South African milling companies know their wheat — both in terms of the quality they need to produce the high-loaf pan bread their consumers eat and the price advantages and disadvantages of global wheat supplies. That means promoting U.S. wheat requires sharing information and demonstrating the advantages of the U.S. marketing system — both goals of a South African trade team visit that traveled to the Sunflower State August 22-24, 2024.

“U.S. wheat has recently been priced out of the South African market,” said Chad Weigand, USW regional director for Sub-Saharan Africa. “But with lower export prices, this group was eager to hear from all the people on each visit and see the process U.S.-grown wheat goes through prior to being boarded on a ship. The comments I heard were clear that they were very impressed with this trip.”

The team was organized by U.S. Wheat Associates, the industry’s market development organization, and while in the state they were guests of the Kansas Wheat Commission. While stateside, the team also visited North Dakota, Nebraska and Texas.

Trade team members represented one of the four major wheat milling companies in South Africa, Tiger Brands. While in Kansas, the trade team focused on learning about the U.S. grain trade, global supply and demand, and estimates on price movements. The team toured the IGP Institute, including the full-scale pilot flour and feed mills, and shadowed a milling short course taking place at the main IGP building. Team members also visited the Kansas Wheat Innovation Center, learned more about Kansas wheat production and toured the state-of-the-art research facility.

In Kansas City, the team met with the USDA Federal Grain Inspection Service (FGIS) and met with various grain traders and grain/wheat export companies to discuss market hindrances and opportunities.

“The tour at FGIS provided much comfort to us as importers of U.S. wheat in the sense that it assures us of compliance to the agreed specifications of our import agreements,” Dries Dannhauser, the Commodities Procurement Director with Tiger Brands said.

South Africa is a middle-income market with a population of more than 60 million people, nearly two-thirds of which live in urban areas. The major wheat food product consumed there is pan bread, but snack foods and confectionary items have been rising in popularity.

The country is also the only one in the region with significant wheat production, but production has been sporadic over the past 10 years — varying from 51.4 to 80.8 million bushels (1.4 to 2.2 million metric tons) — due to weather conditions and competition from corn and soybeans. Even with this domestic production, South Africa is a net importer of wheat, importing 55 million bushels (1.5 million metric tons) in the 2023/2024 marketing year.

The country’s agribusiness sector is well developed. All of the major mills have their own in-house industrial bakeries. The milling industry is very sophisticated, and millers are both price and quality conscious. South African millers prefer Hard Red Winter (HRW) wheat for bread wheat but will make importing decisions based on price from a larger range of competitors, including Germany, Canada, Australia, Brazil, Russia and Ukraine.

This price competition is worsened by a tariff differential with the European Union. Starting in 2017, the European Union secured a quota of duty-free wheat sales to South Africa, which now represents 15 percent of South Africa’s annual imports and undercuts U.S. HRW exports. The United Kingdom has an additional quote of duty-free wheat that came into effect after Brexit, further exacerbating the price disadvantage.

While the United States only has an average of two percent share of imported milling wheat, there is opportunity to expand exports to South Africa. Trade teams like the one in August are part of USW and Kansas Wheat’s work to increase U.S. wheat imports by South African milling companies by providing market, crop quality, freight and risk management information to the major milling groups. Efforts like trade teams help demonstrate the advantages of the U.S. marketing system and enhance these millers’ confidence and proficiency in purchasing U.S. wheat.

“When they’re here in person, it’s making those connections, meeting the producers face to face, meeting their suppliers face to face. It establishes trust and confidence in the system,” Weigand said, “Rather than just being disconnected from it all and just buying wheat on paper, once they see this, it gives a very personal feel to it.”

Learn more about USW’s mission to develop, maintain and expand international markets to enhance wheat’s profitability for U.S. wheat producers and its value for their customers in more than 100 countries at www.uswheat.org.