|
|
 |
|
|
|
|
 |
February 25th, 2008
Let the Markets Work
by Steve Mercer, Director of Communications, U.S. Wheat Associates
A unique combination of weather-related production issues and rising global demand for agricultural commodities is spurring wheat prices to all time highs. This is making flour users nervous. Some independent bakers are even calling for the government to intervene in the U.S. wheat market to protect domestic supplies.
As the export market development organization funded and directed by wheat growers, U.S. Wheat Associates (USW) believes the global marketplace is strong and flexible enough to manage this problem. U.S. farmers must be allowed to freely respond to today’s market signal: It is time to produce more wheat!
The wheat marketplace is global, with world supply and demand heavily influencing U.S. wheat prices and U.S. producers heavily influencing world supply. Our own people only consume half of the wheat we produce every year. The other half is purchased by more than 90 other countries which cannot produce enough wheat to meet domestic demand.
Dig deeper and you will find that U.S. wheat producers find themselves in one of two categories: those who can only grow wheat and those who can grow other crops that offer good income potential. Any intervention by our government to separate our overseas customers from the U.S. wheat supply they have come to rely on would artificially bring down prices in the short term. It would also remove a critical economic incentive for U.S. farmers to produce more wheat in the long term—exactly the opposite of what is needed today and into the future.
Growers in the U.S. and around the world are responding to today’s tight supply and higher prices by planting more wheat. In fact, the International Grains Council recently forecast that the world is likely to produce a record 642 million metric tons of wheat in the coming year if there are no serious weather problems. We hope that good growing conditions prevail in the U.S. and around the world—and that our domestic flour users seek solutions to their short-term challenges in the marketplace instead of in the halls of government.
Read More. USW constantly tracks, analyzes and reports on world wheat supply and demand. This information can help growers, millers, wheat buyers, bakers and other flour users manage their supply and costs more efficiently. We invite everyone to visit our Web site at www.uswheat.org. There you can sign up for our bimonthly Wheat Letter for news and information, read the Price Report posted every Friday after the markets close, and study the World Wheat Supply and Demand Situation report updated every month after the USDA issues its World Agricultural Supply and Demand Estimates.
|
|
|
|
      |
|
