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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The emergence of Russia as a very competitive wheat exporting country has dramatically changed the Egyptian market opportunity for U.S. wheat farmers. Egypt still imports more wheat than any other country, but for several years Egypt’s government purchasing agency has been able to import Russian wheat and wheat from other nearby exporters at FOB costs that have been as much as $50 per metric ton cheaper than U.S. wheat on top of a freight advantage. Most Russian wheat is imported for use in Egypt’s subsidized baladi bread program.

USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) recognizes these challenges and has shifted Foreign Market Development (FMD) and Market Access Program (MAP) funding from staff and activities in Egypt to other regions and countries that offer better opportunity for U.S. wheat export sales. However, USW has identified an emerging high-value market in cookies, crackers and cakes, as well as other products like pasta, in Egypt that is served by private importers, mills and processors. While such products are affordable for many Egyptian consumers, they return higher margins to the supply chain and they require high quality flour and offer a new opportunity for U.S. wheat.

In marketing year 20115/16 (June to May), for example, Badawi Group contacted the USW office in Cairo to discuss their plans to introduce a new line of branded pasta products. Badawi is the largest tea company in Egypt and wanted to extend a respected, premium reputation into the growing pasta market.

USW Regional Technical Specialist Peter Lloyd traveled from Casablanca, Morocco, to meet with Badawi managers. While durum wheat is the premier source of semolina for pasta, flour from other wheat classes can be used effectively depending on cost and consumer preferences. After reviewing Badawi’s product concepts, Lloyd recommended the company should consider using high protein U.S. hard red spring (HRS) wheat as its primary pasta ingredient.

Next, USW Regional Director Ian Flagg and Marketing Consultant Nihal Habib reviewed how Badawi could best execute a HRS wheat purchase. Following a final discussion, Badawi imported 30,000 metric tons of HRW in 2015/16, the first significant sale of U.S. spring wheat to Egypt in many years. The purchase returned significant revenue to U.S. spring wheat farmers in North Dakota, Montana, South Dakota and Minnesota from a very small investment of MAP and FMD funds. This opportunity would never have materialized if that investment and USW’s ability to serve this prospect were not in place. Moreover, Badawi set a standard for premium tea in Egypt and USW believes it can set another standard for premium pasta, which holds promise for additional HRS sales.

USW is fostering similar opportunities in Egypt through technical support aimed at helping build a preference for U.S. soft red winter and soft white wheat in the emerging cookie, cracker and cake products. The effort shows that USW is making the most efficient use possible of MAP, FMD and U.S. wheat producer funding in response to changing market dynamics.