China’s dynamic market is impacting U.S. wheat supply and demand, reported speakers at the U.S. Wheat Associates (USW) board of directors meeting in Minneapolis, Minn.

In separate presentations, Mike Krueger, president of The Money Farm, Fargo, N.D., and USW Regional Vice-President Matt Weimar, Hong Kong, examined how the changing demand for food in China can move U.S. prices. Although China is the largest producer of wheat in the world, it imports some wheat each year.

“Chinese flour millers need imported, high-quality wheat to blend their domestic medium protein wheat up or down to produce flour products that meet increasing demand for more premium products,” Weimar said. “Their imported wheat reserves are low, so the market is calling for more imported wheat from classes like hard red spring, soft white and maybe some hard red winter.”

Weimar directs USW promotion programs in the People’s Republic of China and North Asia. He said China’s wheat imports could increase from about 31 million bushels in 2009 to 55 million bushels in 2011.

“To position U.S. wheat as the right choice to meet that need,” Weimar said, “we are focused on educating large millers about the ability to certify the quality and characteristics they need from the U.S. wheat supply chain.” Weimar also noted the on-going USW effort to train Chinese millers and bakers to produce flours and premium products that favor a preference for U.S. wheat.

Mike Krueger, who advises farmers on crop marketing, said Chinese demand for corn is helping increase U.S. corn prices. That also has an impact on U.S. wheat prices.

“The country is not a huge export market for corn, but meat consumption keeps growing and China really doesn’t have an alternative to corn as a course feed grain. On top of the lower U.S. production forecast and the existing ethanol demand, Chinese demand is helping to hold up U.S. wheat prices.”

The USW board met in Minneapolis with the National Association of Wheat Growers (NAWG) Board of Directors at the 2010 Fall Wheat Conference. Each organization’s committees and two joint committees met Oct. 23-24. The boards of directors met together Oct. 24, followed by separate board meetings and a NAWG Foundation board meeting Oct. 25.

USW is the industry’s market development organization working in more than 100 countries on behalf of America's wheat producers. The activities of USW are made possible by producer checkoff dollars managed by 19 state wheat commissions and through cost-share funding provided by USDA’s Foreign Agricultural Service.

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