Foreign Market Development Archives - Page 3 of 3

Perceptions of wheat flour quality can be difficult to change. Korean flour millers, for example, traditionally judge U.S. soft white (SW) wheat quality based on #1 Grade and a very low protein specification. Unfortunately, two years of hot, dry growing conditions in Washington and Oregon severely reduced the low-protein SW supply and spurred a price barrier to sales. Through trade service and technical support funded by the Market Access Program (MAP) and the Foreign Market Development (FMD) program, FAS cooperator U.S. Wheat Associates (USW) was able to show the millers that they could import higher protein SW at a much lower cost and still meet customer demand. In turn, this effort ended a significant decline in imports.

SW wheat is ideal for the cake, cracker and confection products that make up a large part of Korea’s flour consumption. Between marketing years 2013/14 and 2015/16, USW took a multi-tiered approach to maintaining this important market:

Representatives based in Seoul convinced millers to use Solvent Retention Capacity (SRC) analysis, rather than only using protein specifications, to measure SW flour performance.
Working with state wheat commissions, USW support staff in the United States shipped samples of the more abundant higher protein SW to Korea. Technical staff performed the SRC analysis on flour milled from the samples and successfully demonstrated equivalent performance.
The next step was to prove the SRC analysis and higher protein SW flour performance to downstream bakery and confectionery customers in a seminar supervised by USW South Asia Bakery Consultant Roy Chung. The largest commercial bakery in Korea saw the opportunities and purchased an SRC analyzer.
Finally, USW helped large flour millers understand how they could adjust grade and protein tender specifications. Two large millers did change their specifications and tendered for SW with slightly higher protein levels, which helped reduce import costs. The Korean Flour Millers Association also relaxed some of its grade requirements and received a discount of $5 per metric ton from the trade.

In marketing year 2013/14, before the challenge of higher protein levels appeared, Korean millers imported an estimated 731,000 metric tons (MT) of SW worth about $212 million. As the cost of very low protein SW increased, millers cut back on imports while learning about alternatives from USW. Total SW exports fell to about 538,000 MT in 2014/15.

Armed with new information and support from their customers, these millers were able to slightly increase SW imports in 2015/16 to about 565,000 MT, returning value to the U.S. wheat supply chain and farmers in Washington, Oregon and Idaho.

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

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

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.

December 31, 2014/by Amanda Spoo

Trade Service, Technical Support Protect Soft White Wheat Exports to Korea

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

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

Brazil Turns with Confidence to U.S. Wheat

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