11/10/08 Exporters reluctant to sell U.S. wheat to Japan

Farm and Ranch November 10, 2008 Japan, often the largest annual export market for Pacific Northwest wheat, did not buy any U.S. wheat in October. This week it cancelled a tender for 100-thousand tons of wheat. What's going on? Tom Mick, CEO of the Washington Grain Alliance says the issue is new Japanese chemical residue standards that are tougher than accepted international standards, and which U.S. exporters fear they can't guarantee can be met. Mick: "What the Ministry of Agriculture, Fisheries and Forests has said is that if they find any agrochemical residues, the seller has to pay for the disposing of that wheat, or destroying it, or they have to take it back to its country of origin. No exporter is going to bid without knowing if there are any chemical residues there and that is an elaborate test. The Japanese spend 30-thousand dollars per cargo, that's each cargo that comes into the country, testing for the various chemical residues. That is cost prohibitive for us to do in the United States." Mick says its easier for Canada with its Wheat Board to run tests and pass the costs on to farmers. Australia uses less chemicals. Mick says the industry, including U.S. Wheat Associates, is working on the issue. Mick: "We don't how this whole thing is going to shake out but I am getting very concerned about what the futures hold for us here." I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.