In late October, the CEO of Kansas Wheat traveled to Brazil and Columbia, hoping to ramp up imports of Kansas wheat in South America.
Kansas is the largest exporter of hard red winter wheat, but with trade negotiations continuing and new wheat producers ramping up, the U.S. wheat producers need to negotiate more openings for their wheat in already-established export markets, as well as find new trade partners. South American markets are good examples of increasing trade with already-established markets.
“Brazil is one of the largest importers of hard winter wheat,” said Justin Gilpin, the CEO of Kansas Wheat. “They use seven million tons a year. It’s a really good fit for their bread.”
Gilpin traveled to South America with other representatives from the U.S. Wheat Associates to try to drum up business. They also taught quality data seminars. In 2019, USW hopes to host seminars in 38 other countries. In each seminar, delegates discuss grade factors, protein levels, flour extraction rates, dough stability, baking loaf volume, noodle color and texture for the six U.S. wheat classes. Each class is tailored to the needs of each market.
Gilpin presided over seminars in Brazil and Columbia that focused on hard red winter wheat. About 95% of the wheat grown in Kansas is hard red winter wheat. This wheat is high in protein and has strong gluten for bread.
“This trip allowed us to grow and expand for the next six to nine months,” Gilpin said. “This made for really good discussions.”
In 2017, the USDA reported Kansas produced 19% of U.S. wheat – more than 300 million bushels. According to Gilpin, the U.S.’s largest volume buyer of wheat is Mexico. Because the grain can be shipped by rail, the cost of transport is lower than for other countries. In September, Gilpin said Mexico imported 200,000 tons of wheat by rail. He said Mexico’s purchases are up more than 50% from last year.
“Kansas has the largest amount of exported wheat from the U.S.,” Gilpin said. “There are increasing exports. Over 10 million tons of hard red winter wheat. There are 36.74 bushels in one metric ton.”
Competition
For decades, the U.S. has relied on exporting wheat. During the 1980s the U.S. dominated this market. Now, other countries, including Canada, are growing this grain. Although Mexico and Japan continue to be important importers, exports to several other countries have decreased. Competition from the Ukraine and Russia is mounting. In addition, there are worldwide stockpiles of this grain and trade negotiations with China continue. The Minnesota Department of Agriculture said in 2017, agricultural exports to China were more than 17% of the total U.S. agricultural exports that year. At that time, wheat was the fifth largest grain import from the U.S. by China.
“Russia is the biggest exporter. They are the largest wheat producer in the world,” said Joe Janzen, Ph.D., a professor of agricultural economics at Kansas State University. “We have some of the most competitive wheat markets right now.”
Janzen said France and Germany had large wheat crops this year as well, as did Argentina. Because of Russia and the Ukraine’s proximity to Europe, Africa and the Middle East, Russia and the Ukraine are increasing their exports to these areas. Also, the cost of shipping is less expensive for them. The U.S. still has a stronghold in parts of Asia, South America and Africa, especially in Nigeria, Kenya and Morocco.
Finding New Markets
Finding new markets is always a challenge. Sometimes another producer’s lower production rates help other suppliers.
Weather and political challenges may affect the year’s crop. Because Australia had a difficult year in wheat production – due to weather, there are additional openings in Southeast Asia for wheat exports this year.
Doug Keesling, a fifth-generation farmer who grows wheat in Lyons, would like to see wheat exports open up to another market, Cuba. Keesling, the owner of Keesling Farms, serves as a co-chair for the United States Agriculture Coalition for Cuba. The National Association of Wheat Growers, U.S. Wheat Associates, Kansas Wheat and dozens of other agricultural organizations are members of this organization that hopes to bring U.S. agricultural ideas, education and trade relations to Cuba.
“All we want is to be able to sell our agricultural products to our neighbor,” Keesling said. “Trade is the number one way to increase the agricultural economy.”
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