Touring the wheat fields

Early this spring, wheat made headlines when it jumped to $20 dollars a bushel, but no one had wheat to sell , because of a series of bad crops around the world.

The world's storage bins held less wheat than at any time in the past 60 years. So a lot of people have a keen interest in this year's wheat crop.

"Everybody is hoping it's a good crop and grain prices stabilize a little bit," says Rich Karnemaat.

Karnemaat, from Michigan, works for a grain milling company. He doesn't spend much time walking through wheat fields.

This week he's on his first wheat quality tour, getting a look at the hard red spring wheat crop.

"We sell to a lot of major food companies throughout the U.S.," he said. "They're very interested in the crop yields and where market prices trend, because it's going to be a major impact on their business."

Since Karnemaat is rookie on the wheat tour, he gets some pointers from veteran Kelly McMonigle who's on his ninth tour.

"You're going to count all of these," McMonigle said, pointing to an area of ground.

"Oh wow, ok, the whole yard, not just the foot," Karnemaat said, nodding as he understood the assignment.

There are four people on this team. They'll drive a designated route along roads in eastern North Dakota and stop in 12 fields randomly.

Each time, they'll take measurements at two spots. First a yard stick is laid along a row and the wheat plants are counted.

"And then you count the spikelets the number of spikelets per head," Karnemaat said.

Spikelets are kernals, so the average number of plants in three feet and the average number of kernels per plant are plugged into a formula that shows the expected yield from this field.

Nearly all of the hard red spring wheat in the country is grown in the upper Midwest. North Dakota accounts for nearly half.

McMonigle says over the years, the estimate has been very close to the actual harvest.

"We cover the whole state and into northern South Dakota and western Minnesota and Montana," he said. "With the number of stops we make, the the number of people on the trip, you get a pretty good idea of what's out there. "

Farmers planted less wheat than expected this year and that's evident on the tour. We drive past miles of corn before spotting the golden brown of a wheat field.

But there may be more wheat in the marketplace. That's because the U.S. crop is expected to be slightly better than last year and around the world there are reports of very good wheat harvests.

More supply means less demand for wheat, according to North Dakota Wheat Commission Marketing Director Jim Peterson.

Jim Peterson is marketing director for the North Dakota Wheat Commission. He says there will less demand for wheat this year.

"It's the India's or the China's, these big swing markets that can really influence world trade and this year it's looking those markets won't need as much wheat," he said. "Plus Europe and Russia which are export competitors, have a bigger crop. So it affects our prices in two ways."

Wheat prices are expected to stay higher than they were at harvest last year. Jim Peterson says he's not expecting record price spikes but there's still volatility in the wheat market.

It will take two or three good harvests to rebuild worldwide supplies. The world economy is also a factor. Some analysts say recession is good for wheat because people eat more bread and pasta.

Back on the wheat quality tour, Rich Karnemaat wades into another wheat field to count plants and kernels.

As he looks out over the waist high wheat, Karnemaat thinks about the connection between this wheat field and the flour his milling company makes.

"It ends up in things like cereal and snack bars and a lot of consumer items that consumers are going to notice increases or decreases based on crop quality," he said. "So it's a real important part of the process is what happens out in the field and how it's reflected in the marketplace."

The wheat quality tour ends on Thursday. The wheat harvest will start over the next two weeks.

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