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Farmers from Maryland, Minnesota and North Dakota Examine ‘Very Distinct’ Markets for U.S. Wheat in Vietnam, China

The 2024 USW Vietnam-China Board Team (left to right): USW Secretary-Treasurer Jim Pellman (North Dakota), Jennifer Schmidt (Maryland), Mark Jossund (Minnesota) and USW West Coast Office Assistant Director Luke Muller.

The 2024 USW Vietnam-China Board Team returned to the U.S. on March 30. Pictured (left to right): USW Secretary-Treasurer Jim Pellman (North Dakota), Jennifer Schmidt (Maryland), Mark Jossund (Minnesota) and USW West Coast Office Assistant Director Luke Muller.

Wheat farmers from Maryland, Minnesota and North Dakota toured flour mills and bakeries in Vietnam, getting a close look at how U.S. Wheat Associates (USW) works with customers to promote U.S. wheat. The group also traveled to Guangzhou, China, where it met with grain traders and attended the 40th anniversary of the Sino American Baking School (SABO).

Many Important Stops for Farmers

A lot of ground was covered on the week-long mission – literally and figuratively.

“Vietnam and China are two very distinct markets. The team saw the different ways different classes of U.S. wheat are being used by our customers. The farmers were also able to witness the strong relationships USW has built with key industry leaders in both places,” said USW West Coast Office Assistant Director Luke Muller. Muller led the USW 2024 Vietnam and China Board Team.

Working close with the millers and bakers allows USW to strengthen those relationships even more, Muller explained.

“There is a lot of interaction,” Muller said. “The farmers were able to pick up on that.”

Maryland, Minnesota and North Dakota

Making up the team were farmers representing various classes of U.S. wheat. USW Secretary-Treasurer Jim Pellman of McClusky, North Dakota; Jennifer Schmidt of Sudlersville, Maryland; and Mark Jossund of Moorhead, Minnesota, began the journey by meeting at the USW office in Portland. They then attended a Federal Grain Inspection Service (FGIS) briefing on grain grading. Before departing for Vietnam, the team toured the United Grain export elevator in Vancouver, Washington.

More details of specific activities the team participated in while in Vietnam and China – including special attention to the Sino-American Baking School (SABS) anniversary event – will follow in upcoming editions of the Wheat Letter. A video of the trip will also be shared.

The team toured flour mills and bakeries in Vietnam and China. The trip allowed wheat farmers to meet and interact with their customers in both countries.

The team toured flour mills and bakeries in Vietnam and China. The trip allowed wheat farmers to meet and interact with their customers in both countries.

Mills, Bakeries and Customers

Meanwhile, some highlights of the trip:

  • The team visited Vimaflour. It was the first mill opened in northern Vietnam and one of the largest in the country. The team also visited Vietnam Flour Mill, which is part of Wilmar, the largest regional miller in Southeast Asia and China.
  • Team members were able to explore a small, family-owned Bahn Mi bakery in Hanoi, Vietnam. “Bread loaves have a very short shelf life and can only serve the population in close proximity to them,” Muller explained. “These independent bakeries have benefited from the technical servicing USW offers. USW and local millers have shown how blending in up to 30% U.S. dark northern spring (DNS) wheat can help with loaf strength for the overnight fermentation process they utilize.”
  • The team learned how USW Baking Consultant Roy Chung has worked with Libra Biscuit Factory. The business has grown quickly and now exports its cookies and biscuits to more than 20 countries. Some of the cookies sold by Libra are made with 100% U.S. soft white (SW) wheat. Among other things, Chung has helped the company’s bakers develop products and is currently helping them formulate a new soda cracker.
  • In China, the team met with Huaren Trading Company, where conversation was focused on U.S. wheat farmers and the U.S. supply chain compared to competitors.
  • The team also toured Philip’s moon cake factory, which produces over 600,000 moon cakes a day during its peak production.

Stay tuned for more stories from the trip in upcoming editions of the Wheat Letter.

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China’s Soft Red Winter Purchases: The Right Wheat at the Right Time

The purchase by China of 1.12 million metric tons (MMT) of U.S. soft red winter (SRW) wheat for delivery in 2023/24 between Dec. 4 and 8 is a significant and, in terms of its volume, somewhat unexpected factor in the current market. The buyers clearly took advantage of a price opportunity, yet there are other influencing factors behind this buying surge to consider.

Already in the Market

China is in a wheat-buying phase driven in part by reported damage to its 2023 crop from rain at harvest. USDA expects China to exceed its WTO-agreed 9.6 MMT tariff rate quota again in 2023/24. By late November, China had already purchased a total of 1.01 MMT of four U.S. wheat classes, including 789,000 MT of SRW in 2023/24.

The U.S. Wheat Associates (USW) Price Report on Nov. 22 estimated SRW FOB export price out of the Gulf at $250 per MT, and on Nov. 30 at $258 per MT, a very competitive price relative to other wheat origins.

After the recent deals through Dec. 8, total 2023/24 SRW commercial sales to China to date now exceed 1.9 MMT. As a result, USDA raised its Dec. 8 estimate of total SRW sales in 2023/24 by about 817,000 MT to 4.76 MMT. If realized, that would be the largest volume of SRW exports since 2013/14.

A Trusted Source

Portrait of USW Regional Vice President Jeff Coey.

Jeff Coey

Why so much SRW? USW Regional Vice President Jeff Coey suggests that China’s buyers and flour millers are very familiar with this soft wheat class grown in the eastern third of the United States.

“It is a story that goes back decades,” said Coey. “First, our SRW is closest to the wheat grown in China. And the investment U.S. wheat growers have made in USW’s trade and technical service over many years has given Chinese buyers the confidence to import SRW, and other classes, when the opportunity arises.”

Coey said maintaining that education process was the goal behind USW’s investment of Agricultural Trade Promotion (ATP) program funds to bring a team of Chinese buyers to the United States in early November 2023. The visit included in-depth time with Federal Grain Inspection Service inspectors at an export elevator in Houston, Tex., as well as time with a SRW farmer and officials at USDA’s Agricultural Research Service (ARS) Soft Wheat Quality Lab (photo above) in Ohio.

“Those visits in particular were instructive,” said Coey. “Understanding the third-party inspection and certification process and the testing demonstrated at the ARS lab gave the buyers a sense of the design behind the quality data we share with them.”

Three people examine cookies at the USDA-ARS Wheat Quality Lab in Wooster, Ohio, in Nov. 2023.

Quality testing at the USDA-ARS Wheat Quality Lab in Wooster, Ohio, includes cookie spread testing, demonstrated during a November visit for a Chinese wheat buying team.

On the Ground Input

Ohio farmer and USW director Ray Van Horn was in the middle of his corn harvest when the Chinese buyers visited his farm.

“Ray and representatives of our member state wheat commission Ohio Corn and Wheat hosted the team on a crisp, clear afternoon in one of Ray’s fields with a beautiful, new stand of soft red winter wheat. It was a perfect place to share information about the wheat production decisions he makes and how that may affect buyers,” Coey said.

Ohio farmer Ray Van Horn talks with Chinese wheat buyers in his field planted with soft red winter wheat.

In a field seeded with a 2024 soft red winter wheat crop, Ohio farmer Ray Van Horn (right) discusses how he makes decisions and manages his crops with members of a Chinese wheat buying trade team sponsored by USW and hosted by Ohio Corn & Wheat in early November.

Adding value to this buying opportunity is the fact that U.S. farmers produced two large SRW crops with excellent quality in 2022 and 2023.

“Together all these factors helped build the confidence that these buyers can select U.S. soft red winter this year and have a deep supply of consistent quality with a ready domestic market,” Coey concluded.

By USW Vice President of Communications Steve Mercer

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Snapshot of Post-COVID Recovery in the Chinese Baking Industry

The People’s Republic of China is the United States’ largest food and agricultural product export market with sales that reached a record $41 billion in calendar 2022. Under suspension of import duties agreed to in the Phase One trade accord, China has imported more than 827,000 metric tons of U.S. wheat with an estimated value of more than $270 million as of early February in marketing year 2022/23. That pace is down from the previous two marketing years, but still significant.

USDA’s Foreign Agricultural Service (FAS) and U.S. Wheat Associates (USW) are reporting that as China pulls back from zero-COVID policies, there is “great optimism about the economy” in general and specifically the dynamic Chinese baking industry.

Return to Personal Contact

After a resumption of normal public activity, USW Beijing colleagues are finally enjoying a return to interactions with milling and baking customers and visiting retail and restaurant venues throughout the country. USW Regional Vice President Jeff Coey said restrictions have been totally lifted, allowing the team to conduct an informal survey of four bakery companies both in north and south China, namely Toly, Fujian Fumao, Guangdong Chuandao, and Dongguan Food.

Three of the four stated that sales volume had recovered to pre-COVID levels, and the same ratio predicted further increases in 2023. Both innovative product development and exploring new sales channels are cited as avenues for growth in China’s baking market. The photo at the top of this page confirms it was busy recently at a Baker & Spice store, a popular chain of over 60 coffee and snack shops in Beijing and other cities in China.

Investing for Growth

The largest of the group, Toly Bread Company Ltd., expected to raise investment and increase staff in 2023. The company hopes for a higher value mix of offerings allowing them to increase unit price. They expect cake products will take the lead in the company’s product matrix.

A busy China retail bakery.On Feb. 17, 2023, USDA FAS Agricultural Attaché Alan Hallman and colleagues published a Global Agricultural Information Network (GAIN) report on China’s “Post-COVID Food and Agricultural Situation” that provides insight into relevant aspects of end-use wheat demand in this important swing market for U.S. wheat.

While there were closures early in the pandemic, “some bakeries were able to turn the crisis into an opportunity for growth,” the report stated. “Community bakeries increased sales due to strong demand for convenience foods and third party delivery services. Bakeries with strength in group-buying and sales to institutions also benefited. Many businesses and other organizations gave bakery shopping benefits to their employees. Bakeries with brick- and-mortar stores, online order platforms, and delivery services generally remained strong and grew their business during the pandemic.”

Increased Hiring

Mr. Guo Jiguang, chairman of Fujian Fumao, told USW the company is actively opening more stores and hiring more employees in Southeast China to expand its business in 2023. Bread, cakes and desserts remain the main products with fastest growing sales. Mr. Guo added that even if cake and pastry products are becoming more popular among young generations, consumer preferences are changing and both opportunities and threats coexist in the future bakery market.

Photo of busy retail Fujian Fumao bakery in China

A bakery operated by Fujian Fumao in China remains busy and the company plans to open more stores in Southeast China as the country recovers from zero-COVID policies.

Mr. Philip Zhou, chairman of Guangdong Chuandao, is also bullish on baked goods.

“For us, Chinese pastry and western style bread are the two main product categories showing the greatest sales momentum,” he said. “Our company’s plan is to explore new distribution channels and cover more supermarkets and distributors to realize reasonable sales growth goals.”

Optimism with Constraints

Concluding its report, the China FAS team repeated the optimism that recreation, travel and tourism in the country are expected to grow as zero-COVID policies end. “Some businesses have become stronger, and companies have an opportunity to rebuild…” Yet consumer spending will remain somewhat constrained.

USW and dozens of other non-profit organizations in the United States are partners with FAS in agricultural export market development. Through the support of U.S. wheat farmers and FAS programs, USW conducts wheat export market development activities in China through offices in Beijing and Hong Kong.

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Past USW Chairman Darren Padget Shares Sustainable Practices on His Farm

In 2021, the U.S. Wheat Associates (USW) team in Beijing asked then-Chairman and Oregon wheat farmer Darren Padget to record a video message to Chinese milling and trading managers participating in a USW-sponsored “Contracting for Wheat Value” seminar.

The USW team wanted to show customers the important things U.S. farmers do every day to produce more and better wheat with less impact on the environment. Chairman Padget took the challenge to heart and spent an entire spring day walking the Chinese team through his operation to tell his farm’s sustainability story.

USW is sharing that story here with a wider audience that is increasing interested in learning more about sustainable food production.

Better Soil 

Joined by his son Logan and his father Dale — partners in Padget Ranches — Darren talked in his video presentation about the effort to improve the soil in which they grow high quality soft white wheat.

“From when my father came to farm … things have changed quite drastically,” Darren said. “Taking care of the land and making sure it is sustainable is very important  to us as we move forward. We used to till the soil heavily with a moldboard plow … it took a lot of time, a lot of fuel, and a lot of resources. Now, we do ‘direct seeding,’ which means the stubble in the field stays intact, which builds our soil organic matter and is less susceptible to erosion. It has been a big change. We have adopted the technology, and it seems to be the best answer to make sure this farm is here for many generations to come.”

Image shows Darren Padget bending down to drink from a garden hose on his farm

Clean Drinking Water. In the “A Visit to Padget Ranches in Oregon” Darren Padget said his family’s drinking water comes from a well on the farm, a personal reason why they are very cautious about crop protection applications.

Logan Padget is the fifth generation of his family to farm in this dry north-central Oregon region just south of the Columbia River. He has embraced precision agricultural technology. In the video, he talks about the efficiency of the farm’s crop protection product application equipment.

Precision Applications

“This machine is almost as late and great as you can get on technology,” Logan said. “It is GPS-controlled. Once I make the first pass on a field, the GPS can perfectly mimic that line across the field with just one-third of a meter of overlap. That is better than anybody could drive by hand. There’s also section control through the GPS, so if you’re coming across at an angle, each section will shut off to avoid double spraying, which saves us money. It also means fewer chemicals applied to the crop. It’s just a win-win all the way around.”

Better Quality Wheat

Darren also described how farmers are reaching beyond their own fields to help improve the functional quality of the milling wheat they grow for overseas and domestic consumption. He showed a “Preferred Variety List” that ranks public and commercial wheat varieties by desirability of quality characteristics based on three years of data. The list is developed by the state wheat commissions in Oregon, Washington and Idaho, which are directed by farmers who fund commission activities (including membership in USW).

Image shows the front and back of the 2021 Preferred Variety List for PNW wheat

Ranked by Quality. The Pacific Northwest Preferred Variety List encourages functional quality improvement for overseas and domestic millers and food processors. The description of the list states: “When making a decision between varieties with similar agronomic characteristics and grain yield potential, choose the variety with the higher quality ranking. This will help to increase the overall quality and desirability of Pacific Northwest (PNW) wheat.”

We invite you to view the entire video below.

Image shows the opening scene from a video featuring Darren Padget

https://vimeo.com/578611568

 

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Wheat Industry News

Recent news and highlights from around the U.S. wheat industry.

Speaking of Wheat

“The retaliatory tariffs led to a significant reduction in U.S. agricultural exports to retaliating partners. Nationally, direct U.S. agricultural export losses due to retaliatory tariffs totaled more than $27 billion during 2018 through the end of 2019. Across retaliatory partners, China accounted for approximately 95 percent of the losses ($25.7 billion) …” — From “The Economic Impacts of Retaliatory Tariffs on U.S. Agriculture,” a study by the USDA Economic Research Service.

Market Outlook Webinar

The Northern Crops Institute (NCI) Market Update webinar series will feature Jeffrey McPike with WASEDA Commodities Inc. for its next webinar, Feb. 16, 2022. McPike will review the 2022 market outlook for wheat, corn and soybeans. Register for the webinar here. Previous NCI Market Update webinars are posted online, including a look at durum markets on Feb. 2 by Jim Peterson, Policy and Marketing Director, North Dakota Wheat Commission.

Wheat in the Spotlight

Wheat is back in the national and international news these days. Reporters have asked U.S. Wheat Associates (USW) to comment on how a Russian invasion of Ukraine would affect wheat prices (about which we do not speculate). The Wall Street Journal and Forbes reported on that topic. Fortune.com wrote about higher costs for Lunar New Year treats like sponge cakes and pineapple tarts based on smaller U.S. soft white wheat supplies. Bloomberg published a similar article.

Sufficient Moisture

Kansas wheat farmers reported last week during a board meeting of the Kansas Association of Wheat Growers that wheat fields across Kansas were generally planted into sufficient moisture conditions and went into winter with decent stands. But more moisture will be needed over the winter and into the spring to kickstart a crop emerging from dormancy and maintain growth. Read more here.

2022 Northern Crops Institute Courses

The Northern Crops Institute (NCI) in Fargo, N.D., has available courses in 2022 for online and in-person instruction. Available courses include a Pasta Production and Technology course in April. Learn more about NCI courses and how to register here.

2022 IGP Institute Flour Milling Course Schedule

The IGP Institute in Manhattan, Kan., has several upcoming flour milling and grain processing courses available in 2022. Courses in this curriculum area cover aspects of managing the flour milling process, from grain selection to finished products. Learn more about IGP Institute courses and how to register here.

Subscribe to USW Reports

USW publishes various reports and content that are available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo and more on LinkedIn.

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China Exceeded Annual Wheat TRQ Volume in 2021

China’s latest customs numbers are in, and the news is significant. After clearing 933,500 metric tons of wheat through customs in December, China in calendar year 2021 exceeded its 9.636 million metric ton (MMT) annual wheat TRQ (tariff rate quota) established in its World Trade Organization (WTO) membership. The official tally was 9.718 MMT of imported wheat.

According to customs, Australian wheat and U.S. wheat at more than 2.7 MMT each were China’s largest suppliers in 2021. The difference between them is a mere 9,000 metric tons. That is about the volume that fits into one hold on a bulk freight vessel.

Customs data showed China exceeded its annual wheat TRQ in part by importing 2.544 MMT of Canadian wheat and 1.412 MMT of French wheat in 2021. The volume China imported from those four wheat suppliers indicates to U.S. Wheat Associates (USW) that buying from deep and transparent markets with good ocean shipping infrastructure is still attractive to China’s buyers. The remaining 3% of its total 2021 imports arrived from Kazakhstan and Russia.

Image of U.S. HRW wheat and list of functional benefits included to show how China exceeded its annual wheat TRQ with help from USW.

Introducing HRW Wheat. China imported a significant amount of U.S. hard red winter (HRW) wheat in 2021. So in September, USW used presentations (above) and technical demonstrations to help Chinese millers and grain buyers understand the functional benefits of HRW.

U.S. Wheat Demand

In December, a private buyer purchased a small container-load of U.S. wheat. That helped lift China’s total U.S. imports in the second half of calendar year 2021 t0 848,000 metric tons. The obvious, recent slow-down in U.S.-origin wheat arrivals is disappointing. But it is not surprising. In fact, U.S. export wheat prices are now above domestic Chinese prices on a Cost and Freight basis.

China’s private milling and wheat food manufacturers serve an increasingly sophisticated consumer market. Their demand for four classes of high-quality U.S. wheat remains strong. That is why our experienced, professional USW China team members continue to educate industry customers about U.S. wheat value and functionality. We are pleased that COFCO, China’s state trading company, welcomes our activities that, we believe, helped China exceed its annual wheat TRQ.

Practical Guidance

A good example from 2021 was a three-day “Contracting for Wheat Value” seminar in July for 32 participants representing 11 non-state and state Chinese trading companies and mills. The goal of the seminar was to help the participants become better-prepared buyers. USW provided practical guidance on writing contract specifications that take advantage of U.S. wheat crop and market situations and much more. According to input from the meeting participants, our goal was achieved.

Chinese wheat buyers participated in a USW Contracting for Wheat Value seminar in 2021, part of effort to help China exceed its annual wheat TRQ in 2021.

Contracting for Wheat Value. USW combined an in-person meeting in Guangzhou, China (above), with video and virtual presentations in July 2021 to help Chinese wheat buyers better understand the U.S. wheat export system.

Policy Plays Its Role

We also respectfully look for help from policymakers on both sides. Since the Phase One agreement, U.S. wheat sales to China are far above USW’s pre-trade war average. As USW Vice President of Policy Dalton Henry noted one year ago, policymakers “would do well … to pick up where Phase One left off and continue to build on the tremendous export potential for China.”

It is true that some uncertainty will remain in U.S.-China trade relations. It is also true that opportunities will emerge to do business in China. USW has support from our farmers and USDA Foreign Agricultural Service export market development programs. And USW will stay engaged in keeping our Chinese customers informed about the quality, variety and value of U.S. wheat. So hopefully, next January, we will see that China has once more exceeded its annual wheat TRQ.

Finally, we wish all our customers and friends peace and good health in the Year of the Tiger!

By Jeff Coey, USW Regional Vice President, China, Hong Kong and Taiwan

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Chinese Government Grain Policy TRQ Dispute Moving Ahead

By Ben Conner, Partner, DTB AgriTrade

Over the last several years, U.S. Wheat Associates (USW) and other industry groups have demonstrated how the policies of a few advanced developing countries are distorting world wheat trade and hurting farmers in the United States and other wheat exporting countries. Chinese government grain policy attracted special attention, leading to two dispute cases at the World Trade Organization (WTO), one on excessive subsidies and one on China’s administration of a tariff rate quota on wheat, corn, and rice. By April 2018, WTO dispute panels had sided with the United States in both cases.

Today, the official settlement process for one of those cases has entered the next phase. On July 26, 2021, the United States asked the WTO Dispute Settlement Body (DSB) for authorization to raise tariffs on imports from China due to its failure to comply with the DSB recommendations on its tariff-rate quota (TRQ) administration. China blocked the request, which puts the matter before an arbitration panel. Simultaneously, China made its own request for another panel to review whether it has brought its policies into compliance.

Very close observers of WTO processes might experience deja vu because this is exactly what happened with the case on China’s subsidies for the same commodities last summer.

The next step is for the WTO to form two panels to review the requests of both China and the United States. The compliance panel will look at whether China’s TRQ administration is now functioning on a “transparent, predictable, and fair basis … using clearly specified administrative procedures,” as required by the DSB recommendations. An arbitration panel will review the U.S. request to raise tariffs and decide whether its methodology is appropriate.

Two Reasons for the Challenge

Why is the U.S. government taking this step forward on this case? After all, China has been importing record amounts of wheat and corn since the signing of the Phase One deal (rice is notably lagging) that included implementation of the WTO recommendations on TRQs and subsidies. There are two main reasons.

Procedurally, the U.S. government had to continue extending the window for China to comply (they had already agreed to seven extensions), allow that window to expire with no further action and forfeit its right to suspend concessions, or request that right within 20 days after the window expired. It chose the third option.

Even though China has allowed higher imports, there is still little clarity on how TRQ shares are allocated and reallocated.

If the process remains opaque and unpredictable, China will not be in compliance with its TRQ obligations, which could prevent imported wheat with qualities supplementing Chinese domestic wheat from reaching the Chinese wheat millers who could use it most effectively. It is encouraging that the U.S. and Chinese governments are continuing this case as it will help resolve disagreements over whether China is in compliance with its TRQ commitments and exert pressure to fix problems with Chinese government grain policy permanently.

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One Year Later – Phase One Trade Deal with China Producing Results for U.S. Wheat

By Dalton Henry, USW Vice President of Policy

Just over a year ago, on Jan. 15, 2020, the U.S.-China “Phase One” agreement was signed, leading to the eventual waiver of China’s retaliatory tariffs against U.S. agricultural products. Those actions opened the door again to the largest wheat consumer in the world after nearly two years in which U.S. wheat producers were all but shut out.

While the final results of the Phase One agreement will not be written for several months, early returns show the agreement paid off in a big way for U.S. wheat producers and their Chinese customers.

The Phase One agreement contained both specific purchase targets for agricultural commodities, and structural changes to China’s import systems. To date, much of the celebration and criticism has centered on the purchase targets — with very little attention paid to the structural changes that in some instances resolved disputes decades in the making.

One dispute of relevance to wheat had been at the center of a WTO case dating back to 2015 on China’s administration of their grain tariff rate quotas (TRQ). In a case the U.S. won in mid-2019, the WTO panel found that China had not administered the quota in such as way as to be “transparent, fair or predictable.” With the WTO case entering compliance at roughly the same time as Phase One agreement was being negotiated, U.S. negotiators included additional language in the agreement to build on the WTO case win and ensure eventual Chinese compliance. That language included stipulations making clear that Chinese “State Trading Enterprises” are subject to the same rules as private companies and specific transparency requirements to make it possible to evaluate Chinese compliance with the allocation and reallocation provisions that are so important to the proper functioning of their TRQ.

With those new rules in place, China is projected to import 9 million metric tons (MMT) of wheat this marketing year — a 25-year high, and almost double their previously highest TRQ purchases. China turned to U.S. wheat producers for a significant portion of that higher import volume. Since the signing of the Phase One agreement, U.S. wheat sales to China have totaled more than 2.8 MMT — nearly 90% above USW’s long-term pre-trade war average. Those imports have come from four different classes of U.S. wheat and helped meet the demand for U.S. wheat from China’s private flour millers. This import volume is likely to make China the fourth largest export market for U.S. producers in marketing year 2020/21, which ends May 31.

Chinese wheat buyers and flour milling managers visited the Wheat Marketing Center in Portland, Ore., in May 2019.

Chinese wheat buyers and flour milling managers visited the Wheat Marketing Center in Portland, Ore., in May 2019 during a Contracting for Wheat Value seminar sponsored by USW. USW/Beijing Country Director Shirley Lu (second from right) translates as Wheat Marketing Center Technical Director Dr. Jayne Bock (third from left) and a colleague demonstrated falling number analysis.

There are likely to be substantial trade negotiations between China and the United States in the coming months — something wheat producers should welcome. The Phase One agreement was never supposed to be an “end-all agreement” — in fact, when it was announced, plans were already in place to start on “Phase Two,” which were eventually scrapped after COVID-19 turned the world on its head.

With a new U.S. administration taking office this week, many in agriculture are watching closely to see which way the political winds will blow those discussions with China. While there may be a desire by some for a “fresh start” in the China relationship, the Biden administration would do well for U.S. agriculture to pick up where Phase One left off and continue to build on the tremendous export potential for China. President-elect Biden’s early statements and plans to keep tariffs in place on Chinese goods until they can be reviewed are an important first step in the right direction.

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USW Demonstrates Hard Red Winter Wheat Performance to Chinese Customers

Chinese trading concern COFCO, as part of a commitment to purchase U.S. farm products, for the first time in recent history purchased hard red winter (HRW) wheat in marketing years 2019/20 and 2020/21. COFCO has purchased about 672,000 metric tons (MT) of HRW for immediate sale to Chinese flour mills.

On behalf of the farmers we represent, U.S. Wheat Associates (USW) helps buyers and end users make the best use possible of U.S. wheat. Because HRW has not been commonly used in China, the USW team in China decided to sample and test the wheat purchased to demonstrate the usefulness of this versatile class.

A representative sample of HRW for the study came directly from a COFCO shipment taken at a port in southern China’s Guangdong Province.

Thoughtful Test Design

USW Technical Specialist Dr. Ting Liu thoughtfully designed the study. After referring to some customer inquiries and previous studies done on HRW for various regional markets, Dr. Liu and USW Country Director Shirley Lu selected several end use applications to test using different flour blends with HRW that could be measured for performance against locally produced control flours.

The USW team worked closely with local flour mills and the Sino-American Baking School (SABS) in Guangzhou to mill the HRW sample on a Buhler laboratory mill. They analysed the characteristics of single HRW flour and blends with flour from U.S. hard red spring (HRS) and soft white (SW) wheat. Nine end products were produced and tested, including pan and sweet breads, sweet rolls, hamburger buns, baguettes, croissants, pizza dough, noodles and steamed breads.

“After some very intensive work in the test bakery, the hard red winter single flour and blends cooperated so well our team decided to run some tests twice to confirm the stellar results they observed,” said USW Regional Vice President for China and Taiwan Jeff Coey.

Sharing Results

On Aug. 14, 2020, USW conducted an online presentation to share the test results with an estimated 200 contacts from China’s mills and wheat trading organizations. The presentation focused on measured HRW wheat and flour quality, along with results of the baking tests. USW also shared typical HRW quality data from the 2019/20 crop and initial information on conditions of the 2020/21 crop.

In opening remarks to the participants, Coey said “in terms of end use quality, I want to advise you to consider U.S. hard red winter a very reliable medium- to high-gluten strength wheat that should perform well for you in a variety of your most demanding applications.”

Sharing photos and data from end products produced with single and blended flours, USW Beijing colleagues informed Chinese customers about the excellent performance of U.S. HRW in an Aug. 14 webinar.

The USW Beijing team greatly appreciates the cooperation of: COFCO for the chance to sample an actual HRW shipment; the Wheat Marketing Center, Portland, Ore., for data from their previous work on pizza dough and noodle results; the SABS staff who helped USW conduct its tests before its regular course schedule started; and several Chinese flour mills who allowed USW to use their instrumentation to help complete the testing.

Additional specific results or the tests are available from the USW Beijing office and the regional USW office in Hong Kong.

 

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Meet the USW Technical Experts: Dr. Ting Liu – Opening Doors in a Naturally Winning Way

Name: Ting Liu, Ph.D

Title: Technical Specialist

Office: USW China, Hong Kong Region, Beijing Office

Providing Service to: People’s Republic of China

Where and who we come from makes so much difference in each life. For Dr. Ting Liu, the skills she observed in her family as an only child in southeastern China’s Zhejiang province led directly to a doctorate in food science and her position as Technical Specialist with U.S. Wheat Associates (USW).

“I grew up with parents who produced and sold all kinds of furniture in our town, so they showed me how to stay in harmony with customers,” Dr. Liu said. “My love of food started as I watched my grandmother form dough for the many different Chinese wheat foods she made and sometimes helped me make.”

Ting as a child with her grandmother.

Filled with the traditions of her grandmother’s baking and a focus on schoolwork, Dr. Liu earned a spot in the Food Science and Engineering program at Zhejiang Gongshang University. Learning professional skills and participating in efforts to develop new products, including nutritious drinks and snacks, as she earned her bachelor’s degree, helped convince her that she should focus on food research and development.

“In order to build more food knowledge, improve my competitiveness and broaden my horizons, I decided to do graduate study in food science abroad,” Dr. Liu said.

U.S. Connections

She chose the University of Minnesota, Twin Cities, because it served a large agricultural state home to the headquarters of many large-sized food companies, such as Cargill and General Mills. Ultimately, her connections there helped lay the foundation of her work today representing U.S. wheat farmers in China.

“I decided to do my post-graduate research on whole wheat products because of my childhood memories and my understanding of the health benefits of whole grains,” Dr. Liu recalled. “That is how I met a very important advisor in my life, whose name is Dr. Len Marquart. Under his guidance during my doctoral study, I improved my English writing and communication skills, my ability to think independently, solve problems, and how to develop professional networks of influential people. He also made it possible for me to do my research as a visiting scholar at the Wheat Marketing Center (WMC) in Portland, Oregon, from June 2014 to January 2016.”

Ting (Third from the right, first row) with Wheat Marketing Center (WMC) Staff and USW China End Product Collaborative Team in 2015 at WMC.

Dr. Liu’s work at WMC was productive and transformative. Working with Dr. Marquart and former WMC Technical Director Dr. Gary Hou, she completed three research projects on improving the quality of whole wheat tortillas using different particle sizes of flour milled from U.S. hard red winter (HRW), hard red spring (HRS), and hard white wheat, sprouted whole wheat flour and a chemical leavening system. Through this research, Dr. Liu published six peer-reviewed technical papers and one book chapter in English on whole wheat products. She presented research results at the annual meetings of the American Association of Cereal Chemists (AACC) International and the Institute of Food Technologists. She was also actively involved in the AACC International Milling & Baking Division.

Dr. Liu said working at WMC exposed her to flour milling and wheat and flour quality analysis. She also helped prepare short courses and workshops on wheat products, prepared a range of wheat food products, and completed a research project on pan bread with added whey permeate. Much of that work was done under WMC’s educational partnership with USW.

Understanding the Mission

“One of my favorite things about working at WMC was helping host teams of wheat growers and students from all over the United States, as well as U.S. wheat customers from all over the world,” Dr. Liu said. “In 2015, I had the chance to meet the people working with USW in China when they brought three teams to WMC for different programs. This helped me better understand the USW mission and ignited my interest in joining the USW team in China.”

Ting graduated and obtained a Ph.D. in Food Science from the University of Minnesota in 2016.

Fortunately, as Dr. Liu completed her doctorate program in August 2016, a technical position was available in the USW Beijing office.

“Dr. Marquart believed I would be well-suited to a job serving as a liaison between U.S. farmers, their wheat, and the milling and wheat food industries in China,” Dr. Liu recalled. “During my job interview, USW Regional Vice President Jeff Coey told me the greatest asset of USW lies in its people who are truly good at what they do, are eager to share their knowledge with their teammates and customers, and tend to devote many years to the organization. I took the job as Technical Specialist without hesitation.”

“Ting already had a keen understanding of our mission from her work at the Wheat Marketing Center, and it was apparent right away that she would bring a tremendous value to our team and to our customers in China,” Coey said.

The need for additional wheat classes in China was increasing as Dr. Liu settled into her new position with USW in September 2016. According to IBIS World Industry Report, China’s bread and bakery product manufacturing industry grew rapidly at an annualized rate of 6.6 percent between 2013 and 2018. And until the government implemented retaliatory tariffs in March 2018, China was importing an annual average of 1.6 million metric tons of U.S. HRS, soft white, and HRW.

With that growth comes an opportunity for USW and Dr. Liu. USW continues to have a strong working relationship with the leaders and faculty at the Sino-American Baking School in Guangzhou and baking consultants to help China’s flour millers and wheat food processors better understand how to best utilize the characteristics of U.S. wheat classes to help grow their businesses. Under the guidance of Coey, USW Country Director Shirley Lu, Dr. Liu has taken on more and more of those responsibilities.

Ting conducted a Frozen Dough short course at Sino-American Baking School in 2019.

“Our team has great confidence in providing technical service that customers need to meet new consumer demand using U.S. wheat,” Lu said. “Ting has the expertise, language ability, nice personality, and high sense of responsibility that fit perfectly in the organization and our unique markets.”

It is clear that customers in China consider Dr. Liu a valued addition to USW’s service. They appreciate her undeniable professional credentials and achievements, but above all, they enjoy her sincere, friendly personality.

“Dr. Liu is very keen to use her professional expertise to solve practical problems in our technology research and development,” said one general manager of a flour mill in Guangdong province. “We want to express our heartfelt thanks to her and to U.S. Wheat Associates.”

Dr. Liu made a strong impression on the research and development manager at a very influential wheat buying and flour milling organization in China. She noted that Dr. Liu “takes the initiative to determine the technical needs of our company and provides cutting-edge information to solve problems and help the company. She always teaches complex knowledge with concise language and a sweet voice.”

Continuing Education

In her own generous way, Dr. Liu said USW has made it possible for her to get the best training and exposure to real-world milling and baking challenges as part of her work.

In 2018, USW sent Dr. Liu to a Baking Science and Technology course at AIB International in Manhattan, Kan., an intensive, 16-week program combining science, hands-on lab work, and baking tradition. She represented herself and USW with distinction, earning top student honors and an “Excellence in Laboratory Leadership” award for her participation in the course.

Ting completed the Baking Science and Technology (BST) Course at AIB International in Manhattan, Kansas, in 2018.

“I was also able to assist in the USW Baking Science and Technology, Cookie & Cracker, Frozen Dough, and Advanced Prepared Mix courses developed by our Bakery Consultant Roy Chung at the UFM Baking School in Bangkok, Thailand,” Dr. Liu said. “There is no doubt Mr. Roy is a master of baking and teaching and is very nice to share his technical service expertise and experience with me. Moreover, our Regional Technical Director, Mr. Peter Lloyd, has also provided tremendously valuable guidelines on troubleshooting and solving challenges in flour mills.”

Ting (First from the left, first row) assisted in Mr. Roy Chung’s Advanced Prepared Mix Technology Course in 2019.

Her enthusiastic accounting of the training she has received, and the wide range of technical support she provides make it clear Dr. Liu loves the work she does on behalf of U.S. wheat farmers.

“By visiting and providing technical services to customers, we can better understand customer needs and reflect these requirements to U.S. wheat farmers,” she noted. “At the same time, we can enhance our customers’ effective processing of U.S. wheat flour and how its functional attributes perform for the baker.

“In addition, the seminars and short courses I have conducted can help current and potential customers further understand the characteristics of U.S. wheat and flour, the flour milling process, testing methods, and ways to adjust formulas and processes according to flour specifications. This is of direct benefit to U.S. wheat growers by promoting their wheat to customers in international markets.”

Ting and her bread while attending a BST course at AIB International in 2018.

An Excellent Bridge

In fact, after one recent USW Crop Quality Seminar and a special technical session attended by top Chinese flour mills and food processors, a food company executive commended Dr. Liu’s professional analysis and insight on the supply, quality, and application of U.S. wheat classes.

“She was clear and confident in her presentations and is a knowledgeable expert. I believe she will be an excellent bridge between U.S. Wheat Associates and customers.”

Even in the face of challenging political realities and complex commercial dynamics, private and public customers in China continue to seek information and advice from USW.

“No customer is compelled to work with USW,” Jeff Coey said. “The fact that they choose to accept our service and the products we promote is a testament to everyone on our team,” Jeff Coey said. “Ting complements our ability to earn that trust, understand the constraints, and grasp the opportunities in this market for U.S. wheat. She has a naturally winning way of opening doors for us wherever she goes.”

By Steve Mercer, USW Vice President of Communications

Editor’s Note: This is the seventh in a series of posts profiling U.S. Wheat Associates (USW) technical experts in flour milling and wheat foods production. USW Vice President of Global Technical Services Mark Fowler says technical support to overseas customers is an essential part of export market development for U.S. wheat. “Technical support adds differential value to the reliable supply of U.S. wheat,” Fowler says. “Our customers must constantly improve their products in an increasingly competitive environment. We can help them compete by demonstrating the advantages of using the right U.S. wheat class or blend of classes to produce the wide variety of wheat-based foods the world’s consumers demand.”

Header Photo Caption: Ting presented “International Whole Grain Development” at the 2017 Sino-Foreign Whole Grains Industry Development Experts Forum.

Meet the other USW Technical Experts in this blog series:

Shin Hak “David” Oh – Expertise Fermented in Korean Food Culture
Tarik Gahi – ‘For a Piece of Bread, Son’
Gerry Mendoza – Born to Teach and Share His Love for Baking
Marcelo Mitre – A Love of Food and Technology that Bakes in Value and Loyalty
Peter Lloyd – International Man of Milling
Ivan Goh – An Energetic Individual Born to the Food Industry
 Adrian Redondo – Inspired to Help by Hard Work and a Hero
Andrés Saturno – A Family Legacy of Milling Innovation
Wei-lin Chou – Finding Harmony in the Wheat Industry

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