Growing Demand Brings China Mill Representatives to North Dakota
Date Posted: August 9, 2013
A trade team consisting of representatives from four Chinese mills will visit North Dakota August 11-13 to learn about production prospects of the 2013 hard red spring wheat (HRS) crop and price outlook and to learn more about the HRS breeding and quality programs at North Dakota State University (NDSU).
The group will also visit the Northern Crops Institute and a local elevator shuttle facility.
These meetings will help the team members build knowledge about the U.S. wheat marketing system and about the benefits of U.S. wheat for specific Chinese end-products.
According to North Dakota Wheat Commission Chairman, Francis Leiphon, "we certainly welcome the opportunity to develop a stronger relationship with customers in the China wheat market.
"China offers North Dakota wheat producers significant potential growth opportunities, and we want to build on the recent demand trends we have seen for U.S. HRS wheat."
China demand for U.S. wheat has exploded in recent months with current U.S. sales to the country for the first two months of the 2013-14 marketing year already reaching 131.6 million bushels, nearly nine times the five-year average.
The bulk of the increase this year has been for soft red winter wheat, a type of wheat similar to China's own domestic production, to replace stocks in their national grain reserve and to compensate for a domestic crop that has suffered significant production and quality issues.
From a longer-term perspective, demand is growing for high quality, higher protein wheat as Chinese consumers are showing an increasing demand for convenient and high quality food products.
To meet consumer demand, millers will need access to premium wheat classes such as HRS.
For the 2012-13 marketing year that ended May 31, China imported 27 million bushels of U.S. wheat, of which 17.5 million bushels were HRS - the highest in almost ten years.
China's demand for HRS has increased in each of the past three years which is a promising trend.
According to Matt Weimer, U.S. Wheat Associates (USW) Regional Director, Hong Kong, the team members visiting the state are in charge of final purchasing decisions for their mills and are looking for information on crop quality and grain standards.
"China is looking to the U.S. to help bolster both wheat supplies and quality, and this team will learn how to use the U.S. grain marketing system to further increase the value of purchases of the high quality wheat needed to meet their consumers' demands."
Weimer will accompany the USW and North Dakota Wheat Commission sponsored team that will make stops in Oregon, Idaho and Montana before visiting North Dakota.