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Things to Know When Buying U.S. Wheat

U.S. Wheat Associates (USW) works on behalf of U.S. wheat producers to help millers, bakers, wheat food processors and government officials understand the process of buying U.S. wheat at the best value possible.

The U.S. grain marketing system is reliable and transparent but can be complicated. So, USW keeps buyers and wheat food processors informed about the wide variety of U.S. wheat classes, how wheat moves to export markets as well as current crop quality and prices.

Interactive map to help when buying U.S. wheat

USW has developed an interactive map of regional U.S. wheat production by class and how it is transported to export terminals.

As part of a recent seminar for overseas buyers, USW Vice President and West Coast Office Director Steve Wirsching recorded a presentation titled “U.S. Wheat Market Overview.” From how regional climate affects wheat quality and USW’s process for sharing estimated export prices to how export basis regulates the flow of grain to market and the role of the Federal Grain Inspection Service (FGIS), Wirsching provides an important primer for buying U.S. wheat.

Many Resources for Buyers

Click on the image below to see the entire presentation that was used in the buyer’s seminar in July 2021. Additional information is always available online. And most importantly, USW representatives in 13 offices around the world, are always ready to help our customers, through trade service and technical support, making buying U.S. wheat a rewarding experience.

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Wheat Industry News

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

Speaking of Wheat. “It has amazed me in my entire 30-plus years in the grain business how farmers never give up hope. It is a tribute to every farmer … that no matter how bad things get, they keep moving forward and look ahead to the following season, hoping for better results. That is why I have never left this business, because of the strength and determination farmers have, and I am honored to know so many of them.” — DTN Basis Analyst Mary Kennedy, from a column in Progressive Farmer, December 27, 2021.

2022 EU Production Estimate. World Grain reported this week that the European trade association Cocereal expects wheat production in the European Union (EU) to decline in 2022 by more than 3 million metric tons (MMT) compared to 2021. In its first forecast for the 2022 EU+UK grain crop, Coceral projected wheat output at 139.8 MMT, down slightly from the previous year mainly due to a return to average yields in the Balkan region.

“Cracking Open China’s Wheat Import Quota.” China imports wheat but at a volume less than half of what is allowed under a quota system first established when China joined the World Trade Organization (WTO) in 2001. A recent study by USDA’s Economic Research Service (ERS) looks at China’s past procedures for allocating quotas to its prospective importers and revealed that … “demand for imported wheat often exceeded what was typically awarded. ERS’ analysis of China’s wheat import data suggests that import volume in 2021 is poised to reach that quota for the first time in two decades.”

Wheat Marketing Center Searches for Executive Director. The Wheat Marketing Center (WMC) is looking for an Executive Director. WMC is a dynamic and multifaceted non-profit research and technical training entity that promotes multiple classes of U.S. wheat by demonstrating their quality and functionality in end products. Learn about the position and how to apply here.

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

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

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

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

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U.S. Wheat Associates Continues to Find Success in Virtual Programs

By Catherine Miller, USW Programs Coordinator

With the COVID-19 pandemic still lingering in 2021, U.S. Wheat Associates (USW) continued to provide reliable, high-quality service to customers worldwide via virtual programming. The pandemic’s start quickly brought challenges that no industry in modern history had experienced on such an immediate, global scale. However, USW quickly pivoted and adapted its programs. That experience and valued feedback we received better prepared USW to improve and expand virtual programs in 2021.

USW conducted more than 315 virtual programs in 2021 and reached over 13,000 participants. This increased from 296 virtual programs and 11,000 participants in 2020, even as some regions slowly began implementing in-person activities again this year. The chart below showcases a breakdown of the types of USW programs and compares virtual participant reach in 2020 and 2021 to pre-pandemic, in-person participant numbers in 2019.

Estimated number of participants in USW programs 2019-2021

“Marketing year (MY) 2021/22 combined ending stocks of major wheat exporters are projected to reach their lowest level in more than ten years. This tighter supply outlook among exporters pushed wheat prices to historically high levels, and adverse global weather

Mike Spier

Mike Spier, USW Vice President of Overseas Operations

conditions intensified market volatility,” said USW Vice President of Overseas Operations Mike Spier. “In 2021, USW overseas staff rose to the challenge and increased the number of customers reached through crop and market updates by more than 1,000 participants compared to similar programs in 2020. This increased frequency in virtual programs and timely market information kept buyers around the world informed of the latest wheat price, production and quality trends, helping them navigate tighter supplies, price volatility and challenges brought on by the pandemic.”

In 2021, USW hosted a new monthly webinar series, “Creating Value for U.S. Wheat,” hosted by Mark Fowler, USW Vice President of Global and Technical Services. With assistance from Catherine Miller, USW Programs Coordinator, the seven-part series featured technical topics and current market trends such as solvent retention capacity (SRC), flour blending, flour particle size impact, stream selection and more. Webinar speakers included USW’s in-house technical staff, including Fowler, Roy Chung, Ivan Goh, Tarik Gahi, Peter Lloyd and Andrés Saturno. The monthly webinars ran from April to October and reached more than 1,840 participants.

Another highlight from USW’s 2021 virtual programming was the first-ever “School of Wheat Quality Course.” USW collaborated with Dr. Senay Simsek, Purdue University, and Brian Sorenson, Northern Crops Institute (NCI), who designed and executed two intensive 6-week virtual sessions for customers in South and Southeast Asia. Participants took a deep dive into the various steps of wheat quality testing from field to table through live-streamed lectures and demonstrations. Benchmark exams were conducted throughout the 6-week course and were a requirement for graduation—a helpful tool to ensure participants stayed engaged.

“These courses provided foundational instruction on testing wheat and flour quality. Training mill staff how to accurately measure quality parameters and compare attributes offered by different types of wheat helps illustrate the superior quality of U.S. wheat classes,” said USW Regional Vice President for South Asia Joe Sowers. “Courses like this are a win-win for USW and our stakeholders. They facilitate the success of collaborating millers while proving the value proposition of using U.S. wheat.”

For the U.S. wheat industry and its overseas customers, who share historically long connections, meeting together in person here and abroad has always been paramount to its successful relationships. While the value of face-to-face activities is irreplaceable, the unique opportunity to increase USW’s reach to customers has become a silver lining to the challenges brought on by the pandemic. Going forward, USW sees the value in leveraging a mix of in-person and virtual programming to best serve its customers.

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Fundamental Support for Wheat Prices Shared with USW Farmer Directors

By Michael Anderson, USW Market Analyst

U.S. Wheat Associates (USW) represents the interests of wheat farmers in export markets. Each time the USW Board of Directors meet, we report on the latest market information that affects the U.S. wheat marketing environment. At their meeting the week of Jan. 10, 2022, our directors will see continued fundamental support for wheat prices from greater demand worldwide and lower production in major exporting countries.

The next USDA World Agriculture Supply and Demand Report will be released on Jan. 12. Ahead of that report, USDA pegs 2021/22 world wheat production at a record 777.89 million metric tons (MMT), 3% above the 5-year average of 757.4 MMT. Total global supplies are forecast to reach 1,068 MMT, slightly lower than last year. USDA noted lower wheat production in Canada, Russia, and the United States, which all experienced drought in the 2021 growing season.

USDA expects wheat production to be higher in Ukraine, the European Union (EU), Australia and Argentina. Specifically, in Ukraine, production is forecast up 30% this year due to increased planting and favorable weather conditions. In Australia, production is up 700,000 MT to 34 MMT. Argentina may also produce a record wheat crop this year. The Buenos Aires Grains Exchange (BAGE) estimates wheat production at 21 MMT, 1 MMT more than USDA’s December production estimate. USDA estimates 2021/22 world wheat ending stocks will drop 2% from the 5-year average and be 278 MMT, a 12 MMT drop compared to last year and the lowest level since 2016/17.

Global Consumption Outpaces Production

Fundamental support for wheat prices is also seen in global consumption that is expected to increase 7 MMT to 789 MMT, up 1% compared to 2020/21. Both global human wheat consumption and feed wheat use are forecast higher. Feed wheat use is expected to increase 2% to 161 MMT. Lower beginning stocks, drops in production for major exporters, and increased use have supported higher wheat prices overall. In the USDA’s December supply and demand report, the estimated average farm gate price for U.S. wheat is $7.05/bu, a 54% increase year-over-year.

USDA expects global wheat trade to reach 205 MMT, up 1% from last year and 6% more than the 5-year average.

Price Effect on Export Sales

Through Dec. 23, 2021, total U.S. wheat export sales of 15.8 MMT are 23% behind last year’s pace according to USDA commercial export sales data. Soft red winter (SRW) sales are significantly ahead of last year’s pace. USDA projects total 2021/22 exports will hit 22.8 MMT which, if realized, would be 16% less than last year and 13% less than the 5-year average.

Wheat Exports by Country

One year ago, USDA saw winter wheat seeded area was up 5% from 2020 at 32 million acres. USDA’s annual Small Grains Summary, released in September 2021, had U.S. wheat production at 1.65 billion bushels, down 10% from 2020 despite harvested area being up 1% at 37.2 million acres. Winter wheat production was up 9% but spring wheat production was down 44%, soft white production (both winter and spring) was down 16% and durum wheat production was down 46%.

USDA assessed that winter wheat production was 1.28 billion bushels, up 1.1 million bushels with an average yield of 50.2 bu/acre, down 0.7% compared to 2020. The area harvested for winter wheat was 25.5 million acres, up 11% compared to 2020. Hard red winter (HRW) harvested acres were up 10% and production totaled 749 million bushels, 14% more than in 2020. Soft red winter (SRW) production totaled 361 million bushels, up 35% compared to 2020. Spring wheat production was estimated at 331 million bushels, down 44% from 2020. The harvested area totaled 10.2 million acres, down 16% from 2020 with an estimated yield of 48.6 bu/acre. Hard red spring (HRS) accounted for 297 million bushels, down 44% from 2020.

Winter Wheat Planted area from 2021 to 2022

Ten years of winter wheat seeded area data from USDA illustrates another fundamental support for wheat prices.

Start 2022 With USW Market Information Reports

USW monitors USDA’s assessments of the fundamentals supporting wheat prices each month in our Global Wheat Supply and Demand Report. In addition to the January WASDE report, USDA’s Winter Wheat Seeding Report will also be released Jan. 12. Export prices are updated weekly. Visit the Market Information page on our website or subscribe to USW market reports here.

 

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Trade Service Encourages Nigerian Flour Millers to Invest in U.S. Wheat

U.S. Wheat Associates (USW) has developed a strong relationship with Nigerian flour millers over many years through in-person service and many customer visits to the United States (see photo above). Yet the price of imported wheat is always a concern for these experienced customers serving a growing wheat market.

That is why USW’s regional Sub-Sahara African team based in Cape Town, South Africa, invested funding from USDA Foreign Agricultural Service programs to give Nigerian flour millers an early look at a potentially bullish market and a chance to purchase increased volumes of U.S. wheat before prices moved higher.

Having experienced how effective virtual meetings could be at reaching a wider audience, USW/Cape Town planned a series of online meetings for Nigerian flour millers and customers from other Sub-Sahara African countries.

A Correct Observation

In virtual meetings in February and April 2021, wheat market analyst Mike Krueger reviewed market fundamentals for millers. Citing a tight U.S. corn market outlook, the relatively low U.S. wheat planted area, and potential issues from Russian trade policies, Krueger suggested to the 20 Nigerian participants that wheat prices would increase up to the new crop harvest – an observation that the market confirmed.

Presentation from Nigerian flour miller webinar

Prices to Rise. This chart presented by market analyst Mike Krueger during a February 2021 webinar for Nigerian flour millers provides supporting data for Krueger’s expectation that U.S. wheat prices would increase into 2021/22. Millers were able to take advantage of this information provided by USW.

In June, USW/Cape Town collaborated with Kansas and Nebraska wheat commissions and U.S. hard red winter (HRW) and hard white (HW) wheat traders to share real-time crop and price conditions including from U.S. wheat farmers to 20 Nigerian participants. And the team held a soft red winter (SRW) crop update webinar in late July 2021, including presentations by the Ohio Small Grains Checkoff, past USW Chairman Jason Scott, a SRW grower from Maryland. USW Regional Director Chad Weigand also updated the 10 Nigerian flour miller participants on the global wheat market situation.

The USW Sub-Saharan Africa team also encouraged customers to participate in a monthly “Creating Value for U.S. Wheat” webinar series featuring USW milling and baking experts. In August 2021, one of those webinars focused on using solvent retention capacity analysis to help millers produce a wider range of high-quality flour products for wheat food producers. In total, 65 Nigerian flour millers participated in all seven of the online seminars.

Crop Quality Webinars

In October, USW/Cape Town conducted individual Crop Quality webinars with the five largest Nigerian flour millers and a multi-company webinar for remaining mills in Nigeria and the region, reaching about 50 flour milling representatives.

Armed with the early information about the potential for rising wheat prices and regular, online updates from USW, customers in Nigeria had purchased 58% more U.S. wheat in 2021/22 as of Dec. 16, 2021, compared to the same time the year before. Total imports include HRW, SRW, HW and hard red spring (HRS).

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Wheat Industry News

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

Speaking of Wheat

“Bob Dole had a heart as big as his beloved State of Kansas. With his special friend George McGovern, Bob Dole helped to feed literally millions of people around the world. They worked together to support the price of wheat, but also to reform the food stamp program, child nutrition programs and create the WIC program. Then after they left the Senate, working with President Clinton, they created the global school lunch program that now feeds millions of children in the poorest areas of the world.“ — Marshall Matz, Chairman, OFW Law, Washington, D.C., from a tribute in Agri-Pulse to former Sen. Bob Dole, who passed away at the age of 98, Dec. 5, 2021.

U.S. Winter Wheat in “Rough Shape.” Reuters reported this week “winter wheat has struggled in some areas, including parts of Oklahoma where scrawny plants lack robust root systems. Such crops are vulnerable to further deterioration.” The story quoted Kansas Wheat CEO Justin Gilpin saying, “Dry soils and lack of snow cover will make wheat more susceptible to harsh winter weather, so that will be watched.” After the article was published, a storm with hurricane force winds caused dust storms and wildfires in western Kansas, Colorado and Nebraska.

2022 EU Production Estimate. World Grain reported this week that European trade association Cocereal expects wheat production in the European Union (EU) to decline in 2022 by more than 3 million metric tons (MMT) compared to 2021. In its first forecast for the 2022 EU+UK grain crop, Coceral projected wheat output at 139.8 MMT, down slightly from the previous year mainly due to a return to average yields in the Balkan region.

“Cracking Open China’s Wheat Import Quota.” China imports wheat, but at a volume less than half of what is allowed under a quota system first established when China joined the World Trade Organization (WTO) in 2001. A recent study by USDA’s Economic Research Service (ERS) looks at China’s past procedures for allocating quotas to its prospective importers and revealed that … “demand for imported wheat often exceeded what was typically awarded. ERS’ analysis of China’s wheat import data suggests that import volume in 2021 is poised to reach that quota for the first time in two decades.”

Graph of China's Wheat Imports

Source: USDA Economic Research Service

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

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

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USW Office And Publications Schedule For The 2021 Holiday Season

During this 2021 holiday season, all of us at U.S. Wheat Associates (USW) take time to reflect upon the good things we have … like our partnership with our friends at home and abroad. We appreciate working with you and hope that the holidays and the coming year will bring you happiness and success.

2021 holiday schedule

Please contact your local USW office for holiday schedules.

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Adjusting to USDA Estimates in a Record-Setting Year

Marketing year 2021/22 (June to May) has been record-setting to date. USDA estimates of global production, trade, and consumption have all outpaced previous years. However, since it’s initial 2021/22 World Agricultural Supply and Demand Estimates (WASDE), USDA has adjusted its forecast down, led by a 17 million metric ton (MMT) reduction in global wheat production by December. Ending stock estimates for the world’s top exporters are also down.

The weather has played a key role this year in lowering production in Canada, Russia, and the United States. Quality concerns following wet harvests in the EU and Australia have affected milling-quality wheat and supported markets. And Russia’s use of an export tax and now plans for an export cap have tightened supply while adding to prices. Other factors, including ballooning ocean freight rates, natural disasters, Covid-19 restrictions, and smaller domestic production in some key countries, have helped prices climb to multi-year highs (see chart below).

Chart of Wheat Exporting Country Stocks and Wheat Price Relationship

Lower stocks and higher prices dominated the first half of the wheat marketing year 2021/22. USDA steadily reduced its global production estimates from June to December mainly from some large exporting countries. Given record world wheat use, the 2021/22 average export price to date for ordinary U.S. hard red winter wheat from the Gulf ($301/MT, above) reflects the situation. Sources: USDA and USW Price Report.

As U.S. Wheat Associates (USW) marks the middle of the 2021/22 export calendar, the following are snapshots of the influential factors for major wheat exporters and how USDA estimates have changed.

Canada

Weather was a strong factor this growing season for Canadian wheat. In the Prairie Provinces, the Normalized Difference Vegetation Index (NDVI), which measures plant health, had the wheat crop maturing four weeks earlier than normal. Hot and dry weather withered the all-wheat estimate to 21.65 MMT, down 33.5% compared to the 5-year average. StatsCan’s wheat estimate of 21.6 MMT is the lowest all-wheat production since 2007. Durum production took an even steeper cut to 2.7 MMT, the lowest ever recorded for the country. Exports are also projected lower. The latest WASDE report forecast Canadian wheat exports to total 15 MMT, 43% less than last year. Year-to-date, Canadian wheat exports are running 38% behind 2020.

Australia

The South Pacific country continues to rebound from a drought-ravaged 2019/20 crop with expectations for a second bumper crop in a row. The latest WASDE report put Australian wheat production at 34 MMT, 8% higher than November’s report and 41% higher than the 5-year average. Exports too were projected higher at 25.5 MMT. Data on quality is still unknown because the Australian crop is in mid-harvest. However, wet weather has led to concern about the final volume wheat that meets milling quality standards.

Russia

Russian wheat production has been on a downward slope since June when USDA estimates of production stood at 86 MMT. The latest string of WASDE reports have cut that estimate to 75.5 MMT with 36 MMT forecast for export. Year-to-date, Russia has exported 19.4 MMT of wheat, 54% of the overall estimate despite a wheat export tax that increased to $91/MT on Dec. 10, more than double in the rate last July. On top of the fluctuating export tax, Russia is considering a wheat export quota set to begin in mid-February.

Ukraine

The Black Sea country has had an impressive production year, up 30% year-on-year, and exports running 17% ahead of last year’s pace at 14.5 MMT. Ukraine’s agriculture ministry signed an agreement with grain traders capping wheat exports at 25.3 MMT, about 1 MMT higher than the latest WASDE’s export projection.

European Union

The EU also saw higher production this year than last, driven mostly by impressive yields in Romania and Bulgaria. Exports are running 11% ahead of last year’s pace and the EU is expected to replace Russia as the year’s leading wheat exporter. Coceral, a European trade association, forecast that the 2022 soft wheat crop will drop to 125.4 MMT, 3.4 MMT less than their 2021 figure despite the area planted being only marginally reduced. Yields however are estimated to be down 3%.

Argentina

The Buenos Aires Grains Exchange (BAGE) expects the biggest wheat harvest ever for the South American country. Higher than anticipated yields have traders estimating a 22.1 MMT wheat crop, higher than USDA’s estimate of 20 MMT. Even so, the government has taken steps to discourage the pace of export license registrations.

United States

U.S. wheat production is forecast down 5 MMT this year after dry weather in the Pacific Northwest (PNW), Montana, and North and South Dakota withered average yields for soft white hard red spring and Northern durum. In its latest WASDE report, USDA said, “U.S. export prices are expected to remain elevated the rest of 2021/22, further diminishing U.S. competitiveness.” The December WASDE forecasts U.S. wheat exports to total 22.8 MMT, the smallest total in 7 years if realized.

Imports Up, Too

As wheat prices continue to rise, major wheat importers are outpacing their purchases compared to 2020/21 (see chart below). For example, Egypt made its largest single purchase of wheat ever this year, buying 600,000 MT and paid $90/MT more than the average price paid a year ago. Iran’s wheat imports are up 218% compared to last year, while Turkey’s import demand is up 36%.

Graph of wheat import volume for 10 countries at the same date the past two years.

Wheat import volumes are up in several countries even as global wheat prices continued rising. Source: USDA

Looking ahead to the second half of 2021/22, many analysts see little change in ending stocks but continued market volatility given the many unknown factors in the global economy including logistical challenges and pandemic uncertainty.  Producers and buyers now look to the potential for increased wheat acres (USDA forecasts a 5% increase in 2021/22) and better growing conditions to help add stability to the global wheat market in 2022/23.

By Michael Anderson, USW Market Analyst

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Exporters Share U.S. Wheat with the World

The commitment of the people who participate in every step of the U.S. wheat export supply system helps build an unmatched reputation for both quality and reliability.

The 2021 crop is an unfortunate but telling example of how U.S. farmers overcome significant risks to meet domestic wheat demand and still provide sufficient supplies for export markets. Farmers and commercial elevators can store and efficiently transport U.S. wheat in top condition to meet overseas demand when needed and throughout the marketing year. Prices are discovered through futures exchanges and basis costs that are always available to customers.

High Standards

The rigorous crop inspection and management continues with private export companies where high standards create the consistency and trust overseas customers depend on.

These companies use risk management tools to honor sales contract prices often made months before vessel loading. The Federal Grain Inspection Service (FGIS) independently inspects wheat at vessel loading to certify that the quality matches the customer’s specifications.

FGIS inspector of U.S. wheat

The Federal Grain Inspection Service weighs and inspects every sub-lot of U.S. wheat to certify it meets each customer’s specifications. This inspector is dividing a wheat sample into two equal sub-samples for various inspection processes.

“It’s a critical function the Federal Grain Inspection Service provides to meet our contractual obligation overseas and create that global standardization,” said United Grain Corp. President and CEO Augusto Bassanini. “I think that separates the value of U.S. wheat and other grain products from the rest of the world.”

Those inspections also yield valuable data down to the sub-lot level of 1,000 to 2,000 metric tons that offer customers even more value from their purchases with help from U.S. Wheat Associates (USW).

Personal Integrity

“Creating that difference for U.S. wheat is all done through relationships,” Bassanini said. “We couldn’t do it without the people, whether in this organization, whether in U.S. Wheat Associates. Really, it is that quality of those individuals that really creates, again, the unrivaled value to our customers.”

Augusto Bassanini

Augusto Bassanini, President and CEO, United Grain, Vancouver, Wash.

United Grain and Bassanini generously offered their story in USW’s video presentation “Wholesome: The Journey of U.S. Wheat” as a representative of all private export companies that share the U.S. wheat crop with the world. Now “Wheat Letter” shares that story below.

Learn more about how USW works with buyers and the U.S. wheat export supply system here.

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New Wheat Flour Lab to Help Promote U.S. Wheat Exports to South America

U.S. Wheat Associates (USW) sees a robust growth opportunity for U.S. wheat exports to South America. To meet rising demand for bread, snacks and other wheat foods, regional flour millers are hungry for information they need to purchase a wider range of high-quality wheat classes.

U.S. wheat must compete in Colombia, Peru, Chile, Brazil and other South American countries with imported Canadian and Argentinian wheat. Technical training and comparative analysis to demonstrate the advantages of U.S. wheat classes are important parts of USW’s work in the region. However, those efforts are somewhat constrained because a substantial portion of the funding for activities was needed for travel costs to conduct activities in sometimes limited facilities in each country or at U.S. educational institutions.

ATP Funding Yields Innovative Idea

A potential answer to this challenge arrived in 2019 when the Agricultural Trade Promotion (ATP) program, administered by USDA’s Foreign Agricultural Service (FAS), was created to help U.S. agriculture build new export markets. Under ATP, USW’s regional South American office staff in Santiago, Chile, proposed an innovative promotional concept to establish a regional flour milling, cereal chemistry and baking laboratory in cooperation with a respected university.

Through pandemic-related delays and customs challenges, USW and its project partner, Universidad Mayor, worked steadily to build a facility on the university’s Santiago campus and equip the lab with a test flour mill, wheat and flour analysis instruments and bread ovens. On Dec. 3, 2021, USW and the university dedicated Laboratorio De Analisis De Granos Harinas Y Panifcacion at an event attended by Chile’s Minister of Agriculture, U.S. State Department and FAS officials, the university rector and executives with several Chilean flour mills.

Photos show honored guests at the dedication of the new lab.

Honored Guests. Learning more about the new lab are, (L to R): Bret Tate, Agricultural Attaché, USDA/FAS; Lisa Swenarski, Counselor for Public Affairs, U.S. State Department; Pedro Pablo Lagos, Purchasing Manager, Luchetti Pasta, Santiago, Chile; Andrés Saturno, Technical Manager, USW/Santiago; Miguel Galdós, Regional Director, USW/Santiago; Lisa Swenarski; María Emilia Undurraga, Chilean Minister of Agriculture; Dr. Patricio Manque, Rector, Universidad Mayor. Photos courtesy of Universidad Mayor.

“We are very pleased to open the first lab of its kind in this region with Universidad Mayor,” said Miguel Galdós, USW Regional Director, South America. “We know that technical managers at South American flour mills have more influence today on the types of wheat their mills need to purchase. USW will be able to help more of those managers understand the differential advantages of U.S. wheat classes by conducting programs at this regional lab. At the same time, having access to consistent and reliable testing and analysis will lead to improvements in production processes and help improve the quality of regional wheat-based end products.”

More Efficient, More Effective

“Before now, South American millers would have to send wheat samples to a commercial company in Guatemala for analysis, so this lab adds much more efficiency in its support for regional customers,” said Mark Fowler, USW Vice President of Global Technical Services, who participated in the dedication event.

As a partner in the new lab, USW purchased and installed all the equipment using ATP funds, while Universidad Mayor built the lab and will cover fixed costs. USW Santiago in return will share equal access with the university to the lab for technical support activities supporting U.S. wheat exports to South America and remain the lab’s only private partner for 15 years.

Photo shows instruments in a new laboratory for measuring wheat quality that will support wheat exports to South America.

Fully Equipped. USW donated the instruments needed to analyze and compare wheat, flour and baking performance at the new lab. Funding for the equipment came from the Agricultural Trade Promotion program administered by USDA/Foreign Agricultural Service. Photo courtesy of Universidad Mayor.

Golden Opportunity

After attending the dedication event, USW Vice President of Overseas Operations Mike Spier called the new lab “a golden opportunity” to demonstrate the competitive baking advantage of U.S. wheat classes compared to wheat from other origins.

“With the ever-changing travel restrictions and quarantines, USW hasn’t been able to organize in-person technical activities for several months,” Spier said. “The lab provides everything USW Technical Specialist Andrés Saturno needs to get back to demonstrating the superior end-use baking performance of U.S. wheat classes to partners in Chile and other customers in USW’s South America region.”

Impressive Team and Project

For USW Chairman Darren Padget, a wheat farmer from Grass Valley, Ore., the dedication event was his first overseas trip to meet with customers in more than two years and his first visit to South America.

“I was very impressed by the enthusiasm of the regional USW team and among the guests at the dedication for this new lab,” Padget said. “I understand why, partly because we visited a supermarket in Santiago and saw the types of bread consumers purchase and how they shop. In Chile, consumption is very high, and they buy most of their bread for the day by the piece. Consumers there and across South America are looking for excellent quality products with a ‘clean label’ – very few additives. I think this lab will help USW demonstrate how flour from our wheat helps millers and bakers meet that demand.”

The evidence of that was on display at the dedication event as artfully crafted bread products and pizza refreshments baked by Master Baker Didier Rosada and his wife Kathy Cruz using flour milled from U.S. wheat. USW frequently works with Rosada’s Red Brick Consulting company to conduct baking seminars in Spanish-speaking countries. The week of the dedication, Rosada and USW held a workshop using U.S. wheat flour for customers representing 75% of Chile’s milling industry.

 

Impressive artisan bread products display.

An Artful Display. Master Baker Didier Rosada and Katherine Cruz, Red Brick Consulting, produced this impressive display of bread products admired by and shared with guests at the dedication of the new lab, Dec. 3, in Santiago, Chile. Photo courtesy of Universidad Mayor.

Traditional preferences and the landed price of imported wheat will remain a competitive challenge for U.S. wheat in South America. But the complete value of U.S. wheat becomes more obvious to customers through demonstration and training. Now there is a dedicated facility for that work, giving USW the opportunity to interact with regional customers more frequently and invest more of its funding to show them the unique advantages of U.S. wheat.

USW Colleagues at the Lab Dedication that will support Wheat Exports to South America.

Proud Colleagues. The USW/Santiago team who worked tirelessly to build the new laboratory to promote U.S. wheat exports to South America shared their enthusiasm for the project with USW guests. L to R: Mark Fowler, Vice President of Global Technical Services; Maria Martinez, Administrative Assistant; Andres Saturno, Claudia Gomez, Senior Marketing Specialist; Mike Spier, Vice President of Overseas Operations; Paola Valdivia, Finance & Administrative Manager; Miguel Galdos; Osvaldo Seco, Assistant Regional Director; and Darren Padget, USW Chairman.

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Think Farm Export Programs Don’t Matter? Think Again.

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