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2017, Angola, flour milling, Foreign Agricultural Service, hard red winter, Market Access Program, monetization, North American Millers’ Association, Quality Samples Program, technical service, trade service, U.S. wheat, U.S. Wheat Associates, USDA, Wheat Hard Red Winter

Reintroducing U.S. Wheat to Angola’s Expanding Flour Milling Industry

The West African nation of Angola is making good progress in its desire to improve food security for a rapidly growing population, currently estimated at 24.5 million people. The Angolan government believes that building its own food processing capacity is a crucial part of that effort to help reduce the cost of importing food, while creating jobs for the Angolan people and preserving foreign exchange. Angola currently imports an estimated 800,000 MT of processed wheat flour from various origins to produce popular baguettes and Portuguese style bread, but the country was not always dependent on flour imports.

USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) introduced hard red winter (HRW) wheat to Angolan milling companies in 1993 through the USDA PL 480 Title 1 monetization program. The industry processed a significant volume of HRW and Angolan bakers very much liked the quality of the HRW flour to make baguettes and Portuguese-style bread. When the Title 1 program ended in 2001, donated supplies of U.S. HRW were no longer available, and the Angolan government turned to subsidizing imported flour.

Recently improved economic prospects and the government’s new focus created an opportunity to begin increasing flour milling capacity. To build on its legacy of success, USW invested funds from the Market Access Program (MAP) for a part-time consultant to provide timely and accurate information about U.S. HRW to Angolan flour millers, bakers, grain traders and government officials.

In 2016, USW met with representatives of an Angolan flour mill that plans to expand its capacity beginning in 2017 and another mill that planned to re-open a mill that had been closed for 10 years. Wiese proposed using the Quality Samples Program (QSP) to demonstrate the value and utility of U.S. HRW to the mills’ staff and customers. Under QSP, USW coordinated the shipping of two separate HRW milling wheat samples from Kansas through an export terminal in Norfolk, Va., to the Angolan flour mills in late January 2017. After milling, analysis of the flour showed the HRW wheat met industry standards and produced good quality baked products, including the flour produced by the re-opened mill. With competitive prices and expanded storage, those mill managers say HRW will be strongly considered for import.

In a separate QSP activity, USW’s local representatives and staff from its West Coast Office in Portland, OR, worked through the North American Millers’ Association (NAMA) to purchase and mill HRW wheat and ship the flour to an Angola food processing company to demonstrate its use in pasta production. The U.S. Ambassador to Angola, Helena M. La Lime, and representatives from USW and NAMA celebrated the arrival of this shipment in a ceremony at the processing company on Feb. 28, 2017. Amb. La Lime highlighted the great potential U.S. wheat has in supporting Angola’s milling and food industries and said the United States “supports Angola’s efforts to diversify the economy through industrialization and increased local production of consumer goods.”

U.S. wheat farmers are pleased that their wheat has the potential to help improve economic conditions in Angola. Through trade service, technical support and training funded by wheat farmers and USDA, our organization tries to build lasting relationships with our valued customers around the world. And, assuming prices remain competitive in the changing world wheat trade, we hope that our support will lead to increased demand for HRW to produce great bread, pasta and other wheat food products for the Angolan people.

December 31, 2017/by Amanda Spoo

U.S. Wheat Associates (USW) represents the interests of U.S. wheat farmers in international markets. As it does with all U.S. wheat importing customers, USW focuses on helping Mexico’s buyers, millers and food processors solve problems or increase their business opportunities with U.S. wheat classes. This effort, supported by wheat farmers and the partnership with the Market Access Program (MAP) and Foreign Market Development (FMD) program, has fostered a productive relationship that has endured for decades through many challenges. More than 22 years of duty free access to the Mexican market under the North American Free Trade Agreement (NAFTA) certainly helped build the relationship.

Mexico is one of the largest U.S. wheat buyers in the world, importing just under 3.0 million metric tons (MMT) on average going back many years. Not in marketing year 2016/17, however. As of May 18, 2017, Mexico’s flour millers had imported more than 3.3 MMT of U.S. wheat, which is more than any other country. That volume is up 39 percent over last year at the same time.

Breaking down their purchases by class, flour millers in Mexico generate strong demand for U.S. hard red winter (HRW) wheat. In 2015/16, they were the leading HRW importers and are taking advantage of the favorable prices and high quality of the 2016/17 HRW crop. At a current volume of about 2.0 MMT, they have imported 79 percent more HRW this year and again lead buyers of that class. The association representing Mexican flour millers says a rising number of industrial bakeries, along with traditional artisanal bakeries, account for about 70 percent of the country’s wheat consumption. That puts HRW producers in a good position to meet that demand. Being closer to HRW production and having a highly functioning ability to import a large share of HRW directly via rail and duty free from the Plains states is an advantage for Mexico’s buyers.

In addition, Mexico is home to Bimbo, the world’s largest baked goods company, and an increasing number of cookie and cracker companies. The functional properties of U.S. soft red winter wheat (SRW) is well suited to the production of cookies, crackers and pastries, and serves as an excellent blending wheat. Millers supplying this growing market imported an average of 1.2 MMT of SRW between 2011/12 and 2015/16. With imports from the Gulf of more than 1.0 MMT of SRW in 2016/17, Mexico was the top buyer of SRW again. USW and state wheat commissions from the PNW are also helping demonstrate how millers and bakers can reduce input costs by using U.S. soft white (SW) as a blending wheat for specialty flour products.

The successful story of how U.S. wheat farmers and their customers in Mexico have worked together in a mutually beneficial way and, for now, U.S. wheat continues to flow to our customers in Mexico.

December 31, 2017/by Amanda Spoo

In the early 1960s, U.S. wheat farmers reached out through Western Wheat Associates (WWA) to build new partnerships with Taiwan. After many visits, WWA opened an office in Taipei in 1966. With cooperation, forward-thinking and much success over the years and with support from U.S. wheat farmers and USDA Foreign Agricultural Service export market development programs, USW has served Taiwan’s flour milling, technical education and wheat foods organizations for 50 years.

The Taiwan Flour Mills Association (TFMA) and USW forged a uniquely productive relationship. U.S. wheat farmers helped TFMA create the Taiwan Wheat Food Promotion Council, which established a baking school in Taipei. As U.S. wheat farmers continued to provide the highest quality wheat, USW continued to provide service and support that helped TFMA promote wholesome, nutritious wheat foods to Taiwan’s consumers. This trusted relationship still allows TFMA to confidently import almost all its wheat from the United States. Taiwan is on average the sixth largest market for U.S. wheat. In each of the past three marketing years, Taiwan’s flour millers purchased about 1.0 million metric tons of U.S. hard red spring (HRS), hard red winter (HRW) and soft white (SW) wheat currently valued at about $250 million.

The early spirit of cooperation with millers extended to building a vital wheat foods industry. Training at the baking school set the standards for an industry that wanted to produce the finest quality wheat food in the world. When millers and bakers raised the money to expand in 1984, the school became the China Wheat (now Grains) Products Research and Development Institute with an added focus on developing new wheat foods and demand continued to grow.

Members of the Taipei Bakery Association (TBA) and bakers across the country have always produced consumer goods of the highest quality. With a permanent office in Taipei, U.S. wheat farmers quickly reached out to TBA to join TFMA and educational leaders in developing and promoting healthy bakery products. Together they sponsored baking courses and contests, consumer outreach, school lunch programs, supported by trade service and technical support from USW.

The ultimate reward for so many years of hard work can now be measured on an international scale. Taiwan’s industry took the world by surprise by sending a team for the first time to the prestigious World Bakery Cup in 2008 that earned a bronze medal. Another bronze followed in 2012 and in 2016, Taiwan’s baking team won a silver medal. On a more practical level, consumption of wheat foods in Taiwan has now surpassed that of rice, a remarkable achievement reflecting the power of cooperation.

December 31, 2016/by Amanda Spoo

With the advantage of proximity to U.S. Gulf ports, Venezuela has been a relatively stable buyer of U.S. wheat for many years. In fact, USDA Foreign Agricultural Service (FAS) cooperator 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.

USW put its funding from the Market Access Program (MAP) and the Foreign Market Development (FMD) program to use meeting with Venezuelan millers at regional meetings such as the annual Latin American Millers Association (ALIM) conference. Still the situation forced USW to forfeit an annual U.S. wheat crop quality seminar that is critical to help millers stay interested in U.S. wheat and understand how to get the best value from their imports.

In response, 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. In October 2015, 29 customers representing seven of the largest milling companies in Venezuela participated in the webinar at ESLAMO. The out-of-pockets 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 Hard Red Winter (HRW) and Soft Red Winter (SRW) classes. Claudia Carter, Executive Director of the California Wheat Commission, presented quality information for Hard Red Spring (HRS) and Durum classes. Dr. Andrew Ross from Oregon State University presented quality information for Soft White (SW) for the Venezuelan webinar.

Feedback from the participating millers was quite positive and USW plans to hold a second 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. soft white and hard white wheat for the first time. Venezuela’s average annual U.S. wheat imports of nearly 543,000 metric tons over the past five years have returned substantial revenue to farmers and employers in the U.S. wheat supply system.

December 31, 2016/by Amanda Spoo

With funding from several state wheat checkoff programs and USDA Foreign Agricultural Service export market development programs, U.S. Wheat Associates (USW) is helping new flour millers learn how to get the wheat they need from U.S. farmers, a strategy that has built a dominant market share in this growing Southeast Asian market.

USW has for more than 50 years helped Philippine flour millers use sophisticated purchase specifications that increase value and enable the millers to import five classes of U.S. wheat. However, the industry is undergoing a generational transfer of leadership to younger family members or staff. Some knowledge gets passed down but this transition still requires significant training to assure new market participants can navigate the evolving international trading environment.

USW is addressing this transition through trade team visits to observe the U.S. wheat production and marketing systems, workshops on how to write the best U.S. wheat tenders and information on the quality and functionalities for every crop. These activities, funded by the Market Access Program (MAP) and the Foreign Market Development (FMD) program, help assure the next generation of decision-makers are familiar with the U.S. marketing system and the advantages of U.S. wheat classes in milling and end-product performance. The activities also prepare the industry for key quality concerns and opportunities in the current crop, helping them revise their specifications appropriately to maximize the value of the wheat they receive.

For example, in August 2015, USW sponsored a U.S. visit for new managers at Monde Nissin and Atlantic Milling. They learned that hard red spring (HRS) basis was at historic lows and low protein soft white (SW) stocks were very tight. As a result, these mills accelerated their purchasing pace and bought 110,000 metric tons (MT) of U.S. wheat sending substantial revenue back to the U.S. supply chain and farmers in the Pacific Northwest, Montana, North Dakota and South Dakota. This early purchase of U.S. wheat pre-empted the risk that both mills would consider purchasing lower priced spring wheat from Canada.

In October 2015, during a USW contracting workshop, market leading flour miller San Miguel used the information to revise confusing specifications in their contract language that helped reduce their import cost. This led them to make their first hard red winter (HRW) purchase in recent history. It is the fourth year in a row that San Miguel bought U.S. milling wheat exclusively, maintaining U.S. wheat as the quality standard in the Philippine market. In turn, this further reduces the chance that other mills may consider importing from other origins.

In marketing year 2015/16 (June to May), Philippine millers imported more U.S. HRS and SW wheat than any other country in the world. Its total imports of 2.164 million metric tons of U.S. wheat in 2015/16 ranks the Philippines at third among all countries. This represents more than 90 percent of total Philippine milling wheat imports and a substantial estimated return to the U.S. wheat supply chain.

December 31, 2016/by Amanda Spoo

U.S. wheat is seldom the least-cost option for importers, but it has a reputation for quality that adds critical value. Recognizing that quality starts with the seeds farmers sow, USDA Foreign Agricultural Service (FAS) cooperator U.S. Wheat Associates (USW) gathers feedback from its overseas customers that is shared with the scientists who breed new wheat varieties at home.

With partial funding from the Foreign Market Development program, for example, USW and state wheat commissions in Oregon, Washington, North Dakota and Minnesota organized a Wheat Quality Improvement Team (WQIT) of four university wheat breeders to meet with customers in Japan, Korea and Thailand April 18 to 26, 2015.

The breeders heard what wheat buyers, flour millers and wheat food producers like and do not like about U.S. soft white (SW) and hard red spring (HRS) wheat quality. At the same meetings, the breeders informed these customers about their work to improve the quality and yield potential of newly released varieties. This was the fourth WQIT led by USW. In 2004, a similar trip was made to Asia, followed by Latin America in 2009, and Europe and North Africa in 2010.

The team also took part in an Overseas Variety Analysis (OVA) program event at the UFM Baking School in Bangkok, Thailand. Through OVA, USW creates direct comparisons between U.S. varieties and competing wheat supplies. Working with the Wheat Quality Council, USDA’s Agricultural Research Service, state universities and wheat commissions, USW selects new varieties to mill and sent to overseas cooperators in top markets who analyze their quality in end-use projects and compare them to standard control flours.

Feedback from the OVA program and this year’s WQIT will bring results home to the farm. The next step for the WQIT is to apply the feedback and observations to research and wheat breeding programs, as well as share insights with other breeders, wheat producers and invested state wheat commissions. The OVA data will be shared with state wheat commissions and the Wheat Quality Council to set quality targets for breeding research and to develop recommended variety lists for farmers.

These activities create a primary basis for continual improvement in U.S. wheat quality that in turn supports import demand each year. USW used the Foreign Market Development program help fund the recent WQIT and the Market Access Program to engage customers and breeders through the OVA program.

December 31, 2015/by Amanda Spoo

U.S. Wheat Associates (USW), a cooperator with USDA’s Foreign Agricultural Service (FAS) built a large and loyal market for U.S. hard red winter (HRW) wheat in Nigeria through trade service and technical assistance. Success in Nigeria is now a model for nearby markets like Cameroon where a food company is now building demand for instant noodles.

By importing an annual average of 2.36 million metric tons of U.S. HRW the five years between 2009/10 and 2014/15, Nigeria was the leading HRW buyer in the world. While most HRW is milled for bread flour, to reach such levels, USW also helped establish HRW as the preferred wheat for Asian noodle flour in Nigeria.

As it continued to support Nigerian millers and food processors, USW used Emerging Market Program (EMP) funding to invite prospective buyers from neighboring Cameroon and other countries to learn more about the success enjoyed by their Nigerian colleagues. After meeting with Nigerian flour millers at USW’s request, a major food manufacturer decided to produce instant noodle products in his country.

To foster that desire, USW brought company representatives to Portland, Ore., to attend Introductory and Advanced Instant Noodle Technology & Processing short courses at the Wheat Marketing Center. USW also provided in-plant technical support and trade service information. The business owner credits each level of support from EMP-funded USW activities for giving the company the opportunity to introduce instant noodles and see rapid growth in demand.

Starting with about 9,000 metric tons of Nigerian-milled HRW flour, the company soon needed a local supplier. The outcome of activities in Cameroon, funded through the EMP, was 55,900 metric tons of new HRW exports over two marketing years. The business owner was so positive about potential growth, he planned to renovate a closed flour mill to import and mill HRW for instant noodle production.

USW continues to promote HRW use in instant noodle production in Nigeria, Cameroon, Angola, Ghana, Ivory Coast, Equatorial Guinea, Gabon and Senegal. It is expected that current and incremental HRW exports will benefit wheat farmers in Texas, Oklahoma, Kansas, Colorado, Nebraska and South Dakota.

December 31, 2015/by Amanda Spoo

While U.S. farmers supply nearly 80 percent of wheat imports into the Caribbean region, some importing countries have traditionally preferred Canadian wheat, including Guyana. However, USDA Foreign Agricultural Service (FAS) cooperator U.S. Wheat Associates (USW) is now displacing Canadian sales there by demonstrating how the characteristics of U.S. wheat offer a higher return to flour millers.

Noting that Canadian Western Red Spring wheat is pre-cleaned at export elevators and has higher moisture content than U.S. wheat, Canadian marketers in the past strongly suggested that flour mills could expand production capacity without cleaning or tempering (adding water at the mill). 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.

Using Market Access Program (MAP) and Foreign Market Development (FMD) funds, 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 decided to construct a cleaning house. To support a transition to milling U.S. wheat, USW sent a consultant to the mill who demonstrated 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. hard red spring (HRS), hard red winter (HRW) and soft white (SW) wheat representing returns that go to the U.S. wheat industry from the Gulf of Mexico back to farms in North Dakota, Oklahoma, Kansas, Washington and Oregon.

December 31, 2015/by Amanda Spoo

With Vietnamese wheat imports projected to increase 40 percent in the next 10 years, USDA Foreign Agricultural Service (FAS) cooperator U.S. Wheat Associates (USW) is leveraging export market development funds to position U.S. wheat as the high quality, high value choice for milling and baking operations.

USW utilizes Market Access Program (MAP) and Foreign Market Development (FMD) funding, supplemented with checkoff dollars from state wheat commissions, to work directly with large volume millers and bakers in Vietnam to promote U.S. hard red spring (HRS) wheat and hard red winter (HRW) and develop better end-products with cake plants by using U.S. soft white (SW) wheat.

In June 2014, for example, USW conducted a Contracting for Value Workshop to help flour mill purchasing managers select the right classes and characteristics to extract the most benefit from U.S. wheat imports. Four mills in Vietnam now report using strategies presented in the workshop to help adjust contract specifications based on annual quality variations. One mill said USW’s trade servicing helped persuade them to include U.S. HRS in their long-term business plan and increased purchases of U.S. wheat from 9,600 MT in 2012 to 78,000 MT in 2014, a substantial increase in revenue. An additional procurement workshop in April 2014 convinced another mill to purchase 44,500 MT of U.S. wheat (25,000 MT U.S. HRS and 20,000 U.S. SW) even though the mill had typically purchased Canadian wheat at a lower price.

Also in 2014, USW continued encouraging cake plants to switch from Australian standard white (ASW) to U.S. SW to increase cake volume and extend product shelf life. After an educational seminar and in-plant consultations, seven cake plants in Vietnam now use 100 percent U.S. SW in their production of extended shelf life cakes.

As a result, Vietnam imported 243,000 MT of U.S. wheat in 2014/15. That is well above the 140,000 MT imported in 2013/14. Overall, for the past five marketing years, U.S. wheat sales have exceeded 100,000 MT per year, up from the previous decade average of 32,000 MT per year. That return comes from a much smaller investment in MAP and FMD funds over the past few years and a similar level of support from state wheat commissions.

USW’s long-term market development strategy in Vietnam is establishing a clear preference for U.S. HRS and SW wheat —all at a time when USDA predicts Vietnam’s wheat import demand to continue growing. The benefits will continue to return significant value to farmers and related industries in Washington, Oregon, Idaho, Montana, North Dakota and Minnesota.

December 31, 2015/by Amanda Spoo

The indelible link between the Japanese people and U.S. wheat producers began when the Oregon Wheat Growers League (OWGL) organized a trade delegation visit in 1949. Today, Japan is a mature, but very sophisticated market that must import most of its milling wheat. By providing critical, timely information about U.S. wheat and related market issues, Foreign Agricultural Service (FAS) cooperator U.S. Wheat Associates (USW) is helping maintain a majority market share in a critical market with 2014/15 imports equal to more than 10 percent of total U.S. wheat exports.

Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF), grain traders, millers and bakers are pressed by consumers to consistently deliver excellent quality, uniformity, variety and safety. They must be prepared to defend their work. That is why USW and its state wheat commission members focus activities there on helping buyers understand the quality of every wheat crop, keeping both Japanese government and millers informed about market and policy developments and collaborating in detail on any food safety related concerns.

For example, according to the Japan Consumer Affairs Agency, buckwheat is among seven potential allergens that can produce severe reactions. USW works with state commissions to provide assurance that imported U.S. wheat meets the market’s “no-buckwheat” demand. Together they travel to Japan to fully understand the issue from the customers’ point of view. They help farmers adopt practices to keep buckwheat out of wheat crops.” And in 2015, they hosted on-farm visits to show Japanese miller why there is a low risk of seeing buckwheat in U.S. wheat shipments.

Another example developed in 2013 following the discovery of wheat plants with an unapproved genetically modified (GM) trait in a single field in Oregon. From the start, FAS, USW, the U.S. commercial grain trade, state wheat organizations and wheat farmers took this unusual situation very seriously. Their work helped identify and share the most accurate information from the ongoing APHIS investigation to buyers, government agencies and end users. While MAFF temporarily suspended new purchases of U.S. Western White, a sub-class of soft white (SW) wheat, the reasoned response to the incident provided the assurance MAFF needed to quickly resume Western White tenders and minimize the market disruption.

This consistent level of service, supported by MAP and FMD funds, helped protect U.S. wheat sales in the face of aggressive competition from Canada and Australia. Income from Japan comes back to wheat farmers and the wheat supply chain in the Pacific Northwest and farmers in Washington, Oregon, California, Montana, Wyoming, North Dakota, South Dakota and Nebraska.

December 31, 2015/by Amanda Spoo

Reintroducing U.S. Wheat to Angola’s Expanding Flour Milling Industry

Mexico is a Loyal and Very Important U.S. Wheat Buyer

A Legacy of Cooperation – U.S. Wheat Farmers, FAS and Taiwan’s Milling and Baking Industry

Online Conference Maintains Valuable Wheat Export Connections in Venezuela

Legacy of Training Sustains Market Leading U.S. Wheat Exports to the Philippines

Wheat Quality Improvement Programs Support U.S. Wheat Value Proposition

Spreading Success through Service: USW Helps Establish Noodle Market in Cameroon

Technical Assistance Helps Displace Competition in Guyana’s Wheat Market

Market Development Funding Helps Position U.S. Wheat as a Better Choice in Vietnam

Wheat Exports Hinge on Meeting Japan’s Need for Information

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