GRAND FORKS, N.D. - U.S. wheat farmers face many challenges. But a wheat industry official says there's good news in southeast Asia, especially the Philippines and to a lesser extent Indonesia.
"It's a success story by any degree. It's spectacular," said Joe Sowers, regional vice president-Philippines and South Korea for U.S. Wheat Associates, which promotes U.S. wheat exports worldwide. About half of wheat produced in the United States is exported.
Sowers spoke Dec. 12 in Grand Forks at the annual Prairie Grains Conference. The two-day event, which ended Dec. 12, typically draws 750 to 900 people. It's organized by seven North Dakota and Minnesota farm groups, including the Minnesota Association of Wheat Growers and the North Dakota Grain Growers Association.
Wheat is a major crop in northwest Minnesota, Montana, North Dakota and South Dakota, where many farmers grow it every year.
But trade wars are hurting U.S. wheat exports, as is Russia's rise as a major wheat exporter and increasingly serious competitor for wheat sales worldwide, Sowers said.
A very difficult wheat harvest in the Upper Midwest, the result of weeks of wet and uncooperative weather, also is working against area wheat farmers, he noted.
That makes burgeoning sales to the Philippines and Indonesia especially welcome, he said.
In fact, the Association of Southeast Asian Nations, or ASEAN, is now seen as the world's top wheat-importing region for the first time. The organization's 10 members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (Burma), Philippines, Singapore, Thailand, and Vietnam.
"It's more and more important, this Southeast Asian market," Sowers said.
The Philippines and Indonesia are particularly strong markets.
The Philippines are projected to import a record 7.2 million metric tons of wheat this year, more than double what imports were a decade ago. Ninety-five percent of the country's imported wheat comes from the United States.
Indonesia is expected to import a record 11.3 million metric tons this marketing year, with about 18% of that coming from the United States. Ukraine, Canada, Argentina, Australia and Russia also are major wheat exporters to Indonesia.
Sowers, who's based in the Philippines and regularly visits Indonesia, said the rising population and growing middle class of those two countries contribute to the growing demand.
As living standards rise, many consumers are diversifying their diets, shifting from rice to wheat.
"These consumers can choose what they want, not what they can afford," he said.
That's true for Southeast Asia in general, too.
According to at least one study, "We'll see more entrants into the middle class (in Southeast Asia) that the rest of the world combined," Sowers said.
The age of Southeast Asians is another major boost. In the Philippines, for instance, more than half of the population is under the age of 24 and 90% is under the age of 55, Sowers said.
That contrasts favorably with countries such as Japan that, on balance, have much older populations. Younger adults generally have more disposable income, making them especially attractive to marketers, Sowers said.
Another plus for U.S wheat in the Philippines: it's recognized for high quality, with Filipino companies often promoting that their products are made with American wheat, Sowers said.