News / USA

Despite Rise in Wheat and Corn Prices, US Producers Make Their Push in Asia

Unlike a few years ago, when surging rice prices provoked near panic in some Asian markets, the region is largely not bothered by the sharp rise in prices for wheat and corn.

Wheat prices jump more than 50 percent

Earlier this month, days after Russia banned wheat exports because of a drought, agriculture representatives from the U.S. state of Nebraska visited Hong Kong and Taiwan to promote their products. In Taiwan, they signed about $500 million worth of wheat, corn and soybean contracts for the next two years.

Wheat farmer Dan Hughes was among them. He hopes the United States, the world's top exporter of wheat, will take up the slack in global supply.

"It's fortunate for us in the U.S. that it's dry in the former Soviet Union. The unfortunate thing is that some farmers in the world have to lose their crop in order for us to make a decent return in our investment," Hughes explains, "We've just finished up our harvest about a month ago, we had an average crop in our farm and with the increase in price that has occurred since the drought in Russia we should have a profitable year this year."

With poor crops in Russia and Eastern Europe, international wheat prices have jumped more than 50 percent since June. While prices are still well below records set in 2008, the increase has consumers and governments in many countries worried.

Asia reacted calmly to jump in wheat prices

But in the United States, the government says wheat production will increase 2 percent this year, and it could be the best year ever for wheat growers in terms of harvest per hectare.

Two years ago, when rice prices more than doubled, there was near panic in Asian markets, as governments and consumers raced to lock in affordable supplies of the region's staple food.

In comparison, Asia has reacted calmly to the jump in wheat prices.

That is largely because the two largest nations - India and China - are also the world's top wheat producers, and they say they have plenty. Nearly all wheat harvested in China and India is sold domestically.

India, the world's second largest producer of wheat, is keeping its reserves for its own use, and has only sold some to neighboring countries like Bangladesh.

China is the largest wheat producer, and the National Development and Reform Commission says that higher world prices will not tighten domestic supply. The commission says wheat prices in China are already higher than international prices so it is unlikely to sell its stock overseas.

That does not mean Asian governments are unconcerned about rising grain prices.

Food prices in China rose 6.8 percent in July, compared with a 5.7 percent rise in June. Chinese authorities carefully monitor food inflation because sudden leaps could lead to unrest among the country's vast rural population.

Australia tough competition for US

Some of the largest food producers in the region, such as the Australian-owned Goodman Fielder, whose baking ingredients business is based in China, say they have already locked in wheat supplies for several months. That shields them from the current price surge.

"At the moment there's no need for us to participate in the market," said Peter Margin, Goodman Fielder's chief executive. "We're very comfortable in the terms of our current position. We think given the current supplies and a strong Australian crop, we would probably see some downward [price] movement there."

Although much of Asia is sheltered from rising grain prices now, that could change, as growing populations and wealth are expected to raise grain consumption.

World corn prices have also increased this year. China has imported large amounts of U.S. corn in recent months, for the first time in four years. A drought at home and increasing demand for corn to feed livestock saw Chinese imports more than double in July from June.

US farmers see market expansion

As incomes rise and tastes change, Hughes and other U.S. farmers see a growing market in Asia, especially in China.

"There's a growing demand for protein products, meat, and in order to generate meat you got to have grains to feed those animals to get them processed. So we view that part of the world as a huge potential market for U.S. grains and for U.S. beef and pork," Hughes said. "There's just a lot of people there, their income levels are rising and they're going to be wanting to eat more meat in their diet."

This month, the U.S. has seen record weekly exports in wheat, corn and soybeans.

But U.S. farmers face tough competition from Australia, however, because its exporters can get grain to Asia faster.

You May Like

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid