Alexa

U.S. wheat gluten industry decimated by cheap imports

U.S. wheat gluten industry decimated by cheap imports

Amid growing fears over contaminated imported wheat gluten found in recalled pet food, domestic makers say the infrastructure for U.S. gluten production has been so eroded by low cost imports that it can no longer supply domestic demands.
Only four domestic gluten manufacturers _ two located in Kansas _ have survived the flood of foreign wheat gluten brought here in the last decade at prices cheaper than U.S. producers can make it.
When the United States removed quotas on gluten imports in 2000, gluten prices plummeted by about half, said John Neufeld, chief operating officer for Dallas-based White Energy, whose firm purchased the bankrupt wheat gluten facility in Russell, Kansas.
That gluten plant was built in the mid-1990s by Farmland Industries when the U.S. government had placed quotas on foreign gluten imports to protect its domestic gluten industry, Neufeld said.
Even though the U.S. exports half of the wheat it grows, it imports roughly 80 percent of its wheat gluten from China, Australia and the European Union, according to figures from the National Association of Wheat Growers.
Wheat gluten is used primarily as an ingredient in the baking industry and in cereal for human consumption, as well as in pet foods.
"Imagine if this was a child _ instead of 30,000 pets. How about 30,000 children? Would we be thinking, 'Gosh, I am glad I saved a few cents on that loaf of bread I bought,'" said John Thaemert, a Sylvan Grove farmer and NAWG president.
Last Thursday, the government said several hundred of the 6,000 hogs that may have eaten contaminated pet food are believed to have entered the food supply for humans. The potential risk to human health was said to be very low.
The pet food recalls and pet deaths have raised alarm among industry leaders, who contend the nation's growing dependence on foreign food supplies compromise its national security as much as its dependence on foreign petroleum.
"Food security is important and it has a cost," Thaemert said.
The food supply chain in the United States is highly regulated to make sure it is safe, but those safeguards are not always in place overseas. Other countries can make low cost food products because they have lower labor costs, cheaper land and less government regulation.
And that cost differential is particularly acute for wheat gluten because most of the companies that produce gluten internationally do it as a byproduct of starch manufacturing. Most of the starch consumed in North America comes from corn. European countries mostly use wheat starch, leaving those countries with far more wheat gluten than their markets can absorb, Neufeld said.
His company estimated that the U.S. consumes about 530 million pounds (240 million kilograms) of wheat gluten. Government figures show that about 386 million pounds (175 million kilograms) of that wheat gluten was imported, he said.
China _ the country where the contaminated wheat gluten in the pet food recalls is believed to have originated _ has dramatically increased its sales to the U.S. in the few years. Chinese imports now account for about 10 percent of the wheat gluten used in human food and as much as 40 percent of gluten imports that go into animal feed in this country, Neufeld said.
White Energy, which operates an ethanol plant next to the wheat gluten facility in Russell, uses the wheat starch for its ethanol production. It sells the gluten it produces primarily to the domestic baking industry.
The Russell facility produces 40 million pounds (18 million kilograms) of wheat gluten annually, accounting for just under 8 percent of U.S. gluten consumption, he said. Its gluten plant has been running at capacity and has not been affected by the recent concerns over the imported gluten.
The nation's largest gluten maker, MGP Ingredients Inc., is based in Atchison, Kansas, with another plant in Pekin, Illinois. The company has the capacity to produce 120 million pounds (54.5 million kilograms) of gluten in year but the plants are running at only 20 percent of that capacity, said Steve Pickman, MGP Ingredients' vice president for corporate relations.
"Very simply, it is price competitiveness with imports," Pickman said. "We have been unable to compete effectively on a price basis with imported gluten."
It costs 20 percent more for the company to make wheat gluten than the market price, which is determined by imports, he said.
"The United States has the most comprehensive regulations in place of anywhere in the world when it comes to consumable products. ... Understandably there is a cost associated with that. It doesn't come free," Pickman said. "But it is a lot less expensive than the price we are paying now due to a product that has been brought into this country with questionable safety and integrity."
___
On the Net:
http://www.wheatworld.org/
http://www.white-energy.com/
http://www.mgpingredients.com/


Updated : 2021-04-13 16:27 GMT+08:00