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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.

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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.