Wheat pricing has been extremely volatile in the last 2 years. This couldn’t have come at a worst time for a group of farmers looking to market their wheat based on a true cost of production. The bottom line is that commodity wheat has not treated the American farmer very well. While stable (relatively low) prices have some predictability, the truth is that yield and quality vary significantly based on Mother Nature, which can be pretty fickle to predict. (Ignore for the moment all the wisdom in the Farmer’s Almanac.) So while moisture and temperature might dictate whether a farmer has a good yield, some commodity trader a thousand or two-thousand miles away determines whether that family farmers pays down any debt this season or not! Worst scenario I learned about is the farmer who pre-sells a certain amount of wheat at a price in order to get access to the funds during the growing season and then has a yield below expectation. Now they actually “owe” wheat and guess what? The current price is double what they were paid when they set a contract! How good is your crystal ball?
The Shepherd’s Grain group is trying something different – reality-based pricing. They actually calculate their true cost of production, add a very modest profit and divide by the actual yield in bushels to get a price. Radical, I know. (Ohh and yes, they put back into the costs any subsidies they received from the government!)
Stone-Buhr is going to support these farmers – whether their price is above or below a commodity price. This might end up hurting at times but it seems to me to be the only “sustainable” relationship we can establish.
And let’s talk about commodity pricing for a minute – how is this reality just because a third-party market says so. What we learned after AIG imploded was that many dollars of the current commodity price were related to their positions in the market which was all about paper and not about wheat. When they imploded they sold sold sold their positions which drove down the price of wheat. And guess what? They weren’t alone and lots of funds started to liquidate their commodity positions to generate the cash they needed. Ugghhh. Why in the world should a family wheat farmer in the middle of nowhere Washington State be affected so significantly by a Wall Street commodity trader? OK it’s the system, I get it, but the reality is that when harvest came in 2008 the local grain elevators price for their newly harvest wheat was below their cost of production. Remember it was less then a year earlier when wheat was selling at a 30 year high! Ugghhh, want to be a farmer now?
And lastly, if there ever were questions whether there might have been some “speculation” in the wheat commodity markets, can we agree now the answer was, “of course!” (I’m talking to you Steve!)
I guess I should tell the history of how we got to this point to set the record.
In late summer 2005, I was introduced to Karl Kupers and Fred Fleming of “Shepherd’s Grain” in Spokane, WA. I was intrigued to learn about their group of family wheat farmers looking to market “identity-preserved” wheat grown in a certified sustainable manner. They were going to be exclusively certified by Food Alliance and were piloting a project to sell bulk flour to regional bakeries. We all immediately hit it off and I was extremely happy to find a supply of wheat that went beyond simply “organic” or some other specialty certification. These were multi-generational farmers who realized that if they didn’t act they would continue to lose the rich topsoil that they were blessed with on their lands. By growing conventionally and tilling the land, they inadvertently were doing two things: 1) they were turning up the top layers disturbing the beneficial organisms (mychoriza) and losing moisture and 2) they were losing soil due to erosion via wind and rain.
I was taken to farm fields where you could immediately identify which soils were done conventionally (loose, dusty, dry) and which were no-till (rich, moist, dark and smelly). The runoff from those fields was much cleared than the cloudy water runoff from a conventional field. And the moisture and smell difference was profound. I remember Karl saying to dig in the soil and really put a handful up to my nose. It was striking to see the difference and considering they were using less fossil fuels and yielding respectable levels, this seemed like a real no-brainer to me. (But little did I know how hard it really is to be farmer – part grower, planner, mechanic, financial analyst, planner, botanist, weatherman, etc. – you get the picture. And there is just so much work – it’s daunting to someone like me. Anyway, I digress….)
The odd thing for me was that I had been driving to the mill in Spokane a few times already – driving through acres of wheat – and never really thought about it. I was a little ashamed to realize that a 100 year-old brand of wheat flour was only buying commodity wheat with no idea who grew it and how. We bought wheat based on a specification – varietal, protein, moisture, ash. The Stone-Buhr line of flours had always been a “high-spec” with some strict quality controls, but let’s be honest: it can be very similar to other flours. I am sure a 100 years ago, the Stone-Buhr miller knew his wheat grower but in 2005, we had lost that connection.
By May of 2006 we got a deal in place to test market an all-purpose wheat flour from this new regional supply in a 5lb bag under the Stone-Buhr brand. If we were a big company, it could’ve gone quicker, but the reality is also that the grocery world is not a super quick moving industry! We started producing the flour by the beginning of 2007.
The best part of showing off the product at the Natural Products Expo in March 2007 was the response from retailers. It was clear that regional retailers in the Pacific Northwest wanted to support their farmer neighbors and they trusted Stone-Buhr to have a quality product (which we really did – that’s for another blog post, but I’ll put this All-Purpose Flour up against any other low-gluten wheat flour – test bakers, you are all on notice!). Even a local drug store chain called Bartell’s wanted to offer the flour – and they didn’t even sell flour! By the end of 2007, we had a good start with the Haagen’s and Rosaur’s regional grocery store chains and Safeway and QFC offering the new product in the Pacific Northwest. In 2008 we were successful in getting the new product in over 300 stores in Washington, Oregon, Idaho, Colorado, Utah and California.
As an old friend once said to me, “the grocery world is pick-and-shovel” – this has proven out – it takes a lot of work to get a good product on a lot of store shelves! Stone-Buhr is a tiny company in comparison to its competitors but I think our story and products are better for you, the regional economy, the planet and a whole heck of a lot of family farmers in the USA!
Testing 1,2,3…. Check, check. Is this thing on? OK, I’m not sure I can really commit to “blogging” on a regular basis but I thought I’d give it a shot and see how it goes…… please forgive my grammar, spelling and general non-sequiturs.
FindTheFarmer is an idea that I’ve been pushing around for a while now. I have to be honest and admit from the start that Michael Pollan really inspired me with his writings and to him I should give credit for the kernel of this idea.
The basic story is that Stone-Buhr is the first major wheat flour brand to offer consumers the chance to learn where the wheat came from and be assured we are both supporting regional family farming and certified sustainable agriculture. I am so pleased to launch this site with the support of the farmers of Shepherd’s Grain and the Food Alliance sustainable certification standard.
It is my hope that consumers find the information interesting and we are able to grow the products that are FindTheFarmer enabled! I’ll try and use this blog to tell the story as it happens and as this is only a start, please send any and all feedback!