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CapitalPress.com
January 1, 2016
Bulging global wheat supply, strong dollar impact U.S. growers
By MATTHEW WEAVER
Capital Press
Pacific Northwest wheat
farmers face a record-large
global supply and a strong
U.S. dollar, but growing de-
mand for the varieties they
raise offers hope for higher
prices, U.S. Wheat Associates
representatives say.
Increases in yields and har-
vested acres pushed the world
wheat supply to 946 million
metric tons, up 3 percent
from last year, according to
the USDA World Agricultural
Supply and Demand Estimate.
“That means there’s a lot
of wheat in the world, which
means there’s a lot of cheap-
er wheat available from other
origins,” said Stephanie Bry-
ant-Erdmann, a market ana-
lyst for U.S. Wheat.
The top five wheat export-
ers — the U.S., the Europe-
an Union, Canada, Australia
and Russia — produced 328
million metric tons of wheat,
which is 40 percent of global
wheat supplies. They account
for roughly 81 percent of
wheat exports, according to
U.S. Wheat.
However, it’s the type of
wheat Northwest farmers
grow that provides them with
an advantage, said Steve Mer-
cer, vice president of commu-
nications for U.S. Wheat.
The market for soft
white wheat and western
white wheat is shifting from
price-sensitive markets such
as the Middle East to Asian
markets, he said.
Demand is still increasing
in those growing markets,
Mercer said. Low proteins in
soft white wheat and west-
ern white wheat — a blend
of soft white wheat and club
wheat — grown primarily in
the PNW are “very precious,”
Mercer said.
Low protein is desirable in
sponge cakes and confections
produced in Asia. The last two
or three years of drought have
reduced the availability of
low-protein wheat.
“The drier it is, the wheat
tends to get harder and con-
centrate in the kernel, increas-
ing protein levels,” Mercer
said.
As moisture improves, the
supply of lower-protein wheat
will increase, he said.
PNW wheat organizations
and U.S. Wheat also hope
to boost soft white wheat as
a blending wheat in Latin
American markets. Custom-
ers blend soft white wheat
with U.S. hard red wheat to
develop a better product for
a lower price than competing
spring wheat from Canada,
Mercer said.
“All those markets are
growing, there’s a shift from
mom-and-pop-type
baker-
ies to supermarkets, big box
stores and supermercados,”
Mercer said.
The U.S. dollar is at a
12-year high against foreign
currencies, which also puts
American farmers at a disad-
vantage to their competitors,
Bryant-Erdmann said. For
example, the dollar this week
was worth 120 Japanese yen,
up 20 percent from recent
years.
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