U.S. Wheat Associates (USW) participated in a Feb. 6 briefing panel for Capitol Hill staff that was focused on international food assistance programs and hosted by U.S. Representatives Tracey Mann (KS), Rick Crawford (AR), John Garamendi (CA) and Jimmy Panetta (CA).

USW Director of Trade Policy Peter Laudeman was a panel member along with representatives of rice and milling industry and the Seafarer’s Union (AFL-CIO). Rep. Mann moderated the discussion, while Rep. Crawford was on hand to remark on issues involving food programs.

A Team Effort

Joining Laudeman on the panel were Bobby Hanks, representing USA Rice; Adam Thomas, representing the North American Millers’ Association; and Brian Schoenman, Political and Legislative Director of Seafarers International Union of North America.

“The briefing covered a broad landscape but was particularly focused on the American Farmers Feed the World Act, which remains a strong opportunity to reinforce the role of U.S. commodities – most notably wheat – in international food assistance,” Laudeman said, noting that the legislation carries impact for both U.S. wheat producers and the entire wheat industry.

Part of Farm Bill Effort

The American Farmers Feed the World Act of 2023 would restore the emphasis on U.S.-grown commodities to fight global hunger, rather than using American taxpayers’ dollars to purchase food from America’s competitors. It would also restore transparency by reducing overhead costs, preserving resources to purchase life-saving food, and protecting at least 50% of the budget for purchasing U.S.-grown commodities and delivering them to the destination country.

“As both the House and Senate move closer to final Farm Bill text in each chamber, solidifying all additional support for the American Farmers Feed the World Act will be critical,” Laudeman added.

Wheat Plays Major Role

USW has joined the National Association of Wheat Growers (NAWG) and other agriculture commodity groups in backing the legislation since it was introduced in June 2023.

“America’s international food aid programs have enjoyed bipartisan support for more than 65 years because they are simple, effective, and they feed millions of vulnerable people around the world each year,” Mann said when introducing the Act in June 2023. “Through these programs, America fortifies our allies, counters the influence of foreign adversaries, creates new markets and trading partners, and stops wars before they start. For decades, America has purchased and donated American-grown commodities to execute our foreign assistance programs.”

When clatter around trade policy gets noisy, Dalton Henry likes to quiet things by breaking down issues affecting the exporting of U.S. wheat into two basic categories.

“Everything has potential to be either an opportunity or a distortion,” the Vice President of Policy for U.S. Wheat Associates (USW) explained. “In general, USW’s Policy Team spends every day looking at situations around the world that impact U.S. wheat and sorting out which category they fall under. Then we work on solutions.”

Market access is a centerpiece of trade policy.

As with any agricultural product, tariffs, export barriers and other trade policies can increase the cost of U.S. wheat for the entire supply chain and customers who sit on the buying end of that chain. Ultimately, USW’s Policy Team – Henry and Director of Trade Policy Peter Laudeman – is tasked with helping smooth the process of getting wheat grown by U.S. farmers to customers around the world.

Where trade agreements do exist, the team monitors them to ensure they are properly implemented and followed. It also keeps an eye on human and environmental health regulations around the world to make sure they don’t disrupt U.S. wheat trade. And the team plays a big role in monitoring the use of wheat in U.S. international food assistance programs.

An example of a trade policy success by USW was realized about a year ago, when it teamed with USDA to show the Vietnamese government why eliminating a 3% tariff on imported U.S. wheat would help ease food inflation while benefiting Vietnamese flour millers.

Australia and Canada, the largest wheat suppliers to Vietnam, had duty-free access to Vietnam under regional trade agreements. The decision at the end of 2021 to remove the tariff on U.S. wheat also helped level the playing field in what is a fast-growing market.

Food Assistance: A Policy Team Focus

Laudeman, who joined USW in August 2022, brought with him diverse experience working for both U.S. growers and the crop protection industry.

In addition to trade policy work alongside Henry and his work on biotech and plant breeding innovation, Laudeman is providing USW with leadership on food assistance and development.

“A lot of people don’t realize our food aid markets, where the U.S. government is purchasing and donating commodities, makes up a Top 10 U.S. wheat export market,” Laudeman said. “The USW Policy Team makes sure that that all regulatory mechanisms are functioning properly when we send U.S. wheat food aid, either as emergency support or on a developmental basis.”

In his role, Laudeman also spends a lot of time working closely with professional economists. As a believer in the notion that trade policy is inherently economics-based, it’s a natural connection for him. He regularly monitors USDA databases and other data sources to assure USW can analyze trade data.

It’s not all numbers and calculators, he emphasized.

“My role is very relationship-based and USW’s relationships with other commodity organizations are vital because many times we need a strong agricultural coalition to work on some of these trade issues that impact us,” he said.

Preparing for 2023 Issues

While the entire U.S. wheat industry continues to keep an eye on the Russia-Ukraine conflict and its affect on trade, USW’s Policy Team is also focused on a handful of other countries and ongoing situations that could have an impact on wheat trade.

“Where are the big distortions in the global wheat market right now? China continues to be problematic, even though we have seen tremendous progress in how they are running their tariff rate quota system,” Henry notes.  “We still have challenges with their domestic subsidies for a system that produces a larger and larger wheat crop year after year. China continues to hold more than 50% of the world wheat stocks domestically, and that weighs heavily on global wheat prices.”

India’s domestic price support programs also stands out as a red flag in the coming year, Henry noted. He listed Turkey is a third “distorter” because of its on-going policies that encourage dumping of wheat flour and under-reporting data to the World Trade Organization.

At the top of Henry’s 2023 “Wish List” is renewal of anti-dumping duties imposed by the Philippines government on Turkish flour. If the duties are not renewed, the Philippines milling industry will be hurt and up to $100 million in U.S. wheat imports could be lost.

And not going away in 2023 are non-tariff barriers to trade, which represent the fastest-growing  barrier impacting wheat trade, according to Henry.

Examples of non-tariff barriers are rules like maximum residue limits (MRL) on pesticides and limits on weed seed species or insects. Many sanitary and phytosanitary (SPS) regulations are critically important to protecting plant and human health, but many countries are using them to protect domestic producers – creating obstacles to trade for U.S. wheat.

Breaking down those obstacles is the goal.

“Trade policy work requires us to be in constant contact with a wide range of regulators and non-government organizations,” said Henry. “Ultimately, the goal is the same – to make sure we are doing everything we can to help keep wheat trade flowing between the farmers we represent and our values customers around the world.”