Opinion: Wheat's Unwritten Trade Agreement

Posted November 13, 2017

Australia has the best trade agreement in wheat imaginable. It is with the United States and the kicker is, they didn’t have to lift a finger to get it, we gave it to them. We should do our best to hire those trade negotiators away from Australia to work on our behalf, but it is not possible to do so, for they don’t exist. There is no written agreement on paper; we have decided as a country not to compete with them in most wheat markets in the world pertaining to Hard White wheat.

The reason Australia has a so-called “corner on the market” is because they grow Hard White wheat primarily for the international market. We, as a country, also grow Hard White wheat, with even better qualities than Australian Hard White, but we have for some reason or reasons decided to produce only enough for our domestic market, thus leaving the international market basically untouched by our grain.

In doing so we have, in a sense, provided an unwritten agreement to other countries — such as Australia and Canada — that we will not really interfere with the world market in Hard White wheat. The HW wheat market is growing, as evidenced in Nigeria where Australia has taken a portion of the U.S. Hard Red wheat market and replaced it with white wheat.

There are countries such as Nigeria, Taiwan, Korea and many South American countries that are looking for Hard White wheat for its whole grain qualities, but we are allowing them to look elsewhere, rather than growing it here in this country. We are content to compete with Russia, the Ukraine, and other countries on a bulk commodity low value product. It is a competition in which the way to make the sale is to be the low price producer.

There is no reason to compete as a low price producer when we — as Kansas farmers — have an option. That option is also available to other Hard Red Winter wheat states. If Kansas, along with several other Hard Red Winter wheat producers, would commit at least a third of our red wheat production to white wheat production, we would show our international buyers that we are not only serious about producing Hard White wheat, but that we would be a reliable supplier.

In doing this, we could eliminate over 70 percent of our wheat competitors, as only Australia and Canada currently grow Hard White. We would be able to move our product, rather than store it sometimes for over a year at a time. It is time for our farmers to let the grain industry know that we would like to make a change.

Ron Suppes
Dighton, Kansas