PNW wheat leaders work to maintain competitive edge overseas
COEUR D’ALENE, Idaho — Pacific Northwest wheat leaders say they want to maintain their competitive edge in the global marketplace no matter what the future holds for the Trans-Pacific Partnership trade deal.
“The PNW positioned itself in a very solid spot with our overseas customers — we’ve been very transparent, have a lot of dialogues,” said Mike Miller, chairman of the Washington Grain Commission and vice chairman of U.S. Wheat Associates. “The rest of the world is gunning for us right now. We have to be prepared.”
The trade environment in the current marketing year will be critical to price both this year and next, said Randy Fortenbery, economics professor at Washington State University.
The 12-nation TPP, which President-elect Donald Trump said he would reject, was important for keeping the U.S. competitive with Australia in Asia, he said.
“Even in the absence of TPP, the potential tariffs that can legally be imposed on us don’t have to be,” Fortenbery said. “Quality can still matter. If we can deliver the best product, then the buyers and traders may not impose the maximum tariff because they’d still like to have a quality product at a price that’s reasonable for them.”
It will be important to maintain a dialogue and be involved in trade discussions moving forward, Fortenbery said.
“The biggest danger is if we get aggressive in terms of trying to restrict trade, agriculture ... is the sector that will likely be punished by potential trading partners,” he said.
Miller recalled part of a conversation with buyers from the Philippines about how to maintain the region’s trading position, and likened wheat farming to producing “widgets.”
“You build a widget that nobody else can build, and you create the need for it,” Miller said. “You don’t jeopardize the integrity of the widget, you service the widget to where they continually need you to build upon, adapt, modify. Once you find a customer, make sure you understand exactly what he wants, then you service that need.”
Darren Padget, chairman of the Oregon Wheat Commission. said the three commissions work together to maintain wheat quality. He spoke of a visit to Japan with other Northwest wheat producers and farmers from elsewhere in the U.S., and visiting the Japanese Ministry of Agriculture, Forestry and Fisheries.
“They immediately looked at the three white wheat guys and said, ‘We’re good,’ and all the eyes went down to the hard red spring guy and said, ‘So, we’ve got a problem,’” Padget said.
To show overseas customers the region is serious about wheat quality, the three commissions have elevated the requirements to consider a wheat variety desirable, Padgett said.
Bill Flory, a member of the Idaho Wheat Commission, encouraged farmers to interact with visiting trade teams when they are in the region.