News / USA

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

TEXT SIZE - +

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

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

John the XXIII and John Paul II will be made saints in a ceremony at St. Peter’s Square on April 27 More

Thailand Reacts to Plots Targeting Israelis

Authorities hope arrest of two Lebanese suspects will disrupt plot to attack young Israeli tourists More

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

'Once Upon a Forest' takes viewers deep into heart of tropical rainforest 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.
Pope Francis Hopes Dual Canonizations Will Reconcile Churchi
|| 0:00:00
...
 
🔇
X
Jerome Socolovsky
April 22, 2014 4:14 PM
On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Robotic Mission Kicks Up Lunar Dust

A robotic mission to the moon was deliberately crashed onto the lunar surface late last week, but not before scientists had collected data gathered by the spacecraft which was designed to self-destruct. VOA's Rosanne Skirble reports on the preliminary findings of the craft, called LADEE - an acronym for Lunar Atmosphere and Dust Environment Explorer.
Video

Video Boko Haram Claims Responsibility for Bombing in Nigerian Capital

The Nigerian militant group known as Boko Haram has claimed responsibility for a bombing in the capital on April 14th that killed 75 people. In the video message, Abubakar Shekau, the man who says he ordered the bombing, says nothing about the mass abduction of more than 100 teenage girls, most of whom are still missing. Heather Murdock has more for VOA from Abuja.
Video

Video Ukraine Developments Hang Over Obama Trip to Asia

President Barack Obama's trip to Asia this week comes as concerns over Beijing's territorial ambitions are growing in the region. Those concerns have been compounded by Russia's recent actions in Ukraine and the possibility that Chinese strategists might be looking to Crimea as a model for its territorial disputes with its neighbors. VOA's Bill Ide has more from Beijing.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid