September 08, 2015

08/09/2015: Commodities: US wheat crop tour

Annual US wheat crop tour strengthens relationships with Japanese executive millers  
By US Wheat Associates 

First published in Milling and Grain, May 2015

Building mutual trust and long-term business relationships takes time and commitment. As a part of its market development activities, one important activity US Wheat Associates (USW) employs to create stronger partnerships with overseas customers is to invite them to have a first-hand look at the US wheat crop. That is what a team of six-flour milling executives from Japan’s leading milling companies will do during travel to the Pacific Northwest April 30 to May 8, 2015.

“Japan imports large amounts of US wheat so it is important for the Japanese flour milling industry to regularly exchange views and information with US wheat organisations and businesses,” said Mr Masaaki Kadota, executive director of Japan’s Flour Millers Association.

“We really appreciate your efforts to support our needs as your customers.”

USW collaborated with the Montana Wheat and Barley Committee, Oregon Wheat Commission and Washington Grain Commission to organise and host this trade team.

The Oregon Wheat Growers League (OWGL) established the first overseas US wheat export office in Tokyo in 1956 and in that same year, the first Japanese millers team visited the United States to learn about its markets. After it was established, USW continued the tradition and for well over a decade, this particular activity has become an annual trip for Japanese executive millers. According to Kadota - who has accompanied this team for many years - there is always something new to learn and discuss.

“There is nothing better than strengthening the mutual trust I have with those whom I meet each year,” said Kadota.

The team will make stops in Oregon, Washington and Montana. During meetings with wheat farmers, grain industry representatives and university researchers, the team will discuss the US wheat supply and demand picture, including potential quality, availability and price. The team will also discuss current views on competitive markets, dietary trends and the role innovations in wheat breeding will have in balancing future world food supply demands with the need for less impact on the environment.

“This exchange of dialogue and information is essential to US trade with Japan,” said USW West Coast Office Assistant Director Shawn Campbell.

“When questions and concerns arise, we rely on the trust built during these activities to guide us toward decisions that have a positive impact for both US wheat farmers and the Japanese milling industry.”

USW is the industry’s market development organisation working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of US wheat producers and their customers.” USW activities are made possible through producer checkoff dollars managed by 19 state wheat commissions and cost-share funding provided by USDA’s Foreign Agricultural Service. USW maintains 17 offices strategically located around the world to help wheat buyers, millers, bakers, wheat food processors and government officials understand the quality, value and reliability of all six classes of US wheat.

The US Wheat Industry Relationship with Japan
In 1949, the OWGL organised a trade delegation to investigate ways to expand US wheat sales to Japan. That trip ultimately resulted in a variety of marketing and education activities conducted by Western Wheat Associates, including a “Kitchens on Wheels” school lunch program that promoted wheat foods to Japanese consumers in rural areas. Western Wheat Associates merged with Great Plains Wheat in 1980 to become USW.

Today, those efforts continue to pay off with US wheat enjoying the largest market share in a well-established and quality conscious market. Japan has purchased significantly more US wheat than any other country over the years, including more than 3.50 million metric tons (MMT) on average the last five years. Japan issues consistent, large, weekly tenders for US hard red spring (HRS), hard red winter (HRW) and western white, which is a blend of soft white (SW) and up to 20 percent club wheat, a SW sub-class.

Japan’s milling and baking industries are highly advanced. A modern baking plant produces 600 to 700 different items daily from more than 30 blends of flour of various classes while meeting strict quality and food safety restrictions. As a result, Japanese millers demand very high standards of cleanliness and uniformity - and US wheat producers consistently meet those standards.   

USW’s efforts in Japan focus on providing up-to-date market information and collaborating with Japanese industry groups. The Ministry of Agriculture, Forestry and Fisheries (MAFF) carries out all wheat purchases in Japan and then sells the wheat to Japanese flour mills.

The Japanese grain trade acts as intermediaries between MAFF and overseas sellers, and MAFF relies on the Federal Grain Inspection Service to certify that its specifications are met. The Portland, OR, office of OMIC USA Inc., conducts stringent residue testing for MAFF as the wheat is loaded and its offices in Japan test the wheat again when it arrives at its destination.

Japanese customers value consistency and reliability. Their keen concerns include food safety issues. Flour millers want to increase their knowledge about the quality and supply chain of US wheat.

As an Overseas Variety Analysis (OVA) program participant, Japan is a part of a collaborative effort of wheat breeders, wheat commissions, government research agencies, domestic partners, and overseas millers and bakers that add more value to US wheat varieties each year. Historical OVA program results show that new wheat varieties typically rank higher in processing characteristics than older ones, demonstrating that US wheat quality is continuously improving.

The trust between USW and the Japanese industry allows for open dialogue between the two countries, to foster a mutually beneficial, long-term trading relationship.                   

Read the magazine HERE.

The Global Miller
This blog is maintained by The Global Miller staff and is supported by the magazine GFMT
which is published by Perendale Publishers Limited.

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