Flour

Flour Pricing Components

Flour prices are influenced each day by three rather independent and potentially volatile components.  

  • The first component, wheat future prices, forms the base from which actual wheat prices are derived.  Futures are standardized, tradable contracts.  Parties swap pieces of paper, obligating them to make or take delivery of wheat some time in the future.

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Flour Facts

When we talk “flour,” we are talking about wheat flour.  Because wheat is the most commonly distributed cereal grain in the world, a reference to flour is generally a reference to wheat flour.

 

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Flour Treatments

Enriched Flour

In the 1930s, nutritional surveys conducted by the Department of Agriculture revealed widespread nutritional deficiencies of thiamin, riboflavin and niacin (B vitamins) in the American diet.  These findings prompted the fortification of certain staple foods.  The Food and Nutrition Board recommended a program for fortifying white flour and white bread with thiamin, riboflavin, niacin and iron, with calcium and vitamin D as optional.  

In May 1941, the flour enrichment standards were issued and finally adopted in 1943.  The standards were recently changed, and as of January 1, 1998, enriched flour now also must contain folic acid.  The enrichment of flour has no affect on its baking performance or caloric value.

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Enrichment of Flour

In the 1930s, nutritional surveys conducted by the Department of Agriculture revealed widespread nutritional deficiencies of thiamin, riboflavin and niacin (B vitamins) in the American diet.  These findings prompted the fortification of certain staple foods.  The Food and Nutrition Board recommended a program for fortifying white flour and white bread with thiamin, riboflavin, niacin and iron, with calcium and vitamin D as optional.  


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Wheat/Corn Ratio--Wheat as Animal Feed

You will often hear analysts talk about wheat prices being too high or low relative to corn.  They use the wheat/corn price ratio as an indicator of how much wheat will displace corn (the largest animal feed) as feed.  They then attempt to translate that information into bushels of demand and calculate the impact on future wheat prices.  
 
Nutritionally, wheat and corn are not equivalent. Corn has about 90 percent of the nutritional value of wheat. That is why corn prices are normally lower than wheat.
 

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Explanation of the "Falling Number"

Frequently, flour buyers will hear the quality of the wheat described by it’s “falling number”.  

 

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  1. Flour Quality