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Montana Ag Network: June 4th Report – U.S. wheat in Mexico, African swine fever update

Posted at 5:48 PM, Jun 04, 2019
and last updated 2019-06-04 19:53:41-04

Mexico continues to be a growing market for the U.S. wheat industry and this week leaders of both countries are meeting in Cancun for a special Mexico Wheat Trade Conference hosted by the U.S. Wheat Associates.

Vince Peterson is president of U.S. Wheat Associates and he said he looks for the trend to continue in the future, especially as the population grows in Latin America.

“Mexico and south is a wheat deficient area,” said Peterson. “They right now import about 25 million tons of wheat total. That’s about what we export in one year and they’re going to grow that up to probably 35 million tons over the next 20 to 30 years. So, it’s a dynamic place. It’s a growing market and someplace we need to be.”

Over 50 percent of all U.S. wheat grown is exported. For farmers like Kansas Wheat Commissioner Gary Millershaski, their bottom line depends on important export markets like Mexico.

“The biggest import for wheat for Mexico is hard red winter, which is the majority of what we raise,” said Millershaski. “And you produce it, take it to a local elevator and take what you get; or we like to say we’re trying to build up relationships with the buyers and the millers. Where we’re at, it’s a straight shot on the rail to Mexico. This is our this is our bread and butter is what it is.”

The feeling is mutual said Francisco Salas with Harinas-a wheat buyer in Chihuahua, Mexico.

“Well we have a long history of using U.S. wheat in the northern part of Mexico because we are really close,” said Salas. “A lot of the procurement of wheat we do it’s from the railroad coming from Kansas to the El Paso on down into Chihuahua which is not far away. So, we have a long history of getting wheat from Kansas, northern Oklahoma and Texas, and it’s a relationship we cherish a lot. We’ve been doing business for a long time before and we’re looking forward to upholding that for years to come.”

Peterson said fueling the demand for U.S. wheat are Mexican consumers who want wheat products as part of their daily diet.

“We fit right into the tortilla consumption in the north and then the other kind of bread consumption,” said Peterson. “And then you’ve got a huge growing biscuit, cookie, cracker industry. In fact, if you go into most supermarkets in the U.S., you’ll see Mexican varieties of those things on our shelves as well. So, the trade is working and working well for us. We just have to make sure we continue to get it there.”

As for the future of the new USMCA, attendees at the conference remain hopeful all three countries will eventually ratify the new trade agreement paving the way for increased export business for the U.S. wheat industry.

In other news, North Korea is now on the list of Asian countries infected by African Swine Fever.

A new report from CoBank states China and southeast Asia are already expected to face a massive shortfall in animal protein supplies over the rest of this year, into 2020, and possibly for years to come yet.

China accounts for half the world’s pork production and consumption all by itself.

The Chinese breeding herd is down 22 percent from last year and the overall hog herd numbers are down 21 percent.

A lot of eyes in the U.S. livestock industry are watching the ASF issue carefully and observing how it’s impacting the global protein industry.

-Reported by Russell Nemetz/MTN News