TWIN FALLS — News that Taiwan has agreed to continue buying wheat from Idaho is welcome at a time when prices are in the doldrums. But it begs the question, where does Idaho wheat go?
The deal, signed last week by Gov. C.L. “Butch” Otter and Taiwanese milling industry officials is a $576 million agreement representing about 5 percent of the Idaho crop. The agreement is a non-binding letter of intent that is agreed to every two years based on projected demand in Taiwan. Similar letters were signed in North Dakota and Montana.
According to U.S. Wheat Associates, Taiwan is the eighth largest importer of U.S. wheat buying an average of 38 million bushels per year. Idaho alone produces between 85 and 95 million bushels of wheat annually.
European style breads and bakeries are popular in Taiwan, particularly those made with whole wheat flour and olive oil. Gift packages that include flour-based food items such as pineapple cakes are hot items for Taiwan’s tourists, particularly mainland Chinese travelers.That’s helping fuel a switch away from rice-based food products. According to the Foreign Agriculture Service, per capita rice consumption has fallen from a high of 216 pounds to 99 pounds in 2013. Over the last 30 years, wheat consumption has risen from 51 pounds to 73 pounds.
While Taiwan is farther along the conversion path, other Southeast Asian countries such as Indonesia, Malaysia, Vietnam and Myanmar are experiencing large jumps in both population and disposable income which brings a growing demand for western foods like pizza, hamburgers and bagels. That is a benefit for hard red spring wheat growers across the Northern Plains.
Exports of U.S. hard red spring wheat are up 31 percent compared to last year, with most of that flow from the Northern Plains to Pacific Northwest export elevators.
Idaho is one of the nation’s six top hard red spring producing states, but it is best known for its soft white wheat production that is used primarily to make noodles, cookies and crackers. Taiwan millers typically purchase soft white wheat from Idaho but are buying more hard red wheat to use in bread.
Geography plays an important role in determining what wheat classes are grown across Idaho and where the resulting crop is shipped.
Growers in the Magic Valley grow a little more hard red wheat than soft white wheat. About half the wheat grown in south-central Idaho is consumed domestically, largely by mills in eastern Idaho, Utah and California. The other half is exported.
The story is different in northern Idaho where about twice as much soft wheat is planted on an acre-basis than hard wheat and nearly all of that production is exported via the Columbia River system and Pacific Northwest ports.
Idaho wheat exports were valued at $258.4 million in 2015. Statewide, roughly 47 percent of the crop is exported and the rest is used domestically.
While Idaho growers tend to think of Asia as the final destination for their grain, Mexico and Latin America are becoming more important.
Mexico is one of the largest U.S, wheat buyers in the world, importing about 110 million bushels each year, usually just short of the volume Japan buys. However sales were up strongly during the last marketing year, pushing Mexico to the number one spot. Much of that is hard red winter wheat from the Southern Plains, although some Idaho wheat also goes to Mexico.
A rising number of industrial bakeries, along with traditional artisan bakeries, account for about 70 percent of wheat consumption according to CANIMOLT, the association representing Mexican millers.
Strong export sales are good news for growers who are watching wheat prices continue to lag. Forecasters with the U.S. Department of Agriculture lowered their estimate for the season-long national wheat price this month to a range of $4.30 to $4.90 per bushel, which is still $1 better than a year ago.