Posted November 22, 2022
There is something fishy happening in Ecuador, but it is a good growth opportunity in a market that already appreciates Kansas hard red winter wheat, thanks to the relationships built by Kansas Wheat and U.S. Wheat Associates (USW), the wheat industry’s export market development organization.
“One of the interesting stories is that a lot of high protein hard red winter wheat is going into fish food,” said Aaron Harries, Kansas Wheat Vice President of Research and Operations, who joined USW staff for a series of crop quality seminars in South America in early November. “In Ecuador, specifically, they’re using it to feed shrimp. And in southern Chile, they’re using it to feed salmon.”
Aquaculture is a rapidly growing market in South America, thanks to imports from an equally expanding Chinese market. Salmon are top feeders, so feed pellets must float so salmon will come to the surface and eat. Shrimp are the opposite — they are bottom feeders — but feed pellets still need to sink slowly. HRW wheat fits the bill in helping with buoyancy and providing high protein content.
“They use high protein HRW wheat because they want higher protein content for the fish food,” Harries said. “They can also use soybean meal, but wheat has a viscosity that makes the pellet float. So that’s a market we’ll certainly be exploring and making sure we’re getting them the product they want to meet these needs.”
Fish food was a hot topic during the USW crop quality seminars, but the main event featured the results of the 2021 Crop Quality Report, the latest in a series of reports by USW. Each year, the organization gathers thousands of samples throughout the harvest season and at export locations to analyze for wheat, flour and end-product qualities. These results are compiled into an overall report for all six wheat classes and broken down into individualized reports by wheat class.
After the report is finalized, USW conducts crop quality seminars to dive deep into the information with global customers, like the ones Harries participated in this November in Colombia, Ecuador, Peru and Chile. Harries also discussed prospects for next year’s wheat crop and addressed challenges from the strength of the U.S. dollar, high competition from corn and soybean exports, problems on the Mississippi River, potential rail strikes and other issues.
“In terms of HRW wheat, we had good news to deliver as far as the quality of the crop — just excellent milling and baking quality,” Harries said. “Of course, the downside of that is price. The market competitiveness of hard red winter wheat is just not great right now.”
While the seminars provide a wealth of information, they also allow state wheat commission staff, U.S. farmers and USW staff a chance to meet with the best customers for U.S. wheat. In Colombia, Harries had the chance to reconnect with millers that had traveled to Kansas as part of trade teams — some as recently as this past summer and some from a decade earlier. These relationships, when combined with transparent crop quality data, help secure long-lasting, steady customers.
“These meetings are important because when you meet face-to-face, the buyer can sense the transparency that we provide to our marketplace,” Harries said. “We don’t pull the wool over their eyes; we tell them exactly how things are in person so they can judge our message. And I think they do have confidence in us.”
Whether HRW is destined for fish food or bread, the trading relationships built through this exchange of information help build lasting markets for Kansas wheat producers in South America.
“This is a set of customers that really like U.S. wheat and they’re looking for value opportunities,” Harries said. “They’re trying to get creative on how they use U.S. wheat, whether it’s in blends or their milling process, but they like the quality of wheat and they try to make it work, even if the price is high.”
Learn more about how Kansas Wheat works with U.S. Wheat Associates to promote HRW around the world at https://kswheat.com/international-buyers.
Written by Julia Debes for Kansas Wheat