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U.S. WHEAT ASSOCIATES: HELPING OUR CUSTOMERS FIND OPPORTUNITY IN A CHANGING WORLD
Source: U.S. Wheat Associates news release

Early in 2011, USW predicted that world wheat trade should at least double by 2050, even if total world wheat consumption merely keeps pace with expected population growth. Our analysis showed that farmers produce wheat primarily in temperate zone countries around the world, which will see slower population growth. This is in sharp contrast to where demand for wheat will grow the fastest: in tropical and subtropical regions not conducive to wheat production.

A little more than three years later, USW sees no slow-down in population growth in southern Asia, the Middle East and Africa that would alter our conclusion. However, we may need to re-examine our analysis to consider the impact of dramatic economic changes taking place in critical wheat importing regions and countries - changes that millers and wheat food processors must embrace for their businesses to continue to grow.

Demand for food is increasing most rapidly in developing countries where, experts suggest, a truly global middle class is emerging. Some analysts predict the world's middle class will grow to nearly five billion in 2030. The "Human Development Report 2013" by the United Nations Development Programme acknowledged this change as "The Rise of the South."

"Some of the largest countries have made rapid advances, notably Brazil, China, India, Indonesia, South Africa and Turkey," the report noted. "But there has also been substantial progress in smaller economies, such as Bangladesh, Chile, Ghana, Mauritius, Rwanda and Tunisia."

Having significantly more income to spend on food substantially influences the attitudes of people in this emerging middle class toward the foods they choose.

"As consumers become wealthier, they are also demanding products that are believed to enhance physical and mental health and well-being," the consulting firm KPMG wrote in a 2012 report titled "Expect the Unexpected: Building Business Value in a Changing World."

"Food today is medicine," Dr. John Izzo, a distinguished fellow at the EastWest Institute, said at a presentation on April 11 to a group of U.S. agricultural marketing professionals. "The growing middle class wants as much food as it can get as long as it is guilt-free. And by guilt-free, I mean they want to know if the food is good for them, is it produced in environmentally sustainable ways and are the farmers and workers who bring it to market being treated fairly."

He added that the evidence shows these changes are taking place much faster in developing countries than they did in the developed countries.
In a changing environment like this, organizations must adapt in order to maintain or grow their market positions. At a conference April 10, I heard management and business performance consultant Ryan Estis put it this way: "We all have to view change through the lens of opportunity."
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For example, "increased demand for health and wellness products, coupled with raised awareness of environmental and social issues, represents an opportunity for food companies to develop substantial new markets," advised KPMG in its 2012 report.

USW and its educational partners are ideally prepared to help our customers produce the new, high quality wheat food products demanded by the emerging middle class. We are also working to support research in new technologies that will continue reducing the environmental impact of U.S. wheat production.

Our long-term commitment to customized service is ideally suited to the changes our customers face today and will face in the future. Together, we can turn those changes into opportunities for growth.


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