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Enhancing the Quality of US Grain for International

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Enhancing the Quality of US Grain for International Chapter 5 The Changing Role of . Contents Page Quality in the Market Place . 89 Changing Nature of Markets–A Case Study in Wheat. 91 Background 91 Product Consumption and Wheat Importation . 91 The Dynamics of the Wheat Market. 93 Analysis Results . 93 Case Study Summary . 98 Chapter 5 References . 99 Tables Table Page 5-1. Export Classes of Wheat Categorized by Characteristics and Country of Origin ● . .... ... ● . ..,..0.. 92 5-2. Required Protein Levels for Wheat-Based End Products and Protein Content of U.S. Wheat Classes. 92 5-3, Regional Tastes, Preferences, and the Requirements for Wheat-Based End Products . 93 5-4, Wheat Consumption in Selected Countries, 1984/85 . 94 5-5. Market Shares of Imported Wheat Classes, 1984/85. 95 5-6. Correlation of Imported Wheat Class Market Shares, Income, and Domestic Wheat Production, 1984/85 . 96 5-7. Average Growth Rates of Wheat Class imports by Country, Region, and World, 1961/62-84/85 ● ****.. .**.*.** ● **..*.. ● ******. ● *,.,..* * 97 5-8. Simulated Changes in Wheat Class Market Shares, 1985/95 . 98 Chapter 5 The quality concerns of each industry using The varying quality requirements exhibited wheat, corn, and soybeans are identified in by these industries, especially for wheat, high- chapter 4. Wheat, by its very nature, is the most light the need for the United States to become complex of the three grains in terms of defin- more aware of individual industry require- ing quality because of the vast array of prod- ments if the goal is to produce and deliver high- ucts and processing technologies involved. quality grain, The Nation has developed the Quality requirements differ not only by type reputation as a consistent supplier for any type and individual product, but between mills using and quality of grain desired; to become a sup- the same type wheat to produce flour for the plier of high-quality grains, it must become same type of product. Corn is somewhat less more quality-conscious and develop a reputa- complex in that fewer products are produced tion as a supplier of high quality. The U.S. grain and quality concerns can be traced to the indi- industry must understand the specific require- vidual industries, Nevertheless, the quality re- ments of its customers in order to deliver the quired by one corn industry is not necessarily quality requested and must become more aware important to others, so decisions regarding corn of the dynamic issues surrounding the quali- quality must be assessed in terms of major ties required by the marketplace. Areas such usage. Quality concerns of different industries as technological advancements in processing using wheat are somewhat offset by the fact technologies, Government policies, customer that different types of wheat exhibit different preference, development of new finished prod- properties. Soybean quality is the least complex, ucts, and consumption patterns all affect cus- because the vast majority of soybeans are used tomers’ purchasing decisions and their defini- to produce oil and meal, tion of quality at any one point in time. QUALITY IN THE MARKETPLACE High quality, as defined by the specific at- spondents considered uniformity as being im- tributes required by each industry, is constantly portant even though they differed on which at- changing. But the ability to produce and de- tributes were more critical. Overseas millers liver high-quality grain can mean more than also indicated the importance of uniformity: just providing grain that meets specific test re- Canada and Australia stress uniformity be- sults. What constitutes high quality from the tween shipments and this often accounts for customer’s point of view can range from spe- wheats from these countries being considered cial handling (low-temperature drying of corn) first choice. to the uniformity of specific attributes within Even identifying the important quality attri- and between shipments. The importance of the latter was evident in the OTA survey results butes for specific industries is not simple. Some traditional measuring technologies are not ac- and in the statements by overseas wheat millers cepted by all industries producing the same (ch. 4). product. In the OTA survey, tests for rheologi- The OTA survey specifically asked respond- cal properties (extensograph, alveograph, and ents to rank the importance of uniform quality mixograph) were considered more important between shipments. Domestic and overseas re- by overseas wheat millers than by domestic 89 88-378 - 89 - 4 . .. 90 ones. Though overseas millers considered these low-protein wheat. Some European processors tests key, their importance varies by region of are also producing isoglucose, a sweetener and the world. Paul Clark, for example, has indi- sugar substitute, from wheat starch (that por- cated that in trying to identify and establish soft tion of the wheat kernel remaining after the glu- wheat flour quality characteristics, Archway ten is extracted), similar to corn sweetener’s Cookies, Inc., found not only that companies use in the United States. had different quality requirements but that Corn, which has always been considered different companies keyed on different analyti- from a feed point of view, is beginning to ex- cal tests for performance parameters (3). perience pressures in areas similar to those ex- As processing technologies become more so- perienced by wheat. As feed manufacturing phisticated through automation or as more becomes more sophisticated and automated, demanding qualities are required for finished along with the need for strictly controlled bal- products, the need for specific attributes within anced diets especially in the poultry industry, well-defined ranges becomes more critical. the demand for quality attributes and con- Technologies for baking bread, rolls, and sim- sistency in delivery is of increased importance. 1 ilar products in large bakeries have advanced In other cases, individual dry and wet corn mill- significantly. While bread can be made by hand ing companies are placing more stringent de- using low-protein wheat, large dough mixers mands on the quality of corn they purchase. I and other equipment found in large automated Companies are contracting with farmers to ! bakeries place too much stress on the low- grow certain varieties and provide special han- 1 protein flour, which results in unacceptable fin- dling, such as low-temperature drying. , ished products and the need for different at- Traditional quality attributes, even though tributes. The way the flour will be baked plays varied, thus may be influenced by technologi- a very important role in determining the spe- cal advances, economic concerns, and Govern- cific values for the various attributes required. , ment policies here and abroad. For the United In addition to advances in processing tech- States to produce and deliver high-quality grain, nologies, technological advances in other areas it must not only become increasingly aware of can have an impact on the quality required by concerns over quality expressed by domestic different industries. For many years, high- and overseas industries and match quality to protein wheats have been blended with low- their wishes, but it must understand why im- protein wheats to strengthen flour. More re- porters purchase grain in the first place. cently, vital wheat gluten, a product contain- The findings in chapter 4 could lead to the ing 75 to 80 percent protein, has been used as conclusion that the United States should stress a flour fortifier. The recent expansion of vital developing high-protein wheats. Yet the ex- wheat gluten production is the result of tech- panded use of vital wheat gluten in some coun- nological improvements in breadmaking, pop- tries to obtain self-sufficiency provides a ulation growth, and increasing urbanization in completely different picture. Knowledge of cus- some countries. Vital wheat gluten in these na- tomer preference, consumption patterns, and tions has become more attractive than higher the role of Government policies is critical when priced, imported wheat. considering what direction the United States Many countries striving to become self-suf- should take. The rest of this chapter examines ficient in wheat production are producing vi- these areas using wheat as an example. tal wheat gluten to fortify their locally produced 91 CHANGING NATURE OF MARKETS-A CASE STUDY IN WHEAT As the intensity of competition in grain mar- Winter (SRW), in varying arrangements—the kets increases, so does the differentiation of im- second through fourth positions. Durum is con- portant quality characteristics. Because of the sistently the class with the lowest export vol- dynamic nature of wheat markets, OTA ana- ume. Each of the remaining exporter countries lyzed the demand for wheat quality character- is known for one dominant class or, in the case istics in international markets. The analysis had of France, type. Argentina predominantly ex- two specific objectives—to identify the extent ports Trigo Pan whereas Canada has estab- to which market shares are determined by fac- lished a reputation with high bread-making tors such as relative prices, income, prefer- quality Canadian Western Red Spring (CWRS). ences, and other factors, and to analyze prefer- France, a member of the European Community ences for wheat by quality factors and estimate (EC), exports soft wheats. Australian Standard changes in these preferences. * White is by far the dominant class in Australian wheat exports. Background The quantity and quality of
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