The adoption of biotechnology, export expansion, and supplier reliability are crucial components to further bolster the U.S. wheat industry — a $16.5 billion economic powerhouse in 2008.
“Bringing biotechnology into the wheat realm is imperative for a healthy and expanding U.S. wheat industry,” says Michael Edgar, Yuma, Ariz.
Edgar is nearing the completion of his one-year term as chairman of U.S. Wheat Associates (USW), the industry’s export market development organization.
USW and the National Association of Wheat Growers (NAWG) are collaboratively building industry support for the adaptation of biotechnology in wheat.
The two groups and the North American Millers’ Association, plus similar associations in Canada and Australia, announced in May the intent to work toward synchronized commercialization of biotech traits in wheat. The groups agreed that biotechnology in wheat should be introduced in a coordinated fashion to minimize market disruption.
Biotech wheat is currently not grown commercially in the world.
“Wheat has lost acreage in the United States to corn and soybeans due to competition from crops that have the advantages of biotech traits,” Edgar said.
More than three-quarters of the wheat growers responding to a NAWG survey approved a petition supporting the commercialization of biotechnology in wheat.
“Until now, there has only been speculation about the breadth of grower support for biotechnology in wheat,” said NAWG CEO Daren Coppock. “This petition was designed to gather those answers from across our wheat producing areas, and now we have an objective and clear answer.”
According to the National Agricultural Statistics Service, U.S. wheat farmers produced more than 75 million tons of all varieties of wheat in 2007.
About half of the U.S. crop is exported annually, Edgar says. The top five customers in order: Japan, Egypt, Nigeria, Mexico, and the European Union.
USW’s key role is building export markets for U.S. wheat in about 90 countries. Cuba is a budding market for expanded U.S. wheat sales. USW leadership visited Cuba several years ago, successfully opening the door to limited U.S. wheat sales into the country.
Edgar and U.S. wheat farmers met in Washington, D.C., this past spring with leaders from the Cuban Interest Section, a quasi-equivalent to a Cuban embassy.
“Cubans consume 750,000 to 900,000 tons of wheat annually and we should be able to supply their needs,” Edgar said. “It doesn’t make sense for Cuba to buy European-grown wheat that’s transported across the Atlantic Ocean when the U.S. coastline is several hundred miles away.”
Free trade agreements are another venue to building markets for U.S. farm products. The North American Free Trade Agreement with the United States, Mexico, and Canada is the most popular and controversial FTA. More than a dozen FTAs are in place.
Pending FTAs with Colombia and Panama are on hold awaiting direction from the Obama administration.
“USW is providing the Obama administration with background information and export projections on U.S. wheat sales to Columbia and Panama,” Edgar says. “I don’t have a good feel on whether the Obama administration will support or oppose the proposed agreements.” USW supports the agreements.
If the deal is worked out, Columbia and Panama would likely purchase hard red winter wheat from the Pacific Northwest or the Gulf of Mexico.
The U.S. wheat industry has a solid reputation as a reliable, steady supplier of grain to the world. That image is critical, Edgar says, to maintain current markets and build new opportunities. USW has 16 foreign offices around the world promoting the United States as a reliable and steady wheat source.
“When the world experienced a short wheat supply last year, the U.S. wheat industry and U.S. Wheat Associates stayed in close contact with their customers worldwide,” Edgar said. “We remained a reliable, steady supplier of grain to the world. Not all wheat-exporting countries could say that.”
USW is not a grain trader; the organization develops markets for U.S. wheat companies to negotiate wheat sales.