Oregon Archives - U.S. Wheat Associates

The export market development programs administered by USDA’s Foreign Agricultural Service are highly successful partnerships with U.S. farmers, ranchers, dairy producers and small food businesses. U.S. Wheat Associates (USW) and the Washington Grain Commission (WGC) are leveraging that partnership to increase demand for soft white wheat in Guatemala.

Over several years, USW and WGC have worked together to educate decision makers at commercial bakeries and food manufacturers in Latin America about the benefits of low protein soft white (SW) wheat. WGC provides direct funding from its checkoff program and USW uses funding from the Market Access Program (MAP) and Foreign Market Development (FMD) program.

In 2013, USW sent an expert in “premix” consumer bakery products to work with an innovative and growing Guatemalan flour mill and wheat foods company. The consultant helped the company set up a small plant to develop formulations for chocolate and vanilla cake mixes as well as pancake and corn bread mixes using flour from U.S. SW wheat. After extensive quality testing and production refinement, the company has now successfully launched these branded consumer products through a large Guatemalan supermarket chain.

With direct producer funding, USW also worked with WGC to conduct a seminar with the same company designed to show how blending flour from U.S. SW and other wheat classes can improve end-product quality while reducing flour costs compared to competing wheats. Milling consultant Andrea Saturno and USW Technical Specialist Marcelo Mitre demonstrated several different blending proportions and conducted bake tests at the company’s own laboratory. The company continued trials on its own and chose a blend of 50 percent SW and 50 percent U.S. hard red winter (HRW) wheat that it successfully markets as an industrial bread flour.

In addition, the company says its two largest flour customers now purchase SW-based flour to manufacture branded cookie and cracker products. One of the customers recently built a new cookie factory that represents an opportunity for USW to expand its technical assistance.

Such end-user success and growth creates an opportunity to continue expanding annual SW exports to Guatemala of almost 130,000 metric tons per year, valued at more than $25 million, making Guatemala the largest SW volume importer in Latin America. Total U.S. wheat commercial sales to Guatemala in marketing year 2017/18 exceeded 527,000 MT.

May 1, 2018/by Erica Oakley

Noodles are the staple product in South Korea that represent more than 50 percent of Korean wheat food consumption. For many years, manufacturers have preferred Australian wheat to produce noodle flour, and specifically “Australian Noodle Wheat” that helps produce an end product with the color favored by consumers. USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) is addressing the competitive advantage and increasing market share by providing technical service funded by the Market Access Program (MAP) and the Foreign Market Development (FMD) program.

Every year since 2015, the USW Seoul Office conducts a Korean Noodle Flour Development short course at the Wheat Market Center (WMC) in Portland, Ore., and a Noodle Flour Blending Seminar in Seoul to demonstrate the advantages of blending with U.S. wheat.

Representatives from one noodle manufacturer and two mills from Korea attended the 2017 course, where they researched flour blends using an increased percentage of U.S. wheat flour in instant noodle products. The participants concluded that using more U.S. wheat still allowed them to maintain the preferred product color and quality while reducing input costs. Blends include varying percentages of flour from U.S. soft white, hard red spring and hard red winter wheat classes.

In December 2017, USW shared the course results and reviewed quality parameters with Korean noodle manufacturers and flour millers. A highly regarded local expert presented information on quality parameters affecting noodle flour functionality. Because of this, one company said that they intend to use HRS for a new end-product line in 2018. Another company reported that they increased U.S. wheat percentage in their noodle formulation from 50 percent in CY15 to 90 percent in CY17, and is also using U.S. wheat flour in their export product portfolio, which increased by 20,000 metric tons (MT) in CY17. And a third company reported that they also increased U.S. wheat in their blends in CY17, absorbing 10,000 MT of additional U.S. wheat flour. All participants reported that the seminar provided a valuable opportunity to share information on improving noodle quality.

Despite lacking a single U.S. wheat class with optimal noodle quality, USW’s efforts — funded by state wheat commissions, MAP and FMD — have helped secure a 20 percent share of the wheat imported for the Korean noodle market. The top four instant noodle manufacturers in South Korea consistently now use more than 45 percent U.S. wheat, up from less than 25 percent in 2009.

May 1, 2018/by Erica Oakley

Cake and pastry consumption in the People’s Republic of China is growing but millers there struggle to produce the best flour for their customers. By leveraging expertise on its staff and working with public and private partners, USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) were increasing exports of soft white wheat to China for farmers in Washington state, Oregon and Idaho prior to the implementation of retaliatory tariffs.

Soft white (SW) wheat mills into excellent cake and pastry flour needed to meet growing Chinese demand. Chinese mills have some influence on what type of wheat may be imported and may import a limited amount of wheat privately. This supports USW using funding from the Market Access Program (MAP) and the Foreign Market Development (FMD) program to promote SW performance and help millers purchase it and mill it.

In June 2017, USW brought six executives from four Chinese flour mills to Portland, OR, to participate in a wheat procurement course and visits to the USDA-ARS Western Wheat Quality Laboratory in Pullman, WA, and SW breeding programs in the Pacific Northwest.

In China, USW arranged technical support meetings at local flour mills. Its Beijing and Hong Kong staff set up local trials with millers to demonstrate SW flour performance in Chinese and Western style baking. USW continued sending consultants to the Sino American Baking School in Guangzhou to teach new bakers the best uses of SW flour in cakes and pastries.

Also in 2017, USW and flour mill manufacturer Buhler teamed up to put on a week-long technical seminar focused on the milling of SW at Buhler’s location in Wuxi, Jiangsu province. Peter Lloyd and Buhler experts addressed 16 managers from eight Chinese mills who all reported that the seminar addressed some of the unfamiliar challenges of milling SW.

After importing less than 52,000 metric tons (MT) of SW in marketing year 2015/16 (June 1 to May 31), China purchased more than 227,500 MT in 2016/17. In 2017/18, China’s imports of SW stood at 307,000 MT. USW staff notes that much of this volume was imported by trading companies that had to pay out of quota duties on the wheat, in the hope of selling it on to Chinese mills willing to pay a premium over domestic wheat.

That year, prior to the trade conflict with China, total U.S. wheat exports reached 1.6 MMT with returns of more than $330 million 2017/18 to wheat farmers and related industries in Washington, Oregon and Idaho.

May 1, 2018/by Erica Oakley

The popularity of non-traditional baked goods like chewy breads, cookies and fluffy cakes is rapidly growing in the People’s Republic of China. To help build a preference for flour from U.S. wheat classes among aspiring Chinese baking companies, USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) has expanded its technical capabilities through staffing and an exceptional training activity.

USW hired Dr. Ting Liu in September 2016 as Technical Specialist to provide support and training to demonstrate the performance of U.S. wheat in the new baked goods as well as traditional Chinese wheat based products. Dr. Liu works from USW’s Beijing office and regularly travels across China to provide baking demonstrations, technical seminars and promote practical application of U.S. wheat performance results. Staff administrative expenses for Dr. Liu and her experienced marketing colleagues in China are supported by the Foreign Market Development (FMD) program with development activities funded by the Market Access Program (MAP).

Because there is intense interest in professional baking expertise, especially in scaling up industrial sized operations, USW decided to invest some of its activities funding to send Dr. Liu to the 192nd Baking Science and Technology course at AIB International in Manhattan, Kan., from January through May 2018. This is an internationally respected, 16-week program combining science, hands-on lab work and baking tradition in its course work. With her expertise in food science and cereal chemistry, Dr. Liu was well prepared for this training — but she far exceeded expectations.

Dr. Liu represented herself, USW and the U.S. wheat farmers she represents with distinction, earning honors as the course’s top student and an “Excellence in Laboratory Leadership” award for her participation in the course. Now she will apply this advanced knowledge to effectively stress that flour which performs its intended functions enables Chinese bakers to produce higher quality, better tasting wheat foods, and that U.S. wheat flours are essential ingredients on which bakers can rely for consistent results.

Though China’s centrally planned food and trade policies create substantial barriers to export growth, the increased ability to train the industrial bakeries that must meet consumer demand is pulling in high protein U.S. hard red spring (HRS) and hard red winter (HRW) wheat for bread products and soft white (SW) for cakes and cookies. In marketing years 2016/17 and 2017/18, China imported an average of 843,000 metric tons (MT) of HRS, 163,000 MT of HRW and 318,000 MT of SW per year, valued at about $324 million per year for farmers and wheat supply participants in the Pacific Northwest and Northern Plains.

May 1, 2018/by Erica Oakley

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

APHIS, flour milling, Foreign Agricultural Service, Foreign Market Development, Idaho, Market Access Program, Oregon, soft white, U.S. wheat, U.S. Wheat Associates, Vistnam, Washington, Wheat Soft White

Protecting Vietnam’s Growing Demand for U.S. Soft White Wheat

Vietnam’s flour millers annually import a total of more than 1.8 million metric tons (MMT) of milling wheat and wheat consumption is projected to grow by 4 percent to 6 percent per year. Rapidly expanding demand there for cookies, crackers and cakes is an ideal target market for low-protein soft white (SW) wheat grown in Washington, Oregon and Idaho.

With funding from the Foreign Market Development (FMD) and Market Access Program (MAP), U.S. Wheat Associates (USW) has demonstrated the advantages of SW flour by introducing solvent retention capacity (SRC) analysis to Vietnam’s millers and manufacturers. Even though Vietnam imposes a 5 percent tariff on imported milling wheat and competing Australian wheat enters duty free, U.S. SW annual imports increased from about 39,000 metric tons (MT) in marketing year 2013/14 (June to May) to almost 93,000 MT in 2015/16.

That import pace continued into early 2016/17, but after discovering minor insect presence in some U.S. wheat and DDGS cargoes, the Vietnamese government on Dec. 1, 2016, required all U.S. shipments be fumigated with the insecticide methyl bromide. This effectively blocked U.S. wheat exports because methyl bromide is banned for most uses here and is impractical for bulk grain treatment.

USW Headquarters and Southeast Asia office staff immediately began working with the U.S. Animal and Plant Health Inspection Service (APHIS) to address this issue. USW provided some of the information APHIS used in an official response to Vietnam, which opened the door to negotiations. APHIS and shippers ultimately established specific insect control requirements that were acceptable to Vietnam’s Plant Protection Department. The restriction ended Aug. 31, 2017, a notably fast resolution to such a significant Sanitary/Phytosanitary trade barrier.

Soft white exports to Vietnam dipped to about 58,000 MT in 2016/17. Yet USW kept providing trade service and technical support visits to Vietnamese flour mills and bakeries. Although millers could not import U.S. wheat for the first three months of 2017/18, SW sales for the year rebounded to more than 93,500 MT, valued at almost $19 million. Total U.S. wheat exports to Vietnam, including hard red spring and hard red winter wheat, in 2017/18 reached almost 186,000 MT.

May 1, 2018/by Erica Oakley

A Latin American and Caribbean Buyers Conference June 2016 in Portland, OR, sponsored by USDA Foreign Agricultural Service cooperator U.S. Wheat Associates (USW) with Market Access Program (MAP) funding and support from 9 state wheat commissions, set the stage for incremental wheat exports by 75 flour millers and buyers from 16 countries.

The increasingly competitive global wheat market puts a premium on in-person trade service and technical support to differentiate wheat supplies. The 2016 Buyers Conference created a collegial opportunity for wheat buyers to meet with farmers, U.S. based grain traders and technical experts on local supply chain visits, in seminar sessions and social activities. USW arranged for speakers on a range of relevant topics including U.S. wheat quality trends, logistics management, plant breeding methods and other key wheat price drivers that address specific constraints on U.S. wheat sales to these growing markets.

By increasing the basic knowledge of how to purchase U.S. wheat, for example, a flour miller in Haiti bought their first two shipments ever of U.S. hard red winter (HRW) after the conference, with plans to import more HRW. The miller noted that meeting with traders and millers at the conference opened talks about possible joint purchases. Two participants from a new flour mill in Honduras said they now have better information to consider additional U.S. wheat purchases from Pacific Northwest ports. An experienced Colombian buyer said seeing the whole process from varietal development to the farm and supply system was “amazing” and definitely increased his confidence in U.S. wheat quality and reliability.

To help overcome regional preferences for Canadian wheat, master baker Didier Rosada presented (in Spanish) evidence that blending two or more U.S. wheat classes can be less expensive and improve end-product quality. With this information and discussions at the conference, a large Costa Rican miller and food processor indicated it would likely increase U.S. soft white (SW) wheat imports for blending.

While it is not possible to quantify all additional U.S. wheat exports directly related to the 2016 conference, 2016/17 sales to Mexico, Central America and the Caribbean of 6.3 million metric tons (MMT) are up 23 percent over 2015/16. Sales of 3.5 MMT of U.S. wheat to South American markets represent a 70 percent increase in 2016/17 over the prior year.

Overall, the effort to identify how world market dynamics made U.S. wheat an attractive choice was a timely message for Latin American buyers. To help meet the growing demand for new and better wheat food products in the region they increasingly buy based on the kind of quality characteristics U.S. wheat classes offer. A survey of buyers at the 2016 conference showed that 64 percent believed the experience will help them compare U.S. wheat quality, while 70 percent said it would help them compare U.S wheat value, to competing origins. These are key objectives for USW in its trade service and technical support activities funded by the MAP and Foreign Market Development (FMD) program.

December 31, 2017/by Amanda Spoo

Just as the 2016 wheat harvest was starting, a farmer in Washington state discovered and reported rogue wheat plants genetically modified to be “Roundup Ready” in a fallow field on his farm. Yet U.S. Wheat Associates (USW) helped avert a potentially devastating market disruption by taking quick steps to work with the USDA Foreign Agricultural Service and other USDA agencies, overseas wheat buyers and state wheat commissions.

U.S. wheat imports by Japan, Korea and Taiwan represent an annual average of about 20 percent of total U.S. wheat exports, valued at more than $1 billion even with very low prices. Most consumers in those countries oppose food produced from genetically modified crops, so the stakes could hardly be higher.

Once informed of the situation, USW began working on the issue closely with all the stakeholders involved, including its in-country offices and FAS posts, the Animal and Plant Health Inspection Service (APHIS), the U.S. grain trade and Monsanto. APHIS took prompt and thorough action to identify the regulated wheat event in the suspect plants and kept our organizations, as well as government officials in several key overseas markets, informed as it worked to find the facts. In turn, USW shared information about the situation with the domestic grain trade and downstream customer organizations, as well as overseas grain trade and buyers in Japan, Korea and Taiwan.

Out of an abundance of caution, Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) suspended new purchases of U.S. western white wheat (soft white and 20 percent club wheat) from the Pacific Northwest (PNW) and Korea’s Ministry of Food and Drug Safety (MFDS) suspended all new U.S. wheat imports until their officials could validate and start using a customized version of a new detection assay provided quickly by Monsanto and APHIS.

Testing ultimately confirmed that U.S. wheat remained safe and reliable, adding confidence that nothing had changed the U.S. wheat supply chain’s ability to deliver wheat that matches every customer’s specifications. Because USW and state wheat commissions also had a bank of trust with customers in Japan, Korea and Taiwan, and because Monsanto and APHIS acted so quickly and calmly, both countries reopened their markets to all U.S. wheat imports within eight weeks.

Without the goodwill earned over decades from USW trade and technical service and business relationships funded by the Market Access Program (MAP) and the Foreign Market Development (FMD) program, wheat farmers in Washington, Oregon, Idaho and other states would be isolated in their ability to work through such a market disruption. Instead of export losses, total sales to the North Asian countries in marketing year 2016/17 increased 12 percent compared to 2015/16 with a total value of $1.2 billion.

December 31, 2017/by Amanda Spoo

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

Building Chinese Demand for U.S. Soft White Wheat

USW Training Achievement Supports Long-Term U.S. Wheat Promotion in China

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

Protecting Vietnam’s Growing Demand for U.S. Soft White Wheat

Latin American Buyers Conference Builds Knowledge Base for Future U.S. Wheat Exports

Trust and Partnership Protect Key North Asian Wheat Export Markets in a Crisis

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

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

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