03/20/07 Black Sea wheat competition in Mideast

Farm and Ranch March 20, 2007 Yemen, located on the southern edge of the Arabian Peninsula, is an important market for Pacific Northwest soft white wheat. Mick: "That country alone most people don't realize takes 11-12 percent of our total exports. You know it is bigger than Japan at times." That's Tom Mick CEO of the Washington Wheat Commission who says soft white wheat is perfect for the indigenous flat breads consumed in Yemen. But Mick says that soft white market is in jeopardy for a couple of reasons. Mick: "One is the Black Sea area is dumping wheat in there at an extremely low price. When I was there a couple of weeks ago there was a $30 spread between Black Sea wheat and our PNW wheat. A lot of that has to do with transportation costs but it is such a large number that the mills can't ignore it. They can't use Black Sea wheat 100%. They still have to use at least 30% of our soft white for a blend." Mick says it is disturbing how big a chunk the Black Sea wheat is taking of the Yemenese market. Then there is Egypt the biggest swing market for PNW soft white where Mick says a new government policy is to purchase the cheapest wheat. And during his recent visit to Egypt Mick learned Black Sea wheat was cheaper by some 57 dollars a ton, including transportation, than PNW soft white. Mick: "We are very disturbed. Hopefully we can convince the people that quality is very important, but it is going to take two years to turn this thing around." Despite these negatives Mick points out there are positives for soft white, like Australia's small crop and the likelihood it's production won't fully bounce right back. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.