SPOKANE — Mike Miller sells his wheat to overseas buyers.
Justin Gilpin tends to focus on domestic markets.
But the two agree on the biggest priority for the U.S. wheat industry: Keeping the value.
“How do we enhance the quality we have available for our buyers, so we make sure we’re increasing demand and getting better value for our farmers growing that better quality?” said Gilpin, CEO of the Kansas Wheat Commission. “We’ve got to find a way through management and genetics, through our handling system that we’re able to be the highest quality out there and we get the most value and return back into our industry to our growers.”
“Somehow we have to maintain and increase the value in the production chain, all the way from the seedsman through the ports,” said Miller, chairman of the Washington Grain Commission and U.S. Wheat Associates.
Miller and Gilpin spoke about the relationship between domestic and overseas markets during the Tri-State Grain Growers Convention in Spokane.
Miller noted that Russia and Canada have overtaken the U.S. in global wheat sales, but customers continue to pay more for U.S. wheat because of its higher quality.
Some congressional leaders want to reduce USDA’s Market Access Program and Foreign Market Development programs, which fund 64 percent of U.S. Wheat’s budget, Miller said.
“They are saying these programs are lavish trips, a waste of money or the American farmer doesn’t get any value,” he said. “It’s not so. You can’t just call (customers) up and ask them to buy wheat.”
U.S. Wheat provided congressional leaders with an in-depth analysis of the programs, Miller said. A 2014 Cornell University study found that every dollar invested in U.S. wheat export development from farmers and through the two USDA programs returned $149 to the U.S. wheat economy, and had a direct return of $45 for every dollar of farmer contributions. A study by Informa Economics showed every $1 invested returned $28 in export revenue between 2002 and 2014.
After U.S. Wheat provided the data, one congressional leader looked at the information and said it wasn’t enough, Miller said. “That’s the mindset we’re running against here.”
On the domestic side, the market has been “pretty loud” about wanting higher quality hard red winter wheat, Gilpin said. Higher protein is the desired quality, he said.
But farmers in Kansas aren’t necessarily receiving a higher payment for higher quality, he said.
For example, farmers in Garden City received 90 cents under the Kansas City Board of Trade cash price for hard red winter wheat, compared to farmers in Rapid City, S.D., who received 40 cents above the cash price.
“No protein distinction,” Gilpin said. “Whether it is 9 protein or 13 protein, they do not post protein scales. ... it’s an issue Kansas really has to address.”