Minnesota Archives - U.S. Wheat Associates

It can be an uphill battle to convince milling wheat buyers to opt for premium-priced, but better performing, U.S. wheat. Long-term investments funded by wheat farmers through state wheat checkoff programs, the Market Access Program (MAP) and the Foreign Market Development (FMD) program, however, have yielded significant gains.

In the Philippines, USW has helped flour millers and commercial food companies build and maintain a multi-year campaign to increase consumption of wheat-based foods. Over the past five years, annual per capita consumption of wheat in the island nation has increased from 23 to 29 kilograms. That is an annual demand increase of 600,000 metric tons of wheat, with an estimated 97 percent of that wheat coming from the United States.

U.S. wheat enjoys this level of market dominance because the program investments have helped USW stay “on the ground” in the Philippines and other Asian markets for decades, making trade and technical service calls and conducting wheat food production training. USW Regional Vice President Joe Sowers says the producer funds, FMD and MAP are essential to building trust with buyers and end-users who also look to USW for advice.

For example, a large Filipino flour miller had collaborated with USW on several activities and immediately following its participation in the Buhler-KSU Executive Milling Course at IGP Institute in Manhattan, KS, June 12 to 16, 2017, the mill started printing “Guaranteed 100% U.S. Wheat” on its flour bags. This effectively locked the mill’s 90,000 MT of annual wheat purchases into U.S. origin supplies. This change also influenced another flour mill that conducts cooperative shipping with the first mill to purchase only U.S. hard red spring (HRS) wheat even though Canadian spring wheat was offered at an FOB export price of $35 per metric ton less than U.S. HRS.

USW’s work to establish U.S. origin wheat as a quality standard for Philippine flour directly contributed to 175,000 MT of HRS sales in marketing year 2017/18 (June 1 to May 31) with an estimated FOB value of $50 million. Overall, the Philippines purchased more HRS and more U.S. soft white (SW) wheat than any other country in 2017/18.

May 1, 2018/by Erica Oakley

Euromonitor International has predicted that sales of baked goods in the People’s Republic of China will increase 22.5% by 2021. Domestic wheat is less than optimal in flour production and quality for these baked goods, so imports are needed. USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) is using Market Access Program (MAP) and Foreign Market Development (FMD) program funds to meet that demand by helping the Chinese baking industry tackle technical challenges to produce world class baked goods using imported U.S. wheat.

USW applied FMD funds to hire Dr. Ting Liu in September 2016 as Technical Specialist to bolster USW’s technical ability to demonstrate U.S. wheat performance qualities for new baked goods. One of Dr. Liu’s first projects, supported by MAP funds, was to help the Sino American Baking School (SABS) in Guangdong Province offer consultation to baking companies that have some experience using flour made from U.S. wheat. The long-term goal is to help them expand new specialty items such as sourdough, frozen dough and whole grain products. In marketing year 2016/17, three Chinese companies requested the technical assistance from senior specialists currently teaching at, or recently retired from, SABS. USW and SABS are strongly associated with excellent instruction and product development, so USW’s support is also helping build stronger reputations for both the school and for U.S. wheat.

Growing demand for baked goods and interest in healthy, whole grain products represents good opportunity to increase Chinese demand specifically for high-protein U.S. hard red spring (HRS) wheat. In May 2017, Dr. Liu represented USW at the 2017 Sino-Foreign Whole Grain Industry Development Experts Forum in Shanghai. Joining 22 experts in food processing, nutrition and health, financial investment, policy and marketing, Dr. Liu actively participated in the forum as one of 10 industry guest speakers. Drawing from USW’s activities in several other countries, Dr. Liu’s presentation focused “International Whole Grain Development,” which provided guidelines and references to the development of whole grains products in China.

China’s U.S. wheat imports can swing up or down with government policy decisions. However, total U.S. import volume doubled in 2016/17 to more than 1.6 million metric tons (MMT) compared to almost 880,000 MT in 2015/16. A closer look shows China’s annual import of HRS wheat grown in Minnesota, North Dakota, Montana and South Dakota has steadily increased the past five years from 475,000 MT in 2012/13 to more than 1.1 MMT in 2016/17. That is the second highest volume of HRS imports in the world that year.

December 31, 2017/by Amanda Spoo

China’s complex wheat importing rules can be a significant barrier to private purchases, but wheat imports help cover gaps in the need for high-quality wheat for a growing commercial wheat food market. USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) is using Market Access Program (MAP) and Foreign Market Development (FMD) program funds to educate traders and millers in ways that help overcome issues and increase private purchases of U.S. hard red spring (HRS) wheat grown in the northern plains.

Individual Chinese flour mills may privately import wheat under the government’s tariff rate quota (TRQ). Yet buying in bulk is not economically viable for individual mills because their capacity is too small. To overcome this non-trade barrier, several mills can pool TRQ purchases through private trading companies. One of those traders is Nantong Yufeng Grains & Oils Co., Ltd., which had been a steady but relatively small customer for U.S. wheat since 2013. Initially the company was only able to purchase U.S. wheat in small volume containers.

Because this trading company was ready to expand its ability to purchase wheat in bulk for its Chinese flour mill customers, USW recognized that its people needed training in how to get the most value from its tenders for bulk loads of U.S. wheat. To do that, USW brought two of Nantong Yufeng’s traders and its mill customers to “Contracting for Wheat Value” workshops in the United States in August 2014 and June 2015. This activity, developed using MAP funds several years ago, helps wheat buyers better understand and use the inspection data created by Federal Grain Inspection Service as ships are loaded with U.S. wheat. In addition to the technical training, these workshops fostered deeper contacts with Pacific Northwest (PNW) exporters. In turn, this encouraged on-going communications between this buyer and U.S. sellers, a key basis of trust, understanding and a cooperative relationship.

When Nantong Yufeng expanded its ability to handle more efficient, lower cost bulk shipments of U.S. wheat in marketing year 2015/16, the training and new relationships came to fruition. With first-hand knowledge of quality, price and contracted value, the company chose U.S. HRS over Canadian supplies. It imported HRS in two Panamax vessel loads of 57,750 metric tons (MT) each for its Chinese milling customers.

When the first shipment arrived at port, though, Chinese customs officials unfamiliar with wheat inspection and contracting questioned the importer on “dockage” level and the term “deductible from contract value.” With the knowledge Nantong Yufeng gained from the USW seminars and additional assistance from USW Marketing Specialist Shirley Lu, the trader resolved the issue smoothly. In a subsequent purchase, USW suggested that Nantong Yufeng should specify a lower maximum dockage and there were no customs issues associated with this purchase.

The workshops and local trade servicing under MAP and FMD in 2014/15 and 2015/16 helped Nantong Yufeng import 172,000 MT of HRS. Total U.S. HRS exports to China in 2015/16 were 744,000 MT — two times total sales in 2014/15 — returning substantial revenue to the U.S. wheat trade and farmers in Idaho, Montana, North Dakota, South Dakota and Minnesota.

December 31, 2016/by Amanda Spoo

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.

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

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

Establishing U.S. Wheat as Quality Standard in The Philippines

Market Development Helps Build Future Demand for U.S. Wheat in China

Contracting for Value Workshops Educates Private Chinese Buyers, Spur Spring Wheat Sales

Positioned for Opportunity in Changing Egyptian Wheat Market

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

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

Our Story

Market Information

Crop Quality

Working with Buyers

Who We Represent

Policy

News