Wheat origination seen as a strength at Grain Craft

Grain Craft is the largest flour milling company without an associated grain merchandising business. As such, it believes this is not a disadvantage and may even be an advantage in the flexibility it provides in originating quality wheat and other grains.

“We don’t have any concerns when it comes to wheat origination,” said Peter Frederick, president of Grain Craft. “We’ve had multi-year relationships with grain suppliers. So has Cereal. We have very good trading talent and origination talent. Having one of the only mills in the industry capable of unloading unit trains in the industry gives you a unique perspective on things.”

Wheat procurement at Milner-P.F.M. and now at Grain Craft has become far more sophisticated in recent years.

“We now have I.P. (identity preserved) programs, varietal programs that are very large,” Mr. Frederick said. “That was a learning first in the Pacific Northwest — how to do that.

“We contract grow a lot of varieties through third parties. We’ve been doing it for a while. We don’t just put a bid out. We have grain companies specifically i.d. wheat in their bins for us. “

The I.P. program is aimed principally at optimizing quality and consistency, said Charles B. Stout, chief executive officer.

“We ship flour from Idaho to Miami,” he said. “They don’t necessarily know where the bag comes from. They just know nothing else works like that. It’s about the bake. It’s not about coating for fried chicken. You think about high end bread. You think about pizza. You have a pizza with all those expensive ingredients on top, but it’s the crust that everyone remembers. And it’s being made by some kid. They want that to be bulletproof.”

As they consider the adequacy of the wheat supply, Mr. Stout said the company keeps an eye on the big picture.

“It’s not that we take the availability of wheat for granted,” he said. “There’s still plenty of wheat in the United States. Half of the wheat goes for export. We’ve had those conversations checking ourselves. But if we ever bought a grain company, it would be because it’s a good business to buy. It’s not going to be robbing Peter to pay Paul.”

Fundamental changes in how grain is transported from origination areas to destination mills have added to millers’ confidence in their ability to procure the wheat they need.

“There are shuttle loaders in Montana,” he said. “There are shuttle loaders in Kansas. That creates some competition. We can buy wheat.”