Technically Speaking: Increased non-GMO specialty grains use in North Asia is reason for optimism

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By Alyson Segawa, SSGA Technical Adviser, North Asia

The North Asian countries of Japan, South Korea, Taiwan and China hold continued potential for the U.S. specialty grains market. While overall human consumption of some grains remains relatively small compared to feed use, data suggest that the North Asia region may present an opportunity for IP grains.

Prompted by the U.S.-China Phase One deal signed in January, China opened to U.S. exports of barley in May following the approval of a phytosanitary protocol by both countries. Japan is the largest importer of U.S. barley among North Asian countries, and the market for U.S. food grade barley has been growing rapidly in recent years.

Japan is also the largest annual importer of U.S. buckwheat and purchased 95% of total U.S. buckwheat exports to North Asia in 2019. Japan is the top market for U.S. rye in North Asia with South Korea and Taiwan purchasing rye in recent years as well. Taiwan and Japan together comprised 81% of U.S. oat exports to North Asia in 2019.

Millet has a long history in Asia, particularly in China, and U.S. millet exports to North Asia increased 286% from 2017 to 2019. Significant increase in purchases by China, combined with sales to South Korea and Japan, comprised 92% of North Asia’s millet imports from the U.S. in 2019.

Overall, food use of specialty grains in Asia may be on an upward trend. Further trade promotion efforts, with stabilized containerized shipments and inventories, may further expand market share of SSGA-covered specialty grains in North Asia over the long term.

Technically Speaking is an SSGA feature that includes news and information from SSGA’s technical advisers for North Asia, Southeast Asia and Europe.

SSGA highlights EU market opportunities for specialty grains

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Recent consumer research has shown that a majority of Europeans are willing to pay more when it comes to greater transparency in their food.

According to the research firm DNV-GL, 60% of global consumers are willing to pay at least 5% more for assurance of transparency in the foods they buy. Transparency is at the heart of the U.S. identity-preserved field crop system that SSGA promotes, along with consistency, quality and safety in those products exported worldwide.

“There’s clearly an appetite for (transparency) in the EU,” said Dave Miller, specialty grains consultant for the Specialty Soya and Grains Alliance (SSGA). “They’re hungry for more information on food safety, environmental issues and social issues.”

It’s because of that appetite that SSGA conducted a webinar for its members and others hoping to learn more about specialty grains export opportunities to Europe. The online event, which was held on Oct. 8, drew around 25 participants, including SSGA members who handle a variety of specialty grains.

“We’re building insights and building market development,” Miller said. “There are data sources we have access to that will help (members) better understand the markets and to work on their own market development.”

The webinar featured three presenters who each shared a perspective on the opportunity for IP specialty grains in the EU:

  • Jacob Golbitz, managing director of Agromeris, a food and agricultural industry consulting firm
  • Alyson Segawa, SSGA IP technical adviser and founder and CEO of Eliasan Consulting
  • Anne Dettmer, founder of Artisanne’s, a London-based public relations and marketing firm

Golbitz spoke about the growth of specialty grains usage in the European Union and the United Kingdom, using data from the Mintel Global New Products Database, a collection of information of consumer products that includes food products grouped by type (bakery, snacks, desserts, etc.) and searchable by product information (ingredients, flavors, sizes, etc.).

Using searches of specific specialty grain ingredients, information gleaned from the database was used to highlight intersections of the most-active European markets and top product categories. That information shows a very promising target market for U.S. suppliers of specialty grains.

Segawa gave an oversight of Europe as an upward-trending market for specialty grains, focusing primarily on a top six of sorghum, barley, oats, rye, triticale and quinoa.

Analyzing data and consumer trends from 2012 to 2018, Segawa echoed that EU customers are willing to spend more healthier choices, and that may present a unique opportunity for SSGA suppliers to continue building the U.S. market share in Europe.

Dettmer, who works with trade associations, focusing specifically on the United Kingdom and Ireland, talked about breaking into the UK market with a particular focus on planning and research. It’s imperative that U.S. exporters understand their target markets and how food manufacturers in those markets make their ingredient decisions.

SSGA Executive Director Eric Wenberg said the webinar had good participation and encourages feedback from attendees.

“We’re just getting started,” Wenberg said. “We have to figure out how to get, as we say in the West, ‘belly to belly’ with Europe and show that IP is the value that adds value. We know that, not from hunches anymore, not from instinct, but from the data that’s coming into us and the research that’s being done.”

SSGA to host EU specialty grains webinar

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Join the Specialty Soya and Grains Alliance (SSGA) for a webinar on Thursday, Oct. 8 at 10 a.m. CDT to explore the specialty grains market in the European Union. This informative event will highlight the grains, product categories and countries that are driving innovation, as well as highlight the opportunities, import sources and company perspectives on the specialty grains business in Europe. The event will also highlight two of the data resources available to SSGA members as they explore new markets.

Scheduled speakers include:

  • David Miller, moderator, SSGA Specialty Grains Action Team
  • Jacob Golbitz, Agromeris
  • Alyson Segawa, SSGA Technical Adviser – North Asia
  • Farmer – TBD
  • Overseas Market Representative – TBD

Use the link below to join the meeting.

SSGA Specialty Grains in the EU Webinar
Thu, Oct 8, 2020 10:00 AM – 11:30 AM (CDT)

Please join my meeting from your computer, tablet or smartphone.
https://global.gotomeeting.com/join/557247237

You can also dial in using your phone. For supported devices, use a one-touch number below to join instantly.

United States: +1 (408) 650-3123
– One-touch: tel:+14086503123,,557247237#

Access Code: 557-247-237

Alternative flour is trend to keep watching

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By Dave Miller, SSGA Specialty Grains Consultant

The global pandemic has thrown many product categories into upheaval. And for as many that have suffered mightily, there are just as many that have experienced a surge in business as consumers shift the patterns that traditionally guide their life. Baking is one such category.

While consumers love baked goods, the trend for baking at home, particularly from scratch, has declined steadily for years, driven both by increasingly busy lifestyles as well as convenience baking products such as refrigerated doughs. But as shelves were stripped by panic buying and consumers found themselves at home more, scratch baking has seen a resurgence.

That spike appears to be a big reason why specialty flours are reaching more consumers than ever before.

“All-purpose flour was out of stock at a lot of retailers, and so what happened was folks that have never even heard of nut flours started buying our product because there was no more all-purpose flour on the shelves,” JC Taylor III, director of marketing and innovation for Nature’s Eats told the website Food Dive in an article about the boost in alternative flours. “So they’d buy our product, they’d use it and they found out that they loved it. So we’ve gotten this huge influx of new consumers using our product.”

The big question for SSGA members is will the trend continue post-pandemic. Many experts seem to think trends will be “sticky.” According to April 2020 research from Bernstein, 59% of consumers said they’re baking more from scratch than before the pandemic. Further, 44% say they’re eating more healthy now and they expect that trend to continue vs. only 6% who say they’re eating more healthy now but expect to revert to old habits.

While consumer trends take a long time to shift, the length and foundation of the current changes may likely have a long-term impact that is either permanent or very slow to return to pre-pandemic levels, making the alternative flours category an attractive business opportunity.

SSGA to launch European marketing efforts Sept. 15

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The Specialty Soya and Grains Alliance (SSGA) is launching its marketing efforts in Europe on Sept. 15 with the U.S. Identity-Preserved Soya and Specialty Grains Virtual Seminar. This webinar will promote the U.S. container and identity-preserved (IP) traceability system and its benefits to European companies and consumers.

The co-organizer of the event, the Dutch company Bridge2Food, is promoting the event on its website and through social media channels to attract a robust audience of European buyers. SSGA is also working with the U.S. Department of Agriculture offices in Europe to promote the event. Target participants include companies along the soy value chain, from traders and importers, to food processors and ingredient companies, to food producers and retailers. Registration is free so we hope and expect significant participation by European companies interested in high-quality, U.S. IP products.

The seminar will feature three SSGA presentations and a virtual trade show. Two of these presentations will introduce the U.S. IP system and focus on its advantages, including traceability of container-shipped field crops. We will also have a panel discussion with U.S. producers of IP soya and specialty grains.

Concurrent to the presentations and during networking breaks, participants will be able to meet with exhibitors in the virtual trade show. SSGA members can exhibit for free. This will be a great opportunity for SSGA members to introduce themselves to the European market and to make new contacts in this important market.

If your company would like to join us, email Katelyn Engquist to register.

Updates from the experts

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For a recent virtual trade show, Specialty Grains Lead Dave Miller and Strategic Adviser for Trade and Transportation Bruce Abbe provided video updates on their respective areas of expertise. Listen to their updates below.

Specialty Grains action team setting direction, fostering connections

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By Dave Miller, specialty grains consultant

In the past three months, the Specialty Grains action team has taken a two-fold approach to adding value to Specialty Soya and Grains Alliance (SSGA) members.

First, the action team continues to refine its strategic approach. With more than 20 different specialty crops, driving insights about the combination of crops and markets that represent the greatest opportunity has been a focus for the team.

And, while that important work is taking place, the team is already reaching out to industry associations representing the needs of potential customers to foster relationships.

Recently, the Specialty Grains action team met with the Whole Grains Council (WGC) and the American Society of Baking Executives (ASBE) to explore collaboration opportunities. While the WGC is largely a consumer-focused organization dedicated to the inclusion of more whole grains in consumer diets, its membership is rich with companies that either are or should be customers of SSGA member companies. In meeting with the WGC, it became clear that traceability is important to many of their member companies as they look to continue to add value to their consumer base. In the near future, SSGA will author a blog post on the WGC website about the importance of traceability to WGC members. The organizations will also look to partner on future trade events.

The introduction to ASBE served as an initial entry point to the vast domestic and international baking industry. ASBE represents companies involved in wholesale and in-store baked goods and is the host of the annual BakeryTech trade show. The action team is currently evaluating attendance of that show among several others. While many members of ASBE may be more commodity driven, a portion of its membership is highly focused on specialty, value-added products perfect for the ingredients created by SSGA. The meeting also pointed SSGA to another trade organization highly focused on specialty products, the Bread Bakers Guild of America.

At the same time as these outreach efforts are taking place, the action team is refining its approach to representing the needs of specialty grain members. That includes evaluation of market demand potential by grain and country, as well as building an event attendance plan, highlighting trade shows and conferences that focus on customer channels and markets and where SSGA will appear to network on behalf of members.

Organic Outlook: Corn, wheat face supply glut; soy market expected to remain strong

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Larger-than-expected beginning stocks and more harvested acres have placed organic corn and wheat on a bearish trend over the 2019/20 market year, according to the new Mercaris Organic Commodity Outlook. Meanwhile, strong demand and lower imports have provided support to organic soybeans markets.

Mercaris, the nation’s leading market data service and online trading platform for organic, non-GMO and certified agricultural commodities, today released its spring outlook.

Despite poor planting and harvest conditions in 2019, additional certified corn and wheat farms helped push harvests above previous estimates. In addition, corn imports rose sharply at the end of the 2018/19 market year, 12% above projections.

“Feed-grade organic corn prices have experienced a lot of pressure since last August, as harvest exceeded the industry’s expectation,” said Ryan Koory, Director of Economics for Mercaris. “With buyers expecting tighter 2019/20 supplies, a lot of organic corn was imported and stored at the end of 2018/19 putting corn markets in a perpetually long supply position this year.”

For organic soybeans, a collapse in imports from China and a reduction from Canada and the Black Sea Region point to supply constraints and higher prices.

“With China and the Black Sea Region sending less organic soybean meal to the U.S., domestic organic soybean crush has picked up the slack, tightening the overall U.S. soybean supply situation,” Koory said. “We may see this pressure back off this fall if we experience a good organic soybean harvest. But, through the remainder of 2019/20 organic soybean prices look firmly supported.”

Additional findings from today’s report include:

  • U.S. organic corn production is estimated at 39.7 million bushels for 2019/20, up 9% from the previous outlook but still down 4% year-over-year.
  • Organic soybean production is estimated at 7.6 million bushels, also up 9% from the previous outlook, but down 4% year-over-year.
  • Organic feed demand is projected at 31 million bushels, with organic wheat and organic corn silage making up a growing percentage of overall feed.
  • Organic wheat production saw a 15% year-over-year increase in 2019 at 20 million bushels, driven mostly by an increase in acres in the High Plains.

Today’s report includes additional data and commentary on expected yields, use, prices and more for organic commodities. For more information and to purchase a copy of the report, visit Mercaris. There will be a webinar on April 30 at 10:30 a.m. CT to cover these findings for those who purchase the report.

For information about COVID-19-related risks to organic markets, a free Mercaris report is also available here.

Traceability: The IP advantage

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By Eugene Philhower

Eugene Philhower, SSGA Technical Adviser for Europe

In these days of polarization on just about every topic, there is at least one concept that those of us in the food and farming sectors should all agree upon — that traceability means “back to the farm.” As an identity-preserved (IP) technical adviser for the Specialty Soya and Grains Alliance (SSGA) covering Europe, one of my roles is to help enable increased exports by communicating about the benefits of IP crops and their traceability.

With the ever-increasing interest from consumers in the U.S. and Europe to “know where our food comes from,” the pressure is on every stop along the food value chain to provide “back-to-the-farm-level” information for more and more products, particularly for traditional bulk commodities like soy. If a food product cannot currently be traced back to the farm or farms from where the raw materials came from, it will be expected to do so in some form in the not too distant future.

Here in Europe, there is another factor that needs to be considered. The images of the burning rainforest in Brazil last fall have rallied governments, particularly in Northern Europe and the European Commission, to take visible action on deforestation. This is not new as environmental groups and organizations such as the Consumer Goods Forum have long called for decisive actions on deforestation. However, with broader and more governments actions, the momentum is building.

For example, earlier this year, the seven signature countries of the 2015 Amsterdam Declaration issued a statement on conversion-free soya, calling for national action plans to ensure that “100 percent of our (countries’) soya consumption is produced according to the law and in a way that protects forests and valuable native vegetation (deforestation and conversion free).” It is interesting to note that the commitment is not just limited to deforestation but includes the prohibition of conversion of valuable native vegetation to crop production.

Just last week, the German government adopted guidelines for the promotion of deforestation-free supply chains. In its guidelines, the government commits to promote the cultivation of European Union (EU) and locally produced protein. While details are vague, the German government also intends to increase and improve information of consumers and support more uniform and more stringent approaches at EU level.

Additional sources of plant protein are in demand in Europe as manufacturers experiment with new products. According to Bridge2Food, European companies are looking for long term sources of supply to build out food production lines, and some of them for re-export to Asia. Working in the high-end manufacture means traceability.  There is a new government commitment to action and that connects deforestation, choosing a source for imports, and the promotion of local protein.

Back to traceability, the current grain marketing infrastructure in the U.S. has developed on the handling of bulk commodities. The system efficiently manages both a large volume and a large number of products. Over time, this has allowed for efficiencies and lower costs all along the value chain. The foundation of the U.S. position as the number one ag exporting country is this infrastructure. For bulk commodities, the county elevator serves as close to the farm as economically and physically possible and there are very good reasons for this. Under the current system, starting at the local elevator, products are mixed and processed at the individual steps along the way. As a result, each step only needs information on the product as delivered from the previous step. With this “one step forward, one step back” approach, along with appropriate testing and quality inspections, each step along the way has the responsibility to ensure quality and safety standards are met.

In recent years, back-to-the-farm-level traceability has become routine for certain commodities and products. U.S. Department of Agriculture (USDA) regulations require comprehensive traceability in meat due to concerns on animal health and food safety while trade in organic products relies on segregation and certification starting at the farm level.

Whether consumers are motivated out of concerns for the tropical rainforests and habitat destruction or in the interest in supporting “local” production, more and more consumers, and the competitive retail sector, will be demanding to know where all of its products are produced. Back to the farm traceability is a fundamental aspect of the SSGA IP effort that promotes the origin of products and the U.S. is in a great position to respond to these growing demands.

FEFAC concerned about feed supply issues

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By Arvin Donley for World Grain

EU food and feed industry representatives are expressing concerns to the European Commission about enacting social distancing measures designed to prevent the spread of the coronavirus (COVID-19) without disrupting the food and feed supply chains.

The global COVID-19 pandemic, which has infected more than 200,000 people and killed more than 7,000, has spread quickly through Western Europe in the last two weeks. Italy, Germany and France are among the countries hit hardest by the virus.

While the groups acknowledged the need to strictly comply with EU and national instructions to prevent further dissemination of the virus among its employees, suppliers and customers, they emphasized that it was important to ensure that the food and feed supply chains remain open.

The European Feed Manufacturers’ Federation (FEFAC) called for the inclusion of feed next to food in the list of essential goods mentioned in the EU Commission Guidelines on Border Management published March 17.

“Farm animals must be fed every day in order to provide key food products consumed by the population and to ensure animal health and welfare,” FEFAC said. “Some Member States, like Spain, Italy and Belgium, have already included feed supplies on their list of essential goods, but we need a harmonized approach at EU level.”

In addition, the groups called on the EU and national authorities to take swift action to ensure that all food and feed, even if not perishable, can be transported across the EU unhindered as long as all required health safety measures are respected.

They said the decision to close the EU outside borders that was taken on March 17 to contain the propagation of the virus should not apply to vessels bringing in the food and feed raw materials that are in short supply in the EU — again, as long as they take every necessary health measure to ensure the health of all actors in the food and feed supply chain.

“As traders of agri commodities, our mission is to ensure the supply of the raw materials and ingredients that are needed by farmers, the food sector and the feed industry for direct use and further processing,” said Philippe Mitko, president of COCERAL. “We source from European producers, moving agri goods across the EU and exporting the surplus, but we also import the raw materials for which the EU is in deficit.

“We have been watching disruptions in the food and feed supply chain increasing in the last few days and are very concerned about future developments as the COVID-19 virus continues to spread. The EU needs to protect the health of all operators in the chain so that they continue to ensure the uninterrupted supply of food and feed.”

Nick Major, president of FEFAC,  said he believes the EU can achieve both goals of keeping its citizen safe from the virus while keeping the food and feed chain flowing.

“The EU feed industry fully accepts the need for strict containment policies at EU and Member States level to slow down the infectious COVID-19 cycle,” Major said. “Our priority and key mission are to protect animal health and welfare of farm animals and food supply chains for milk, meat, eggs to consumers during the COVID-19 crisis. We therefore urge the EU Commission to recognize the status of feed as essential goods in the EU COVID-19 guidelines, which is crucial to uphold the functioning of the single market for feedstuffs to prevent supply chain disruptions and shortages of essential nutrients to the EU farm animal population.”