By Dalton Henry, USW Vice President of Policy

Representatives from the Taiwan Flour Millers Association (TFMA) are in Washington, D.C. this week to sign letters of intent for the purchase of wheat and other U.S. grown commodities over the next two years. The trip is part of a biennial Agricultural Trade Goodwill Mission that takes TFMA delegates to both D.C. and major wheat-producing states. During their trip, the delegation is also making stops in Oklahoma, South Dakota and Idaho to meet with farmers, grain handlers and state officials before returning to Taiwan.

The Republic of China, known as Taiwan, is consistently a top ten market for U.S. wheat. TFMA imports wheat on behalf of all 20 Taiwanese flour mills and has imported far more wheat from the United States compared to other origins, at an average of 1.07 million metric tons (38.9 million bushels) per year since marketing year 2014/2015.

“We have long had mutually beneficial trade relations with the Taiwan milling and flour products industry,” said Vince Peterson, USW President. “They continue to be a reliable trading partner that fully recognizes the value of purchasing quality U.S. grown wheat”

Members of the Taiwan delegation in Idaho with state commissioner Joe Anderson.

This year, a team of four flour millers is joining the delegation of association representatives.

Significant hard red spring (HRS) imports reflect a need for strong gluten flour for breads, rolls and frozen dough products as well as for blending with hard red winter (HRW) to make traditional Chinese flour foods and noodles. Year-to-date sales to Taiwan in marketing year 2018/19 (June to May) are up 11% from 2017/18. Imports of soft white (SW), including Western White (a blend of SW and up to 20% club), help meet growing demand for cake, cookie and pastry flours.

Follow U.S. Wheat Associates (USW) on Facebook and Twitter for pictures from this weeks activities.

thumbnail

U.S. Wheat Associates (USW) works directly with overseas buyers to answer questions and resolve issues in purchasing, shipping or processing U.S. wheat through technical support and trade service including trade delegations to the United States, regular crop and market condition updates, quality surveys and other activities.

Two examples in South America confirm that USW’s face-to-face interaction with customers has a direct influence on purchase decisions. For an large flour miller buying group in Chile, processing a sample of U.S. wheat and personally observing the U.S. supply system convinced the group to purchase U.S. wheat again. And for a large miller and wheat foods producer in Ecuador, consistent trade service led to a first-time U.S. wheat purchase.

Seeing is Believing.

Chile’s Grupo 9 (G9) purchases about 30% of Chile’s imported wheat but had for several years been importing Canadian spring wheat that was priced aggressively against U.S. hard red spring (HRS) and hard red winter (HRW) wheat. Through USDA Foreign Agricultural Service programs, USW provided a sample of U.S. hard red winter (HRW) and sponsored two G9 millers to participate in a 2017 visit to the United States. Based on the positive reaction to these activities, USW’s representatives in South America invited another influential G9 representative to join another trade team to the United States in June 2018.

In Portland, Ore., the participants made contacts with new Pacific Northwest grain traders and observed the FGIS grain inspection process. In Nebraska, hosted by the Nebraska Wheat Board, the team saw public HRW breeding research at the University of Nebraska, Lincoln, and in North Dakota they learned about the quality of the 2018/19 hard red spring (HRS) crop from the North Dakota Wheat Commission and Northern Crops Institute.

2018 Chile-Ecuador Trade Team in North Dakota at the Northern Crops Institute.

As the tour progressed, USW saw more and more interest from the participants. They learned that lower moisture U.S. wheat offers good value in their milling processes. They saw how they could use inspection data to get maximum return from their wheat import contracts. They also talked to farmers and elevator operators who showed how quality is maintained throughout the supply chain.

In September 2018, the G9 buyer told USW it was considering purchasing a full cargo of U.S. wheat. USW shared the quality data from the new harvest and past years and discussed the excellent buying opportunities. In April 2019, the buyer purchased U.S. HRW to mill into bread flour and soft red winter (SRW) to mill into cookie and pastry flour. And to continue the long-term commitment to serving the buyers group, USW sponsored the same manager to participate in the “Hard Red Spring Wheat Quality Tour” in North Dakota in July 2019.

2018 Chile-Ecuador Trade Team in North Dakota.

G9’s return to buying U.S. wheat helped significantly increase export sales to Chile in 2018/19. It is a trend that has continued into 2019/20. With a sustained effort focused on replacing Canadian supplies, USW can report that after only the first three months of the marketing year, the country’s HRW imports are already twice what they were in 2018/19 at this same time.

Constant Support

Sucesores of Jacobo Paredes M. S.A, is the largest pasta producer in Ecuador and is a major bread product producer. Its purchases represent about 10% of Ecuador’s total wheat imports for food. Mr. Xavier Sanchez is the owner of the company and is responsible for its wheat purchases. Mr. Sanchez and his team have attended virtually all the activities that USW has carried out in Ecuador. However, by tradition and experience, the company has milled only Canadian spring wheat to produce both pasta and bread flour.

USW has focused its technical support on demonstrating how the company can lower its costs and improve its bread quality by replacing at least some Canadian spring wheat with U.S. HRW. In July 2019, Mr. Sanchez participated in a USW “Wheat Purchasing Seminar,” in Quito, Ecuador. He told USW representatives based in Santiago, Chile, that USW’s constant support, along with the information he received at the seminar, had convinced him to make their first purchase of U.S. wheat. Initially, Jacobo Paredes bought 3,000 metric tons (MT) of HRW min 12% pro from the Gulf of Mexico to arrive in October 2019. Recently, the company made a second purchase of 1,500 MT of HRW to arrive in December. Mr. Sanchez said he counts on USW support, which finally made the difference in the company’s purchase decision.

2019 Wheat Purchasing Seminar in Ecuador.

Now, USW’s technical support will be applied to ensure that the U.S. wheat experience will provide the best possible value. USW will visit the mill when the first HRW wheat shipment arrives to help Jacobo Paredes with sampling, conditioning and milling, in addition to helping the company formulate the best flour blend for their bakery.

For more information about USW’s exceptional trade service and technical support, please contact your local USW office.

 

Header Photo Caption: 2017 Chile Trade Team in Washington.

thumbnail

Original news release by the National Association of Wheat Growers published here.

The Senate Committee on Agriculture held a hearing July 31, 2019, looking at perspectives around reauthorizing the Grain Standards Act. Brian Linin, a wheat farmer from Goodland, Kan., testified on behalf of the National Association of Wheat Growers (NAWG) on the importance of reauthorizing the Grain Standards Act. Linin also serves as a board member of the U.S. Wheat Associates and works for Frontier Ag, Inc.

Highlights from his testimony can be found below:

“The Grain Standards Act serves a critical role in exporting grains and oilseeds, including U.S. wheat, of which about 50% is exported each year. With such a large volume of wheat being exported, our export markets are critical to wheat farmers’ bottom lines…”

“The grain inspection system is one that is valued by our overseas customers and adds value to our commodities. Foreign customers can be assured that an independent agency has certified shipments to meet the grade requirements specified in a contract. This certainty and reliability has helped wheat and other U.S. commodities to grow our export markets and serves as a significant advantage of purchasing U.S. wheat versus wheat from other origins…”

Brian Linin and Senator Pat Roberts (KS).

“A properly functioning grain inspection system is critical, and we urge Congress to reauthorize the Grain Standards Act this year. Despite the significant impacts of tariffs on exports, U.S. wheat has maintained some competitiveness in the international market in part thanks to the advantage and premium international buyers place on the U.S. grain inspection system.”

“Given the current uncertainty in trade agreements and many of the bearish factors working against U.S. wheat exports, it is critical we maintain one of our key advantages. Foreign and domestic customers value an independent agency certifying shipments to meet the grade requirements of contracts.”

To read Brian Linin’s testimony in its entirety, visit NAWG’s site here.

thumbnail

Under the Agricultural Trade Promotion (ATP) program administered by USDA’s Foreign Agricultural Service (FAS), U.S. wheat farmers recently welcomed additional support for the effort to build overseas demand for the high-quality wheat they produce.

FAS awarded $8.2 million to U.S. Wheat Associates (USW) in cost-share assistance in May 2019 and awarded an additional $2.6 million on July 19 earmarked for wheat export promotion through September 2022. To apply for the funding USW was required to demonstrate that wheat farmers were hurt by import barriers laid down as a result of trade disputes. In 2018, USW reported that farmers had experienced losses of more than $330 million as a result of China’s retaliatory tariffs on wheat and a slow down in imports by Mexico.

José Luis Fuente, President of Camara Nacional de LA Industria Molinera de Trigo (CANIMOLT) at the USW Mexico Wheat Trade Conference, June 2 to 4, 2019.

USW will do all it can to use these additional resources as effectively as possible and demonstrate how the addition of ATP funds will help grow new opportunities for wheat farmers and differential service for overseas customers. These include on-going efforts to develop emerging wheat export markets in Myanmar, Malaysia, Vietnam and Indonesia as well as niche soft wheat markets in the Middle East and North Africa.

USW is already putting these ATP funds to work. In June, USW held a very successful conference for Mexican wheat buyers that brought together wheat farmers, the grain trade and flour millers who represent more than 80% of Mexico’s total wheat import volume. USW sees growth potential in Chile and with ATP funding sponsored a representative of a large Chilean buyers’ group to participate in the recent Wheat Quality Council’s annual hard red spring (HRS) wheat tour in North Dakota. ATP funding is now helping build increased awareness of U.S. wheat’s superior baking quality in flour blends in the large regional market around Bogotá, Colombia.

These ATP funds come at a critical juncture for the U.S. wheat industry, said USW President Vince Peterson.

Participants take measurements to estimate yield at the recent 2019 Spring Wheat Quality Tour in North Dakota.

“We appreciated the support for the traditional Market Access Program and Foreign Market Development program in the most recent Farm Bill,” he said. “However, those program apportionments have remained essentially unchanged for 17 years with FMD and 13 years with MAP and the ravages of time and inflation have eaten away at their effective bottom lines. This renewed financial capability is an important response that will help USW adequately address both today’s trade challenges and tomorrow’s new market opportunities.”

Peterson cited several trade challenges. Mexico for example is a leading buyer of U.S. wheat, but almost everything about that relationship depends now on the passage of the pending U.S.-Mexico-Canada Agreement on Trade. In Japan, a strong preference for several U.S. wheat classes there is threatened by the growing tariff advantage for Canadian and Australian wheat supplies under the new Trans-Pacific Partnership agreement. Since March 2018, China has turned to Canada to supply what had been U.S. wheat before tariffs were implemented and just this week its government announced changes that will make it possible to import Russian grain supplies. USW is encouraged by apparent progress in those negotiations reported on July 31.

The Trump Administration’s support through the ATP program, combined with the Market Facilitation Program (MFP), is welcomed by wheat farmers affected by low prices and other risks related to on-going trade challenges. It is no exaggeration to say that the long-term health of an industry that contributes about $6 billion per year to wheat farm families and U.S. wheat supply businesses hinges on a swift and favorable end to the on-going trade disputes.

*Header Photo Caption: Panel on “Optimizing Rail Operations of U.S. Wheat Shipments and Minimizing Additional Expenses for Mexican Importers.” at the USW Mexico Wheat Trade Conference, June 2 to 4, 2019.

thumbnail

By Casey Chumrau, USW Marketing Manager, Santiago Office

The Federal Grain Inspection Service (FGIS) may be somewhat unfamiliar to most farmers but serves as a major competitive advantage for U.S. grains on the international market. Based on two congressional acts establishing a standardized inspection process, all wheat exported from the United States is inspected and given a grade as it is loaded onto the export vessel, whether it be a train or ship. This independent process sets the United States apart by providing a form of certainty and protection for buyers.

An official FGIS grade certificate is sent to buyers before the vessel arrives, allowing them to make important production decisions in advance based on the characteristics of the wheat before it arrives. In addition, the buyer knows that an independent agency will certify that every shipment meets the grade requirements specified in their contract, avoiding costly conflicts between the buyer and seller. The U.S. farmer works hard to produce a high-quality crop demanded by the market, and the FGIS inspection process helps maintain that quality all the way to the end user. This is a significant differential advantage of purchasing U.S. wheat versus other origins.

FGIS has an international affairs office that provides educational training programs explaining the roll and procedures of the agency. U.S. Wheat Associates (USW) has used this service many times over the years, most recently July 15 to 19, 2019, in Peru, an import market of about 2.0 million metric tons (73.5 million bushels). FGIS agent Jose Robinson traveled to Peru to conduct half-day seminars in the five largest wheat importing companies in the country. Robinson gave presentations and demonstrated parts of the inspection process to 53 participants from the quality control departments of the five mills. The participants shared their processes with Robinson, showed examples of the wheat they inspected in plant and were able to test their abilities to conduct similar inspections while receiving guidance from an expert.

The participants gained a deeper understanding of the FGIS inspection protocol and testing methods and left with increased trust and confidence in the FGIS certification process. The changes implemented in the mills following the training sessions will result in fewer discrepancies between the FGIS grade and the results of local, in-plant inspections, leading to increased satisfaction with U.S. wheat.

The ability to send an FGIS agent overseas allows USW to train a large number of participants at a fraction of the cost it would require to train even a few customers in the United States.

The USW Santiago Office plans to repeat this training activity in four other South American countries over the next two years. Learn more about how USW works with buyers here.

 

thumbnail

Many years of work conducting trade service and technical support in South Asian countries like Myanmar (Burma) showed U.S. Wheat Associates (USW) there was a growing opportunity to compete with nearby Australian wheat supplies. Knowing two deep-water ports were opening in Myanmar in 2019, USW intensified its activities. In mid-May 2019, USDA Foreign Agricultural Service representatives were on hand to welcome the first bulk grain vessel to dock at one of the ports loaded with 22,000 metric tons (MT) of high-quality U.S. hard red spring (HRS) wheat purchased by a local flour mill.

With funding from the Market Access Program (MAP) and Foreign Market Development (FMD) program, USW has provided technical and trade servicing to mills and bakeries in Myanmar for more than 20 years.  With the ability only to take container loads, U.S. wheat had to compete with less expensive supplies shipped mainly from nearly Australia. Still, its political situation was changing and consumer purchasing power was growing.

To lay the groundwork for U.S. wheat bulk shipments to customers in Myanmar, USW hosted a workshop on FGIS inspection and certification in marketing year 2017/18 for three milling companies and government officials. USW separately brought in a private trading company and the FAS staff in Yangon to brief the Myanmar Plant Protection Department about the bulk U.S. wheat export supply system. The briefing provided information that helped increase the confidence in purchasing and handling U.S. bulk wheat shipments.

The vessel New Journey carrying 22,000 metric tons of U.S. HRS at berth in Thilawa port at Yangon, Myanmar, May 2019.

Technical training continued with seven individuals from Myanmar baking companies who participated at their companies’ expense in three USW-sponsored baking courses at the UFM Baking School in Bangkok, Thailand, between May and July 2018. In a survey about their participation, these customers said they planned to demand flour produced from U.S. HRS wheat in their processing plants. And in December 2018, USW Bakery Consultant Roy Chung made a technical service call on a milling and wheat food processor in Myanmar to provide additional information on the potential value in milling U.S. HRS for bread flour and blending for other products.

In 2019/20, USW will apply funding from the FMD program to bring purchasing managers from selected Myanmar flour mills to the United States for a course called “Contracting for Value.” Participation will help the milling executives quantify the economic value of U.S. wheat classes and will help them understand possible adjustments in contract specifications to enhance that value.

Myanmar-based customers are embracing the benefits of working with imported U.S. wheat. Exports of HRS and soft white (SW) wheat to Myanmar grew from 26,300 MT in 2017/18 to about 65,000 MT in 2018/19. USW will continue to provide valuable trade and technical support there and throughout the growing wheat markets in South Asia.

*Header Photo Caption: Myanmar International Terminal Thilawa (MITT)

thumbnail

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 June to promote all six classes of U.S. wheat in an ever more complex world wheat market.

Mexico. The USW Mexico City Office hosted the Mexico Wheat Trade Conference in Cancun, Mexico. Mexican millers, representing more than 85% of total Mexican milling capacity, attended the conference, as well as Mexican government officials, U.S. farmers from 13 states, U.S. grain trade representatives, and representatives from the four railroads serving the Mexican market including BNSF, Ferromex, Kansas City Southern-Mexico and Union Pacific. The program included messages from USW Chairman Chris Kolstad and USW President Vince Peterson, thanking the Mexican milling industry for their business and many years of close friendship, as well as presentations and discussions on the United States-Mexico-Canada Agreement (USMCA), price risk management, rail transportation, ocean freight, contracting for wheat value and more. Read the full article about the conference here.

https://youtu.be/tvytAcIROE4

Jamaica. USW Technical Specialist Marcelo Mitre and Assistant Regional Director Stephanie Bryant-Erdmann accompanied Bakery Consultant Kirk O´Donnell to Jamaica to conduct two, 2-day seminars in partnership with a local mill. The seminars—attended by a combined 57 participants from four countries representing the baking, milling and distribution sectors—focused on the quality and versatility of U.S. wheat, baking technology, ingredient functionality, traditional fermentation methods, puff pastries and shelf life.

USW Bakery Consultant Kirk O´Donnell at a seminar in Jamaica. Photo Credit: JF Mills

A participant a the baking seminar in Jamaica. Photo Credit: JF Mills

Brazil. Accompanied by USW Marketing Manager, Casey Chumrau, and Technical Specialist, Andres Saturno, a delegation of Brazilian flour milling managers who are responsible for quality control in their wheat purchases, traveled to Kansas, Ohio and Texas. During its travels, the delegation met with the Federal Grain Inspection Service (FGIS), milling companies, analysis laboratories, wheat breeding facilities and visited wheat farms.

The 2019 USW Brazilian Trade Delegation visits Texas A&M University. Photo Credit: Texas Wheat

The Philippines. The USW Manila and Seoul offices hosted a Korean Bakery Workshop in Seoul, South Korea, for Philippine bakers and millers to learn about Korean products, formulations and production methods to help the industry take advantage of growing opportunities and improving processes in the Philippines. The workshop took place at the Korean Baking School (KBS) under the direction of a Grand Master Baker and was facilitated by KBS program staff, along with USW Food Technologist, David Oh, and Country Director, CY Kang.

USW Korean Bakery Workshop in Seoul, South Korea.

Taiwan. USW collaborated with Chia Nan University (CNU) of Pharmacy and Science to host a full-day 2019 CNU Symposium on Chinese-style Steamed Breads for baking and catering professionals, souvenir development companies and culinary faculty and students. The symposium including hands-on training on how to make fermented steam bread and buns, as well as presentations on quality control of steamed bread, an introduction to wheat flours used for steamed breads and wheat flour inspection and milling.

2019 CNU Symposium on Chinese-style Steamed Breads

China. Together, USW and the Wheat Marketing Center (WMC) hosted a Contracting for Wheat Value Workshop (CFWC) for Chinese buyers and technical officials. This workshop highlighted the strengths of U.S. wheat production and its reliability and high quality. Participants also had the opportunity to travel to visit Padget Ranches in Oregon’s Sherman County. Darren Padget is a wheat farmer and current USW Vice Chairman and invited the workshop participants for a farm tour and dinner barbeque with several local farmers and neighbors.

Contracting for Wheat Value Workshop participants visit Darren Padget’s farm in Oregon’s Sherman County.

*Header Photo Caption: Contracting for Wheat Value Workshop participants visit with a farmer in Oregon’s Sherman County.

Italy. USW Regional Marketing Director Rutger Koekoek spoke at the Romacereali Conference on the outlook for durum wheat for North America and North Africa. The conference is a popular event for the Italian cereal sector organized by the Rome Chamber of Commerce. Its 200 participants primarily work in the Italian durum milling, durum trading and pasta processing industries.

Sub-Saharan Africa. Accompanied by USW Assistant Regional Director, Chad Weigand, and Marketing Specialist, Olatunde Omotayo, a delegation of milling and procurement staff representing companies from Nigeria, South Africa, Senegal, Ghana and Cote d’Ivoire spent 10 days traveling to Washington D.C., North Dakota and Kansas to learning more about the excellent quality of hard red winter (HRW), hard red spring (HRS) and durum supplies available, as well as the promise of more exportable supply of hard white (HW) and the logistical advantages of purchasing from the United States

The 2019 USW Sub-Saharan Delegation at the Kansas Wheat Innovation Center. Photo credit: Kansas Wheat

Nigeria, South Africa and Kenya. USW Vice President of Global Technical Services, Mark Fowler, and IGP Institute Associate Director, Shawn Thiele, conducted on-site milling consultations and hands-on technical training in four flour mills in Nigeria and three flour mills in South Africa. During their visits, Fowler and Thiele gave recommendations for improving milling operations and flour quality for HRW, HW and soft red winter (SRW) flour. They also spoke at the African Milling School (AMS) in Kenya about U.S. wheat classes and milling for U.S. wheat for the AMS Apprenticeship Program

 

Mark Fowler (L) and Shawn Thiele (R) inspect flour at a mill in Nigeria.

USW and IGP staff at a mill for training in Nigeria.

thumbnail

By Steve Mercer, USW Vice President of Communications

When U.S. Wheat Associates (USW) was planning to hold its 2019 Mexico Wheat Trade Conference June 2 to 4, 2019, no one anticipated that the threat of new tariffs on Mexican imports would come just two days before the meeting started.

“What we thought was an unfortunate coincidence turned out to be a fortunate opportunity to address the trade policy concerns face to face with our Mexican customers,” said USW President Vince Peterson. “Talking through the potential concerns that way allowed us to move on to talk about how we can work together to navigate the policy issues and increase the efficiency and value of Mexico’s U.S. wheat purchases. We found that our shared challenges bring us closer together.”

2019 Mexico Wheat Trade Conference Cancún

 

In the just ended marketing year 2018/19, Mexican flour millers imported more U.S. wheat than any other country. The flour millers that attended the conference in Cancún represented about 80% of the 3.3 million metric tons (MMT) total 2018/19 commercial sales to Mexico reported by USDA as of May 30. USW Chairman Chris Kolstad, a wheat farmer from Ledger, Mont., thanked the millers for this and past business, and assured them that “USW and the National Association of Wheat Growers will do everything in our power to ensure that the USMCA Agreement on Trade is approved.”

Kolstad said the North American Free Trade Agreement (NAFTA) served both countries well and the United States-Mexico-Canada Agreement (USMCA) will continue to benefit the three countries with increased trade and new economic opportunity. His focus set the stage for insight from other conference speakers into why approval of USMCA is so important. They all agreed that the agreement will be implemented — but they do not know when it will happen.

Interviewing conference attendee, Francisco Salas Romero, Harinas.

Interviewing conference attendee, Francisco Salas Romero, Harinas.

“NAFTA has integrated the U.S. and Mexican economies steadily over 30 years,” said speaker Juan Carlos Baker, who served on the Mexican government’s USMCA negotiating team and now is a private trade consultant in Mexico. “But recently, the negative voices about NAFTA and USMCA have been the loudest. We must tell the positive stories about our trade benefits and the USMCA. I believe we will have a new agreement and will be able to continue trade, but how open it will be is up to us to determine.”

José Luis Fuente, President of Camara Nacional de LA Industria Molinera de Trigo (CANIMOLT), offered an inspired appeal to work together to tell officials in both countries that export opportunities must be improved, not restricted.

José Luis Fuente, President of Camara Nacional de LA Industria Molinera de Trigo (CANIMOLT)

José Luis Fuente, President of Camara Nacional de LA Industria Molinera de Trigo (CANIMOLT)

“We know that U.S. wheat farmers and U.S. Wheat Associates have done many things to tell this story,” Mr. Fuente said. “We have a partnership based on affection that is backed by actions. But actions are more needed now in this unusual trade environment.”

A large portion of the conference focused on other actions that can help facilitate U.S. wheat trade between Mexico and the United States. Two speakers focused on how millers can manage price risk. Christopher Lawrence, Senior Market Strategist with Rabobank, covered how best to hedge exchange rate exposure between U.S. dollars and Mexican pesos. Austin Damiani, an independent wheat futures trader from Minneapolis, Minn., provided valuable insight into hedging price risk.

<em>Austin Damiani, independent trader, Minneapolis Grain Exchange</em>

Austin Damiani, independent trader, Minneapolis Grain Exchange

“It is very important to consider locking in prices with futures,” Damiani said. “I am a speculator who bets on how the market will move. That is a risky activity. But I believe that as wheat buyers, if you are not hedging you are speculating.”

Panel discussion speakers: Justin Gilpin, CEO, Kansas Wheat; and Luis Olivera, Executive Vice President Sales, Ferromex, Mexico City.

Panel discussion speakers: Justin Gilpin, CEO, Kansas Wheat; and Luis Olivera, Executive Vice President Sales, Ferromex, Mexico City.

With so many logistical options for delivering wheat to Mexico, USW Regional Vice President Mitch Skalicky and his colleagues based in Mexico City who planned the conference emphasized commercial rail issues and opportunities in the program. A panel discussion on optimizing rail shipments and minimizing additional expenses included the President of Kansas City Southern Railroad-Mexico, and the Executive Vice President of Sales for Ferromex (Mexico’s national rail system). These two private sector companies are the principal railroads who operate Mexico’s rail lines through long term concessions that they have with the Government of Mexico. Representatives from the Mexican government and U.S. wheat grower organizations were also included on the panel. Gabriel Letona of Advan Sea in Panama City, Panama, also discussed the comparative advantages of FOB and CIF ocean freight contracting.

Presentations on contracting to receive U.S. wheat of superior value and how the U.S. farmer co-operative system has evolved as a major source of efficiently delivered wheat and grain exports rounded out what participants deemed as a very welcome and successful conference.

Chuck Conner, CEO, National Council of Farmer Cooperatives

Chuck Conner, CEO, National Council of Farmer Cooperatives

“We have 14 farmers here from 13 different states and U.S. Wheat Associates staff from 3 offices to show you that we take your business seriously,” Chris Kolstad told the millers. Those farmers, state commission members and USW, he added, “are all united in our desire and goal to earn your full trust in the United States as your primary source of imported wheat.”

*Header Photo Caption: Panel on “Optimizing Rail Operations of U.S. Wheat Shipments and Minimizing Additional Expenses for Mexican Importers.

thumbnail

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.

thumbnail

The world’s wheat buyers have heard the claim that U.S. wheat farmers produce “the world’s most reliable choice.” U.S. Wheat Associates (USW) and the U.S. wheat farmers we represent believe that claim is legitimate because so many customers rely on several classes of U.S. wheat to meet their specific end-use and quality needs and because buying it carries less risk.

Here are some of the reasons why our overseas customers know they can depend on the integrity of our supply chain, the quality of U.S. wheat and our unmatched reliability as a supplier.

First, the U.S. wheat “store” is always open. U.S. farmers overcome significant risk every year to meet domestic wheat demand and still provide half their crop for export markets. Farmers and commercial warehouses can store and efficiently transport wheat in top condition to meet overseas demand when needed and throughout the marketing year.

Prices are transparent and honored. U.S. wheat export prices are discovered openly through futures exchanges and basis costs and are always available to customers. Private exporters use risk management tools to honor sales contract prices often made months in advance of vessel loading.

Quality is assured. USW publishes weekly reports during harvest that summarize initial wheat quality findings. USW works with several organizations and laboratories to analyze hundreds of harvest and export wheat samples for all six U.S. wheat classes and publishes all results in the annual Crop Quality Report. Our staff, farmers and industry experts then travel the world to present the results to our customers and end users. Those customers know U.S. wheat will meet their specifications because the supply chain follows uniform grain segregation and inspection procedures. The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality loaded matches the quality stated in the customer’s contract. Those inspections yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that customers can use, with assistance from USW, to get the most value from their tenders.

Direct government export intervention is banned. Several U.S. federal laws protect the sanctity of all export contracts. The only exception is a declared national emergency. Export tariffs are forbidden in the U.S. Constitution, fully adhering to World Trade Organization disciplines, and the United States will not use food as a weapon.

Buyers receive unmatched trade servicing and technical support. With funding from U.S. wheat farm families and USDA’s Foreign Agricultural Service, experienced USW staff and consultants add exceptional value to all U.S. wheat class imports.

Fostering trade. USW invests substantial funding from farmers and federal programs to help overcome trade or technical barriers that would otherwise keep end-users from realizing the highest value and most revenue from using U.S. wheat.

The U.S. wheat industry is proud of its position as the world’s most reliable choice. All of us who participate in the industry believe that it contributes to world food security and economic stability, and work to maintain a transparent and open market to sustain that valued reputation.