About 286,000 tons of U.S. hard red winter wheat already purchased for food aid programs will proceed as planned, and the wheat industry is optimistic that even more wheat will be used for food aid in the future.

“Everything we expected to be coming has come and gone through without any sort of timing delays,” said Peter Laudeman, director of trade policy for U.S. Wheat Associates, the overseas marketing arm for the industry.

A 200,000-ton purchase, for USDA’s Food for Progress program, represents “the largest single food aid purchase in probably any time in recent years,” Laudeman said.

That purchase sold for about $50 million, Laudeman said.

Another 86,000 metric tons of soft white wheat, sold for the U.S. Agency for International Development (USAID) Food for Peace program, was about $20 million.

Food aid market

Wheat sold for food aid sells for the same value as wheat sold elsewhere on the market.

“We very intentionally try and make sure they function like a commercial market, so we’re not distorting supply and demand or artificially adjusting prices,” Laudeman said.

In the short-term, no other major purchases of wheat for food aid are expected, Laudeman said.

“Which was kind of frustrating to us, to be honest, because there’s some other food aid programs that were continuing to use U.S. taxpayer dollars to buy wheat products from other countries that we compete against,” Laudeman said.

But in the long-term, “there’s probably some big opportunity to be able to get back to some stronger wheat purchases,” he said.

‘Top 10’ export market

Food aid is a “top 10” export market for U.S. wheat farmers, Laudeman said. About 5% of wheat exported goes to food aid.

In recent years, about 1 million tons have gone to food aid each year, he said.

Laudeman expects more in the future.

“At the very least, more consistently and in large volumes,” he said.

Food for Peace

U.S. Secretary of State Marco Rubio announced on X that 83% of USAID’s programs would be cut. The remaining programs would move under the state department.

“The United States will continue to purchase food from American farmers to meet lifesaving needs of communities around the world,” a State Department spokesperson said on background. “As of March 13, 2023, critical food programs – known as Title II – have resumed.”

Various lawmakers are calling for the Food for Peace program to move from under USAID to under USDA.

Food for Peace is expected to continue, Laudeman said.

“Out of all of the different contract cancellations and pauses and whatnot, generally emergency food assistance, especially Food for Peace … has been one that there have been no cancellations for,” Laudeman said.

The wheat industry supports moving the program under USDA. That would require congressional action, but Laudeman thinks it will happen, “and probably sooner than later.”

“It seems like that right time to say, ‘Hey, let’s restructure things in a way that’s going to be as efficient as possible, buy as much food as possible and feed as many people as possible,” Laudeman said.