Highlights From the Recent Wheat Quality Council Annual Meeting, Kansas City

The Wheat Quality Council (www.wheatqualitycouncil.org) supported in part by wheat checkoff dollars, assists in evaluating and communicating milling and end-use quality of wheat grown in the U.S. The council provide forums for breeders, producers, and industry members to discuss desired characteristics and evaluation of upcoming wheat varieties

New Markets for New Products
David Shelton, Wheat Marketing Center, Portland, OR, says wheat foods markets are becoming more sophisticated and global, and that new wheat products and markets are growing in two ways: existing products being introduced in new areas, and adapting products to new areas.

For example, Shelton says there is now a wide variety of Asian noodle types with a range of protein, color and quality.  The Asian noodle market is growing strongly in Latin America with many different ingredients and flavorings. “I’m amazed at the eagerness of people trying different things,” Shelton says.  He points to one example of a group of Singaporean bakers teaching Mexican Asian noodle makers how to make strudel, a German pastry.

Quality of Monsanto Wheat Lines
Controversy about Roundup-Ready wheat varieties aside, how might they perform from a quality standpoint?

Indeed, one of the key elements for the commercialization of Roundup-Ready wheat varieties is that milling and baking performance be the same or better than other wheat varieties.

Arnold Estrada of Monsanto, presented quality research of genetically-engineered herbicide-tolerant wheat lines.  Estrada showed diagrams comparing multiple lines with their originating parents, wherein the new lines performed at or better for flour extraction, flour protein, mixograph strength, bake absorption, and other traits. In addition, new lines not from adapted parents, are performing better for many quality traits.

U.S. Wheat Perspective
Neil Fisher, Administrator of the North Dakota Wheat Commission, says world wheat usage is increasing at a faster pace than production, resulting in a 20-year low in wheat stocks. U.S. wheat use overall is strong, Fisher says, with increased exports offsetting a decrease in domestic consumption, keyed by low-carb diets.

He notes too that Chinese wheat production and use (China is the world’s largest wheat producer and user) has moved similarly, and that the Chinese “are more quality minded” than ever before. China’s purchases of U.S. hard red spring wheat have reached nearly 11 million bushels thus far in the 2003-04 marketing year, the largest since 1991-92 and a sizeable jump from 1.7 million bushels last year. Milling companies can blend U.S. spring wheat with lower protein wheat grown in China to improve processing characteristics and end-product quality, says Fisher.

Latin American Perspective on U.S. Wheat
Mexican wheat production could drop as much as 50% in 2004.  According to Jose Luis Fuentes, president of the Latin American Millers Association (ALIM), this decrease in production from a severe drought is causing restrictions wherein water is only available for humans in certain Mexican regions. Speaking at the recent Wheat Quality Council annual meeting in Kansas City, Fuentes told participants that Mexico will be needing larger import volumes of wheat.  “U.S. exports are very important to us,” said Fuentes.

ALIM is a non-profit organization comprised of milling companies and wheat industry representatives founded to develop the wheat milling industry in Latin America.  Organized in 1982 by five countries with the support of U.S. Wheat Associates, ALIM has now grown to 30 member countries in Central and South America and the Caribbean.

According to Fuentes, Latin America produced 26,122 metric tons (mt), imported 19,161 mt, consumed 34,319 mt, and exported 10,964 mt of wheat in 2003. Brazil, Argentina, and Mexico are the largest importers, while Mexico buys more wheat than Central America and the Caribbean nations combined.  Fuentes feels there is good potential growth for wheat markets in Mexico, Central America, and the Caribbean. Of the 7,726 mt of wheat being imported from the U.S., most is hard red winter, followed by soft red winter, and then hard red spring.

Fuentes says dockage and contract specifications are major issues for Latin American grain buyers. He said 73% of buyers complain of dockage levels over 0.5%. “Dockage is a subject of great concern,” Fuentes says, adding that ALIM has requested the assistance of U.S. Wheat Associates to help lower dockage levels under 0.5%.

He also said that while many buyers specify quality parameters in their purchase contracts, some of these parameters are not being met.  He signified that problems are mainly due to mixes in wheat classes, varieties, quality, and protein levels. More direct buying would help reduce these problems by preserving the identity of variety, origin, and quality. Consistent quality is often more important to Latin American wheat millers than purchase price, he points out, and he strongly recommended the simplification of bureaucratic paperwork to make it easier for direct purchases from U.S. producers.

In Mexico, Fuentes said interest rates and inflation has been low and the economy stable over the past three years, which is making it easier for Mexican buyers to do business with the U.S.  Mexico has the highest number of varieties of breads than anywhere else in the world, Fuentes points out.

The Mexican industry has been struggling more with transportation issues, similar to the grain industry in the U.S.  Fuentes said that maritime transport that cost $9 per mt a few years ago is now at $26-28 per mt. That’s a key reason why more grain is being moved in Mexico by rail, which also offers better quality control and consistency, according to Fuentes.

Latin American bakers are getting smarter and more specific about their grain purchases, Fuentes said. They follow U.S. grain futures prices and understand price and quality.  Fuentes said Latin America buys U.S. wheat because it is economically convenient and competitive. While inconsistent quality can sometimes be a problem, he said that many Latin American millers are happy with U.S. wheat quality and price, and that the U.S. offers a convenient and superior infrastructure to provide wheat exports.

Jose Luis Fuentes, president of the Latin American Millers Association, says Mexico will need to import more wheat due to severe drought conditions in that country. Fuentes spoke at the recent Wheat Quality Council Annual Meeting in Kansas City.