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06-12-13 *US Wheat Associates News* Ecuador Trade Team Visit Focuses on U.S. Wheat Competitive Advantages…

Posted by Brian Allmer on June 12, 2013

USWA - US Wheat Associates Logo

ARLINGTON, Virginia — In an increasingly competitive world wheat market, U.S. Wheat Associates (USW) must be positioned to help U.S. wheat farmers take advantage of any market opportunity. Ecuador presented one such chance after the Canadian Wheat Board (CWB) lost its export monopoly control on August 1, 2012. And, in the past year, USW has turned an ongoing relationship with flour millers in Ecuador into increased sales. This summer, USW will further foster greater demand in Ecuador by bringing a team of experienced Ecuadoran wheat buyers to the United States June 16 to 22 to learn more about the advantages of U.S. wheat and the export supply system.

“Despite heavy competition from the Canadian Wheat Board monopoly, USW managed to gain a decent share of the market,” said USW Regional Vice President Alvaro de la Fuente, who will lead the trade mission. “Now, we are competing equally with Canada on the basis of quality and value and U.S. wheat commercial sales are up more than 50 percent year over year.”

Ecuador has imported more than 540,000 metric tons of wheat per year on average since marketing year 2007/08. Canadian spring wheat made up the largest share of the total, but U.S. soft red winter (SRW), hard red winter (HRW) and soft white (SW) wheat commercial sales for 2012/13 (June to May) reached more than 7.6 million bushels (205,800 metric tons), compared to a five year average of 5.1 million bushels (139,000 metric tons). 

One of the goals of this trade mission is to demonstrate the value of HRW or blends of HRW and U.S. hard red spring (HRS) with SW or SRW compared to Canadian spring wheat.

“With minor adjustments, bakers can lower their costs with flour blends milled from U.S. wheat without compromising quality,” de la Fuente said. 

The team’s first stop is Portland, OR, where there is access to U.S wheat supply systems from the wheat farms to end product education at the Wheat Marketing Center. Buyers will also learn how opportune it is to source multiple wheat classes and protein levels from the Pacific Northwest. In Oklahoma, the team will see HRW wheat in the field, observe how that wheat moves efficiently to market and get a first look at HRW quality for 2013/14. Price discovery, quality certification and trade considerations will be featured in the team’s final stop in Kansas City, MO.

In addition to generous support from the Oklahoma Wheat Commission and USDA’s Foreign Agricultural Service, USW worked with Kansas Wheat, the Oregon Wheat Commission, the Wheat Marketing Center, the Federal Grain Inspection Service and grain trade companies to organize the Ecuador trade team.

USW is the industry’s market development organization working in more than 100 countries. Its mission is to “develop, maintain, and expand international markets to enhance the profitability of U.S. 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 the 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 U.S. wheat.

 

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Nondiscrimination and Alternate Means of Communications
U.S. Wheat Associates prohibits discrimination in all its programs and activities on the basis of race, color, religion, national origin, gender, marital or family status, age, disability, political beliefs or sexual orientation. Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact U.S. Wheat Associates at 202-463-0999 (TDD/TTY – 800-877-8339, or from outside the U.S.- 605-331-4923). To file a complaint of discrimination, write to Vice President of Finance, U.S. Wheat Associates, 3103 10th Street, North, Arlington, VA 22201, or call 202-463-0999. U.S. Wheat Associates is an equal opportunity provider and employer.

2013 Ecuador Team – Team Members

Pedro Vega 
Industrial Business Manager, Moderna Alimentos S.A.

Felipe Vergara 
General Manager, Corporacion Superior S.A.

Rafael Gonzalez-Rubio
Assistant General Manager, Ecuatoriana de Granos (Ecuagran)

Alvaro de la Fuente
Regional Vice President, South America, USW/Santiago

Economic Changes in Ecuador Create Attractive Environment for U.S. Wheat

Tremendous political and economic changes over the past decade in Ecuador and other South American countries have dramatically influenced the wheat foods industry. While most bakeries in Ecuador are small and tradition-bound, milling, baking and wheat food companies are growing and becoming more competitive. These companies are more concerned with end-product quality to meet the changing demands of more affluent consumers. This transition to a consumer-driven, quality conscious market creates opportunity for U.S. wheat growers to increase sales and maximize market share in the region.

The experienced managers from Ecuador that USW is bringing to the United States June 16 to 22, 2013, represent the major flour, cookie and pasta groups in Ecuador. Together, they directly purchase or influence the purchase of almost 71 percent of the country’s total annual average wheat imports of more than 540,000 metric tons. 

Primarily because the Canadian Wheat Board (CWB) was able to offer favorable terms and preferential service to Ecuadorian buyers for many years when it had monopoly control, Ecuadoran bakers still have a preference for high protein flour. Change comes slowly, but USW consultants have been demonstrating to millers and bakers that they can make high quality bread with lower protein HRW or with blends of HRW and SRW or SW wheat. This effort should also be more effective because private Canadian exporters are not likely to be able to continue offering discounted prices for their spring wheat. 

In this new environment, this trade team connects these buyers with U.S. wheat growers, grain traders and federal grain inspection managers to demonstrate the advantages of the U.S. wheat marketing system, as well as the quality and diversity of U.S. wheat.

U.S. Wheat Sales to Ecuador

1,000 Metric Tons

Crop Year
(June – May)
HRW
SRW
HRS
White
Durum
Total
2012/13
40.0
134.1
0.0
31.8
0.0
205.8
2011/12
38.6
66.5
0.0
30.3
0.0
135.4
2010/11
53.2
42.3
0.0
0.0
0.0
95.4
2009/10
66.7
83.5
0.0
0.0
0.0
150.2
2008/09
52.1
55.7
0.0
0.0
0.0
107.8
2007/08
64.2
41.1
9.8
24.2
0.0
139.3
2006/07
0.0
43.7
5.5
6.4
0.0
55.6
2005/06
8.7
17.5
55.5
38.7
1.6
122.0
2004/05
21.7
37.8
25.0
10.5
0.0
95.0
2003/04
31.3
35.4
9.5
14.7
1.3
92.2
Data current through May 31, 2013
Source: USDA - FAS – Weekly Export Sales Report

One metric ton = 36.74 bushels

 

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