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Montana Ag Network: the state of the international wheat market

Wheat
President, US Wheat Associates
Posted at 4:51 PM, Jun 20, 2023

FORT BENTON — At the Montana Wheat and Barley Committee's June meeting, the President and CEO of the U.S. Wheat Associates, Vince Peterson was invited to attend.

Montana Ag Network: the state of the international wheat market

In response to the Second World War, the demand for US commodities in the world market was calling. In the 1950s, the U.S. Wheat Associates was founded and was the first group to make trips to Europe and Asia to market and build offices in international countries. A primary purpose was to promote exports, serve overseas customers, and make customers profitable. In turn, brings profits and export potential back to its own producers.

To this day, the U.S. Wheat Associates works in conjunction with the Montana Wheat and Barley Committee to bolster international trade.

"One, it takes money to run an organization and states like Montana and others have very graciously put in checkoff programs years ago and have increased those over the years to meet new demands... then you've got the people because this is not an organization that actually sells any wheat. Grain export companies do that. We don't produce wheat. The farmers do that. We are working with the overseas customers to help them make decisions on buying the wheat produced by our organization or by our growers here."

The U.S. Wheat Associates has helped Montana producers create relationships with international buyers, including South Korea and China.

"It's a huge area for the experts, a commodity with a gateway right out the Pacific Northwest. In fact, it's been the outreach of the hand from Montana producers and others in the area to the overseas customers to invite them to come to the United States, invite them to come to see the farm, see the equipment, see the land, see the farms and the families that are doing this work," explained Peterson.

Peterson explained that many international buyers are coming from cities that are home to upwards of 10 million residents. It's practically a culture shock to see that family farms are run without outside help.

According to Montana State University, wheat is the state's largest export commodity. Montana exports nearly 100 million bushels of wheat which is valued at $565 million, in the nation it is the third largest producer of wheat.

Source: Montana Wheat on the Move

"...every single year we are we have more people, we are consuming more. That trajectory is going up. We're going to have nearly 10 billion people by 2050, we're going to consume a billion tons of wheat globally, and we're going to have to trade 350 million tons of that globally," adding, "The potential is unbelievable out there. Looking forward now, we can't get by without looking at the immediate problems. We've got a war going on in Russia-Ukraine, we've got droughts, we've got El Ninos, La Ninas, all of those things. They've been causing us problems in the short term and I think they are short-term problems. But nevertheless, we are in a place right now where our U.S. exports are on the low side of the numbers. We've had those low crops, three years in a row, and a lot of other places that are at very cheap prices. So we've got some challenges ahead of us. We're trying to work in that environment where we're we're facing a lot of competition globally. But at the same time, the carrot is out there. The demand is going to be there in the future."

Peterson told MTN News that the wheat industry needs to work on getting its production back in balance. His impression of the wheat fields from Great Falls to Fort Benton was that it looks promising and remained optimistic as any man of agriculture would be.

With a recent spat of continuous rainfall, the Montana Wheat and Barley Committee and President Peterson are hoping that it can hold off to allow for a short growing period for Winter Wheat. Some could argue, that there has been too much rain in this short period of time.

Considering the last three years for wheat and barley yields, it's much better than what mother nature has offered in recent years.

For more information regarding the U.S. Wheat Associates, click here.


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