Posted by: usset001 | July 21, 2011

Wheat Market Outlook – Wheat is not wheat (continued)

Yesterday I noted that I have 20 minutes on Monday to present the outlook for the wheat market at the AAEA conference in Pittsburgh. Preparing for the presentation got me thinking about wheat (again), and how it differs from corn and soybeans as a basic commodity. The bottom line is that wheat is not wheat, because of multiple classes and quality differences that range from subtle to sharp. I talked about the distinction between high and low protein wheat. There are other distinctions to discuss, including red vs. white, hard vs. soft, common vs. durum and food vs. feed wheat.

Red vs. white wheat: Most of the wheat produced in North America is red wheat including hard red winter in the U.S. southern plains, Canadian western spring wheat on the Canadian prairie, hard red spring in the northern plains of the U.S. and soft red winter in the eastern corn belt and southeastern part of the country. White wheat production is limited to the Pacific Northwest and eastern Canada. White wheat production is the norm in the EU, China and Australia, but we are back to red wheat when talking about Russia, Ukraine and other former soviet states.

The difference is in the color (obviously) and a very subtle difference in taste. Whatever makes a red wheat red imparts what some would call a slightly bitter flavor. I call it the taste of bread. White wheat, proponents claim, has a sweeter taste. I call it a bland flavor. Preferences depend on what you are accustomed to locally. For example, bakers in the PNW will most likely believe that nothing makes a better cake than flour made from soft white wheat, while bakers on the east coast will make hold the same belief for cake flour made from soft red winter.

The Asian market prefers white wheat flour in the production of Asian noodles – the U.S. market prefers red wheat flours in the production of most everything related to bread. The real issue at play is consistency – bakers want the same flour today that they used yesterday, because they have mastered the art of making the best product they can with the ingredients at hand. Red or white wheat – most bakers probably don’t know the origin of their flour but, don’t change a thing!

In the early 1990’s, I made a presentation on the U.S. flour market to millers and bakers from Africa. Africa is often the recipient of food aid, one month taking middle protein white wheat from the EU, followed by low protein soft wheat from the U.S., followed by higher protein hard red wheat. I asked them how they managed to make bread when their most important ingredient changed often. The response was a “welcome to my world” rolling of the eyes.

Hard vs. soft wheat: Hard wheat is generally higher in protein, and soft wheat is generally lower. The distinction here is very similar to the distinction between high and low protein. There is a subtle difference in the milling of hard wheat vs. soft wheat. A miller once explained to me that there are two basic steps in the milling process: grinding and sifting. Hard wheat demands a lot of grinding and a little bit of sifting, while soft wheat need less grinding and more sifting.

Blending is the norm in the milling industry, and hard and soft wheat flours are often blended to meet the quality specs of different flours. This is particularly true in the U.S., where many different classes of wheat are available.


Responses

  1. […] of several posts in late July, I was commenting on the outlook in the wheat market (see here and here). In the last of these posts (here), I offered my opinion on one particular aspect of the wheat […]

  2. Nice mix of data and opinion. The market for specific wheats is increasing. We’re trying to get local (Southern California) growers to put in heirloom varieties that we will buy, mill, and sell to local bakers. What is the difference, in cultivation & seed costs, between wheat for feed / cover crop and wheat for milling? Would offering a farmer a 25% margin above ‘feed’ wheat prices be enough of an incentive?
    Thanks for your input.
    Paul Morgan

    • Paul
      Thanks for your interest. I am not a wheat agronomy expert nor a cost of production expert, but here is my two cents worth. If local producers are growing feed wheat, I imagine these are very high yielding varieties, grown for a cheap sources of feed and not for high quality flour characteristics. Feed wheats may yield 100 bu./acre or more, while the heirloom varieties you have in mind may produce less than 50 bu./acre. In this case, a 25% premium will not entice growers.

      I led an effort to get a handful of North Dakota growers to produce one particular (and odd) variety of HRS wheat. NDSU studies indicated a 30% yield penalty. We ended up paying 50% more to make up for the yield penalty and to cover their costs for seed and segregation.

      One more thought; Wheat quality for milling is a product of inherent varietal characteristics AND the environment it is grown in. I have a bias in believing that the best quality wheat is raised in the Dakotas, Montana, and Kansas. You may have heirloom wheat with distinct qualities, but this wheat may need to be grown in the right area to bring those qualities out. Here in Minnesota, we know how to grow grapes, but our wine is not quite as fine as the wine made from grapes that come from Napa Valley.

      Good luck and give me a call if you want to explore it further.


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