Mexico
Mexico is a very important customer for U.S. wheat producers. Under NAFTA, U.S. wheat is imported duty free (as is Canadian wheat). While per capita wheat consumption is steady, population growth helps drive total wheat food consumption, including a growing market for cookies and crackers, pasta and instant noodles.
For many years, Mexico has on average imported more than 88 million bushels (2.4 million metric tons) per year from the United States. U.S. wheat sales to date (Feb. 7) in marketing year 2010/11 (June – May) have already reached 88 million bushels and are 43% ahead of the same time in 2009/10.
Mexico now imports about half of its wheat via rail. Recognizing that direct connections between buyers and sellers would help preempt competition from Canada, USW sponsored a Transportation and Logistics Seminar in Mexico City in November 2007. Large Mexican wheat buyers, importers and executives from Mexico's two principal railroads met with U.S. wheat producers, country elevator operators and wheat commission representatives from five states. The USW/Mexico City staff that developed the seminar also produced a new "Handbook for Wheat Exporters from the United States to Mexico" printed in English and Spanish. Today, Mexico is the second largest importer of hard red winter (HRW) wheat, and buys an average of about 52.5 million bushels (1.4 million metric tons) every year. Imports also include substantial amounts of soft red winter (SRW), hard red spring (HRS) and soft white (SW) wheat.
Mexico will continue to be a dynamic and growing market for U.S. wheat because of free trade policies, population and economic growth and a comparative advantage in transportation logistics.
U.S. Wheat Inspected for Export to Mexico (1,000 Metric Tons; 1 Metric Ton = 36.74 bushels)
Crop Year(June - May) / HRW / HRS / SRW / SW / Durum / HW / Total
2010 / 1,196 / 231 / 449 / 56 / 0 / 1 / 1,933
2009 / 1,185 / 219 / 689 / 0 / 0 / 0 / 2,094
2008 / 1,370 / 244 / 853 / 0 / 2 / 1 / 2,469
2007 / 1,265 / 483 / 631 / 10 / 2 / 0 / 2,390
2006 / 1,099 / 206 / 761 / 66 / 6 / 22 / 2,160
2005 / 1,485 / 334 / 430 / 89 / 1 / 11 / 2,349
2004 / 1,388 / 258 / 611 / 2 / 0 / 36 / 2,295
2003 / 1,328 / 201 / 757 / 7 / 2 / 5 / 2,300
2002 / 1,272 / 164 / 737 / 0 / 0 / 0 / 2,173
2001 / 1,035 / 93 / 856 / 4 / 0 / 1 / 1,989
Data current through February 7, 2011
NOTE: The Imports from U.S. by Class table is a summary of all wheat inspected for export by the Federal Grain Inspection Service.
Peru
The Andean country of Peru is the second largest U.S. wheat buyer in South America. Per capita consumption and total consumption of wheat foods is relatively stable but Peru grows very little high quality milling wheat and must import most of its needs. Yet Peru’s economic growth has outpaced all other South American countries the past few years, so the potential for increased wheat imports is strong.
On average, Peru purchases about 15.6 million bushels (425,000 metric tons) of U.S wheat per year, primarily HRW and SRW. Sales to date in 2010/11 are up significantly to 29.4 million bushels (800,000 metric tons), including mostly HRW because of its excellent value compared to other origins and USW efforts to educate key millers on using U.S. wheat to tap into a growing market for artisan hearth bread.
U.S. Wheat Associates (USW) has worked for many years with all Peruvian wheat flour mills. For the past seven years, it has been working on a more detailed and constant basis with Alicorp to introduce new classes and characteristics of U.S. wheat. USW is conducting baking seminars to demonstrate how excellent bread can be produced by changing certain techniques, including two seminars in Lima in Nov. 2010. This option allows Alicorp to blend lower protein U.S. hard red winter wheat (grown mainly in the southern and central plains) and soft red winter wheat (grown east of the Mississippi River) at a lower cost even compared to Canadian spring wheat.
Today, Alicorp is producing branded flour made with 100% HRW targeting Peru's French bread market, which has the highest potential impact on U.S. wheat sales to Peru. Today, all cargos of HRW have specifications of 11 to 12 percent protein, down from past levels of up to 13 percent.
U.S. Wheat Inspected for Export to Peru (1,000 Metric Tons; 1 Metric Ton = 36.74 bushels)
Crop Year(June - May) / HRW / HRS / SRW / SW / Durum / HW / Total
2010 / 615 / 0 / 71 / 7 / 0 / 0 / 692
2009 / 465 / 0 / 82 / 7 / 0 / 0 / 554
2008 / 224 / 0 / 123 / 0 / 0 / 0 / 347
2007 / 422 / 77 / 89 / 9 / 0 / 0 / 597
2006 / 28 / 0 / 126 / 0 / 0 / 0 / 153
2005 / 350 / 10 / 109 / 11 / 2 / 12 / 494
2004 / 617 / 15 / 84 / 0 / 4 / 0 / 720
2003 / 761 / 9 / 89 / 32 / 5 / 0 / 897
2002 / 311 / 83 / 73 / 0 / 0 / 0 / 467
2001 / 467 / 0 / 88 / 0 / 0 / 6 / 560
Data current through February 7, 2011
NOTE: The Imports from U.S. by Class table is a summary of all wheat inspected for export by the Federal Grain Inspection Service.
Chile
Chile is one of South America’s most dynamic markets with strong economic growth that, while slowing recently, promises strong upside opportunity for U.S. wheat imports. Chile’s annual per capita bread consumption of 100 kg is the second highest in the world and is higher among Chile’s lower income households. This is a well-developed wheat food market with a variety of products available.
Unlike Peru, Chile produces enough wheat to meet 50% of its annual needs. Yet U.S. wheat producers typically earn a market share of about 50% of Chile’s imported wheat. Sales of nearly 11 million bushels (291,400 metric tons) of U.S. wheat so far this year are running about 38% greater compared to the same time in 2009/10. U.S. wheat classes exported to Chile include HRW, SRW, HRS and SW.
Chile has become the major buyer of SW in the region. In addition, USW identified an opportunity to demonstrate SRW value by offering technical assistance to a large milling company that wanted to improve its competitive position. USW sent a milling consultant to help the mill improve its processes using higher percentages of SRW. As a result, SRW sales increased until prices moved up to and exceeded HRW and SW export prices, but also helped build a stronger long-term business relationship with the mill. USW will continue delivering reliable market, quality and technical information, with price relationships and advantages of U.S. wheat from different ports and compared to other suppliers to help mill managers and wheat buyers plan commercial purchases that include U.S. wheat.
U.S. Wheat Inspected for Export to Chile (1,000 Metric Tons; 1 Metric Ton = 36.74 bushels)
Crop Year(June - May) / HRW / HRS / SRW / SW / Durum / HW / Total
2010 / 192 / 21 / 0 / 85 / 0 / 0 / 298
2009 / 202 / 36 / 28 / 125 / 0 / 0 / 392
2008 / 165 / 7 / 258 / 0 / 0 / 0 / 430
2007 / 230 / 9 / 153 / 34 / 0 / 0 / 425
2006 / 16 / 0 / 141 / 97 / 0 / 0 / 254
2005 / 3 / 0 / 22 / 176 / 0 / 0 / 201
2004 / 0 / 0 / 0 / 0 / 10 / 0 / 10
2003 / 139 / 0 / 99 / 39 / 0 / 0 / 277
2002 / 44 / 0 / 124 / 0 / 0 / 0 / 168
2001 / 4 / 0 / 31 / 7 / 0 / 0 / 42
Data current through February 7, 2011
NOTE: The Imports from U.S. by Class table is a summary of all wheat inspected for export by the Federal Grain Inspection Service.