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News 264 views last update:6 Aug 2012

Hard competion for US gluten suppliers

US companies can't compete with the price of imported gluten, wheat processors say. As 80% of wheat gluten used in the United States for human and animal food comes mainly from Europe and Asia.

Almost two-thirds of the more than 181,000 tonnes of wheat gluten the US imported came from European Union countries. That's because Europeans use wheat starch to make sweeteners, which leaves them with a lot of extra gluten. The US merely uses corn for sweeteners, the high fructose corn syrup in their soft drinks.

Due to Europe's wheat subsidies EU nations can sell their wheat gluten for a low price, sometimes below American production costs, gluten makers say.

In addition to EU countries, Australia accounted for more than 18% of imported gluten in 2006 and China 14%, according to the USDA's Foreign Agricultural Service.

Imports increase dramatically
Records of US customs show that last year Chinese suppliers shipped 12,800 tonnes of wheat gluten to the United States for animal use. Ten years ago, this figure was only 1,500 tonnes.

A group that represents American wheat growers says subsidies from foreign governments, combined with low US tariffs for imports, have resulted in a flood of imported wheat gluten priced significantly below the $1.43 per kg the US version fetched at the time the tainted shipment arrived.

Last year, wheat gluten from China averaged $0.95 per kg at the port of arrival, Steve Pickman said, vice president of MGP Ingredients, the largest wheat gluten producer in the US, based in Kansas.

Reshuffle market conditions
The industry wants a reshuffle of market conditions. Changes such as renewing import quotas, setting a minimum price for imports, or demanding that products carry labels indicating a domestic or foreign wheat gluten source could help shore up domestic production.

Kansas growers have planted 10.3 million acres (4.12 million hectares) with wheat during this growing season, according to the US Department of Agriculture. In most years, the state is the country's top wheat producer. While corn is the dominant crop in some parts of Kansas, other regions have the right climate for hard-red winter wheat.

From every tonne of wheat flour 600 kg of starch and 140 kg of gluten can be extracted. Gluten show unique elasticity when water is added. It allows a mound of bread dough to stretch as it is kneaded and helps prevent yeast from forming massive air pockets.

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