As U.S. Wheat Associates (USW) President Vince Peterson often says, at any given hour of the day there is someone, somewhere, talking about the quality, reliability and value of U.S. wheat. Wheat Letter wants to share some of the ways USW was working the past few months to promote all six classes of U.S. wheat in an ever more complex world wheat market.

Brazil. During President Bolsonaro’s meeting with President Trump in March, the Brazilian president announced the implementation of the tariff rate quota (TRQ) that would allow 750,000 MT of non-Mercosur wheat into Brazil tariff free, something USW has pushed for years to be implemented. Soon after the announcement, USW offered support to Brazilian buyers and any purchasing information they may need to consider U.S. now and in the future. When realized, this change will give U.S. wheat farmers the chance to compete fairly for a sizable part of Brazil’s import needs every year.

The Philippines. With funding provided by the Washington Grain Commission, USW organized a team of research and development managers from the Philippine milling industry to take part in an End Products Collaborative in March at the Wheat Marketing Center in Portland, Ore. Recent expansion in the ASEAN milling industry has increased competition and created a need for millers to differentiate their flour products. This activity helps identify the best U.S. wheat options available.

Members of the Philippine Milling Industry participate in an End Products Collaborative at the Wheat Marketing Center.

During the End Products Collaborative the participants visited with the Wheat Marketing Center Board of Directors.

Malaysia. In March, USW South Asia Regional Vice President Matt Weimar conducted two days of trade servicing for a mill in Malaysia, which also has operations in Vietnam and Indonesia. In the past two years, this mill has doubled imports of U.S. wheat to Malaysia alone. Weimar gave a seminar on the World and U.S. Supply and Demand as of March 2019 and shared the value of utilizing additional information resources from USW and USDA.

South Korea. USW Baking Consultant Roy Chung and Food and Bakery Technologist Shin Hak (David) Oh visited Seoul in March to conduct a pre-mix seminar and workshop to demonstrate the versatility of U.S. wheat in a wide range of end products. Workshop participants enhanced their understanding of ingredient functionality and chemical leavening systems while experimenting with new product formulations in pre-mixes.

Participants of the Pre-Mix Seminar with the instructors in black: (L) USW Food and Bakery Technologist Shin Hak (David) Oh; (R) USW Baking Consultant Roy Chung.

Taiwan. In April, USW Regional Technical Director Peter Lloyd spoke at a milling seminar attended by members of the Taiwan Millers Association and faculty members of the China Grain Products Research & Development Institute (CGPRDI). Lloyd’s program focused on hard and soft wheat milling, solvent retention capacity (SRC) and SDS testing methods and their application in the mill, and profitability in the milling industry.

Milling Seminar Participants at the China Grain Products Research & Development Institute (CGPRDI).

China. To meet industry demand for deeper knowledge of techniques in frozen dough production, USW is collaborating with the Sino-American Baking school (SABS), Lesaffre Yeast and Square Technology Group Co., Ltd., to hold three sessions of frozen dough technology courses this year for millers and bakers. During the first session in March, USW Technical Specialist Ting Liu and Asian Products/Nutrition Technologist Shu-ying Yang spoke on the importance of choosing the correct flour for frozen dough by showing how freezing affects gluten functionality.

Panama. USW sponsored a wheat buyer from Panama to attend the IGP Institute Grain Purchasing Short Course in April. The course focused on contract specifications, financing grain imports, grain grading, ocean transportation, discussions of the cash and futures markets and included a visit to an export facility in Portland, Ore.

Spain, Portugal and Morocco. In March, a USW Board Team including farmers from Montana, Nebraska and Wyoming traveled to Spain, Portugal and Morocco to visit customers, millers, government officials and more to listen and learn more about those markets and how they utilize U.S. wheat. Read more about those visits here.

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

Morocco and Tunisia. In April, USW hosted a delegation from Morocco and Tunisia focused on grain storage and management that was part of the USDA Cochran Fellowship Program traveling to Kansas and Texas. This program provides short-term training opportunities to agricultural professionals from middle-income countries, emerging markets, and emerging democracies. Read more about this delegation here.

The Cochran Fellowship Program delegation from Morocco and Tunisia stopped by the Kansas Wheat Innovation Center where they toured its greenhouse and research facilities. The team was escorted by USW Milling & Baking Technologist Tarik Gahi, pictured far right. (Photo Credit: Kansas Wheat)

Italy. USW Regional Marketing Director Rutger Koekoek recently visited Italy for several meetings with the grain trade, milling companies and a leading pasta processor to discuss the advantages of U.S. hard red spring (HRS) and durum crop quality and functional performance in products for the Italian market.

Wheat Research. USW recently worked with CGIAR to create a fact sheet and other support materials promoting the benefits of U.S. investment in global wheat research collaboration.


By Ben Conner, USW Vice President of Policy

Two weeks ago, Brazilian President Jair Bolsonaro visited President Trump in Washington, D.C., to help forge closer ties between the two largest countries in the Western Hemisphere. The joint statement published at the end of the visit highlighted several areas for cooperation and expanded commerce. One of those was a commitment to allow “the annual importation of 750 thousand tons of American wheat at zero rate.”

Of course, U.S. wheat farmers would be delighted if Brazilian buyers choose to import all 750,000 tons from the United States, though duty-free treatment mandated by the World Trade Organization (WTO) would apply to all imports from outside existing free trade agreements like Mercosur. Even with competition, annual average U.S. exports to Brazil are likely to increase substantially; and for this, U.S. farmers can thank the hard work of staff at the Office of the U.S. Trade Representative and the U.S. Department of Agriculture, members of Congress who pushed for this outcome, and officials in Brazil who recognized the benefits of closer trade ties with the United States and the importance of complying with WTO rules.

U.S. wheat farmers have long sought expanded commercial ties with Brazil, which is one of the world’s largest agricultural producers but also one of its largest wheat importers. The United States used to be Brazil’s primary wheat supplier, but it has since been supplanted by Argentina. This makes some sense, since duty-free treatment for Argentina and other Mercosur suppliers, coupled with a 10 percent external tariff, made U.S. wheat less competitive.

While Argentine dominance of Brazil’s imports will not be reversed with this new policy, U.S. farmers are hoping for a more stable relationship with their Brazilian customers. Tariffs prevented development of a consistent market in Brazil for a long time but, now with the tariff rate quota (TRQ) open, the opportunity is there for Brazil’s flour millers to consider U.S. wheat every year equally, instead of only after a poor South American wheat crop.

Now Brazil must take the final steps to implement the TRQ. No country has a perfect record of complying with WTO commitments, but U.S. Wheat Associates (USW) is grateful to see President Bolsonaro taking Brazil in that direction on this issue so early in his presidency. Brazil and the United States have much in common as major agricultural exporters and we hope to see our countries to work together at the WTO to advance a trade liberalizing agenda while expanding the commercial relationship between our wheat sectors.

As U.S. Wheat Associates (USW) President Vince Peterson often says, at any given hour of the day there is someone, somewhere, talking about the quality, reliability and value of U.S. wheat. Wheat Letter wants to share some of the ways USW was working the past few months to promote all six classes of U.S. wheat in an ever more complex world grain market.

Morocco, Algeria and Tunisia. In October, USW organized a Maghreb cake course, the first of its kind in Morocco, for quality and research and development participants representing biscuit and cake manufacturers in Morocco, Algeria and Tunisia. The course focused on how to best utilize U.S. soft red winter (SRW) and soft white (SW) wheat and the use of solvent retention capacity (SRC) analysis to measure flour quality and functionality. A practical, hands-on session allowed participants to test different cake recipes with a variation of flour types and ingredients. Participants also were given an overview of biscuit, cake and wafer industrial production lines and discussed the importance of ingredient quality in minimizing breakdowns in a cake line.

Indonesia. The Federal Grain Inspection Service (FGIS) and USW Singapore Office conducted a week of hands-on wheat grading workshops for flour milling companies in Indonesia in mid-September. Barry Gomoll, Grain Marketing Specialist from FGIS’s International Affairs Division, traveled with Matt Weimar, USW Regional Vice President, to meet with more than 100 personnel from four major Indonesian milling companies. The workshops focused on an overview of FGIS and wheat grading procedures, as well as world and U.S. supply and demand, 2018 U.S. wheat quality and USW online resources.

South America. More than 450 participants from 30 countries, including Brazil, Bolivia, Chile, Colombia, Ecuador and Peru, attended the 2018 Latin American Industrial Millers Association (ALIM) conference in Puerto Varas, Chile, Nov. 11 to 14. USW President Vince Peterson presented insight into the global wheat market situation and the current U.S. political situation, while Regional Director Miguel Galdós from the USW Santiago Office spoke on current trends in industrial bread production. Multiple USW staff, USW Vice Chairman Doug Goyings and representatives from the Kansas Wheat Commission and Washington Grain Commission also attended and took the opportunity to meet in person with many U.S. wheat customers.

Mexico. In October, USW Baking Consultant Didier Rosada traveled to Mexico City, Mexico, to conduct a baking seminar with one of Mexico’s largest bakeries. With assistance from USW Technical Consultant Marcelo Mitre, Rosada introduce nice different products and instructed the bakery on different uses of pre-ferments in an industrial environment. The pair also took the opportunity to visit a few smaller, artisan bakers, to learn more about the segment and help the customers troubleshoot various challenges.

Korea. USW Food/Bakery Technologist Shin Hak (David) Oh presented at a Whole Wheat Flour Seminar, hosted by Korean Master Bakers Association (KOMBA) and Korea Flour Mills Industrial Association (KOFMIA) for bakers in the Seoul area. Oh shared results of his recent research which focused on alternate flour blend formulations for baguettes using U.S. wheat to improve product quality at a competitive price.

Taiwan. In November, members of the USW staff and Washington Grain Commission representative Mike Carstensen attended the 56th anniversary celebration for the China Grain Products Research & Development Institute (CGPRDI) in Taipei. The celebration included the dedication of a new baking training center building and the 2018 Creative Chinese Fermentative Baking Contest, co-sponsored by CGPRDI and the USW Taipei Office. USW Specialist Dr. Ting Liu was invited to speak and gave a presentation on “Sprouted Wheat – A New Trend in Grain Products.” CGPRDI is a leader in training programs for baking and Chinese traditional food products as well as grain research, technical service and analysis in Taiwan. Carstensen and the USW team participated directly in each activity.

USW Transitions. Chad Weigand recently started his new position as Assistant Regional Director in Sub-Sahara Africa, based in Cape Town. Weigand joined USW in 2009 as Market Analyst before transferring to Mexico City as Assistant Regional Director, Mexican, Central American and Caribbean Region, in 2011. He earned a bachelor’s degree in international relations and business administration from the University of San Diego and a master’s degree in international affairs from Columbia University. Weigand spent two years in the Peace Corps as an agribusiness specialist in Ecuador and completed an internship with the Office of Trade Programs at USDA’s Foreign Agricultural Service.

Current USW Market Analyst Stephanie Bryant-Erdmann will replace Weigand as Assistant Regional Director in Mexico City early in 2019. Claire Hutchins joined the export market development organization as Market Analyst Dec. 3, 2018, in the Arlington, Va. Headquarters Office.

Bryant-Erdmann joined USW as Programs Manager in 2014. She grew up working on her family’s Nebraska cattle ranch and earned a bachelor’s degree in agricultural education at the University of Nebraska-Lincoln and a master’s degree from Cornell University’s Institute for Public Affairs. She also had an internship at the U.S. Department of Commerce’s Trade Information Center where she helped create educational materials for U.S. organizations looking to export products and services.

Hutchins was raised on an irrigated wheat, soy and alfalfa farm in the high desert near Fruita, Colo. She earned bachelor’s and master’s degrees in Chinese language, history and art history from the University of Pennsylvania, worked on small farms on the East Coast and recently completed a master’s program in agricultural economics at Utah State University. Hutchins also worked as a Government Affairs Intern at Syngenta’s Washington, D.C., office.


The highlights of Great Plains Wheat (GPW) activities promoting U.S. wheat in South America in marketing year 1976/77 included a baking seminar, equipment donations to the Chilean Milling School, translation of GPW’s “U.S. Wheat” bulletin into Spanish and the hiring of a new Grain Marketing Specialist named Alvaro de la Fuente by Regional Director Don Schultz in the Caracas, Venezuela, regional office. In 1978/79, this young Peruvian national moved to Santiago, Chile, which would be his base for the next 39 years, to serve with GPW Regional Director Robert Drynan. He was named Regional Director with the newly formed U.S. Wheat Associates (USW) by 1981.


Looking back on Alvaro de la Fuente’s long and successful career as he retires from USW as Regional Vice President, South America, is a study in how global wheat markets have changed. In 1977, there were no private wheat buyers in South America. Alvaro in fact came to GPW from a position with the government of Peru where he was responsible for purchases and imports of all bulk food commodities including wheat, managing an annual budget of US$380 million. Prior to that, he managed ocean freights for the same commodities.


That experience, along with his truly international upbringing as the child of parents in diplomatic service and his Louisiana State University bachelor’s degree in International Trade and Finance, were very valuable not only for his work with government wheat buyers, but also to successfully navigate the eventual shift to private wheat purchases in South America.


“That transition happened over the first 10 to 15 years of Alvaro’s career with U.S. Wheat Associates,” said USW President Vince Peterson. “The millers who had relied on the government now had to evaluate wheat quality, tender for the specifications they needed, arrange financing and shipping. Alvaro’s knowledge was ideal for the time and helped build a strong base of demand for U.S. wheat.”


Early on, most South American flour mills were relatively small and family owned, and Alvaro’s work was most welcome. But grain marketing skills were only one part of Alvaro’s success in the region. The value of his professional partnership along with his friendly, generous nature helped build beneficial customer relationships that endure to this day.


Alvaro can count among his many achievements helping to organize ALIM, the Latin American Industrial Millers Association in 1980. ALIM eventually granted Alvaro honorary membership in recognition of his founding efforts and contributions to the region’s milling industry. Over the years, he hired and helped train many of the colleagues who are now capably carrying on his work in the South American region and around the world.


“Everywhere I traveled with Alvaro, his customers always welcomed him as family,” Peterson said. “Alvaro and his lovely wife Betsy always did the same for colleagues, U.S. wheat farmers and state wheat commission representatives who were lucky enough to visit them and his team in Santiago. That personal warmth and the consistent results of his work, I think, will be Alvaro’s lasting example and legacy.”


All of us at U.S. Wheat Associates thank Alvaro for his work and friendship and wish him and his family a long and happy retirement.


Muchas gracias, Don Álvaro!




Almost 100 people from 16 countries participated in the 2018 edition of the biennial U.S. Wheat Associates (USW) Latin American & Caribbean Buyers Conference July 18 to 20 in Rio de Janeiro, Brazil.  Apprehension about a growing number of trade policy issues as the conference started was quickly replaced by enthusiasm for the abundance of opportunities available from the 2018 U.S. wheat harvest and USW’s tradition of service.


Change was the overall theme of this year’s conference and was apparent from the start with the introduction of the newest USW South American Region colleagues: Miguel Galdos as the next Regional Director and Andres Saturno in a new regional position as Technical Specialist. Regional Vice President Alvaro de la Fuente has announced plans to retire in October and USW recognized his 41 years of service at the conference.


USW President Vince Peterson added perspective to the theme with a presentation illustrating the changing dynamics of the global wheat trade and increased competitiveness from Russia and other non-traditional importers into the region. Mark Fowler, Vice President of Overseas Operations, then highlighted how expansion of technical service will increase value for our U.S. wheat customers in the Mexican, Central American and Caribbean region and in the South American region.


“The service we provide combines with the variety and quality of the six classes of U.S. wheat available to remain the best choice for our customers in Latin America,” said Fowler.  “As the market becomes more competitive and our customers strive to differentiate their products to their customers, our ability to provide the technical service and product development assistance becomes even more vital for them and the farmers we represent.”

USW Vice President of Overseas Operations Mark Fowler.


Galdos provided an overview of the Latin American and Caribbean baking industry while Marcelo Mitre, Technical Specialist, USW/ Mexico City, and Casey Chumrau, Marketing Manager, USW/Santiago, shared several examples of how technical support has benefitted USW buyers and wheat food processors. U.S. participants also provided a wide-ranging look at the supplies and quality of U.S. hard red winter (HRW), soft red winter (SRW), hard red spring (HRS), soft white (SW) and durum during the conference.


Ambassador Rubens Barbosa (second from right), President of Abitrigo, the Brazilian Millers Association, was a guest speaker at the Latin American and Caribbean Buyers Conference.

Additional guest speakers included: Alejandro Daly, Executive President of ALIM, the Latin American Millers Association covering how labeling laws affect consumption; Ambassador Rubens Barbosa, President of Abitrigo, the Brazilian Millers Association, focusing on Brazil’s wheat production and national policies; Irineu J. Pedrollo, Owner of I&MP Consulting Associates, presenting on the experiences of a U.S. wheat buyer; Dr. Glenn Gaesser, Arizona State University, presenting on the nutritional challenges of a gluten-free diet; and Mara Isabel Perdomo, Broker Manager Director with Marita Freight and Trade, speaking on freight market dynamics.


In addition to the wheat buyers from milling companies at the conference, U.S. wheat producers from seven states either attended or provided financial support for the conference. USW thanks the Idaho Wheat Commission, the Oregon Wheat Commission and the Washington Grain Commission for their sponsorship and participants from the California Wheat Commission, Kansas Wheat Commission, Montana Wheat & Barley Committee, North Dakota Wheat Commission and Oklahoma Wheat Commission for their support to make the conference a continued success. Additional funding was provided by USDA’s Foreign Agricultural Service.


“It’s significant that the conference was held in Brazil this year because Brazil is one the world’s leading wheat importers,” said Kansas Wheat CEO Justin Gilpin in a report on the conference by Kansas Wheat.


Dr. Romulo Lollato, Extension Wheat Specialist at Kansas State University, spoke on “The Role of Agricultural Extension on Wheat Quality: A Case Study for Hard Red Winter.”


According to Gilpin, Lollato was able to communicate to buyers about what Kansas wheat farmers are putting into their crops for both management and quality.


“Buyers have a better understanding of what goes into wheat production and management for quality,” Gilpin said. “This will help differentiate U.S. hard red winter in a competitive marketplace.”


Kansas Wheat Vice President of Research and Operations Aaron Harries saw the conference as an opportunity for customers to meet U.S. growers and discuss wheat productio

USW Chairman and wheat grower Chris Kolstad.

n and the business of farming, and for growers to show their appreciation to buyers and millers who buy their crops. In fact, USW Chairman Chris Kolstad, a wheat farmer from Ledger, Mont., covered “The Economics of Growing Wheat” at the conference.

“I hope that the buyers and attendees appreciate the transparency we show,” Harries said. “We fully disclose information about the crop, even in years when our wheat crop isn’t that good. I hope they come away from the conference knowing that if they seek any information or expertise, as sellers we have that readily available for them.”


USW has posted presentations from the 2018 Latin American, Caribbean and South American Buyers Conference on its website here:




By Jonathan H. Harsch, Agri-Pulse, Excerpted with Permission

(Editor’s note: This is the third in a new series of Agri-Pulse in-depth stories dealing with the challenges and opportunities for U.S. agriculture when it comes to selling more commodities and value-added products to overseas customers. This article was sponsored by funding from the National Association of Wheat Growers, U.S. Wheat Associates, Washington Grain Commission, North Dakota Wheat Commission and Idaho Wheat Commission.)

Prospects for U.S. farm exports can change suddenly and dramatically.

Breaking into foreign markets takes decades of persistent hard work and hefty investments in building infrastructure, relationships and, ultimately, sales.

Augusto Bassanini, chief operating officer for United Grain Corp., knows firsthand the challenges of building all three. This experienced grain exporter tells Agri-Pulse that after taking years to build trust and a reputation for reliability, “any interference with that trust, that reliability, is going to have an immediate impact … So, you spend years building that rapport and everything could change overnight.”

“It takes years, especially in Asia, to build that rapport,” he says, “and you have to build it face-to-face.”

Bassanini says he’s seen major new export markets developed in South America, Asia and elsewhere thanks to vital funding from farmers’ checkoff dollars and USDA’s export promotion programs. But he warns that current concerns over U.S. trade agreements and tariff battles with China “create an environment of uncertainty,” forcing buyers and end-users to scramble to find new sources for the grain, soybeans, or other commodities they need to stay in business.

Vancouver, Wash.-based, United Grain operates grain terminals in Oregon, Montana, and North and South Dakota where, Bassanini says, “small farming communities are dependent upon grain exports for providing crucial revenue to those remote locations.” So, any threat to export growth will have a disproportionate impact on these farming areas. And he says that threat is already here.

“We continue to lose market share in terms of volume to competing major export hubs like South America, Brazil, Argentina, Russia and the Black Sea region,” he says. “If we are going to compete with them on a yield basis, I don’t think we are going to win that fight.”

Still, he says that despite headwinds, “we continue to expand our share in regions like Southeast Asia because competing countries are not able to deliver quality products on a consistent, reliable basis.” Maintaining these gains, he says, depends on the U.S. investing in improving supply chain efficiencies, upgrading the infrastructure needed to deliver product reliably, and avoiding even rumors about trade disruptions.

Disruption Concerns. Since taking office, the Trump administration has made several gains on the export front for agricultural products.

However, the administration has also unnerved trading partners by renegotiating the North American Free Trade Agreement (NAFTA), pulling out of the Trans-Pacific Partnership (TPP) and announcing tariffs on steel, aluminum and a variety of other products – prompting retaliatory threats from the Chinese and other countries.

Several U.S. agricultural groups say that one of the best ways to keep pressure on the Chinese and counter the Asian giant’s influence is for the U.S. to rejoin what used to be called the Trans-Pacific Partnership (TPP).

The U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) welcomed the possibility of reviving the full 12-nation pact. “If the United States joins TPP, U.S. wheat should be able to compete on a level playing field with Canadian and Australian wheat,” said USW Chairman Michael Miller, a wheat farmer from Ritzville, Wash.

Representing 140,000 American wheat farmers, USW and NAWG wrote USTR’s Lighthizer in March, warning that “Lost market share is incredibly difficult to regain.” They pointed out that under new CPTPP rules, Japan will cut its tariffs on imported Canadian and Australian wheat to $85 per ton but keep the current $150 per ton tariff in place for U.S. wheat. While the change will phase in over nine years, the wheat groups said the “loss in market share and its negative effect on farm-gate prices are likely to come much sooner, as Japanese millers reformulate their product mix to avoid the need to purchase artificially expensive U.S. wheat.”

Hopes were also raised that the farm sector’s major role in the U.S. economy would translate into White House support for increasing rather than flat-lining or reducing funding for the two USDA cost-share programs that, in partnership with farmer-funded checkoff dollars, have played a vital role in expanding U.S. farm sales abroad: the Market Access Program (MAP) and the Foreign Market Development (FMD) Program.

Export promotion legislation. To support these programs, last September Sen. Angus King, I-Maine, introduced S. 1839, the “Cultivating Revitalization by Expanding American Agricultural Trade and Exports Act.” Along with the companion House bill, H.R. 2321, King’s CREAATE bill would steadily raise MAP [and] FMD funding.

The House version of the new farm bill takes a different approach. USDA’s trade programs, including the MAP and FMD, would be combined under a new International Market Development Program … Under current law, only MAP would have funding after this year under the expiring 2014 farm bill. Combining the programs would ensure all the programs have a permanent funding baseline. Boosting both ag exports and export promotion funding has become vital to both the rural and the national economy.

Success in the Philippines. Based in Manila, USW Regional VP for the Philippines and South Korea Joseph Sowers is keenly aware of … aggressive competition. He says it’s an “uphill battle” to convince buyers to opt for premium-priced but better performing U.S. wheat. He also points to significant gains.

In the Philippines, Sowers says, “We have a program here where we invest in increasing consumption of wheat-based foods. And we’ve done it.” He adds that almost all the gains benefit the U.S. with its 97 percent market share, proving that “These kinds of investments are paying off.”

Key to this level of market dominance, Sowers insists, is being on-the-ground for decades with regional offices and regular seminars. He says this presence builds trust with buyers and end-users to the point that “decision makers trust us, they look to us for advice.” He considers [state wheat] checkoff, FMD and MAP funding vital to maintaining USW’s foreign offices and “absolutely essential to everything we do.”

“Our mandate is twofold,” Sowers says. “One is to create the greatest returns to our farmers, to the people who fund us. The other mandate is to make the local industry here the most profitable they can be, to increase their profits so they will buy from us.”

To make it all happen, Sowers hosts seminars year-round, with upcoming ones set for Manila, Bangkok and Jakarta, “talking to buyers about methods that they can use to decrease their purchasing price or to plan their purchases through the year. And then at the same time, have a mill management seminar showing them how to increase their profitability using, of course, U.S. products.”

Along with working to increase exports to developing markets like Sri Lanka and Malaysia, Sowers says Thailand, Indonesia and Vietnam offer “the most opportunity for huge increases in sales” and that new trade agreements offer the best way to make U.S. products more competitive.

New Coalitions. USW’s President Vince Peterson and VP of Overseas Operations Mark Fowler [say] with the farm economy struggling in an already down market, the tariff battle with China puts 1.5 million metric tons of U.S. wheat sales at risk just when unsettled NAFTA and TPP issues threaten sales to other major buyers like Mexico and Japan.

Peterson says the trade battles have “forced us to form coalitions” with other U.S. stakeholders and with “customers overseas worried about their supply relationship with us. They don’t like this any more than we do.” He says the new coalitions aim to alert the Trump administration to escalating impacts on U.S. agriculture from recent policy changes.

Peterson and Fowler tell Agri-Pulse that the strategy to success is to sign new trade agreements, complete the NAFTA negotiations without harming ag exports, reconsider joining the TPP, use the WTO dispute settlement process, and double funding for USDA’s MAP and FMD programs as … CREAATE legislation proposes.

Trade Battles Undermine U.S. Reputation as a Reliable Supplier. U.S. Grains Council President and CEO Tom Sleight warns that due to the trade battles launched by the U.S., “our loyal, longtime customers are actively looking at alternative sources of supply … We’re hurting our reputation not only in China, but with other trading partners, with key ones like Japan, Korea, Mexico. Even in places in Southeast Asia that are new and growing markets for the U.S., we’re creating doubt.”

“There are definite consequences if these battles do not get settled expediently and with proper attention to the impact on agriculture,” he says.

National Association of Wheat Growers President Jimmie Musick explains that with his wheat, cattle, alfalfa, cotton and sorghum operation in Sentinel, Okla., “it doesn’t appear like I raise a commodity that China [is] not [targeting] in their tariff trade war.” To help remove this threat, he wants the administration to understand “how important it is that we maintain good trade relationships and how devastating it will be to our farmers when China puts a 25 percent tariff on our commodities.”

Musick’s also at work on getting more support from farm-state members of Congress. He’d like them to persuade the administration to switch from tariffs to negotiations by offering in return to support legislation that’s on Trump’s priority list.

With today’s long list of farm and trade organizations linking arms as never before, Musick and his colleagues are hopeful their concerted pressure on Congress and the White House will pay off in terms of less turbulent waters ahead and continued growth in the U.S. ag export markets that they’ve worked so diligently to build over several decades.


As U.S. Wheat Associates (USW) President Vince Peterson often says, at any given hour of the day there is someone, somewhere, talking about the quality, reliability and value of U.S. wheat. Wheat Letter wants to share some of the ways USW was working in January and February to promote all six classes of U.S. wheat in an ever more complex world grain market.

Hong Kong. In February, the management of Hong Kong’s restaurant, hotel, resort and supermarket retailing scenes turned out in force to welcome the new USDA Foreign Agricultural Service (FAS) Agricultural Trade Officer, Alicia Hernandez. Hernandez will lead the trade promotion office that covers the agricultural import markets of Hong Kong and Macau. The Consul General hosted a reception at his residence, which featured a U.S. Food and Beverage Showcase event. Long-time baking consultant Heinz Fischer, who created pastries for the event, USW Assistant Regional Vice President Jeff Coey represented U.S. wheat farmers. In addition to undertaking baking demonstrations, Fischer is a mainstay of the USW sponsored Sino-American Baking School in Guangzhou, with a branch-training center in Hebei province, North China.

Panama. In February, USW Technical Specialist Marcelo Mitre attended the 41st Annual International Association of Operative Millers (IAOM) Latin American Regional Millers’ Conference and Expo in Panama City, Panama. Mitre met with representatives of several mills in the Mexico-Central American-Caribbean region. Technical presentations covered a variety of industry topics, as well as a panel discussion on “challenges of the milling industry in the next decade.”

South Korea. In February, USW Country Director Chang Yoon (CY) Kang and Food/Bakery Technologist Shin Hak (David) Oh carried out trade and technical service for two snack food manufacturers in Korea, including one that has applied research done at the Wheat Marketing Center (WMC) Whole Wheat Cookie /Cracker course in 2016. USW staff provided an updated world supply and demand report and forecast for 2018, and encouraged manufacturers to test new U.S. wheat blend formulations to enhance their biscuit and whole grain product quality.

The Philippines. In February, USW Manila Baking Consultant Gerry Mendoza presented as a guest lecturer for a Filipino milling company’s baking course. His presentations on yeast performance and cake science reach 20 participants from both small bakeries and large industrial bakeries. Mendoza also conducted a one-day seminar workshop for 22 participants at the Filipino Chinese Bakery Association Research and Training Center as one of the many regular seminars offered by the Philippine Society of Baking.

South Asia. In January, USW Vice President for Overseas Operations Mark Fowler traveled to USW’s offices in Singapore, Manila and Hong Kong to meet with several customers and members of the grain trade, as well as to conduct supervisory discussions on activities in the region.


By Stephanie Bryant-Erdmann, USW Market Analyst

Six months into marketing year 2017/18 (June to May), total U.S. export sales of 19.5 million metric tons (MMT) are 8 percent behind last year’s pace according to USDA Export Sales data through Jan. 4. However, the estimated total value of U.S. wheat export sales is 4 percent greater than last year on the same date at $4.72 billion, due to slightly higher export prices according to USDA Export Sales data and USW Price Report data.

A deeper analysis of USDA data shows total sales to six of the top 10 U.S. export markets in 2016/17 are ahead of last year’s pace, demonstrating strong demand for U.S. wheat. Sales of soft red winter (SRW) and soft white (SW) are both ahead of last year’s pace. USDA projects total 2017/18 exports will fall slightly to 26.5 MMT, which, if realized, would be 8 percent below 2016/17 but 1 percent above the 5-year average pace.

USDA reported hard red winter (HRW) year-to-date exports at 7.79 MMT, down 10 percent from the prior year. Still, 2017/18 export sales are 10 percent ahead of the 5-year average due to competitive prices for medium protein HRW and the good, overall quality of this year’s crop. The estimated value of year-to-date HRW export sales is 6 percent above 2016/17 due to a 14 percent increase in the average U.S. HRW free-on-board (FOB) price that is supported by the increased premiums for HRW with higher protein. Mexico is currently the number one HRW purchaser. As of Jan. 4, HRW sales to Mexico totaled 1.58 MMT, up 28 percent from last year’s pace. Sales to Indonesia are also up 28 percent year over year at 430,000 metric tons (MT). HRW purchases by Algeria total 456,000 MT, more than double last year’s sales on this date. To date, HRW sales to Venezuela totaling 120,000 MT are nearly four times great than the 2016/17 pace.

Both export sales volume and value of SRW for 2017/18 are up due to the excellent quality of this year’s crop and relatively competitive pricing. Export sales are up 7 percent year over year at 2.02 MMT, boosting estimated export sales value to $400 million, or 12 percent more so far this year. As of Jan. 4, total sales to 11 of the top 20 U.S. SRW export markets from 2016/17 are higher than last year. Sales to Colombia are 12 percent ahead of 2016/17 at 198,000 MT. Nigerian SRW purchases total 234,000 MT, up 12 percent from last year. Sales to other Central and South American countries, including Brazil, Peru, Panama, Venezuela and El Salvador, are also ahead of the 2016/17 pace.

Hard red spring (HRS) sales of 5.15 MMT are down 25 percent year over year and 7 percent below the 5-year average. Higher prices due to smaller 2017/18 production have slowed HRS exports thus far in 2017/18, but global demand for HRS is strong. Year-to-date in 2017/18, the average FOB price of HRS is $293 per metric ton ($7.97 per bushel), compared to $241 per metric ton ($6.55/bu) in 2016/17, according to USW Price Report data. As of Jan. 4, buyers in Japan purchased 878,000 MT, up 20 percent from 2016/17. Sales to Taiwan of 518,000 MT are up 17 percent from last year’s sales on the same date. The Philippines continues to import the largest volume of HRS, though at a 6 percent slower pace so far.

As of Jan. 4, exports of soft white (SW) wheat are up 22 percent year over year at 4.30 MMT. That is 28 percent greater than the 5-year average. Sales to the top 10 SW customers are ahead of last year’s pace, supporting an estimated export value of $896 million, up 25 percent from the prior year. Philippine millers purchased 946,000 MT, up 16 percent compared to last year’s sales on the same date. South Korean sales are up 43 percent at 674,000 MT. U.S. SW sales to China, Thailand and Indonesia are also up. Year-to-date, Indonesia has purchased 515,000 MT, compared to total 2016/17 purchases of 270,000 MT. Thailand sales are up 18 percent year over year at 217,000 MT. Chinese purchases of 306,000 MT are already greater than 2016/17 total SW sales.

Year to date durum exports total 272,000 MT, down 32 percent from the same time last year, and below the 5-year average, with tighter supplies and resulting higher prices. The average export price for U.S. durum is up 5 percent over last year at this time according to USW Price Report data. To date, Nigeria, the European Union (EU), Algeria and Guatemala are the top durum buyers. A significant portion of the first quarter 2017/18 sales is designated as “sales to unknown designations.


By Ben Conner, USW Director of Policy

U.S. Wheat Associates (USW) prioritizes trade policies that support reducing the cost of getting wheat from U.S. farmers to their customers around the world. A time-tested method for doing that is through trade negotiations and agreements. USW will be looking for a more forward-looking trade negotiating agenda from the United States in the coming year, while holding our ground when we believe certain actions might raise the costs of wheat trade.

The biggest item on the trade policy agenda remains the negotiations to modernize the North American Free Trade Agreement (NAFTA). There are some notable improvements that can be made to the agreement through a modernization process, but the absolute priority for USW and most of U.S. agriculture is to prevent dissolution of the agreement – a potentially devastating blow to the U.S. farm sector and potentially to their customers in Mexico and Canada.

The agreement with South Korea (KORUS) is also on the agenda, but it is expected that the scope will be much more limited than the NAFTA negotiations. Hopefully the modification process for KORUS will help stave off a concerning push by some to withdraw entirely.

A serious problem to date is the lack of new bilateral trade agreement negotiations with potential trade agreement partners. KORUS was the last completed trade agreement the United States negotiated, and it was first signed in 2007. The United States continues to fall behind in trade negotiations with competitors in the European Union, Canada and elsewhere. Emphasizing this challenge will be an important priority of USW in 2018.

At the World Trade Organization (WTO), there will be continued fallout from the United States’ successful efforts to prevent a severe weakening of WTO rules in agriculture, which had the predictable but unfortunate effect of shutting down virtually all positive negotiations in this forum. In our view, this was a necessary development if the WTO can ever return to being a dynamic forum for trade negotiations. There will also be progress on the dispute settlement cases against some of China’s policies restricting wheat trade.

If nothing else, 2018 is shaping up to be another roller coaster year for trade policy. In addition to weighing in on the high-profile negotiations discussed above, USW will continue to work on a number of issues with individual markets on behalf of wheat farmers and buyers.


By Gordon Stoner, President of the National Association of Wheat Growers (NAWG) and a wheat farmer from Outlook, Mont. This op-ed first appeared in “The Hill.”

The United States is known for producing the highest quality wheat in the world, yet when U.S. farmers market their wheat at a Canadian elevator, it is automatically labeled as “foreign wheat” and given the lowest possible grade (a way to measure grain quality). Cross-border wheat faces major hurdles in Canadian marketing channels, primarily due to the country’s grain grading system. Conversely, Canadian wheat has full access to the U.S. bulk grain handling system. U.S. wheat farmers should be treated the same when delivering to Canadian grain elevators as their neighbors to the north are when delivering to U.S. elevators. The modernization of the North American Free Trade Agreement (NAFTA) is a ripe opportunity to level the playing field.

I grow hard amber durum wheat primarily used in pasta production. This high-quality wheat class is valued for its premium protein and gluten strength, within 10 miles of the Canadian border. When prices are higher in Canada, it would not be difficult for me to take advantage of those price premiums and drive across the border to deliver my wheat. But until this grading issue is resolved, that is not an option. My neighbors just on the other side of the border do not have this problem; if prices are higher at a U.S. elevator, they can easily drive south to deliver their wheat. This kind of disparity is frustrating for farmers in Northern Tier states, especially given declining wheat prices and thin profit margins in recent years.

Canada’s grain policies require all wheat not grown domestically to be segregated and classified as “foreign grain” and therefore automatically demoted to “general purpose” or feed wheat. Canada’s grading system even discriminates against wheat grown in the United States that is identical to varieties of wheat approved for planting in Canada (Canada regulates the varieties of wheat plants that can be graded, unlike the United States, where we only grade based on the intrinsic properties of the grain). Such classification results in a substantial price discount regardless of the quality of the wheat, and segregation costs provide little incentive for elevators to handle U.S. wheat of equal or better quality.

An updated NAFTA should remove Canada’s discriminatory grading treatment. All U.S. wheat moving into Canada should be evaluated on quality parameters without regard to country of origin. Canada’s policies are clearly national treatment issues, which Canada has a current obligation to resolve under its World Trade Organization commitments. However, NAFTA can also be the vehicle to fix the grading issue. Canada’s grain policies deprive U.S. wheat farmers near the border of significant marketing opportunities, while millions of bushels of Canadian wheat stream uninterrupted across the border.

Trade agreements have the potential to create a level playing field where individuals, families and companies can make their own decisions about what to buy and sell. The role of trade agreements is to provide that opportunity, and that benefits both U.S. wheat buyers and wheat producers. Industry groups on both side of the border agree that this is an issue that needs to be resolved.