identified an unapproved, genetically modified, glyphosate-resistant trait in volunteer wheat in a single Oregon field. But, the timing of the Korea Crop Survey Team’s travel June 16 to 22 to Montana and Oregon provides a great opportunity to reinforce the safety, quality and reliability of the U.S. wheat on which South Korea’s millers, bakers and food processors have come to rely.

Three representatives from three of South Korea’s largest flour mills will meet with wheat researchers, tour grain elevators and export terminals and visit with farmers who are preparing to harvest their soft white (SW), hard red spring (HRS) and hard red winter (HRW) wheat crops. USW collaborated with the Montana Wheat & Barley Committee and the Oregon Wheat Commission to organize this year’s tour.

“We appreciate the opportunity to bring together our Korean customers with the farmers who are dedicated to growing the highest quality wheat possible each year,” said Dr. Woojoon Park, senior marketing specialist in the U.S. Wheat Associates (USW) Seoul Office, who will accompany the team. “Team members will see firsthand the region’s incredible investment in grain research, marketing and transportation and take advantage of the opportunity to frankly discuss mutual concerns with farmers waiting to harvest their 2013 crop.”

USW is aware that private wheat buyers in Korea have temporarily suspended purchases of U.S. SW wheat, pending official decisions from Korea’s Ministry of Food & Drug Safety (MFDS). MFDS did announce last week that it had collected and tested 40 samples of wheat and five samples of flour milled from wheat that had been shipped/imported from Oregon, and that all tests showed that no unapproved recombinant wheat has been identified to date.

The United States currently supplies about 40 percent of South Korea’s wheat imports, competing with Canada and Australia in this sophisticated market. In the 2012/13 marketing year, South Korea imported 1.41 million metric tons (51.8 million bushels) of U.S. wheat.

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.
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2013 Korea Crop Survey Team – Trade Members

Mr. Gyun-Hee Lee
Manager, Food Research Institute, Daehan Flour Mills

Mr. Kwang-Tae Kim
Manager, Sales Department, Daesun Flour Mills Company

Ms. Seon-Hui Kim
Staff, Purchase Team, DongA One Corporation

Dr. Woojoon Park
Senior Technical Marketing Specialist, USW Seoul Office

Mr. Kent Pattison
Marketing Intern, Montana Wheat & Barley Committee

The U.S. Wheat Industry Partnership with South Korea

U.S. market share in Korea has ranged from a low of 34 percent to a high of 63 percent, yet U.S. wheat farmers face tough historical competition in this large market from Australia and Canada.

As a monopoly, the Canadian Wheat Board (CWB) used trade-distorting administrative pricing to differentiate Canadian spring wheat in Korea. Australia also made its largest gains in the Korean market through the monopoly practices of the old Australian Wheat Board (AWB). AWB was able to source and market a sub-set of Australian Standard White wheat directly to Korea for noodle flour. In addition, AWB often used its single desk authority to price its wheat below similar quality U.S. wheat classes.

The monopoly in Australia ended more than three years ago and the CWB lost its monopoly status on Aug. 1, 2012. With the end of both monopolies, USW is able to compete on a level playing field in a transparent market.

The U.S.-Korea Free Trade Agreement (KORUS), implemented on March 15, 2012, also was an important step to help the U.S. wheat industry grow the Korean market. KORUS immediately eliminated the bound tariff on U.S. wheat.

USW maintains its market share in Korea by reinforcing the quality, reliability and variety of U.S. wheat for Korean wheat foods and noodle products. The United States produces a variety of wheat classes with excellent quality needed to produce flours for a wide range of wheat food products; the U.S. wheat export supply chain also is the most reliable in the world. These advantages, in conjunction with USW’s technical training and trade assistance, enable Korean millers and bakers to produce the high quality products their customers expect.

Korean consumers are very sensitive about imported processed foods and raw food materials. In order to mitigate these concerns with respect to wheat, the Korea Flour Mills Industrial Association (KOFMIA) produced a documentary video program entitled "A Story of Flour," including footage shot in the Pacific Northwest with assistance from USW. In 2012, Wheat Belly, written by William Davis, was translated into Korean and rapidly was quoted by the media. As a result, many consumers are now concerned about celiac disease and obesity as a result of wheat-based products. In order to mitigate these concerns, KOFMIA began developing consumer education programs which promote wheat and flour safety and the nutritional value of wheat-based foods. In addition, KOFMIA has conducted monthly flour mill tours and has a blog geared towards the media and families with school age children. These efforts have been very helpful in improving consumers' understanding of the quality and wholesomeness of flour and imported U.S. wheat.

U.S. Wheat Sales to South Korea by Class
1,000 metric tons
Crop Year
(June - May)
HRW
SRW
HRS
White
Durum
Total
2012/13
283.9
9.4
392.1
724.4
0.0
1,409.8
2011/12
247.9
28.0
332.9
1480.9
0.0
2,089.7
2010/11
325.5
63.5
460.1
843.9
0.0
1,692.9
2009/10
260.4
12.4
316.9
619.5
0.0
1,209.3
2008/09
259.4
5.9
342.3
538.8
0.0
1,146.5
2007/08
404.3
7.4
421.5
774.8
0.0
1,608.0
2006/07
223.8
6.0
364.5
598.1
0.0
1,192.4
2005/06
238.7
6.0
380.4
565.4
0.0
1,190.5
2004/05
304.8
0.6
409.2
648.9
0.0
1,363.5
2003/04
283.3
0.0
417.3
728.4
0.0
1,429.1
Data current through May 31, 2013

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