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September 22, 2020

CHATTANOOGA, TENN. — Potentially marking the dawn of a new era in wheat quality, Grain Craft LLC is expanding a pilot program in Kansas and throughout the Southwest allowing bakers to replace high-priced spring wheat with high-quality, segregated, preferred varieties of hard red winter wheat.

Grain Craft recently completed a successful test with a baking partner of flour milled from the preferred varieties and has been given the green light to expand the program to other locations operated by the baker.

Grain Craft believes the program holds the potential for widespread adoption in the milling industry, building a stronger chain from the breeding community, to growers, grain elevators, millers and bakers, as well as the grain export industry.

A motivation for the program has been the inability of bakers in recent years to bake good quality pan bread and buns using flour milled entirely from hard red winter wheat. Instead, blends of 75% hard winter and 25% hard spring have been common. Spring wheat prices recently have been about 80¢ a bu higher than hard winter, even before accounting for the higher transportation costs for shipping spring wheat 800 miles or more from the Upper Midwest.

Most years, the baking quality of hard red winter wheat varieties grown in the Southwest vary widely. Most of the harvested wheat is commingled at grain elevators, so milling flour from the better varieties has been difficult.

Grain Craft in recent years has been partnering with growers and grain elevators to segregate a select group of 33 high-performing wheat varieties, paying growers a premium as an incentive.

The premium, which will be paid by the company’s baking partner, along with the segregation of the preferred varieties have the potential to be a game changer for US wheat quality, said David G. Green, executive director, Wheat Quality Council, Lenexa, Kan.

“The industry has always known we need to get the farmer involved in planting high-quality varieties for the industry,” he said. “Until now there has not been a mechanism to reward farmers for growing specific varieties. So, these types of programs are a major first step in trying to get better varieties planted by the farmer. I think it is a big deal.”

For Grain Craft, the successful test in Kansas marks the culmination of an effort dating back almost 20 years, said Alan Koenig, chief supply chain officer.

The program was launched not in the hard winter states, but in the Intermountain region. Grain Craft started the preferred variety program at its Blackfoot, Idaho, mill in the early 2000s. In the mid 2010s, the company began exploring ways to expand the program in Kansas hoping to make flour milled from preferred varieties available to more baking customers.

The Idaho project was kicked off in 2001 by Reuben McLean, senior director of quality and regulatory for the company, based in Idaho.

Mr. McLean, who has a background in wheat breeding, began working at the Blackfoot mill (owned then by Pendleton Flour Mills) that year and became frustrated that very little high-quality hard wheat was grown in the Blackfoot draw area. While Idaho produces about 100 million bus of wheat per year, soft white wheat accounts for the majority of the state’s production.

“We were importing most of the wheat for Blackfoot from Kansas, Nebraska, Montana, Wyoming, wherever we could get quality,” Mr. McLean said.

Mr. McLean began working with public and private wheat breeders to communicate the need for top quality hard red winter and hard red spring wheat. A preferred variety list was developed with the quality attributes that Grain Craft sought.

“And that’s what got planted and produced for our mill in Blackfoot,” Mr. McLean said.

By 2003, Grain Craft was able to buy a large percentage of its grind locally, a figure that reached 100% by 2005.

“It was a win-win for everybody,” Mr. Koenig said. “It’s a win for us since we are now able to originate 100% of our grain within a 200-mile radius and a win for the farmer
because he now has another crop he can grow. Wheat is a great rotation crop for the potatoes in Idaho, and it was good for the breeders and the seed salesmen out there. Now they have another income source.”

Idaho’s wheat growing environment is atypical in that it depends nearly completely on irrigation. Many parts of the state generate wheat yields above 100 bus per acre, double the national average. Because it relies on irrigation, quality tends to be very consistent. On-farm storage is plentiful, making identity preservation practical.

The resultant flour quality has been excellent, Mr. Koenig said, and the program’s success created a different kind of problem for Grain Craft.

“We were, and still are, shipping flour to places that can be logistically challenging,” he said. “The quality of the wheat produces flour with desirable baking characteristics, and we ship it to California, the East Coast, areas across the entire US.”

With the creation of Grain Craft in 2014, the decision was made to launch a preferred variety program in Kansas. Simply replicating the Idaho model was not a possibility, Mr. McLean said.

“Hard red winter wheat production in Kansas and many other Southern Plains states has been a big eye opener for me,” he said. “For these growers, varietal selection has been all about yield. The term ‘baking quality’ seemed to be somewhat of a new concept.”

Meanwhile, unlike Idaho, agronomic factors play a large part in quality outcomes. In certain years, weather conditions allow nearly all varieties to generate good to excellent baking quality.

Even when growers plant wheat varieties with good milling and baking quality, keeping the wheat segregated in the hard winter states is a major challenge, a challenge made more difficult in recent years by rail freight rates that seek to maximize how much wheat is loaded and shipped in 100-car trains, rather than in 5- or 20-car units. The rate changes have made it tougher for millers to scout and select and gather wheat with optimal quality. As a result, flour milled from hard red winter and available to bakers tends to represent “an average of the crop.” A rail carrier preference to ship as much of the crop as possible to the Gulf for export makes it even more difficult for millers and bakers to pick and choose when it comes to wheat procurement.

When the Grain Craft team began to explore launching the preferred-variety program, Mr. Koenig; Mr. McLean; E.G. Herl, vice president of grain and logistics at Grain Craft; and a prominent baking executive spent an afternoon in 2014 with the Kansas Wheat Commission in Manhattan, discussing how enhanced wheat quality would eliminate the need for mills grinding hard red winter wheats to include the more expensive spring wheat in their milling blends.

Mr. Koenig said, “We have this nice long 2½-, 3-hour meeting, and when we walked out they said, ‘Thank you for coming. It’s refreshing to have an end user spend this much time with us talking about our wheat quality research. This kind of feedback is essential.’”

Grain Craft began working with breeders throughout the Southwest to test varieties and introduced a preferred variety list in 2014.

Momentum for the effort was slow to develop, Mr. Koenig said. Participation in the program grew dramatically in 2016, when Grain Craft began advertising the initiative and paying a premium for the preferred varieties.

“Finally we just drew a line in the sand, and we ran an ad in The Wheat Farm/Row-Crop Farmer magazine with a tagline that says ‘Grain Craft is all about quality, and quality flour starts with quality wheat,’” he said. “We published all the varieties Reuben tested that we liked, and, boom, right away all these breeders are asking, ‘How do I get on your list?’ Not long afterward I was at a National Grain and Feed Association meeting, and someone asked me, ‘How does it feel to be the most talked about guy in the state of Kansas?’”

Mr. Koenig said the advertisement helped start a conversation, which is exactly what Grain Craft was seeking.

“We’re getting more and more farmers calling us direct wanting to be part of our program, which is pretty awesome,” he said.

Longer term, the company would like to supply its hard winter mills all over the country with preferred varieties.

“We’re the largest miller in the state of Kansas now with the Cereal (Food Processors, Inc.) acquisition, and we take our role very seriously,” he said. “And we have mills in California, Alabama, Georgia and a little bit into Ogden that use Kansas wheat.”

He said the company hopes that 50% of the hard winter wheat milled by Grain Craft will be segregated preferred varieties within five years. Additionally, Grain Craft believes the program will expand throughout the milling industry.

“We’re in this not just for us and our customers,” he said. “We think this is the right thing to do for the industry to get all the quality up — not just
domestic use but for export use.”

To participate in the program, growers must bring receipts to the wheat buyer demonstrating that certified seed of the preferred varieties was purchased.

“They have to prove that they’re using certified seed and kept it segregated all the way from the farm to our mill in order to receive that premium,” Mr. Koenig said.

Six of the top 10 varieties grown in Kansas in 2020 are on the Grain Craft list, up from 3 in 2014.

Those six varieties account for 23.9% of all wheat acreage planted in Kansas for harvest in 2020. Included on the list is SY Monument, the top Kansas variety in 2020, seeded on 9.7% of Kansas wheat acreage. The complete Grain Craft list includes 16 varieties planted on at least 0.4% of Kansas acreage and accounted for 34% of all Kansas seedings.

Whether other bakers choose to partner with Grain Craft or other millers in a preferred varieties program, the increased plantings across the Southwest of the preferred crops will confer benefits to bakers broadly, Mr. Koenig said.

“They (bakers) are already benefiting,” he said. “We have this network, but there are preferred varieties being grown that are coming into the system every day. However, if there are others who want to formalize a relationship and a program, absolutely, we’re interested. But we’re making people aware of what we are trying to do overall.”

Even more importantly, deepening the connection up and down the chain from growers to bakers has the potential to facilitate tremendous positive change, Mr. Koenig said.

“This IP (identity-preserved) model has greater potential than just higher quality wheat,” he said. “When you start thinking about connections with a grower network, other important initiatives including sustainability, soil health and many other contributing factors become natural steps and easier to impact on a commercial scale. When you think about the industry in the future, say, 10 years from now, I think there are opportunities we don’t even know about today that are going to surface.”

While the Blackfoot experience was different than what Grain Craft has encountered in Kansas, Mr. McLean said the Idaho model demonstrates what is possible.

“For wheat producers here in Idaho, quality is a part of every conversation they have about wheat,” he said. “Until just a few years ago and I think even sometimes today for the Kansas wheat producer quality was not always part of that conversation. That quality is critical to end users.”

Mr. Koenig added, “Our goal is to have half our grind in five years with our preferred varieties.”

Preferred varieties have not come at the expense of lower yields, Mr. Koenig said.

“What we’ve found is producers are actually getting higher yield,” he said. “They’re doing the right things already. They are strip tilling, no till, fertilizing. They have the agronomist out there checking the fields. They’re out there maximizing their yields already. If they’re buying certified seed already, they get the right variety and get paid for it. Why not? Our goal is for the producers to get paid for both yield and quality.”

Mr. McLean said interest in a preferred variety approach goes beyond the domestic US milling and baking industries.

“I have contacts with US Wheat Associates, and they have been very complimentary of Grain Craft for stepping forward with a list of preferred varieties for quality,” he said. “One of the things that I think US Wheat has heard loud and clear from their overseas customers is that there has been somewhat of a decline in the quality of US wheat. They have to be able to bake whether that’s a loaf of bread, a tortilla or whatever the case may be.”

Steve Wirsching, vice president and West Coast office director for US Wheat, Portland, Ore., said his organization has been working with growers for years, urging them to grow varieties with good milling and baking qualities. For many years, in consultation with the Tri-State Grain Growers (Washington, Oregon and Idaho), US Wheat has published a preferred variety list, designating varieties either as most desirable, desirable or acceptable. Most wheat grown in the Pacific Northwest is exported, and leading customers, including Japan, the Philippines and Taiwan, are very quality-conscious buyers, he said. A gradual improvement in wheat quality has been noted, Mr. Wirsching said. Through the initiative he has worked with Mr. McLean for many years.

“We at US Wheat really support Grain Craft’s efforts,” he said. “I really appreciate what they are working toward, and we would encourage other millers to launch similar programs.”

Grain Craft corporate labs moving to Kanas Wheat Innovation Center
CHATTANOOGA, TENN. — Grain Craft on Sept. 10 announced plans to relocate its corporate laboratory to the Kansas Wheat Innovation Center in Manhattan, Kan. The new laboratory is expected to open in 2021.

The laboratory will be housed in newly finished space within the innovation center, which is located on the Kansas State University campus.

Grain Craft said the move is consistent with the company’s commitment to enhancing wheat quality as well as to flour quality and consistency and to “ongoing exploration of innovation activities.”

A project of the Kansas Wheat Commission, the Kansas Wheat Innovation Center (KWIC) is a wheat research facility opened in 2012. The $15 million complex has 15,000 square feet of laboratories, 22,750 square feet of greenhouses and 10,000 square feet of office space. The center is a three-minute walk from the K-State Hal Ross flour mill and is 1 mile from Shellenberger Hall.

KWIC tenants have included a mix of for-profit and not-for-profit entities, including the Kansas Wheat Commission; the Kansas Association of Wheat Growers; Kansas Wheat Alliance, Heartland Plant Innovations/Earth’s Harvest; the Kansas Foundation for Agriculture in the Classroom; and Jesse Poland, PhD, of the Poland Lab for Wheat Genetics and Germplasm Improvement.

Grain Craft’s laboratory will include analytical, milling, rheological and application capabilities and will give Grain Craft access to other facilities in the Kansas Wheat Innovation Center, including a complete test kitchen.

“Our new lab takes our commitment to be a resource to our customers to a new level,” said Peter T. Frederick, president of Grain Craft. “It not only provides a space focused on quality and product performance, but it’s also a space in which we can grow, collaborate and learn together.”

Alan Koenig, chief supply chain officer at Grain Craft, said the lab’s work aligns well with the goals of the Kansas Wheat Commission.

“While our entities will remain separate and focused on our individual business needs, this collaboration is a natural fit, and it makes sense to construct a space in which we can succinctly work together to achieve ongoing quality and yield improvement,” he said.

Grain Craft’s bake lab currently is located at the company’s Wichita, Kan., flour mill. All corporate lab activities, including application capabilities, will be shifted to the new location. A full-time Grain Craft lab manager will lead the Manhattan facility.

Grain Craft said it will collaborate with the K-State Department of Grain Science and Industry to “enhance the education and development of milling and bakery science students, who are expected to be future leaders in the industry.”

“Our goal as a leading flour miller is to set the stage for a strong future for our breeders, growers and customer partners,” said Nick Weigel, vice president of quality, regulatory and technical services at Grain Craft. “This investment uniquely positions Grain Craft to develop synergies that support our strategic wheat quality objectives. Through this work, we also hope to advance outcomes that contribute to the betterment of the industry overall.”

Grain Craft has been a supporter of the Kansas Wheat Commission’s wheat quality research efforts and has a longstanding relationship with the commission and with KSU.

“This wheat quality lab will be the missing piece of the puzzle in this extraordinary research facility that farmers have invested in,” said Justin Gilpin, chief executive officer of Kansas Wheat. “We appreciate Grain Craft’s vision of working together to create value for farmers. The Kansas Wheat Commission is excited to collaborate with Grain Craft in this venture.”