U.S. wheat is known for its quality — and its higher price, according to Michael Peters, vice chair of the U.S. Wheat Associates board.
USW is the export market development group for the industry. It promotes the quality of wheat to buyers, food processors and governments in more than 100 countries around the world. You can probably imagine that it’s gotten more difficult amidst war in the world’s bread basket, geopolitical unrest, supply chain problems and higher prices.
“U.S. wheat has always been in the marketplace … but with the Ukraine-Russia conflict, it’s kind of brought a highlight back to the U.S., Peters says. “As far as exports this year, we’re actually running a little behind. That’s mainly due to the prices.”
He says the quality and quantity of wheat in 2022 was good. But it’s priced higher than most other countries, making the market tougher. Latin America, Thailand, Korea, Japan and Mexico are good customers of U.S. wheat. He adds Mexico has increased its import of wheat from the U.S.
To justify the price, USW travels to markets to explain that the world renowned quality of U.S. wheat will make for a more quality product. On Capitol Hill, USW is asking for more funding to market wheat overseas.
“There’s a time this year that Russia-Ukraine wheat was actually $100 a metric ton cheaper than U.S. wheat, so that makes it very tough for us to compete with that sometimes,” Peters says. “And our shipping costs is quite a bit higher.”
Unfortunately today, there are also domestic challenges facing wheat, such as low Mississippi River water levels.
“There’s places barges can’t even get through,” Peters says. “To get that shipment of grain down to the Gulf, to ship it out to exports is tough, so you may have to do that more by truck or rail. Rail-shipped wheat is always higher priced than a lot of other commodities. So it’s a difficult issue for the U.S. wheat farmer right now.”
He notes that getting products, such as fertilizer, back up the Mississippi River is also a problem for growers. Peters says it will take prolonged rainfalls and snowfall to recharge the water levels.
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