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 marketing year 2018/19 hard red winter (HRW) and hard red spring (HRS) wheat crops offered excellent milling and baking quality, and therefore more value, than in previous years. U.S. Wheat Associates (USW) representatives in South America invited two representatives of an influential buying group in Chile to participate in a trade team visit to the United States in June 2018. This group had not purchased U.S. wheat, relying instead on Canadian spring wheat, so USW was pleased that the trade team included two executives from the buying group who had never participated in such a visit to observe the U.S. wheat production and supply system.

In Portland, OR, the participants made contacts with new Pacific Northwest grain traders and observed the FGIS grain inspection process. In Nebraska, hosted by the Nebraska Wheat Board, the team saw public wheat breeding research at the University of Nebraska, Lincoln, and in North Dakota they learned about new crop U.S HRS quality.

As the tour progressed, USW saw more and more interest from the participants. They learned that lower moisture U.S. wheat offers good value in their milling processes. They saw how they could use inspection data to get maximum return from their wheat import contracts. They talked to farmers and elevator operators who showed how quality is maintained throughout the supply chain.

In September 2018, the buying group told USW it was considering purchasing a full cargo of U.S. wheat and requested additional crop quality data to support and facilitate the decision. USW shared the quality data from the new harvest and past years and discussed the excellent buying opportunities. In April 2019, the buyer purchased 30,000 metric tons (MT) of U.S. HRW to mill into bread flour and soft red winter (SRW) to mill into cookie and pastry flour. The mill manager who traveled to the United States also expressed interest in purchasing soft white (SW) from the Pacific Northwest. With funding from the USDA Foreign Agricultural Service Market Access Program (MAP), USW provided trade and technical service to open that opportunity. And to continue the long-term process to build sales to the buyinggroup, USW invested Agricultural Trade Program (ATP) funds to send the same manager to participate in the Hard Red Spring Wheat Quality Tour in North Dakota in July 2019.

With a more sustained effort focused on replacing Canadian supplies and funded by MAP, ATP and the Foreign Market Development program, USW anticipates continued growth from this influential buying pool and throughout South America.

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Using Market Access Program (MAP) and Foreign Market Development (FMD) program funds, USDA Foreign Market Development (FAS) cooperator U.S. Wheat Associates (USW) keeps Brazilian millers informed about the quality, variety and value of U.S. wheat every year — even though Brazil regularly imports most of its wheat from Argentina. This knowledge resulted in Brazilian millers buying most of their wheat from the United States between March 2013 and May 2014 when Argentina could not meet their demand.

With high demand, Brazil imports more wheat than most other countries because its farmers cannot produce sufficient domestic supplies. Under the Mercosur trade agreement, Brazil’s millers can import wheat from Argentina without having to pay the tariff of 10 percent or a substantial “Merchant Marine Renovation” tax levied on wheat imported from non-Mercosur countries like the United States.

The Argentine government tightly controls the local wheat supply and, after two poor crops, it decided in December 2012 to cut the amount of wheat it would allow to be exported. Using information from USW in regular trade service calls and at their annual association meeting, Brazil’s millers responded by asking their own government to suspend the 10 percent tariff on non-Mercosur wheat imports, a request that was granted in April 2013.

USW representatives in the South American regional office in Santiago, Chile, quickly marshalled MAP funds to organize a trip for executives from the largest Brazilian milling company to visit the Kansas Wheat Innovation Center, the International Grains Program, the USDA Center for Grain and Animal Health Research and a local wheat farm. By October 2013, a large mill represented on the trip to the United States had purchased more than 37 million bushels of U.S. hard red winter (HRW) wheat

In São Paolo, USW held seminars to show Brazilian wheat purchasing managers how to manage price risk and specify for the best value in U.S. HRW and soft red winter (SRW) wheat. In a separate seminar, milling managers gained technical information to help adjust their systems to get the most yield and highest quality flour from U.S. wheat.

In April and May 2013, Brazil imported 13.4 million bushels of HRW and SRW, or about the same amount of U.S. wheat Brazil usually imports for an entire year. The orders kept coming even after the government re-established the import tariff in November 2013. By the end of May 2014, U.S. commercial sales (delivered or booked) totaled more than 151 million bushels of HRW, which represents about one-third of total U.S. HRW sales for the entire 2013/14 marketing year, and more than 7.2 million bushels of SRW.

That represents a substantial return in revenue to the U.S. wheat industry and farmers.