01/18/05 Black Sea wheat competition

01/18/05 Black Sea wheat competition

Farm and Ranch January 18, 2005 Wheat production in the Black Sea region of the Former Soviet Union is volatile, but it has the potential to significantly impact U.S. wheat exports in certain years. That's the assessment of Vince Peterson, U.S. Wheat Associates vice president of overseas operations regarding the non-traditional wheat exporting countries of the Ukraine, Russia, and Kazakstan. Peterson spoke at the recent Pacific Northwest Farm Forum in Spokane. Peterson: "Statisticians would probably kill me. But if I said in a ten year period, one to two years they are going to have that 25 million ton export, probably right. One or two years they are going to have a drought and probably not going to be in the picture, that's probably right. The other six to eight years are going to be what I would say are normal export years. There is going to be something around eight million tons of wheat coming out of Russia, Ukraine and Kazakstan into the market and is something we are going to have to deal with. But I think that dealing with it is going to be on a basis like this year rather than like we had two years ago." When Black Sea wheat was being marketed $50 dollars a ton cheaper than U.S. Wheat. Over time, Peterson sees the Black Sea region losing some of the competitive advantage it now has as production costs increase, domestic feed demand rises and more land shifts from wheat to corn and oilseed production.. Peterson: "I may be retired before all this happens, but I think this is the way it is going to go. All of this is going to soften a little bit the overall market impact of this producing area on our markets." Tomorrow, Peterson on Black Sea wheat and the PNW in particular. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.
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