U.S. wheat supply chain prepares for growing demand

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Uncertainty in a supply chain is one of the most challenging situations for any enterprise. No doubt the changes taking place in the global grain supply industry inject some uncertainty for the world’s wheat buyers. That is why it is important to note a very positive trend: grain handlers operating in the United States are substantially expanding their capacity.

For example, the first new U.S. grain export terminal in 25 years has been busy ever since it opened in mid-February. EGT, in Longview, Wash., on the Columbia River, has already loaded seven bulk grain ships bound for Asia, including more than 270,000 metric tons of U.S. wheat. EGT’s three partners — Bunge, Itochu and Pan-Ocean — and other exporters recognize the growing demand for high-quality U.S. grain in the Pacific Rim. Expansion projects are also well underway at Kalama Export Company and United Grain. Louis Dreyfus and Temco will soon start their own expansion projects.

Wheat will be a key export commodity for EGT, which now operates two new shuttle train loading facilities in Montana’s wheat country and a third expected later this year. Other grain companies built four new shuttle loading stations in Montana and North Dakota in the past year and have broken ground for an additional nine stations.

Last year, U.S. Wheat Associates (USW) President Alan Tracy noted that world wheat trade is expected to grow substantially in coming years. The six U.S. wheat classes can fill virtually any specific milling and end product quality need, and an expanding export system provides quality assurance, guaranteed delivery and price transparency. As a result, the United States is positioned to remain the largest and most reliable wheat exporter in the world.

“As increasingly sophisticated wheat buyers compete to supply their customers with the specific qualities for the flour that they need,” Tracy said, “the farmers and wheat export industry of the United States have a unique opportunity to build on our existing reputation and customer base.”

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