With new mills and an increasingly competitive price environment, the Philippines continues to be one of U.S. wheat’s top, consistent customers. As new industry leaders emerge there, USW recognizes the importance of providing training to increase millers’ knowledge of procurement strategies and the U.S. wheat marketing system through trade servicing in the South Asian nation and sometimes here at home.
In September, USW combined a formal training course with a first-hand view of the U.S. wheat supply chain for a delegation of six executives from the Philippine milling industry to the United States, Sep. 20 to 22, 2017. USW collaborated with the Northern Crops Institute (NCI), the Washington Grain Commission (WGC) and the Oregon Wheat Commission (OWC) to organize and host this group. Funding also came from the USDA Foreign Agricultural Service (FAS).
“The Philippines was the third largest buyer of U.S. wheat in the 2016/17 marketing year with total imports reaching almost 103 million bushels (2.8 million metric tons) and the largest buyer of both soft white (SW) and hard red spring (HRS) wheat,” said USW Assistant Regional Vice President Joe Sowers, who led the team. “This delegation represented mills that imported more than 1.5 MMT of U.S. wheat in the past marketing year with an estimated FOB value of $325 million.”
The executives first participated in the Grain Procurement Management for Importers short course at the NCI in Fargo, N.D., from Sept. 11 to 20. The course focused on basic hedging principles, fundamental and technical analysis of commodity markets, basis and spreads, the U.S. grain transportation infrastructure, U.S. wheat grading standards and purchase quality specifications for wheat importers.
USW Vice President and West Coast Office Director Steve Wirsching joined the delegation at NCI to deliver a presentation entitled “Getting the Wheat Quality and Value You Want.” The group learned about the importance of wheat quality specifications in purchase contracts and the role of the Federal Grain Inspection Service (FGIS) in performing all mandatory grain inspections for quality assurance.
Sowers shared that a trading game exercise in the commodity trading room at the North Dakota State University Department of Agribusiness and Applied Economics was particularly helpful to both senior and junior members of the delegation in better understanding the intricacies of wheat purchasing.
After attending the course, the delegation traveled to Washington where they visited the WGC to discuss supply and demand and toured HighLine Grain, LLC.
“The Philippines is Washington farmers’ leading customer for soft white wheat, so this was an important opportunity to share our appreciation for their business,” said WGC Vice President Mary Palmer Sullivan. “Having just completed the grain procurement course, they were able to connect what they learned in the course with the real experience and people here in our state.”
Next, the delegation drove from Spokane, Wash., to Portland, Ore., making stops along the way to visit USW Chairman Mike Miller near Ritzville, Wash., and in Pasco, Wash., to visit Tri-Cities Grain, LLC, and meet with WGC commissioners Damon Filan and Dana Herron.
Palmer Sullivan, who traveled with the delegation from Washington to Oregon, shared that the team was particularly interested in learning more about the transportation system.
“Last year, the scheduled river closures and the weather heavily impacted transportation issues for our overseas customers,” said Palmer Sullivan. “I think seeing and learning about the system helped them better understand how to plan ahead and that U.S. wheat farmers are dedicated to providing them with a reliable wheat supply.”
In Portland, the delegation visited the USW West Coast Office and Wheat Marketing Center (WMC) and met with a FGIS quality assurance specialist. On a tour of the TEMCO (Cargill/CHS) export elevator, the group witnessed first-hand FGIS’s supervisory role in vessel hold inspection and loading to contract specifications to ensure uniform quality. During a meeting with the Pacific Grain Export Association, whose members compete for their business, the delegation received timely market information specific to each wheat class. The group also met with OWC CEO Blake Rowe and Commissioner Darren Padget.
“The Philippines was also our largest soft white wheat market this past year, so we wanted to explain the emphasis we put on quality throughout our production process,” said Rowe. “Everyone, from our wheat breeders to our growers to our handlers to our exporters, has a role in providing quality wheat to our customers.”
“This trip gave us the opportunity to keep sharing the many ways the U.S. grain production and marketing system benefits the Filipino industry, which has a strong preference for U.S. wheat that we want to reinforce,” said Sowers.