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News from the Minnesota Association of Wheat |
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AUSTRALIAN FARM GROUPS TO LAUNCH INTERNET MARKET Farm media group
Rural Press LTD pastoral house Wesfarmers Dalgety and business strategy consultant McKinsey & Co are founding partners in the project, which aims to finalize a capital raising of A$40 million next month. The
venture will establish by far the biggest Internet trading and procurement venture for Australia's farm sector, Rural Press' managing director Brian McCarthy told Reuters on Thursday. "The market opportunity is
quite large," he said, noting that Australia's farm sector, with its 140,000 agricultural enterprises, generated annual expenditures of about A$25 billion to produce revenues of about A$29 billion. Surveys
conducted by the venture showed that about half Australia's farmers were already Internet users. However, present farm sector Internet sites were only small operations, he said. "We think the opportunity is
fairly great." The group was also seeking to expand its partners. It could trade internationally but the focus would be on the Australian market, McCarthy said. The Internet site would incorporate
an auction facility and offer modules for each sector of agriculture. "It will be a total one-stop shop for farmers," McCarthy said. The portal will also offer information, with enhanced, detailed
information planned for access through subscriptions.
USW QUALITY SEAL LAUNCHED IN JORDAN
AND LEBANON The USW staff in Cairo report that inspections will be held later this summer or early fall to confirm that the mills meet the highest quality
standards and are using U.S. wheat for their flour. In anticipation of the developments, USW is working with in-country advertising agencies to develop the consumer promotion market strategy. The Quality Seal
program, geared to promote U.S. wheat to consumers, was started in Egypt and continues to be highly successful there and elsewhere, involving over a hundred mills and bakeries.
A U.S. wheat "quality seal" brochure, in Arabic, is part of a retail
REVERSING MARKET SHARE DECLINE IN MOROCCO Are the programs succeeding? As George Galasso, USW regional vice president in Casablanca explains, "market
share is a fickle indicator of the success of market development efforts given the constantly shifting quality and supply parameters characteristic of agricultural commodities."More simply, however, the numbers
look good. Perhaps a brief look at the trends in Morocco would be illustrative. First, the decline... Morocco was awarded wheat under EEP until the program wound down in MY94/95. Comparing the EEP years
(MY1985/86-1994/95) to the post-EEP years (MY1995/96-99/00), American market share declined significantly, from 55% to 19%. U.S. market share was at the mercy of EU export subsidies, but it was also heavily
influenced by market and quality factors when liberalization reduced government buying and private buyers emerged. Post EEP developments... U.S. market share doubled in MY1995/96, with actual sales increasing from
170,000 to 580,000 MT, largely due to the suspension of EU export subsidies and the introduction of an EU export tax. Then, the next year, the import market was liberalized. Although private millers were
knowledgeable about milling and flour requirements, they didn't know the origin of wheats that had been purchased by the government buyer. They were also unfamiliar with quality wheats. USW urged them to take
advantage of an unusually high quality SRW harvest to blend with a big, quality-compromised local crop, and we had good American sales in spite of resumed EU export subsidies. In the following year, MY 1997/98,
American sales volume was comparable to the previous year, but there was a decline in American market share: a Moroccan crop shortfall required a 1 MMT increase in imports, but there was also a reduced blending demand
due to the lower Moroccan crop; there was a lower supply of better quality SRW; EU subsidies increased; and better quality wheats from the Black Sea emerged on the market. Developing an "improver"
market... MY1998/99 saw continued strengthening in EU export subsidies which, among some other factors, resulted in the lowest American sales in many years. Nevertheless, millers became acquainted with better
quality wheats throughout MY 1997/98 and MY1998/99, and USW aggressively promoted wheat blending to improve flour consistency. American sales performance improved substantially in MY 1999/00. The
"improver" wheat market, successfully promoted by USW, guaranteed good American sales performance in MY1999/00 in spite of extremely aggressive EU export subsidies. American sales took off early in
MY1999/00, more than doubling, both in quantity and market share, the previous June-December figures. Almost half of these sales were HRW, almost a fourfold increase over the previous year for this class.
Working with the buyers and millers of Morocco, through the school and through a formal outreach program, has been instrumental in developing the market and in overcoming setbacks and challenges. In fact, if
imitation is the sincerest form of flattery, the French have figuratively reaped praise on the U.S program -- the new "France Export Cereals" office in Casablanca was admittedly modeled after USW
operations. Fortunately, the USW programs are now firmly in place and will provide an invaluable resource to "offer corrections" to French claims. The Food and Agriculture Organization of the United
Nations reports that in Morocco " poor rainfall since mid-January coupled with abnormally high temperatures, resulted in losses of over half of area planted to wheat and barley. As a consequence, production
is expected to be sharply reduced. Initial indications point to wheat output in 2000 at some 1.1 million tonnes, about half of the 1999 drought- reduced output..." In response, the U.S. Embassy in Rabat
announced on July 5 that the United States will provide Morocco with food aid consisting of a donation of 30,000 tonnes of wheat, and concessional financing for the purchase of 40,000 tonnes of wheat and 40,000
tonnes of barley, This new food aid is in addition to the 100,000 tonnes of wheat announced last fall, bringing to 210,000 tonnes the total U.S. food aid for Morocco this year.
DEVELOPING THE WHEAT MARKET IN SUDAN A case in point is Sudan. In 1993, the Clinton Administration applied unilateral sanctions against Sudan. In the ensuing years, the EU, Australia
and Canada have become the top suppliers of wheat to Sudan, typically providing about a half ton of wheat each year. Miller and buyers there have very little familiarity with our. marketing system or wheat
classes, and the challenge for U.S. Wheat Associates, now that sanctions are eased, is to provide them with the basic knowledge so they can purchase American wheat. The first commercial sale of wheat to Sudan since U.S.
trade sanctions were lifted took place in April 2000, when the sale of 31,000 metric tons of hard red winter wheat came after USW conducted several planning sessions with traders and millers who operate in Sudan. USW
staff in Cairo is continuing to aggressively reestablish ties with major Sudanese millers and traders. At the end of May, USW had a 5 -day visit to Sudan, meeting with nearly all the flour millers, and with bank
officials to discuss currency availability and procedures for payments. USW also held a seminar with 45 bakers from the Khartoum area, where U.S. wheat expert Dr. Hamza Hamza gave a presentation on baking ingredients
and their functionality, quality comparisons of US to Australian wheat. The Sudanese invited USW to attend a celebration of arrival of the US wheat purchased in April, and to tour the flour mill that purchased
the wheat. During the ceremonies, the mill indicated that they want to display the "American Wheat Quality Seal," a promotional logo for U.S. wheat, on their flour bags.
CREATING A MARKET IS MORE THAN A SALES PITCH A particularly successful venture has been ongoing for 19 years in South Asia, where USW
and Thailand's UFM Baking and Cooking School jointly conduct a six-week Baking Science and Technology Course. The course, valued by U.S. wheat customers, has produced a large pool of
trained bakers over the years, with many of the past graduates operating some of the largest plants in the region. This spring's class attracted an over-capacity class of thirty-one
trainees from the Philippines, Singapore, Malaysia, Vietnam, Sri Lanka, Indonesia, Myanmar and India. Training this year included an emphasis on the sponge and dough method of bread
making, which favors the use of America's higher protein flours and produces bread of superior quality. Sometimes the work of USW is so much more basic, however, as was the case
recently in the country of African country of Chad. Despite some cumbersome challenges -- the seminar presentation was in English, translated into French, and then translated from French into a local dialect -- the USW
baking consultant conducted a technical workshop with local bakers, many of whom had never had an opportunity to attend a workshop. For the first time, these bakers were brought together to discuss their craft, to
resolve problems, and to learn new concepts.
NDWC AIMS TO IMPRESS COLOMBIAN MILL AND
PASTA PLANT OFFICIALS ON JULY 6-7 On Thursday, the delegation will be at the
Northern Crops Institute, Fargo,for programs on U.S. spring wheat and durum quality and their respective market outlooks as well as the U.S. grain handling, transportation and pricing system. Friday's schedule includes
a tour of Dakota Growers Pasta Company, Carrington; Farmers Elevator of Cooperstown, and the Brad Neske farm near Valley City. Colombia was the tenth largest export market for all classes of U.S. wheat combined in
marketing year 1999-00, but the vast majority of the near 26 million bushels purchased was hard or soft red winter wheat. The state wheat commission hopes this visit will influence these important Colombian
customers to increase their imports of U.S. spring wheat and durum, the primary classes of wheat grown in North Dakota. "Buyer education is especially vital in the Colombian market," says NDWC Marketing Director Jim
Peterson. He explains that Colombian grain buyers need to use more precise parameters in their contract terms to be assured of getting top quality wheat from the United States. The Canadian Wheat Board has
increased sales of spring wheat to Colombia and other Western Hemisphere countries at the expense of the United States in the late 1990s with over-delivery on quality traits and other attractive contract terms.
"Because of the CWB's willingness to subsidize on quality, it has been difficult to convince Colombian mills to specify for quality when purchasing U.S. wheat," Peterson says. At least one pasta plant in Colombia has
been importing some U.S. durum since 1998, but most pasta in the country is still made from spring or winter wheat flour. Growth in the pasta market and competition from imported pasta is creating demand for
better pasta. Pasta made from durum is firmer when cooked and more pleasing in color and overall appearance. For information contact: Note: For a copy of the schedule for the Colombian Trade Mission, contact NDWC Public Information Specialist Ellen Huber, phone 701-328-5111 or e-mail:
Looking at our barley nursery this morning,
scab is already present. Most varieties headed out between June 18 and June 25. I would rate the level of infection as slight to moderate this early in the game. We have had three rain events in the
last five days with heavy fog in which another load of symptoms should appear in the next five days. Then I went over to our winter wheat plots, there is leaf rust and low to moderate levels of scab there
too. Not good news today. Kent McKay NDSU NEWS: STILL TIME TO APPLY NITROGEN According to David Franzen, extension soils specialist at North Dakota
State University, improved corn yields are possible when nitrogen is applied as late as at tasseling. "If fields dry out soon, nitrogen can be applied using a normal applicator until the fertilizer
wagons begin to bend the crop over," Franzen says. When corn gets tall, dribbling liquid nitrogen between the rows is a For more information, growers should contact their local North Dakota or Minnesota extension service
county office. Additional information on flood related topics can be found on the temporary web site < Source: David Franzen, (701) 231-8884
WET SOIL RAISES ROOT ROT DANGER Warm saturated soils favor the development of Phytophthora root rot on
soybean and Aphanomyces root rot on sugarbeets, say Art Lamey, NDSU extension plant pathologist. In addition, he says, saturated soils that stress dry beans and soybeans can favor development of Fusarium
root rot. "This will cause the outer portions of the root to turn brown or reddish brown and the plants to wilt, with the wilted plants often in patches," Lamey says. Cultivating to aerate
the soil will help reduce the danger of additional infections from Fusarium root rot. While cultivating, says Additional information is available at local North Dakota and Source: Art Lamey, (701) 231-7056 |
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