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Taiwan pledges to buy $576 million worth of U.S. wheat

By Sean Ellis

Idaho Farm Bureau Federation

BOISE – A Taiwanese trade delegation’s recent trip to Idaho to sign a “letter of intent” to purchase $576 million worth of U.S. wheat over the next two years was much more than just a ceremonial pledge.

Taiwan has signed these intent letters to purchase U.S. wheat for four decades now and even though they aren’t contracts, they have followed through on every one of them. Similarly, U.S. and Idaho wheat farmers have consistently followed through on their pledges to provide that wheat.

Since 1998, Taiwan has purchased 833 million bushels of U.S. wheat worth about $6.4 billion. A good portion of the wheat Taiwan purchases comes from Idaho.

A Taiwanese agricultural trade delegation visits the U.S. every two years to sign an agreement to purchase a certain amount of U.S. wheat. They sign agreements in Washington, D.C., as well as several of the nation’s wheat-producing states.

Idaho wheat industry leaders were on hand Sept. 19 as a Taiwanese trade delegation gathered in Gov. Brad Little’s office to sign the latest agreement for Taiwanese flour millers to purchase $576 million worth of U.S. wheat over the next two years.

“We are here to buy more wheat,” Director General Daniel K.C. Chen of the Taipei Economic and Cultural Office in Seattle, said during a press conference held along with the ceremonial signing.

He was joined by members of the Taiwan Flour Mills Association, which will purchase the wheat.

TFMA Chairman Tony Yi-Cheun Shu said Taiwan imports 99.9 percent of its wheat and likes Idaho and U.S. wheat because of the United States wheat industry’s ability to deliver the type and quality of wheat that Taiwan millers need on a consistent and reliable basis.

He also said the U.S. wheat industry is very transparent about quality and pricing.

“It may not be the cheapest wheat … but we love the quality,” Shu said. “I want to thank you all for supporting us and I think our cooperation and collaboration in the future will continue.”

The TFMA imports wheat on behalf of all 20 flour mills in Taiwan. The U.S. supplies more than 80 percent of Taiwan’s total wheat imports.

While members of the Taiwanese trade team stressed their commitment to continue purchasing U.S. wheat, members of Idaho’s wheat industry likewise reiterated their commitment to keep providing a quality product.

“I want to commit to you that the wheat commission and the farmers in Idaho are committed to maintain this relationship,” said Ririe farmer Clark Hamilton, chairman of the Idaho Wheat Commission.

Hamer wheat farmer Justin Place, who attended the signing and met with TFMA officials and the governor beforehand, said the trade delegation stressed how much they value the consistency of U.S. and Idaho wheat.

“They know they are going to get a quality product coming from us,” said Hamer, secretary-treasurer of the Idaho Grain Producers Association. “It’s always within spec of what they want and they know they can count on it.”

Although the agreements aren’t contracts, they are serious pledges between wheat purchasers and suppliers, said Idaho State Department of Agriculture Director Celia Gould.

“We have done this for a very, very long time and every time, the commitment has been honored, by both sides,” she said. “It’s a sacred document in that regard. That shows the value of this intent agreement.”

Taiwan’s commitment to purchase U.S. wheat provides a level of certainty to many of the state’s grain farmers. Idaho growers produce more than 100 million bushels of wheat annually on about 1.2 million acres and half of the state’s wheat is exported.

Wheat is the state’s No. 2 crop and No. 4 agricultural commodity in terms of total farm-gate receipts, which is what the farmer gets for their commodity.

Wheat is grown in 42 of the state’s 44 commodities and is an important part of most Idaho farmers’ crop rotations.

Little, a farmer and rancher from Emmett, pointed out that Idaho also exports other ag commodities to Taiwan, including beef, processed potatoes, dairy products, hay, dried peas, chickpeas, animal feed, hide and fertilizer.

“Taiwan has been a very, very loyal customer for a long time,” he said. “A lot of our farmers in Idaho … have made significant investments in their farms predicated on that consistent, good market that we have (in Taiwan).”