Page 76 - Farm and Food Policy Strategies for 2040 Series

but the potential is there and Nelson said his group is slowly, methodically laying the
groundwork.

Unlike India, the biggest obstacle in Mexico is purchasing power, and that has the potential to
change with improvements in the middle class and more disposable income.

Canada, to the north, is the largest foreign market for California citrus. That’s because, unlike in
Mexico, Canadians can spend a little extra to pay for high-quality oranges from the Golden State.

“We’re working with the high-end resorts and good restaurants and we’re working the
food service operations in Mexico so that the middle class and upper middle class have an
opportunity to taste our fruit and appreciate the consistency, flavor and quality," Nelson
said. "The hope is this transforms into a demand in the supermarket. That’s how we’re starting
there … You gotta approach these things with an introductory offer, so to speak.”

Middle East

While the Middle East holds virtually no promise for citrus because of plentiful supplies of
cheap fruit from Turkey and South Africa, the U.S. Grains Council is betting big on the future of
markets in countries like Saudi Arabia.

As water becomes scarcer and populations swell in the Middle East, countries there are going to
be forced to have to rely more and more on imports to support the growing meat and dairy
industries, says USGC’s Schultz.

“Saudi Arabia is under extreme pressure to reduce its water consumption for agriculture, and
they have very large dairy and poultry operations that really need to import feed grains in order
to keep those industries growing and expanding,” he said. “They need to move away from using
subsidies to produce forage in the desert.”

The same view applies to Turkey, Iran, Iraq and Egypt, where “water is increasingly going to be
a scarce commodity and they are better off producing higher-value products for human
consumption than … growing cereal,” Schultz said.

The Middle East is also a target for the U.S. wheat sector, which is counting on a growing
middle class that will want a higher quality and more diverse selection of bread. Russia and its
expanding wheat fields may be dominating the market for cheap grains, but there’s no beating
the U.S. when it comes to quality and diversity.

“New opportunities exist, even in these markets where Russian supplies dominate the price
conscious government imports,” a spokesman for the U.S. Wheat Associates said. “There is
growing demand in the private sector for niche premium bread products requiring higher gluten
strength flour and confectionary products best made with flour from soft wheat classes. This
creates new opportunities for U.S. hard red winter, hard red spring, soft red winter and soft white
wheat imports.”

And the USW isn’t going to sit around to wait for the Middle East to come knocking.

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