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U.S. Wheat Associates Hires Bakery Consultant for Philippines Market

ARLINGTON, Virginia – U.S. Wheat Associates (USW) hires Gerardo “Gerry” Mendoza as Bakery Consultant to provide technical assistance and training to commercial bakeries and wheat food processors in the Republic of the Philippines. Mendoza works from USW’s Manila office and will train with long-time Bakery Consultant Boy Ng, who plans to retire later in 2016. USW is the export market development organization for the U.S. wheat industry.

“People in the Philippines are eating more bread and other wheat foods today,” said USW Assistant Regional Vice President Joe Sowers. “Gerry has exactly the kind of experience we need to continue our legacy of service to the wide range of commercial bakeries and end product manufacturers in this country. We are very pleased he is with us to keep demonstrating the value and performance of flour milled with U.S. wheat in the Philippines.”

Mendoza joins USW with 25 years of experience in the bakery ingredients industry, serving most recently as National Business Development Manager with AB Mauri. In his career, the Philippines native has managed production, served in sales positions and provided technical training and assistance to several key bakeries in the Philippines and around Southeast Asia. Mendoza earned a bachelor’s of science degree in industrial engineering from Adamson University, Manila.

Southeast Asia in general and the Philippines in particular have become one of the most important export markets in the world for U.S. wheat. Robust population and income growth are driving increased demand for wheat based foods. The burgeoning middle class has an increased ability to pay for high quality products, while end product manufacturer and consumer preferences give U.S. wheat classes a strong advantage.

The Philippines was the third largest buyer of U.S. wheat in the 2014/15 marketing year (June to May) and the second largest buyer of both soft white and hard red spring wheat classes. At about 88.1 million bushels (nearly 2.4 million metric tons), U.S wheat exports to the Philippines set a new record, representing a market share exceeding 91 percent of total Philippines milling wheat imports for the year. Overall, U.S. wheat exports face substantial headwinds in 2015/16, but sales to the Philippines are on a similar pace compared to last year at this time.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA/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.

Gerry Mendoza

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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U.S. Wheat Associates Realigns Regional Management as Long-Time EU Director Retires

ARLINGTON, Virginia – U.S. Wheat Associates (USW) announces the retirement of Goris van Lit, Regional Director for Europe, the Former Soviet Union and Israel, and promotes Ian Flagg, Regional Director, who will add van Lit’s responsibilities and continue to direct activities in the Middle East and North Africa region effective Feb. 1, 2016. Based in Rotterdam, The Netherlands, van Lit has worked for USW for 30 years. Flagg, who joined USW in 2005, is also based in Rotterdam and will now have responsibility for that office as well as offices in Moscow, Cairo and Casablanca. USW is the export market development organization for the U.S. wheat industry.

“As a part of our efforts to better align our resources, activities and staff with the realities of current market opportunities in the Middle East and North Africa, USW recently shifted responsibilities for some East African countries to our Sub-Saharan African regional office in Cape Town, South Africa, and transferred Ian to Rotterdam,” said USW Vice President of Overseas Operations Vince Peterson. “With Goris’ retirement, USW is taking the next step in this strategic realignment to more closely coordinate and concentrate our activities on high-quality market segments across the broader region.”

“We cannot thank Goris enough for his many years of dedicated service representing U.S. wheat farmers,” Peterson said. “I served with Goris in the region and saw firsthand the value of his market knowledge, stable management skills and unwavering advocacy for U.S. wheat. We will all miss working with him very much but we wish Goris and his wife Lilian a long and enjoyable retirement.

“Looking forward, Ian has proven his ability to analyze changing market conditions and identify the best opportunities for U.S. wheat exports first in Cairo, then Casablanca,” Peterson noted. “I am very confident that he will be equally effective with his expanded responsibilities.”

Goris van Lit was born and raised near Rotterdam and became fascinated early in life by the international commerce at its growing port and the seagoing vessels being built virtually next door. Studying analytical chemistry, his career started in laboratory analysis and product development for home goods before he joined Meneba Flour Mills. He also worked in cereal food research with the Netherlands Organization for Applied Scientific Research before joining USW as a marketing specialist in 1986. Outside of work, van Lit has nurtured a life-long passion for automobiles and rally racing.

Minnesota native Ian Flagg served USW as Assistant Director, West Coast Office, Portland, OR, and as Market Analyst in the Headquarters office in Arlington, VA, before accepting a position in 2009 as Assistant Director for the Middle East, East and North Africa region in Cairo. He was promoted to Regional Director in 2014 and moved to Casablanca. Flagg has a bachelor’s degree in economics from Minnesota State University, Moorhead, and a master’s degree in Agribusiness and Applied Economics from North Dakota State University.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA/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.

Goris Van Lit

Ian Flagg

 

 

 

 

 

 

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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U.S. Wheat Associates Welcomes WTO Elimination of Export Subsidies

ARLINGTON, Virginia – U.S. Wheat Associates (USW), the export market development organization for the U.S. wheat industry, is very pleased with the recent decision by WTO members to eliminate agricultural export subsidies.

Long banned for industrial goods, export subsidies are, along with guaranteed prices above world market levels and input subsidies, among the most harmful and distorting practices for world agricultural trade. Although the WTO already banned export subsidies for industrial goods, many member countries are still authorized to use agricultural export subsides. While authorized subsidies are rarely used anymore, agreeing to eliminate them is no small matter. For example, while the European Union, collectively the world’s largest wheat producer, no longer uses export subsidies it still has standby authority to do so. Other countries are using unauthorized export subsidies and should be challenged to prevent continued violations of current disciplines. Certainly, eliminating export subsidy authority at once for developed countries and by the end of 2018 for developing countries is a major step forward for world wheat trade.

USW is concerned, however, that the Nairobi Ministerial also reauthorized developing and least developed countries’ use of processing and transport subsidies for agricultural products, an authority that had expired in 2004. While this reauthorization is limited and temporary, it is still a step backward for agricultural trade similar to the setback of the 2013 Bali Declaration.

There were also changes in language affecting food aid and export credits, but our negotiators successfully defended U.S. practices in those areas. While further negotiations will take place on special safeguards and government food stockholding for developing and least developed countries, no commitment was made to continue the Doha Development Agenda as such, which we consider a positive outcome. It is long past time for countries to shelve the failed Doha negotiations and move on to more productive trade liberalization efforts to address the challenges of the 21st century.

USW’s mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. wheat producers and their customers.” USW activities in more than 100 countries are made possible through producer checkoff dollars managed by 18 state wheat commissions and cost-share funding provided by USDA/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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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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National Wheat Organizations Support TPP Approval and Expansion

The National Association of Wheat Growers (NAWG) and U.S. Wheat Associates (USW) boards of directors expressed support last week for the Trans-Pacific Partnership (TPP) because it will be beneficial to U.S. wheat producers and improve their competitiveness in the Asia-Pacific region.

“Wheat growers should support TPP,” said Brian O’Toole, a wheat farmer from Crystal, N.D., and chairman of USW. “Half of the wheat we produce each year is available for export and the prices farmers like me receive are sensitive to the demand for that wheat. TPP will not only help us compete on a more level playing field, but will also help boost the economies of the Asia Pacific region. That will boost demand for U.S. wheat and other U.S. agricultural exports.”

“TPP makes great strides in expanding trade opportunities for wheat in the Pacific Rim. This agreement lays the foundation for future trade agreements. NAWG is hopeful for quick congressional consideration and that other countries will quickly join the TPP,” said NAWG President Brett Blankenship, a wheat grower from Washtucna, Wash.

U.S. Wheat Associates is the industry’s market development organization working in more than 100 countries on behalf of America’s wheat producers. The activities of USW are made possible by producer checkoff dollars managed by 18 state wheat commissions, in-kind support, and cost-share funding provided by USDA’s Foreign Agricultural Service. To qualify for federal funds, USW is required to prepare and submit an annual, comprehensive Unified Export Strategy that details specific market development plans for every country and region. For more information, visit www.uswheat.org or contact your state wheat commission.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, D.C., NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Study Shows Farmers Get $45-to-$1 Return from Wheat Export Promotion Funds

ARLINGTON, Virginia — U.S. wheat producers invested an average of $4.9 million in checkoff funds per year to promote their milling wheat overseas between 2010 and 2014, and for every one of those dollars they received up to $45 back in increased net revenue. That is a principal conclusion of a new economic analysis of wheat export promotion released today by U.S. Wheat Associates (USW).

USW commissioned the study with funding from the USDA/Foreign Agricultural Service (FAS) Market Access Program. Dr. Harry M. Kaiser, the Gellert Family Professor of Applied Economics and Management at Cornell and director of the Cornell Commodity Promotion Research Program (CCPRP), designed and conducted the research using established methods from his 30 years of research experience.

“The study showed that investing in U.S. wheat export promotion had a large and beneficial impact for producers and the economy that far exceeded its cost,” Dr. Kaiser said. “The econometric models we used showed that between 2010 and 2014 the total investment in wheat export promotion by farmers and the government increased total annual gross revenue by $2.0 billion to $3.0 billion. So for every $1 farmers and the government invested, the estimated return in gross revenue was between $112 and $179.” Dr. Kaiser added that the most likely annual return is about $149 for each dollar spent based on USDA supply elasticity studies.

Dr. Kaiser quantified the impact of wheat export promotion through models that account for several factors affecting commodity export demand such as prices and exchange rates. The study determined that cutting promotion by 50 percent between 2010 and 2014 would have significantly reduced wheat exports by about 15 percent. That represents a total potential export loss equal to nearly 161.5 million bushels per year. The value of that loss was determined, then compared to total wheat export promotion cost to calculate a series of benefit-to-cost ratios (BCR).

The BCR from the total promotion cost averaged 14.9 to 1. Because producers contributed about one-third of the total producer and FAS investment through state checkoff program, the BCR for their investment averaged about three times the total, or about 45 to 1. Assuming farmers get ten percent of the total revenue, Dr. Kaiser said the study shows wheat export promotion increased net revenue for farmers by more than $247 million per year. The impact of in-kind contributions from state commissions was not considered in this study.

“Our organization is accountable to wheat farmers and other taxpayers who fund the market development work we do,” USW President Alan Tracy said. “Dr. Kaiser’s research methods are well respected, and the conclusions echo previous studies in 2004 and 2009, so we can very confidently say that the money farmers provide for export promotion is well worth the investment. In fact, the study predicts that increasing the promotion investment has the potential for even greater returns to wheat farmers, the wheat supply chain and the U.S. economy.”

USW will use additional results from the study to help plan and manage its future activities. The organization has posted full study results on its website, www.uswheat.org.

U.S. Wheat Associates is the industry’s market development organization working in more than 100 countries on behalf of America’s wheat producers. The activities of USW are made possible by producer checkoff dollars managed by 18 state wheat commissions, in-kind support, and cost-share funding provided by USDA’s Foreign Agricultural Service. To qualify for federal funds, USW is required to prepare and submit an annual, comprehensive Unified Export Strategy that details specific market development plans for every country and region. For more information, visit www.uswheat.org or contact your state wheat commission.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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U.S. Wheat Industry Comments on Conclusion of TPP Negotiations

Following is a joint statement from U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG).

ARLINGTON, Virginia – U. S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are pleased that negotiators have reached an agreement in the Trans-Pacific Partnership (TPP).

“Asia is a growing regional market and this agreement has the potential to increase economic opportunity and wheat demand even in countries where we already have duty free access,” said USW President Alan Tracy. “That is critically important because our competitors like Australia are moving ahead with bilateral agreements that eliminate tariffs on wheat imports with countries like Vietnam. The high standards in the TPP agreement should help us be more competitive and hopefully lead to even more opportunity for our wheat as new countries join TPP in the future.”

“Trade agreements are essential for U.S. wheat farmers with more than 50 percent of our crop heading overseas. Concluding TPP negotiations is a step in the right direction. My fellow farmer-leaders and I look forward to reviewing the final text and working with Congress to determine how this will impact U.S. wheat farmers,” commented NAWG President, Brett Blankenship, wheat grower from Washtucna, Wash.

USW and NAWG thank Ambassador Froman and the entire U.S. team focused on agricultural issues for their leadership and hard work in concluding these important TPP negotiations.

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/FAS.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, D.C., NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Coey to Provide New Leadership for U.S. Wheat Associates in Chinese Market

ARLINGTON, Virginia — U.S. Wheat Associates (USW) has hired Jeff Coey as Assistant Regional Vice President to fill the vacant position in its Hong Kong office left by Matt Weimar, who recently relocated to the regional office in Singapore as the new Regional Vice President for South Asia. Coey will manage U.S. wheat market development programs and USW’s business and government relationships in China. This includes two offices and staff located in Hong Kong and Beijing.

Coey joins USW with more than 25 years of marketing and trade facilitation experience in East Asia including industry relations and government affairs consulting, as well as demand-building branded retail campaign management. He worked in cotton merchandising in Hong Kong and China and helped set up office operations in Beijing. Most recently, Coey lectured for the master’s degree program at the Hong Kong Baptist University’s School of Communication covering subjects including consumer behavior, intercultural communication, writing for public relations, issues management and crisis response.

“Jeff’s experience in the private sector, commodity trading, market development and academia throughout the greater China region represent an important new asset for the U.S. wheat industry and our China interests,” said Weimar.

“China is a complex market of immense proportions and possibilities,” said USW Vice President of Overseas Operations Vince Peterson. “Jeff has the background and experience necessary to package USW’s efforts in China in a productive manner that allows us to capitalize on those market opportunities.”

Fluent in Mandarin, Coey studied Chinese language and literature at Middlebury College and National Taiwan University. He holds bachelor’s degrees in East Asian Studies and Chinese from the University of Kansas, as well as a Master of Business Administration from the University of Wisconsin, Madison, where his concentration was in international business and marketing.

Jeff Coey

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Japanese Millers Trade Team Visit Will Help Support Future Market Share

ARLINGTON, Virginia — In 2016, the U.S. Wheat Associates (USW) will mark 60 years with a marketing office in Japan, so it comes as no surprise that in marketing year 2014/15, Japan was the single largest buyer of wheat from the United States. In the same year, Japan was also the biggest market for U.S. hard red spring (HRS) and soft white (SW) wheat. To learn more about the high quality wheat to which their customers have become accustomed over the past 60 years, a team of mid-level managers from Japanese flour mills will visit Oregon, Idaho and Montana Sept. 20 to 26, 2015.

Millers on this team are executives from milling companies representing Japan’s National Cooperative of Millers. The first trade team from this group of millers visited the United States in 2014. USW collaborated with the Montana Wheat and Barley Committee, Oregon Wheat Commission and Idaho Wheat Commission to organize and host this year’s visit.

“These mid-level managers will eventually ascend to senior management positions and hopefully take with them an understanding that the United States produces the highest quality wheat for Japan,” said Steve Wirsching, USW vice president and director of the West Coast Office in Portland, OR. “This trade team visit creates an opportunity for us to increase their positive view of U.S. wheat and ensure we can continue to compete in Japan in the future.”

This trade team will bring individuals involved in milling, quality control and marketing to the United States to learn more about the effective wheat export supply chain and give them the opportunity to discuss logistical and quality assurance systems with the people who manage the U.S. wheat supply chain.

The milling managers will begin their trip in Portland, hosted by the USW West Coast Office, where they will be briefed by the Federal Grain Inspection Service (FGIS) and Wheat Marketing Center. While in Oregon, the team will also tour the Columbia Grains export terminal and visit OMIC USA. Continuing their trip in Boise, ID, the team will meet with Scoular Grain and the Idaho State Department of Agriculture, and will tour the Swan Falls Dam and lock system on the Snake River. To complete their tour of the Pacific Northwest, the team will travel to Montana to tour shuttle train loading facilities operated by Gavilon Grain in Chester and United Grain in Moccasin. Other stops include the Central Ag Research Center near Moccasin and Myllymaki Farms outside of Livingston . Throughout their trip the team will have the opportunity to hear from each of the sponsoring state wheat commissions.

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.” The activities of USW are made possible by producer checkoff dollars managed by 18 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service. For more information, visit www.uswheat.org or contact your state wheat commission.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Photo Release: Taiwanese and U.S. Industry Sign Letters of Intent

ARLINGTON, Virginia —  A Taiwanese delegation visited Washington, D.C., this week to meet with officials and U.S. grain industry leaders and take part in a signing ceremony at the U.S. Capitol, held Wednesday.

Signing letters of intent on behalf of the U.S. grain industry were Chip Councell, U.S. Grains Council vice chairman; Alan Tracy, U.S. Wheat Associates president; and Wade Cowan, American Soybean Association president representing the U.S. Soybean Export Council.

The letters committed Taiwanese buyers to purchase approximately $3.03 billion worth of U.S. corn and co-products, wheat and soybeans by 2017.

The delegation will follow their Washington visit with a week of touring the U.S. grain production region, including much of the U.S. Midwest and West.

More about the event is at https://bit.ly/1KiEgmF and https://bit.ly/1WSXmcT.

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

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Excessive Foreign Farm Support Disrupts World Wheat Trade, Hurts Farm Revenue

U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) unveiled the results of an econometric study showing that excessive farm support in several advanced developing countries could cost U.S. wheat farmers nearly $1 billion in revenue every year. USW recently showed that the governments of China, India, Turkey and Brazil have dramatically increased subsidies for domestic wheat production over the past ten years to levels that far exceed their World Trade Organization (WTO) agreements. This study confirms that these policies have a detrimental effect on U.S. and world wheat farmers and global wheat trade.

“I believe we have shown through these studies that the old perceptions about farm support and trade are clearly wrong,” said USW President Alan Tracy. “Today, it is the farm subsidies in a few advanced developing countries, not developed country policies, which disrupt normal trade flows and distort world wheat prices. These rapidly growing subsidies cause direct, serious and now measurable impacts on the prices that U.S. farmers receive for their grain.”

Noted agricultural economist Dr. Dermot Hayes and two of his colleagues at Iowa State University conducted the study. The goal was to determine what would happen to U.S. and global wheat production, trade and prices if domestic support in China, India, Turkey and Brazil were removed. To accomplish this, Dr. Hayes and his colleagues applied the price support and input subsidy data identified in a November 2014 study by DTB Associates to the respected CARD-FAPRI econometric model. Results showed that if all support were removed from all four countries, annual U.S. wheat production would increase by more than 53 million bushels, farm gate prices would increase by nearly $0.30 per bushel and U.S. wheat farmers would receive $947 million more in annual revenue (See Chart 1).

“The results confirm that if domestic support were removed wheat prices in the countries modeled would go down and farmers would plant less wheat, but domestic consumption would go up,” Hayes said. “The lower supply would lead to higher global wheat prices, which tend to benefit wheat exporting countries including the United States.”

The study also indicated that with such changes, wheat trade flows would shift and the four countries would increase net imports by nearly 10 million metric tons (MMT). Hayes said the model estimated the United States would capture more than 20 percent of such an increase to export an additional 2.2 MMT compared to the model’s baseline if there were no changes in domestic support in those countries.

Hayes’ team also used the model to predict the net effect that eliminating support in individual countries would have (See Table 1). Those results indicated that domestic support for Chinese wheat production alone has the largest individual effect. If support there ended, Chinese imports would grow from nearly 2 MMT per year to more than 7.5 MMT per year. This would still be less than the 9 MMT annual tariff rate quota that China agreed to in its WTO accession commitments. Hayes said the model showed that even with the predicted changes, China, India, and Turkey would continue to be at least 90 percent self-sufficient in wheat production. Eliminating domestic support would have the least effect in Brazil where support levels are lower than the other countries.

Shifting the Narrative

Hayes also noted that this study compares future scenarios to data from a market situation in which wheat cash prices were significantly higher than they are now. For example, in addition to Chinese government input subsidies coupled to wheat production, the DTB Associates study in 2014 showed Chinese farmers have government minimum support prices of more than $10.00 per bushel.

“Wheat prices have plummeted more than 30 percent since last year, a significant portion of which is due to these countries’ market distorting policies, which send the wrong signals to their farmers. This hurts American family farms like mine even more,” said Brett Blankenship, who grows soft white wheat near Washtucna, Wash., and is the current President of the National Association of Wheat Growers (NAWG).

Referring to current negotiations in the Doha round, Blankenship added, “It is totally unacceptable to tolerate demands from countries who are in violation of their WTO commitments, who continue with these huge levels of support while demanding concessions from the United States. The American wheat farmer will not give away any more.”

WTO records show that the United States has consistently met its commitments, never exceeding its Aggregate Measure of Support (AMS) limit of $19.1 billion. But other country’s proposals made as part of the Doha round would require the United States to drastically cut its limit, while members with growing programs would not be expected to make meaningful contributions. Deputy U.S. Trade Representative Amb. Michael Punke has called this a “mind-boggling imbalance” that firmly underpins the U.S. position that it is critical to put facts on the table for a frank discussion about the real dynamic of world agricultural production and trade.

The new study indicated that wheat farmers outside of the four countries analyzed would benefit by reducing domestic supports. Hayes said the model showed global wheat cash prices would increase by more than four percent and world net trade would increase by five percent if domestic support is removed in all four countries. The study suggested that there would be benefits even from partial changes in price supports and input subsidies, although Hayes said the magnitude of the cash price and trade increase would depend on the size of the removal in each country.

“Since these subsidies are the acts of sovereign governments, our farmers cannot battle them alone. We are working with USTR and USDA to determine our next steps, including a possible WTO challenge,” Tracy concluded.

USW and NAWG have posted the entire report online at www.uswheat.org/policy and https://www.wheatworld.org/issues/trade/. Results of the two DTB Associates studies measuring domestic support in advanced developing countries, visit www.dtbassociates.com/docs/DomesticSupportStudy11-2014.pdf and www.dtbassociates.com/docs/domesticsupportstudy.pdf. For a third party analysis of individual policy measures by country, visit https://www.oecd.org/tad/agricultural-policies/producerandconsumersupportestimatesdatabase.htm#country.

USW is the wheat industry’s export market development organization working to promote all six classes of U.S. wheat in more than 100 countries. Its 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. For more information, visit our website at www.uswheat.org.

NAWG is a federation of 22 state wheat grower associations that works to represent the needs and interests of wheat producers before Congress and federal agencies. Based in Washington, D.C., NAWG is grower-governed and grower-funded, and works in areas as diverse as federal farm policy, trade, environmental regulation, agricultural research and sustainability.

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