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

Multimedia Brussels Schools, Metro Reopen Under Heavy Guard

City remains under the highest threat alert level due to what authorities have described as a 'serious and imminent' threat of attack

Video Debt-ridden Refugees Await Onslaught of Lebanese Winter

Aid agencies are attempting to reduce potentially devastating consequences of freezing conditions and snowstorms that killed eight last year, including three Syrian refugees

Americans Think About Strange Stuff at Thanksgiving

Millions of Americans are celebrating Thanksgiving, but they’re not necessarily thinking about turkey and stuffing

This forum has been closed.
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.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs