Wheat growers peg new market
Northwest producers hope to resume exports to Iraq after more than a dozen years
Now that Saddam Hussein's regime is gone, U.S. wheat growers expect to see a resurgence of sales in Iraq, which would be a boon for Portland, the nation's largest wheat exporter.
A boon, that is, unless the Aussies get in the way.
A trader for Australian Wheat Board Ltd.'s Portland office told a convention of U.S. grain producers last week that Iraq is a longtime buyer of Australian wheat and that growers in the land-down-under aren't keen to relinquish the lucrative business tie.
Jonathan Schlueter, executive vice president of Portland-based Pacific Northwest Grain & Feed Association Inc., said the Australian board's representative 'pointed out very matter-of-factly that Australia has been selling wheat to Iraq for 50 years; they've had contracts under the U.N.'s Oil for Food program; and they had two cargoes of wheat on the water when hostilities broke out.
'He left us with the question, 'Why are we going to give that up?' ' Schlueter said.
Iraq was the second-biggest buyer of Australian wheat last year.
U.S. Wheat Associates, the marketing and development organization for American wheat, is protesting that an Australian 'master monopolist'Ñ Trevor Flugge, former chief of the Australian Wheat Board, which controls Australian wheat exports Ñ is already in place as senior adviser to Iraq's ministry of agriculture. A U.S. adviser is waiting for Pentagon clearance before he starts work in Iraq.
Before 1990 and the United Nations sanctions, Iraq was the ninth-largest buyer of U.S. wheat and the fourth-largest of soft white wheat, Schlueter said.
Soft white wheat is the predominant variety grown in the Northwest, and 85 percent of Oregon's wheat is sold for export. The Northwest's soft white wheat is ideal for the flat bread that is a Middle Eastern staple.
The U.S. wheat industry devoted considerable time, especially in the 1980s, to building up its presence in the Iraqi
market, said U.S. Wheat spokeswoman Dawn Forsythe.
'They were bringing trade teams here; we were going there,' she said. 'We were giving their millers scholarships to come to the U.S., helping with grain inventory and computer consultants. É We developed good relationships with the buyers, the millers, the food industry in general.'
That meant, as an example, almost 1.2 million metric tons exported from the United States to Iraq in 1983 and 1984, and close to 1 million metric tons annually in several successive years.
In 2001 and 2002, Iraq imported a total of 6.3 million metric tons of wheat, none of it from the United States.
Because Iraq is a large importer, Schlueter said, it's seen as a potential market: 'They depend on imports for between 3 and 4 million tons (of grain) annually. That makes them one of the larger importers in the world, behind Egypt, behind Iran, but in league with Japan.'
Last year, more than 2.6 million tons of grain were exported from Port of Portland terminals, a total that reflects smaller harvests because of drought. In better years, grain shipments through the port have ranged between 4.2 million tons and 5.4 million tons.
Schlueter said the Australian Wheat Board has noted that Australia is closer to Iraq than the United States, 'and we are reminded that they were our allies in the military hostilities there, giving them a better claim than other countries.'
Whether or not the Northwest lands any Iraqi business, wheat exports after this year's crop is harvested should pick up, according to Schlueter, who said the outlook is 'guardedly optimistic' for a better year. 'It would be hard to replicate the disastrous year of 2002.'
Rail grain deliveries to Northwest ports, which include Puget Sound as well as the lower Columbia River, were up by 50 percent over last year during the first quarter of 2003.
The number of ship loadings was down slightly, which Schlueter attributed to 'the ships getting bigger; you get more grain on bigger ships.'
In Portland, grain tonnage at the Cargill and Columbia terminals by the end of May registered 21.2 percent above the same five months in 2002, with a total of 1.12 million tons of grain shipped out.
It's an impressive recovery, given that the grain tonnage shipped from the two terminals in January totaled just 46,575 tons, a fraction of the amount loaded in previous Januaries: 261,694 tons in 2002, 430,614 in 2000.
Grain prices also are good, Schlueter said, in part because other wheat producers had poor crops, which increased demand for U.S. grain.
The U.S. dollar's weakness against many foreign currencies also makes this country's produce easier to sell: The Australian dollar, which had been worth 52 cents U.S., now is about 65 cents; the Canadian dollar has soared from 63 cents to 74 cents U.S.
Contact Jeanie Senior at