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USW Helps Korean Flour Millers See Value in U.S. Wheat Purchases

The run-up in U.S. and global wheat prices following the Russian invasion of Ukraine made intensive trade service even more important for U.S. wheat importing customers. Foreign Market Development (FMD) program funds helped U.S. Wheat Associates (USW) gave Korean flour millers the experience needed to continue purchasing U.S. wheat in July 2022.

USW Seoul brought six flour milling executives responsible for wheat purchases through their membership in the Korea Flour Millers Industry Association (KOFMIA) to Montana, Washington State and Oregon to see the 2022 wheat crops and gain a better understanding of how the U.S. wheat supply chain ensures quality and value.

Loyalty is Strong

Even though U.S. wheat prices were higher than competing supplies, in August 2022, KOFMIA purchased 82,500 MT of hard red spring (HRS), hard red winter (HRW) and soft white (SW) wheat with an FOB value of $31.8 million. Based on information from the U.S. visit, KOFMIA saved money by adjusting SW protein specifications without compromising functional quality.

Then, in January 2023, one of the millers on the team contacted USW for guidance on a potential opportunity for SW prices. USW demonstrated the advantageous spread between SW and Australian soft wheat. The USW recommendation resulted in an additional purchase of 2,000 MT of SW with an FOB value of $616,000.

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USW’s Online Baking Program Putting U.S. Wheat ‘Top Of Mind’ In South America

An online training series developed by U.S. Wheat Associates (USW) in the early days of the COVID pandemic continues to have success in its effort to educate South American bakers and millers about the value and quality of U.S. wheat.

Specifically, the Online Baking Certification program promotes baking methods and processes that highlight all six U.S. wheat classes. What is significant about the program is that it’s able to reach a large number of bakery and milling staff who otherwise would not be able to take part in educational workshops. The virtual format allows participants to study at their own pace before testing through a handful of modules to earn certification.

Funded by the Agricultural Trade Promotion Program (ATP) – a USDA Foreign Agricultural Service (FAS) program created in 2018 to help U.S. agricultural exporters enhance their work in international markets and mitigate other obstacles to trade – USW’s online trainings have made great strides toward reaching the goal of boosting awareness of U.S. wheat.

Bakers and millers in Colombia, Peru, Chile, Ecuador, Bolivia and Brazil have been getting a thorough introduction to U.S. wheat and are learning how they can utilize it to improve the quality of breads and other baked goods.

The goal for U.S. wheat is ambitious yet simple: Sharing ways to improve baked products made with U.S. wheat could result in increased consumption in South America, which could lead to more customers for South America’s bakeries.

It could also potentially lead to a greater demand for U.S. wheat.

Putting U.S. Wheat ‘Top of Mind’

USW’s Online Baking Certification program build’s upon an effort to create awareness of U.S. wheat in South America. Pictured here is an in-person workshop conducted in USW’s Santiago office in 2019, prior to the COVID pandemic.

USW’s Online Baking Certification program builds upon an ongoing effort to create awareness of U.S. wheat’s value and quality in South America. Pictured here is an in-person workshop conducted in USW’s Santiago office in 2019, prior to the COVID pandemic.

Miguel Galdos, USW’s regional director in South America, says the goal of the Online Baking Certification program is to create better awareness of U.S. wheat.

“We want U.S. wheat to be top of mind for more bakers in the region, as well as for the technical staff at the milling companies,” he said. “We want to place a higher emphasis on reaching bakers

and technical people to perhaps give them a voice when it comes to wheat purchasing decisions.”

The fact that both bakers and milling staff are registering for the online course, too, is a sign that many in the industry want to take advantage of the opportunity to get experience working with U.S. wheat.

USW, the wheat industry’s export market development organization, works with wheat buyers, millers, bakers, food processors and government officials in more than 100 countries to promote the reliability and value of the six U.S. wheat classes. The new emphasis on creating awareness in South America and educate the people who work directly with wheat and wheat flour inside of bakeries is strategic.

Creating awareness – putting U.S. wheat top of mind of bakers – opens all kinds of opportunities.

“The key is that once they learn one aspect of U.S. wheat’s quality, they want to see what else there is to learn,” explained Galdos. “In this program, they must test out of one module to be able to move on to the next. Before earning the certification, they must complete a two-day practical course in person. Soon, after moving through the program, they are an expert on our product. At that point, U.S. wheat has developed a customer.”

Virtual Training has Become Commonplace

The virtual baking training includes six different modules that allow bakers and milling staff to progress at their own pace. Participants must pass a module to move on to the next, assuring they are exposed to all of U.S. wheat’s positive attributes.

The Online Baking Certification program includes six different modules that allow bakers and milling staff to progress at their own pace. Participants must pass one module to move on to the next, assuring they are exposed to all of U.S. wheat’s many positive attributes.

Launched in October 2020 as an alternative to in-person training workshops during the height of the COVID pandemic, the Online Baking Certification program has grown rapidly. USW recently added a Portuguese version to the original Spanish version to attract more Brazilian participation. USW also has plans to add a master-level course in the near-future.

The current program has registered nearly 5,500 students in two years. Thanks to a partnership between U.S, Wheat Associates, the Brazilian Wheat Industry Association and the Brazilian Bakery and Confectionery Industry Association, further growth is expected.

The six South American countries targeted by USW are the six that purchase U.S. wheat.

“The biggest wheat buyer in Colombia has had 15 staff members go through the whole program and earn certification,” said Galdos. “Chile has been another active participant, so we are seeing interest from a good portion of the region. Brazil is promising. We have met with the millers and bakers’ associations and U.S. Wheat Associates is going to be recognized by those associations at an upcoming event.”

The birth of the program came by necessity after in-person trainings and workshops were eliminated because of COVID. By March 2020, USW’s staff in Santiago, Chile, were putting together educational materials to complete the online bakery course – courses featuring baking theory, video instruction and assessment platforms were assembled. USW Baking Consultant Didier Rosada played a key role in the production of baking videos for the modules, which were finished in May 2020 and then sent to selected baking staff around the region for testing.

Opportunity for a Competitive Edge

Those who have completed USW’s Online Baking Certification are reporting they gained greater knowledge of traditional baking methods that work well with U.S. wheat.

Miguel Galdos, USW regional director in South America

Miguel Galdos, USW regional director in South America

Galdos emphasized that the online courses provide U.S. wheat with an advantage over competing wheat growing and exporting countries.

One example is the value of U.S. hard red winter wheat compared to Canadian wheat.

“One thing we stress to the bakers in South America is that many of the products they are baking do not require Canadian wheat that is higher in protein but more expensive,” Galdos said. “U.S. hard red winter wheat is a better option, and the content in the online baking courses teach them why. We show them how to bake with it. The problem is that the bakers are not trained. We want more bakers in the region exposed to the value and quality of U.S. wheat and how using it can benefit their products and their businesses.”

Along with putting U.S. wheat top of mind for South American bakers, Galdos pointed out a valuable additional benefit to USW’s online baking program.

“Through this certification process we are working with bakeries, collaborating with millers, collaborating with the people who either are or could be buying and using U.S. wheat,” he said. “We are educating them and creating awareness for U.S. wheat. At the same time, we are building relationships.”

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Image of people around a stainless steel industrial table discussing technical support topics related to serving global wheat importing customers.
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ATP Helps USW Build and Share Valuable Milling and Baking Technical Support

Adding value to U.S. wheat export supplies requires strong technical support and broad knowledge of the milling, baking, and processing needed to produce hundreds of unique food products. With 11 professional flour millers and bakers on staff, U.S. Wheat Associates (USW) uses technical support to add value and create a differential advantage for U.S. wheat classes over competing supplies that often cost less.

With additional funding through the Agricultural Trade Promotion (ATP) program, and help from its educational partners, USW created and implemented a multi-year activity to improve its already strong technical support. In February 2022 and in March 2023, USW held “Core Competency Training” sessions for technical and marketing staff from all its overseas offices. The objective was to help USW become more competent to help milling and baking customers grow their businesses using imported U.S. wheat.

Image shows people in an industrial baking lab discussing production and quality of baguette bread made with U.S. wheat as part of a technical support training program.

At the Wheat Marketing Center in Portland, Ore., in 2022, USW technical and marketing staff gathered to “learn so they can teach” overseas customers.

Building Core Competency

The in-depth sessions and discussions give newer USW technical and marketing specialists the chance to learn from USW’s senior experts working in distant regions. Exchanging information and techniques about different flour and wheat food products creates the chance to develop new product opportunities in new markets. In addition, the Core Competency Training workshops have given USW the shared knowledge to help solve problems and develop more successful training and technical support for customers.

“A clear knowledge of the customer’s business is vitally important to opening the door to U.S. wheat farmers as valued suppliers,” said Peter Lloyd, one of USW’s senior technical managers and a recognized global flour milling expert. “I believe the Core Competency Training has improved our ability to bring the greatest value where it makes the most difference – on the bottom-line profit for a supply chain manager, miller, or baker.”

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ATP Helps Show Philippine Bakers the Power to Demand U.S. Wheat Flour

U.S. Wheat Associates (USW) works to help wheat food companies expand product lines in which U.S. wheat classes have an advantage. This strategy demonstrates that bakers have the power to demand flour products made with imported U.S. wheat and helps increase total wheat consumption. From February 2021 through July 2022, USW leveraged its regional technical expertise and Agricultural Trade Promotion (ATP) funds to expose Philippine bakers to production methods and new products from South Korea.

Webinars on Korean Wheat Foods

USW hosted three webinars in February, May and June 2021 featuring baking demonstrations of trendy Korean baked goods with USW Seoul Food/Bakery Technologist, David Oh. Oh taught popular U.S. wheat flour Korean bread and confectionary product recipes formulated for the Philippine market. Nearly 2,000 Philippine commercial bakers participated and through surveys most said they could apply the recipes in their business. USW has identified 12 Philippines bakery retailers that added products from the seminars made with U.S. wheat flour.

In July 2022, USW technical staff serving the Philippines and South Korea organized and held a comprehensive bakery workshop in Seoul in cooperation with the Korea Baking School. The purpose again was to familiarize Philippine millers and bakers with Korean-baked products, recipe formulations, and production methods.  As a result of the workshop, four of the participants created a total of eight new bakery products made with flour milled from U.S. hard red spring (HRS) and soft white (SW) that are still on sale.

The Philippines remains the largest importer of HRS and SW in the world and, including hard red winter imports, purchases a total average annual volume of about 3 million metric tons of U.S. wheat.

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ATP Funds, FGIS to Help Train Importers to Recognize Wheat Grade Factors

U.S. Wheat Associates (USW) frequently uses the unique U.S. grain inspection system to demonstrate a competitive advantage to the world’s wheat buyers. Now, with additional funding from the Agricultural Trade Program (ATP), USW is expanding its effort to demonstrate the integrity of the U.S. wheat supply chain in cooperation with the Federal Grain Inspection Service (FGIS).

The international affairs office of FGIS provides educational training programs to overseas buyers explaining the mission of the agency to certify the physical and contractual integrity of U.S. wheat and other grains. In July 2019 in Peru, a country the imports a total of 2.0 million metric tons (MMT) of wheat each year, USW worked with FGIS agent José Robinson to conduct half-day seminars for 53 quality control managers from the country’s five largest wheat importing companies. The participants also shared their processes with Robinson, showing examples of the wheat they inspected in plant. As a result, the managers were able to test their abilities to conduct similar inspections with guidance from directly from FGIS.

Under ATP, the USW South American regional representatives based in Santiago, Chile, plan to repeat this training activity in four other South American countries over the next two years.

USW believes this service for wheat importing customers gives them a deeper understanding of and increased trust and confidence in the FGIS inspection and certification process. The changes implemented in the mills following the training sessions should result in fewer discrepancies between the FGIS grade and the results of local, in-plant inspections, leading to increased satisfaction with U.S. wheat.

In addition, USW has earmarked ATP funds to conduct a similar FGIS Grain Inspection and Certification training session at the African Milling School in Nairobi, Kenya, in 2019. This session will be in part a “train the trainer” session for faculty members from the African Milling School and from the IFIM flour milling school in Casablanca, Morocco. Technical officials from the Office of Cereals in Algeria, the agency that plans and purchases the country’s wheat imports, and other participants from selected organizations in Sub-Saharan Africa will also participate.

Working with these schools extends knowledge of U.S. wheat value to flour millers throughout North and East Africa, as well as the Middle East. That is increasingly important in these competitive markets, especially in educating millers and processors in the growing cake and confection markets that need the specific information about the differential performance of U.S. soft red winter (SRW) and soft white (SW) wheat classes.

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ATP Funding Bridges Technical Service Gap in Southeast Asian Wheat Export Markets

U.S. Wheat Associates (USW) is applying funds from the Agricultural Trade Promotion (ATP) program to expand its ability to conduct technical support to wheat buyers and end users in rapidly growing South Asian markets.

USW has had a long-term effort to help customers improve their products and processes through technical support, funded in part by the Market Access Program (MAP) and Foreign Market Development (FMD) program. There is a strong connection between increased imports of U.S. wheat and the investment in milling and food production support. Looking at the highly sophisticated wheat food industries in Japan, Korea and others, USW’s long-term investment has benefited consumers in those countries while establishing strong and consistent export markets for U.S. wheat producers.

In such markets as Vietnam, Malaysia, Myanmar, Thailand and Indonesia, the imported wheat customer base is expanding, and USW saw a need to increase its technical capabilities to match the growth. At the same time, USW knew that some senior technical staff were planning retirements.

The addition of ATP funding gave USW the opportunity to add a new Bakery Technician position to work with customers across the South Asian region. Adrian Redondo, an experienced food technologist and account manager, joined USW in June 2019. He will train with his experienced colleagues and build customer contacts through 2021 when the current USW bakery consultant based in the Philippines plans to retire. Without additional ATP funding, USW would have had to fund a new technician position from a limited pool of FMD funds that would, in effect, cut its ability to fund customer activities.

South Asian imports of U.S. hard red spring (HRS), soft white (SW) and hard red winter (HRW) wheat from family farms in the Pacific Northwest to the Northern Plains have grown from an average of about 3.0 million metric tons (MMT) per year 10 years ago to about 5.0 MMT in 2018/19. Future demand for wheat foods is expected to keep growing in the region. ATP funding provides a wide range of additional opportunities to continue differentiating U.S. wheat in markets like those in South Asia, with no local wheat production and where increasing incomes and urbanization are driving a rapid expansion of wheat food demand.

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Cereal Chemistry Training in Emerging South Asian Markets

U.S. Wheat Associates (USW) is applying Agricultural Trade Promotion (ATP) program funding to hold five “Cereal Chemistry Seminars” in 2019 and 2020 for the milling industries in Southeast Asia. USW believes that with a more complete understanding of the functional value of wheat proteins, carbohydrates and other properties, flour milling quality control managers will become more receptive to the high-quality characteristics of U.S. wheat compared to competing supplies.

In Malaysia, Indonesia, Vietnam, Thailand and Myanmar (Burma), the flour milling industry is expanding to meet the fast-growing demand for wheat food. However, many new managers lack the experience with U.S. wheat to evaluate its differential characteristics relative to its premium price, which puts a constraint on upside U.S. wheat export potential.

To provide the knowledge that will help fully understand the true value of U.S. wheat supplies, USW is developing a comprehensive seminar that will be conducted over the next two years. Seminars targeting about 50 technical staff from the milling and allied industries in each of the five markets will include such topics as Wheat Chemistry and Structure; Wheat Protein Analysis and Functionality; and Wheat Carbohydrate Chemistry and Functionality.

USW anticipates that after the seminars, participants will have enhanced skills to assist co-workers, suppliers and customers in developing new formulations requiring more specific flours and increased volumes of U.S. wheat classes. Participants will gain expertise in flour analysis and the importance of specifications required in large production bakeries. And quality control staff will have enough technical capabilities to defend the functional value of high-quality flour from U.S. wheat.

South Asian imports of U.S. hard red spring (HRS), soft white (SW) and hard red winter (HRW) wheat from family farms in the Pacific Northwest to the Northern Plains have grown from an average of about 3.0 million metric tons (MMT) per year 10 years ago to about 5.0 MMT in 2018/19. Future demand for wheat foods is expected to keep growing in the region. By funding opportunities like Cereal Chemistry Seminars, ATP is helping USW continue to give flour milling and baking managers the information they need to build a preference for U.S. wheat supplies.

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Investment in Japan Helped Build Good Will Needed for Market Access

Implementation of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) created a potentially devastating disadvantage for U.S. wheat exports to Japan. Yet many years of investment by U.S. Wheat Associates (USW), its partnership with USDA’s Foreign Agricultural Service and wheat farmers have built such good will that Japanese flour millers could publicly express their support for closing this looming breach. Finally in late 2019, a new U.S.-Japan agreement put U.S. wheat exports back on equal footing with competitors in the CPTPP.

The CPTPP agreement was gradually discounting effective tariffs that Japanese flour millers pay for imported Australian and Canadian milling wheat over 9 years from about $150 to about $85 per metric ton (MT). Imported U.S. wheat effective tariffs would have remained at about $150 per MT. The disadvantage for U.S. wheat had already exceeded about $20 per MT in 2019. Without a resolution of this situation, more than 60 years of investment in developing Japan into the top buyer of U.S. wheat was at risk.

In 2018, the Japan Flour Milling Association (JFMA) invited representatives of USW and several state wheat commission organizations to be guests at the organization’s 70th anniversary in Tokyo, an indication of the strong relationship with the U.S. industry. At the event, sources within the Japanese milling industry expressed real concern that the tariff disadvantage under CPTPP could force them to find alternatives to average total imports of 3.1 million metric tons (MMT) of U.S. Western White, dark northern spring (DNS) and hard red winter (HRW) wheat. Eventually, the millers suggested, U.S. wheat annual imports could have fallen to as little as 1.35 MMT per year or a potential loss of as much as $500 million per year even at relatively low U.S. wheat export prices.

USW used this concern in public statements, published fact sheets and in testimony to and personal interaction with the U.S. Trade Representative on trade negotiations with Japan.

In April 2019, USW used Market Access Program (MAP) funds to host a trade team of senior Japanese flour millers in the United States. During that visit, the new executive director of JFMA said: “It is important to maintain and develop the good relationship Japan has had with the U.S. wheat industry for more than 60 years.” Ultimately, the U.S.-Japan agreement was signed and will go into effect in 2020.

USW believes the ability to share specific risks expressed by our Japanese customers was a very crucial point that added intensity to negotiations between the two countries. USW was also very encouraged that the USTR and other officials in the Trump Administration take this situation very seriously and worked hard to come to an agreement. A large portion of wheat farm family incomes in Washington, Oregon, Idaho, Montana, Wyoming, North Dakota, South Dakota, Minnesota and other Plains states depended on it.

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USW Reaches Across Regions to Help Build Wheat Exports to The Philippines

USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) is using Foreign Market Development (FMD) program and the Market Access Program (MAP) funds to help expand demand for U.S. wheat in the Republic of the Philippines in part by introducing new products from North Asian countries.

Over the years, USW has built a team of very effective end-product technical experts in Korea and Taiwan. These are very sophisticated but somewhat mature U.S. wheat markets. The still growing Philippines market is hungry for new product ideas. USW decided to share its product and technical knowledge across regions in several ways.

In March 2018, for example, USW worked with a large flour mill in Cebu, Philippines, to plan a customer appreciation learning visit to observe innovations in the Korean baking industry. USW’s representatives in Seoul set up meetings for the team of 19 customers at sophisticated Korean bakeries where they saw new products and formulations, made with flour from U.S. hard red spring (HRS) and hard red winter (HRW) wheat, baking methods and processes.

USW chose that milling customer for this activity knowing that Bakery World 2018, the first bakery trade show in Cebu was scheduled for October 2018 where the organization would be very visible on behalf of U.S. wheat farmers. At the show with more than 6,000 bakers and allied industry representatives, USW Korea Country Director CY Kang presented a look at bakery trends in Korea. USW Korea Food and Bakery Technologist David Oh demonstrated production methods for five different types of breads currently popular in the Korean market. USW Manila Bakery Consultant Gerry Mendoza made a presentation on bakery operations.

With additional support from three state wheat commissions, USW also hosted 30 Philippine managers at a noodle production workshop presented by USW  in Taiwan. USW demonstrated how milling U.S. soft white (SW) wheat yields both high quality cake flour and higher protein “clear” flour that is ideal for bright white noodles.

Using Agricultural Trade Promotion (ATP) funding, USW’s Manila and Seoul offices collaborated on a Korean Bakery Workshop held in Seoul, South Korea from June 16 to 22, 2019. USW designed the workshop as a service to 30 additional Philippine bakers and millers to familiarize them with Korean products, formulations and production methods.

The return to U.S. farmers from the long-term, diverse activities in the Philippines is increasing. From a volume of about 2.0 million metric tons (MMT) in marketing year 2011/12, U.S. wheat imports reached more than 3.0 MMT in 2018/19 and the Philippines imported more U.S. SW and HRS than any other country that year.

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Maintaining Strong Awareness of U.S. Wheat Quality in China

It is certainly true that the trade relations between the United States and China have been and remain in a difficult place. However, USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) is confident that this trade confrontation will one day be resolved. After many years investing funding from the Market Access Program (MAP) and Foreign Market Development (FMD) program, USW remains engaged in keeping our once and future wheat importing customers in China informed about the quality, variety and value of U.S. wheat in anticipation of future opportunities.

USW maintains a presence in Beijing but did not replace a retired colleague to help hold the line on FMD investment. Trade service visits in the first six months of 2019 confirm that private flour millers want to continue importing U.S. hard red spring (HRS) and soft white (SW) when the tariff conflict is resolved. The only flour miller who purchased any U.S. wheat in marketing year 2018/19 was willing to pay the 25% punitive tariff and took delivery of 43,000 metric tons of HRS in April. He expressed an abiding interest in the functionality, flavor and good milling characteristic of U.S. wheat, and holds high hopes for not just a “normal” trading relationship, but one that allow mills like his to run much more of it.

USW representatives also conducted trade service visits with customers attending Bakery China Shanghai 2019. They participated in a U.S. agricultural product showcase sponsored by the USDA/FAS Agricultural Trade Officer posted in Shanghai to highlight the differential advantages of U.S. HRS and other classes of wheat. USW Regional Vice President Jeff Coey reported that every customer was eager to regain access to the high-quality U.S. wheat they learned about through export development programs and experience over the years.

Officials with China’s state-sponsored grain buying agencies also welcome USW trade servicing, technical training and relationship management activities. Even with the tariffs in place, in May 2019 Coey and USW/Beijing Country Director Shirley Lu were invited to speak at a conference in Xiamen to several millers who gained new information about the functional value of U.S. wheat classes. Bakery training classes conducted by USW’s technical specialist in 2019 also expanded awareness of U.S. wheat’s superior functional benefits.

In addition, officials were happy to hear that USW’s commitment to the China market remains unchanged.  In fact, USW told the officials it intends to increase its activities in partnership with FAS in part with funding from the Agricultural Trade Promotion (ATP) program to keep U.S. wheat top of mind among users and policy makers in China. Under ATP, for example, USW plans to hold a series of “Contracting for Wheat Value” courses in the United States for commercial and state wheat buyers over the next three years. Participants will be managers with direct wheat trade contacts that influence wheat purchasing in their organizations. After the courses, participants will get the chance to observe wheat breeding, farms, transportation, quality control and Federal Grain Inspection Service processes.

Given that China imported 1.6 million metric tons of U.S. HRS, SW and soft red winter (SRW) wheat in marketing year 2016/17 and more than 800,000 metric tons of U.S. wheat in 2017/18 before the retaliatory tariffs were implemented, potential demand will benefit farmers in the Pacific Northwest and Northern Plains. And, with funding from MAP, FMD and ATP, USW’s commitment to service in China will continue long after this trade conflict has ended.

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