Posted: Thursday, May 10, 2012 11:00 AM
Reform effort slowly shifting industry to more open market
The U.S. wheat industry expects the role of flour mill managers to become more important in Japan, a key country for exports.
"There is a slow but steady shift in Japan toward more of an open market purchasing system," said Steve Mercer, director of communications for U.S. Wheat Associates.
Currently a division of the Ministry of Agriculture, Forestries and Fisheries carries out all tenders for wheat imports from the U.S. and other nations. The ministry gets input from millers, but the millers have little direct say in what is purchased, Mercer said.
"It could be years before it's actually in place, but eventually those millers will have a much more significant role in the purchase," he said.
U.S. Wheat last week hosted a tour for five Japanese milling executives. They visited Washington D.C., California and Oregon.
"Team visits like this give these executives more access to key contacts and a better understanding of what is happening in the U.S. industry," U.S. Wheat's Japan country director Wataru "Charlie" Utsunomiya said in a press release. "Seeing how wheat quality is controlled from the field to storage to market is very helpful when their managers bring up issues about our wheat."
Mercer said U.S. Wheat brings two groups of Japanese milling executives to the U.S. each year. The goal is to get them familiar with the U.S. export system, particularly the way wheat specifications are certified through the federal grain inspection service.
Later in the year, likely in June, U.S. Wheat will host middle managers from the milling companies.
"They'll probably be the ones who are actually managing the purchase," Mercer said.
Japan is the largest customer for soft white wheat and Western white wheat, a blend of soft white and club wheats. Japan has purchased more than 133 million bushels of U.S. wheat a year for the last five years totaling more than $700 million a year. That is more than 10 percent of total U.S. wheat exports.
The Japanese wheat market "is very important to producers in the Pacific Northwest because of their strong demand for U.S. wheat," he said. "Keeping us in that game at the level we're at is the effort we're trying to make."
The trip is in collaboration with the California Wheat Commission, Oregon Wheat Commission, North American Millers Association and North American Export Grain Association, among others.
U.S. Wheat: www.uswheat.org