US Wheat Industry May Be Having a Tough Time, But It Still Offers the Most Competitive ProductMon, 14 Nov 2016 16:18:16 CST
Nearly every production record has been broken this year when it comes to grain crops around the world, most notably wheat. An outstanding feat and a testament to the capability of modern agriculture - still, this situation has caused some challenges as far as marketing the excess product goes. During the National Association of Farm Broadcasters convention last week, RON’s Associate Farm Director Carson Horn had the opportunity to speak with Dalton Henry, vice president of policy for the US Wheat Associates. According to Henry, despite the challenges of retaining excess grain and the rise of new players on the global market, the US wheat industry remains one, if not the, most competitive wheat exporter.
“We’ve been fairly fortunate so far this year compared to last,” Henry said. “From June to now, we’ve actually exported more Hard Red Winter then what we did in the entire marketing year a year ago.”
Henry identifies Brazil and Morocco as large purchasers stepping up more strongly than before this year, which he says is giving the US some good opportunities to move some of the lower protein grain being stored. Also, alleviating some of the worries of US growers, are the pitfalls of foreign crops. Henry cites heavy rain damage in Canada and the European Union which has shifted large portions of their grain to feed channels. He says that although US wheat right now is lacking in protein - it is still of decent quality and is helping the US keep its competitive edge on the world marketplace while Russia’s presence continues to grow. This year Russia topped the charts as the No. 1 exporter of wheat in the world.
“The rise of Russia as a major world wheat exporter, is a tremendous shift,” Henry said. “Now, a couple caveats on that is they may have been No. 1 overall in total tons shipped. But, if you look at International Grains Council data as to what was the actual prices received for that, they were all the way down at 5th in terms of value received and returns to growers.
“So, yes, they are a significant exporter but I think our focus in the US has always been much more on a quality perspective and maintaining value and profitability maybe ahead of just tons. That’s an area where we still continue to lead even with slightly lower export volumes.”
The trick to all this though, says Henry, is thinking creatively and finding unique markets, that traditionally, the US may not have ever been involved with before. That’s where his organization comes in.
“I think part of it is matching up the quality wheat that US growers produce with markets that will pay for that; will provide additional value and then get the right trade policies in place,” Henry said. “Securing new agreements, finding new market access and removing barriers really, at the end of the day, is one of the most important things we can do to help wheat farmer productivity in the US.”
For a chance to listen to Horn’s entire conversation with Henry about the US wheat industry’s competitive edge in the world marketplace, click or tap the LISTEN BAR below.
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