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The boards of directors of U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) met jointly November 8 to 10, 2021 in Kansas City, Mo. Each organizations’ board includes wheat growers assigned to represent state wheat organizations. These U.S. wheat industry leaders meet together two times each year.

The work at a joint board meeting includes committee meetings specific to USW and NAWG as well as Joint International Trade and Wheat Breeding Innovation Committee meetings. There is a combined board meeting as well as individual board meetings.

At their joint session Nov. 10, U.S. wheat industry leaders heard a very interesting speech from Ms. Esther L. George, President and CEO of the Federal Reserve Bank of Kansas City, which is one of 12 regional Reserve Banks that, along with the Federal Reserve Board of Governors in Washington, D.C., make up the nation’s central bank. The “Fed” as it is known works “in the public’s interest by supporting economic and financial stability.” Pres. George outlined several factors that are contributing to rising inflation in the United States specifically but also affecting the global economy. One of those factors is the dramatic disruption in global supply chains that have pushed up shipping costs and interrupted normal production and distribution of goods.

“Supplier delivery times have slowed dramatically, not only for manufacturers but also for service providers,” President George said, “in part as shipping times from Asia to the West Coast have doubled, and transit costs have skyrocketed.” While a text of Pres. George’s speech is not available, her recent speech at an energy conference includes many of the key points from her presentation to U.S. wheat leaders.

Other Interesting Speakers

On Nov. 10, Mr. Daniel Whitley, Administrator of USDA’s Foreign Agricultural Service (FAS), spoke to the USW board of directors about the long and successful public-private partnership between “cooperator” organization like USW and FAS. He also noted the significant expected increase in U.S. agricultural exports for 2021/22 to more than $175 billion in value, which includes an estimated $7 billion in U.S. wheat exports.

USW Chair and President with Daniel Whitley

FAS Administrator Daniel Whitley (center) with USW Chairman Darren Padget (left) and USW President Vince Peterson (right) at the 2021 Fall USW Board of Directors meeting Nov. 10 in Kansas City, Missouri.

Joining the USW directors virtually, Greg Borossay, head of Maritime Business Development at the Port of San Diego, Cal., previewed expansion plans that will introduce bulk freight loading capacity, including for grains. In addition, he described progress on a U.S. Pacific Coast Marine Highway project to create barge service between San Diego and marine ports in central and northern California, Oregon and Washington state.

Global Wheat Supply and Demand Focus

Even more specific to U.S. wheat exports, USW Vice President of Overseas Operations Mike Spier provided a very thorough review of the supply and demand factors affecting global wheat trade. Focusing on the run-up in wheat prices, Spier noted that U.S. wheat ending stocks declined by 50% in just five years. He also noted that the ratio of wheat ending stocks to “disappearance” (domestic consumption plus exports) among global wheat exporting countries is now at 13%, a level not seen since the global wheat supply shock of 2007/08.

USW Vice President of Overseas Operations Mike Spier

USW Vice President of Overseas Operations Mike Spier provided an overview of global and U.S. wheat supply and demand factors at the USW Board of Directors meeting Nov. 10.

USW and NAWG directors will meet jointly again in January 2022 in Washington, D.C.

 

 

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Behind the world’s most reliable supply of wheat are the world’s most dependable people. Those people, from U.S. Wheat Associates staff to the state wheat commissions and U.S. wheat farm families to the many hands along the U.S. supply chain, and finally our overseas customers – are all a part of our story. Despite the different roles or distances between us, all of the people in our story share an unspoken connection, not only through U.S. wheat but through our shared values of growth, hard work and family. We appreciate the many congratulatory messages and well wishes from our friends and customers from all over the world.


A letter from Randy Suess, retired Washington wheat farmer, 2011/12 USW Chairman:

“I had the opportunity of a lifetime traveling with U.S. Wheat Associates (USW) to many countries and visiting with U.S. wheat buyers, millers and bakers. My thanks go out to those people who made us feel so welcome in their countries.

Traveling to Yemen with Dick Prior1 was quite an eye-opener. Our customers were so delighted to have a farmer there who grew the wheat they milled. I received several invitations to come back and stay with their families. In Salif, I received a stainless steel can filled with honey as a gift. Since it had an open lid, I was not going to be able to take it on the plane with me, so we gave it to our taxi driver. He was overwhelmed to receive it, as honey is extremely rare and valuable in Yemen.

In Yemen, people buy sacks of wheat at the store, and take them to the local corner mill to be ground into flour. 

I always enjoyed visiting cookie factories in Guatemala. They always sent us out the door with grocery bags full of the products they made. I brought these products home with me and shared with other U.S. wheat farmers at meetings. They looked identical to products in the United States but tasted different. Many thanks to those bakers, who were so proud of their products made from U.S. wheat grown in the Pacific Northwest.

Tom Mick2 and I traveled with Mark Samson3 to Bangladesh, which was the second largest food aid recipient in the world. Traffic was a nightmare with thousands of bicycle rickshaws mixed in with a lot of buses and a few cars, so our appointment with 15 flour millers was delayed by over three hours. We did not expect the millers to be still be waiting, but they were. We thanked them for their patience and were surprised at their interest in learning more about the U.S. wheat industry, and how to contract for wheat based on specifications.

The Bangladesh shot is of pastries made within their country, mainly using wheat obtained through food aid.

The Philippine flour millers are the most gracious and accommodating hosts. I was fortunate enough to be there for the 50th anniversary of having an office for U.S. wheat export market development (first as Western Wheat Associates, followed by USW) in their country. They always showed up in large numbers to attend our presentations on supply and demand, and crop quality.

It was an honor to be invited to dinner with Philippine flour miller Norman Uy and his family after one of our presentations. His son Stevie is taking over the mill and was in a group that visited my farm the following year.

(L) Stevie Uy visits Randy’s farm in Eastern Washington with a trade delegation from the Philippines; (R) Norman Uy accepts a framed photo from Randy at the 2012 anniversary event in the Philippines.

While my thanks go out to the buyers, millers and bakers of our wheat around the world, none of it would be possible without the work of our dedicated overseas staff. People like Takeo Suzuki4, who was in the Tokyo office. Takeo was a tireless worker on our behalf, who had many contacts in the industry. If you ever had the chance to travel with him, you had to almost run to keep up with him. I will be forever grateful for his service to our industry. I had the distinct honor of traveling with so many during my eleven-year tenure on the USW board. I started writing down all their names but decided to just thank them as a group for their dedication. While faces have changed over the years, I still see their commitment to providing the world’s most reliable choice of wheat.”


1Dick Prior, retired in 2012 as USW Regional Vice President, Middle East, East and North Africa, in Cairo, Egypt, after serving 22 years managing wheat export market development in the region.

2Tom Mick served eight years as USW Regional Vice President, South Asia, in Singapore, and two years as USW Director of Overseas Operations in Washington, D.C. He retired as CEO of the Washington Grain Commission in 2012.

3Mark Samson served as assistant director of Western Wheat Associates (now U.S. Wheat Associates) in Washington, D.C., as administrator of the Idaho Wheat Commission and USW regional vice president for South Asia in Singapore and regional vice president for Europe, the Middle East, East and North Africa in Cairo,Egypt, and Rotterdam, The Netherlands.

4Takeo Suzuki served as USW Country Director, Tokyo, until his death in 2007.

Randy Suess on his farm in Washington.

The bread delivery in Eritrea has Dick Prior taking a look at the small loaves of bread made from soft white wheat, as it is being delivered on bicycles.

The Malaysia bread town was a factory selling breads and all kinds of sweets, that was set up for tours. Over 30,000 kids were bused in each year to go through their tour.

USW 2011/12 Officers (L to R): Randy Suess (WA), Chairman; Dan Hughes (NE), Secretary-Treasurer; Darrell Davis (SD), Vice Chair; Don Schieber (OK), Past Chairman.

 

 

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By Elizabeth Westendorf, USW Assistant Director of Policy

Every year, U.S. Wheat Associates (USW) invites farmers (selected by state wheat commissions) to visit U.S. wheat customers overseas to learn more about international markets, customer needs, and the role of U.S. wheat in their businesses. This year, USW Assistant Director of Policy Elizabeth Westendorf led a team of three farmers to Spain, Portugal, and Morocco. The team included: Al Klempel, a hard red spring (HRS) and hard red winter (HRW) wheat farmer from Bloomfield, Mont. representing the Montana Wheat and Barley Committee; Kent Lorens, a HRW and hard white (HW) wheat farmer from Stratton, Neb., representing the Nebraska Wheat Board; and Casey Madsen, a HRW and HW wheat farmer from Pine Bluffs, Wyo., representing the Wyoming Wheat Marketing Commission.

They were accompanied by Ian Flagg, USW Regional Vice President for European, Middle Eastern and North African Regions and Rutger Koekoek, USW Regional Marketing Director, from the USW Rotterdam Office, as well as Mina El Hachimi, USW Director of Finance and Administration; Peter Lloyd, USW Regional Technical Director; and Tarik Gahi, USW Milling and Baking Technologist, from the USW Casablanca Office.

The 2019 USW EU-MEENA Board Team and USW staff in Spain during a visit with leadership from Harinas Polo and staff from the U.S. Embassy in front of the Harinas Polo mill.

In Spain, the team visited a pasta factory and several flour mills. They learned the importance of Spain’s growing pasta industry and visited a company capitalizing on health foods trends with innovative seeds and grains blends. The largest pasta producing company in Spain, Grupo Gallo, was the first to introduce semolina-based pasta to Spain in the 1960s when they brought durum wheat into the country. Prior to that, Spain only consumed pasta from common wheat. Today, Spanish millers value stability and consistency in the U.S. wheat they buy, and these qualities become even more important as companies continue to expand into convenience products. In Portugal, this theme of appreciating quality continued, with companies constantly seeking new ways to innovate in the market and distinguish their products from competitors.

After Portugal, the team left the EU to visit USW’s office and customers in Morocco. They met with Moroccan Office of Cereals (ONICL) and spoke about continued progress in implementation of the U.S.-Moroccan Free Trade Agreement, which includes a wheat tariff-rate quota. As in Spain and Portugal, Moroccan mills appreciate U.S. wheat quality, and companies targeting the high-quality niche market know they are well-served with U.S. wheat.

Visiting Kenz Maroc in Morocco. (L to R) Ian Flagg, USW Regional Vice President for European, Middle Eastern and North African Regions; Al Klempel, Montana; Casey Madsen, Wyoming; Kenz Maroc leadership; Kent Lorens, Nebraska; Mina El Hachimi, USW Director of Finance and Administration; Peter Lloyd, Regional Technical Director.

“The Moroccan market is very different from that of Spain or Portugal,” says Westendorf. “But the demand for high-quality wheat is still very evident and will continue to grow. We need to make sure that U.S. wheat maintains its reputation as the world’s most reliable choice by continuing to support our customers through trade and technical service, as well as varietal improvement programs.”

Al Klempel (Montana) and Casey Madsen (Wyoming) speak with Kenz Maroc leadership during a mill tour in Morocco.

In Morocco, the team also visited the Institut de Formation de l’Indstrie Meunière (IFIM), a milling school in Casablanca that USW started in partnership with the Moroccan Millers Federation in 1994. This school trains millers that work all over Africa and the Middle East, and the school is proud to continue partnering with USW to introduce students to the value of high-quality wheat in milling.

Visiting IFIM and touring the training mill, where the team saw equipment sponsored by U.S. Wheat Associates. (L to R): Al Klempel (Montana), Kent Lorens (Nebraska) and Casey Madsen (Wyoming).

USW board teams provide a valuable experience for U.S. wheat farmers to see the hard work of our foreign offices and the results that work produces. It also allows U.S. wheat customers to meet with the farmers producing their wheat, and to better understand the strong value that farmers place on producing an excellent crop.

The team will report to the USW board of directors later this year. To see pictures from this and other Board Team trips, please visit the USW Facebook Page at https://www.facebook.com/uswheat/.

*Header Photo Caption: The 2019 USW EU-MEENA Board Team with USW and U.S. Embassy staff during a visit with the technical director of Grupo Gallo at its mill and pasta factory in Spain.

Customer service is defined as the process of ensuring customer satisfaction with a product or service. When it comes to international trade relationships, customer service is expanded to include managing relationships and being able to ensure a reliable, quality supply.

Twice every year, U.S. Associates (USW) sends U.S. wheat farmer leaders overseas to help cultivate relationships with the people who import, mill and use the wheat they grow. USW refers to these delegations as “Board Teams” because they typically include members of USW’s board of directors who are selected by state wheat commission members. These missions help strengthen customer relationships but also give the participants the chance to see how the organization and local USDA Foreign Agricultural Service (FAS) staff work together to represent U.S. farmers.

Bound this month for Spain, Portugal and Morocco, the next Board Team includes: Alan Klempel of Bloomfield, Mont., representing the Montana Wheat and Barley Committee; Kent Lorens of Stratton, Neb., representing the Nebraska Wheat Board; Casey Madsen of Pine Bluffs, Wyo., representing the Wyoming Wheat Marketing Commission; and team leader Elizabeth Westendorf, USW Assistant Director of Policy.

The team will also be joined by Ian Flagg, USW Regional Vice President for the European, Middle Eastern and North African Regions, as well as Rutger Koekoek, USW Regional Marketing Director. The visits to Spain and Portugal, which are part of the European Union, will provide an introduction to two sophisticated markets, where the United States is seeing increased competition from nearby exporting countries. In Morocco, where wheat imports are subject to tariff rate quotas (TRQs) under two separate trade agreements with the EU and the United States, the team will see how a government buying system works. Throughout the trip the team will have the opportunity to meet with several customers and government officials and tour many facilities.

The team members will report back to USW directors later this year and, as regional leaders, to their wheat farmer neighbors.

Photos and comments from the team’s activities will be posted on USW’s Facebook page at www.facebook/uswheat.

Al Klempel.

 

 

 

 

 

 

 

 

 

Kent Lorens.

 

 

 

 

 

 

 

Casey Madsen.

 

 

 

 

 

 

 

 

 

Elizabeth Westendorf.

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By Catherine Miller, USW Programs and Planning Coordinator

Every year, U.S. Wheat Associates (USW) invites farmers (selected by state wheat commissions) to participate in a “Board Team” trip overseas to follow their wheat and learn from customers about the quality characteristics needed in those markets. In February the first USW Board Team of 2019 traveled to Southeast Asia—one of the largest and fastest growing wheat import regions. Stops in the Republic of the Philippines, Singapore and Indonesia gave the team the opportunity to visit important markets and learn more about how wheat-based products are re-shaping consumer demand.

The 2019 USW Southeast Asia Board Team included Joe Anderson of Lewiston, Idaho, representing the Idaho Wheat Commission; Wally Powell of Condon, Ore., representing the Oregon Wheat Commission; Philip Volk, of York, N.D., representing the North Dakota Wheat Commission; and team leader Catherine Miller, USW Program and Planning Coordinator.

In the Philippines, the team enjoyed a meeting and tour with Wellington Flour Mills. They were joined by company President Ty Weevens (center, front row), whose grandparents originally start the family-owned mill, along with a few cousins who are also apart of the mill’s operations.

In Manila, Republic of the Philippines, the team met with traders, millers and bakers. Each meeting focused on the importance of high-quality wheat to create high quality end-products. The team visited a flour mill, as well as an industrial cracker facility. The team found a common theme that consumers here are looking for more convenience and shifting from traditionally rice-based staple foods to more wheat and grain-based meals. This is a huge market driver for a variety of cookies, crackers and bread products.

“One of our lunches with USW staff and four different mills was one of the highlights,” said Powell. “It was so beneficial to spend that time with them and share a meal.”

Lunch with grain traders in the Philippines.

One of the highlights in Manila was attending the 10th International Exhibition on Bakery, Confectionery and Foodservice Equipment and Supplies, known as “Bakery Fair 2019,” hosted by the Filipino-Chinese Bakery Association Inc. While visiting different exhibits, labeling on some of the flour bags stood out to Anderson: “They said ‘Certified U.S. Wheat.’ That shows the success USW has had building a preference for our wheat, and I’m proud of that.”

In Singapore, the team members next visited a bakery training and supply company. They also had briefings from USW/Singapore regional staff member, who demonstrated how producer-funded USW activities are carried out in the region and how USW works together with local USDA Foreign Agricultural Service (FAS) staff to represent U.S. farmers.

Next, the team traveled to Jakarta, Indonesia, where they met with the largest flour mill in the world, as well as three competing milling companies. The contrast in bakeries between the Philippines and Indonesia, where small-medium end-user enterprises (SME’s) dominate 67 percent the market, was quite clear.

“This was one of the biggest surprises for me, especially since these SME’s sometimes only use one 25 kilogram bag of flour per day,” said Anderson.

During their visit to Indonesia, the team visited Dynamic Bakery, which is a customer of Bogasari, the largest flour mill in Indonesia.

The team toured three of those bakeries in Jakarta. SME’s vary from home-based bakeries to medium scale businesses with a store front. The at-home bakeries were truly unique, and the importance of these niche producers really resonated with the group.

In such a rapidly growing wheat foods market, there are fears that “Indonesia will run out of milling capacity within the next few years if markets keep growing at the present pace,” according to one milling executive. One reason: the cost of production is a limiting factor; logistics alone make up 10 percent of variable costs.

At another flour mill, the group learned more about current market trends. In Indonesia, about 50 percent of flour in the market goes to instant noodle production. Currently, noodle production is met largely with flour from Australian white wheat. However, the team was told there is at least a window of opportunity for U.S. hard red winter wheat, especially given the recent production challenges that have significantly bumped up Australian wheat import prices.

During their visit to Indonesia, the team visited and toured Bogasari, the country’s largest flour mill, which has approximately 50% of the country’s market share. They were also joined in Indonesia by Matt Weimar, USW Regional Vice President for South Asia; and Ivan Goh, USW Biscuit/Bakery and Noodle Technologist.

“It was clear that the uncertainty of low margins and where the price of wheat will be next year was an overall concern for all markets” said Volk. “This just proves that overall U.S. wheat quality needs to be consistent from year to year.”

The team will report to the USW board of directors later this year. To see pictures from this and other Board Team trips, please visit the USW Facebook Page at https://www.facebook.com/uswheat/.

*Header Photo Caption: Visit to MY San – the market leading biscuit company in the Philippines. Mt. Makiling is in the background. (L to R) Phil Volk, North Dakota Wheat Commission; Joe Anderson, Idaho Wheat Commission; Catherine Miller, USW Programs and Planning Coordinator; Wally Powell, Oregon Wheat Commission; and Joe Sowers, USW Regional Vice President for Philippines and Korea.

Diplomacy is defined as the profession, activity or skill of managing international relations, typically by a country’s representatives abroad and, secondarily, the art of dealing with people in a sensitive and effective way.

While the local representatives of U.S. Wheat Associates (USW) are well versed in the art of diplomacy, twice every year USW sends leading U.S. farmers overseas as ambassadors to the people who import, mill and use the wheat they grow.

USW refers to these delegations as “Board Teams” because they typically include members of USW’s board of directors who are selected by state wheat commission members. Such “diplomatic” missions help strengthen customer relationships but also give the participants the chance to see how the organization and local USDA Foreign Agricultural Service (FAS) staff work together to represent U.S. farmers.

Bound this month for the Philippines, Singapore and Indonesia, the next Board Team includes: Joseph Anderson of Lewiston, Idaho, representing the Idaho Wheat Commission; Wally Powell of Condon, Ore., representing the Oregon Wheat Commission; Philip Volk, of York, N.D., representing the North Dakota Wheat Commission; and team leader Catherine Miller, Program and Planning Coordinator with USW.

The team will get orientated for their trip at the USW West Coast Office in Portland, Ore., including time with USW staff to learn more about the “nuts and bolts” of USW’s market development programs and what to expect when traveling overseas, the Wheat Marketing Center, Federal Grain Inspection Service, an export elevator and OMIC USA.

The vibrant milling and wheat foods industries in the Philippines and Indonesia will provide an excellent introduction to growing markets. For example, Indonesia is expected to become the world’s largest wheat importer in the future fueled by an average increase in flour consumption of about five percent per year. The team’s visit to the USW South Asian Regional Office in Singapore will also expose the participants to the hub of export market development activity in the region.

The team members will report back to USW directors later this year and, as regional leaders, to their wheat farmer neighbors.

Photos and comments from the team’s activities will be posted on USW’s Facebook page at www.facebook/uswheat.

Joe Anderson.

Wally Powell.

Phil Volk.

Catherine Miller.

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By Chris Kolstad, USW Chairman and a Wheat Farmer from Ledger, MT, at the USW Board of Directors Meeting, Nov. 2, 2018

When I was in Rio de Janeiro in August for the USW Latin American Buyers Conference, I gave a presentation on farm economics. One of the things I told the customers there was that farming in the United States was a very stressful job.

There are so many things out of our control that can affect whether we are financially successful or not. Obviously, the weather comes at the top of that list. We face temperatures that are either too hot or too cold and rain that never comes or comes so fast and so hard that it causes severe flooding. Hail, wind, frost and numerous other factors come into play. Add to that local, state and federal governments that set rules and regulations that affect the way we farm. From environmental regulations to trade policy, decisions made by our President or Congress can create big swings in our markets.

The American farmer faces rising input costs, rising equipment costs, crop protection products that no longer work, labor shortages and prices that don’t seem to meet our cost of production. We work from sun-up to sun-down and some work around the clock to harvest crops or simply to get caught up.

Farming is a challenging occupation, and I want to thank all of you and the thousands of farmers that you represent for staying the course. I truly believe that better times are coming; part of the reason I believe that is that organizations like U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) are working hard on our behalf to help get new trade agreements signed and to get a fair and practical Farm Bill passed.

Vince Peterson and his USW team around the world have gone above and beyond the call of duty. Vice President of Planning and Programs Jennifer Sydney and our overseas representatives have put together a proposal for the Agricultural Trade Promotion program that includes more than 100 new projects that, if implemented, will help us market our wheat. We obviously don’t know at this time how successful we will be, but we do know whatever amount we are awarded will be used to reassure our customers that the United States continues to be the world’s most reliable supplier of quality wheat.

Let’s face it, some of the rhetoric coming from our government officials has offended some of our customers and, quite frankly, we need to get out there and mend some fences. This money will help us do that. We also heard from Ambassador Gregg Doud, the Chief Negotiator with the U.S. Trade Representative that trade negotiations are starting with Japan, the UK and the EU. Amb. Doud once served as Assistant Director, West Coast Office, and Market Analyst with USW – what a great friend he is to the American farmer.

I also believe there are some things that are in our control, and that all our leaders and associates and many, many others are working on those challenges and creating new opportunities. Knowing that, I feel a little less stressed, and I hope that you do, too.

USW Chairman Chris Kolstad, Ledger, Montana

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By Steve Mercer, USW Vice President of Communications

 

Things have changed in Nigeria’s flour milling industry. Members of a U.S. Wheat Associates (USW) Board Team meeting with millers in Lagos recently learned more about how the West African nation’s economy and consumer preferences are forcing mills to reduce costs and produce a wider range of flour products without diminishing quality.

 

State wheat commission leaders who participated in the Sub-Saharan Africa Board Team that traveled to Lagos, Nigeria, and Johannesburg and Cape Town, South Africa, included Jay Armstrong of Muscotah, Kan., a Past-Chairman of the Kansas Wheat Commission and USW director, Michael Edgar of Yuma, Ariz., and Don Schieber of Ponca City, Okla., who are both Past USW Chairmen. USW staff included Vice President of Communications Steve Mercer and Assistant Regional Director Chad Weigand. USW Marketing Consultant James Ogunyemi and Administrative Officer Olatunde Omatayo, based in Lagos, and Regional Director Gerald Theus, based in Cape Town, met the Team in Lagos.

 

Many millions of Nigerians cannot afford to spend much more than $2 on food every day, according to USDA Foreign Agricultural Service Regional Agricultural Counselor Jude Akhidenor, who briefed the Team in Lagos.

 

“We used to sell all we could produce; now we produce only what we can sell,” the general manager of a leading Nigerian flour milling company told the Team. He said consumers are looking for variety and mills are competing aggressively to respond. High-loaf bread is being eclipsed by instant noodles and pasta as staples.

 

Nigeria is one of the few global markets that has imported all six U.S. wheat classes. The changes in the market are putting pressure on Nigerian mills to cut their costs, however, leading to a growing volume of imported Black Sea region wheat because its price has been significantly lower than the U.S. hard red winter (HRW) that used to dominate Nigerian imports. Nevertheless, one leading miller in Nigeria continues to import HRW even in the face of that price difference.

 

USW 2018 Sub-Saharan Africa Team, L – R, James Ogunyemi, Chad Weigand, Oletunde Omatayo, Steve Mercer, Michael Edgar (behind), Gerald Theus, Jay Armstrong, Don Schieber.

 

The team members noted that the price of HRW and other U.S. classes is determined transparently by the market, not by farmers or the sellers and emphasized the industry’s efforts to continue improving HRW milling, baking and processing characteristics. The shift will likely continue, the millers said, even though they know by experience that HRW offers consistent performance and usually higher quality milling characteristics than Black Sea wheat.

 

“For those who like to see things stay as they are, that would be disappointing,” said Armstrong. “Markets change, however, and for those who like to adapt to new markets this could be viewed as an opportunity. To be more competitive again in Nigeria, I believe we will have to ramp up production of hard white (HW) wheat back at home. The millers we met with in Nigeria and in South Africa all made it clear the benefits of hard white wheat would outweigh cost differences.”

 

After USW introduced HW to Nigerian millers in 2008, Nigeria became the leading global importer of this wheat class.

 

Scaling up HW production in the United States to the point at which exportable supplies are consistently available will take a long, sustained effort. There are signs that the industry is moving in that direction.

 

Hard red winter wheat, however, will remain a very competitive class in the domestic market and in many other parts of the world. The U.S. supply chain is doing all it can to make HRW as competitive as possible, including opportunities to reduce export basis. This year, as exportable Russian wheat supplies decline or are blocked by government interference, Nigeria’s millers will be prepared to import more HRW.

 

From Lagos, the team travelled to Johannesburg, South Africa, and then to the capital city of Pretoria to meet the USDA/FAS agricultural team headed by recently posted Minister Counselor for Agricultural Affairs Jim Higgiston. Over lunch, he and his colleagues discussed the South African agricultural economy and unique challenges including the government policy of “expropriation” of land.

 

Income and gross domestic product are significantly higher in South Africa compared to Nigeria, but as they visited flour millers there the last two days of their trip, the Team members heard that cost is also a determining factor. In addition, the South African government sets domestic wheat prices at levels that remain consistently more competitive than U.S. No. 2 HRW prices to encourage production at home.

 

The USW Board Team at Tiger Foods headquarters in Pretoria, South Africa.

 

Three meetings with the flour milling divisions of successful South African food companies rounded out the team’s trip.

 

“It was very encouraging to hear that South Africa’s millers like U.S. wheat very much and do import more of it when prices are more competitive,” said Schieber. “And the people we met were so welcoming. One of the managers spent the last free day on our trip taking me to visit an implement dealer and a farm machinery show. I really appreciate that.”

 

Two additional highlights of the team’s South African visit were a tour of a plant where a popular, wheat breakfast food is produced and time with a very impressive South African family at their large dairy and grain farm.

 

USW and the team members want to thank all the customers they met on this trip for their candor and hospitality, and the USW staff who worked hard to make the arrangements, including Financial Accountant Cathy Marais and Regional Program Coordinator Domenique Opperman based in the USW Cape Town Regional Office.

 

When he joined USDA in 2017 as the first Undersecretary for Trade and Foreign Agricultural Affairs, Ted McKinney said he anticipated investing significant time overseas building trust, opening doors for farmers and processors [and] removing trade barriers.

“Half the battle of winning the game is showing up,” he said.

U.S. Wheat Associates (USW) completely agrees with Undersecretary McKinney. The U.S. wheat farmers from 17 states who direct our activities fully support eight U.S. citizens and 43 locally employed staff serving customers from 14 offices around the world. USW also sends leading U.S. farmers overseas twice a year to strengthen customer relationships and learn more about how the organization and local USDA Foreign Agricultural Service (FAS) staff are working toward the same goals Mr. McKinney described.

USW calls such delegations “Board Teams” because they typically include members of USW’s board of directors who are selected by state wheat commission members. The next Board Team leaves soon to visit customers in Lagos, Nigeria, and Johannesburg and Cape Town, South Africa. Farmer participants include USW Past-Chairman Michael Edgar of Yuma, Ariz.; Don Schieber of Ponca City, Okla.; and Jay Armstrong of Muscotah, Kan., a Past-Chairman of the Kansas Wheat Commission and USW director. USW Vice President of Communications Steve Mercer is participating as staff lead in his fourth Board Team since he joined USW in 2006.

The team will get orientated for their trip at USW Headquarters in Arlington, Va., before meeting with senior FAS officials in Washington, D.C. Lagos is the hub of Nigeria’s vital flour milling industry and the participants will meet with executives from four major flour mills as well as FAS staff posted in country. Flour mills and wheat food production facilities are on the itinerary as well for the South African leg of this Board Team.

These trips represent a valuable learning experience for the participating board members and wheat buyers, many of whom have never had the chance to hear why U.S. wheat classes offers the best value directly from the farmers who produce it.

This team will report to their fellow USW directors later this year. USW will post photos and comments from the trip on its Facebook page at www.facebook/uswheat.

Michael Edgar.

Jay Armstrong.

Don Schieber.

Steve Mercer.

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By Stephanie Bryant-Erdmann, USW Market Analyst

Every year USW sends board teams overseas to give leading U.S. wheat farmers the opportunity to learn from customers about the wheat quality characteristics their markets prioritize, and to strengthen the relationship between wheat farmers and their customers. One of those teams returned from a trip to Asian countries in mid-March.

The 2018 Asia Board Team, led by USW Market Analyst, Stephanie Bryant-Erdmann, traveled to China and Taiwan. The team included: Mike Carstensen, a wheat farmer from Almira, Wash., and a current USW director representing the Washington Grain Commission; Clark Hamilton, a wheat farmer from Ririe, Ida., and a current USW director representing the Idaho Wheat Commission; Gordon Stoner, a wheat farmer from Outlook, Mont., and the past president of the National Association of Wheat Growers (NAWG), and Scott Swenson, a wheat farmer from Elbow Lake, Minn., and Treasurer of the Minnesota Wheat Research and Promotion Council.

In Qingdao, China, the team met with traders, millers and bakers who provided a unique perspective on the processing and marketing sectors of the wheat value chain. They also toured retail bakeries where they sampled traditional Chinese baked goods and visited an instant noodle and puff snack factory. The team was impressed with the freshness, variety and quality of the products and were particularly fond of a chocolate bread with mango filling. The team learned that stability time, water absorption, protein and color are especially important to the Chinese baking industry.

“At each meeting, the team heard how Chinese millers use U.S. wheat to improve flour products to meet customer demands. In return, team members shared information about the research programs in the United States and the focus on improving quality through the adoption of preferred variety lists,” said Bryant-Erdmann. “The message to customers was U.S. wheat farmers are committed to producing a high-quality product that meets their customer needs.”

U.S. wheat faces several challenges in China, including perennial trade policy issues and strong competition from Canada. U.S. soft wheat represents a good opportunity for continued growth in a market that is growing in sophistication both from the consumer side and from the milling and end-product manufacturing side.

In Taiwan, the team met with the Taiwanese Flour Millers Association, where they learned more about the high-quality Taiwan flour market. Carstensen, Hamilton, Stoner and Swenson each spoke about current growing and planting conditions on their farms and provided an early outlook for the 2018/19 wheat crop — noting that weather would play a big role in final planting decisions, yields and production. Stoner also gave the group a U.S. farm bill update, highlighting the importance of the various programs to U.S. farmers and their customers.

As a first-time board team traveler, Mike Carstensen said “the opportunity to meet with customers and learn more about their business is invaluable. The feedback on wheat quality characteristics is important for us to hear and bring back to share with our wheat breeders.”

Customers in both countries also expressed interest in buying hard white (HW) wheat. Hamilton was able to share his perception of the challenges and opportunities facing U.S. HW production and marketing.

The team also toured Taiwanese wheat food manufacturing plants, retail bakeries and a flour mill with the representatives from the American Institute of Taiwan and the U.S. Agricultural Trade Office. One highlight was visiting the Chimei showcase bakery and trying traditional Taiwanese pineapple cake. Swenson was impressed with the wide range of products, some of which are available in the United States.

“The world is a small place and maintaining the strong relationship between the U.S. wheat farmer and their overseas customers is crucial to the continued success of both,” he said.

U.S. wheat enjoys a strong loyalty from its Taiwanese customers, with the strongest competition coming from containerized shipments of Australian wheat. Improving U.S. logistics for containerized wheat was a long-term concern the team identified and plans to share with their fellow commission members.

The team will report to the USW board later this year. To see pictures from the trip please visit the USW Facebook page at www.facebook/uswheat.