United States 

Department 

of Agriculture

www.ers.usda.gov

Electronic Outlook Report from the Economic Research Service

WHS-04K-01

December 2004

Hard White Wheat at 

a Crossroads

Abstract

Hard white wheat (HWW), which has a white-flour look and whole-wheat nutrition,

has milling and baking qualities that make it particularly suited for certain products.

These include not only whole-wheat products, but pan breads, tortillas, and certain

kinds of oriental noodles. In 2003, HWW plantings accounted for 2.3 percent of all

wheat grown in major HWW-producing States. This represented an acceleration,

occurring in part because of a government incentive program. Up to now, HWW

sales have been largely confined to the domestic market because production is not

large enough to sustain steady exports. In addition, strong foreign competition

makes it unlikely that the international marketplace will generate any significant

price premiums for HWW. Continuing expansion of HWW production would

depend on the development of new, higher-yielding varieties that are more tolerant

to sprout damage—a major problem in 2004—and continuation of the government

incentive program.

Keywords: wheat, hard white wheat, oriental noodles, identity preservation, niche

commodities, farm policy, incentive payments

Acknowledgments

The authors are grateful for comments or technical assistance from USDA staff

members D. Demcey Johnson and Joy Harwood of the Economic Research

Service; Dennis Shields of the Farm Service Agency; Patrick McCluskey of the

Grain Inspection, Packers, and Stockyards Administration; William Tierney of the

World Agricultural Outlook Board; and Frank Gomme of the Foreign Agricultural

Service; and to Ronald Madl of Kansas State University, Ronald Stoddard of the

Nebraska Wheat Commission, and John Oades of U.S. Wheat Associates. 

William Lin and Gary Vocke
U.S. wheat breeders are making a concerted effort to develop new varieties

of hard white wheat (HWW), which at present accounts for a very small

proportion of U.S. wheat acreage. HWW plays a strategic role in several

State breeding programs because of its end-use characteristics and its potential to increase demand, farm income, and the U.S. competitive position on

the world market. Kansas State University (KSU), for example, has devoted

about 75 percent of its wheat breeding program (in terms of the percentage

of crosses between varieties) to white wheat since the late-1990s, up from

10 to 25 percent in the 1980s (Madl). Other States, including Idaho, Washington, Oregon, Colorado, Montana, Nebraska, North Dakota, and Oklahoma, have followed suit by devoting 20-40 percent of their breeding

programs to HWW (Oades).

According to extensive university and industry studies, HWW—hardendosperm wheat with white bran—has the potential for yielding 1 to 3

percent more flour per bushel of grain than other wheats, when milled to

standards for flour color.1 Higher flour extraction rates are possible because

HWW’s white bran means that more bran can be included in the flour,

resulting in higher fiber content than that of other wheats. In addition,

HWW has a less bitter aftertaste when used in whole wheat products, and

its color qualities are preferred by some consumers. These superior milling

characteristics appeal to both domestic and foreign wheat buyers, providing

potential alternative markets to hard red winter (HRW) and hard red spring

(HRS) wheats.

The expansion of HWW production, however, may be constrained by an

agronomic factor—its susceptibility to sprout damage which lowers falling

number (FN) and test weight of the wheat crop.2 With precipitation at

harvest, sprouting occurs much more rapidly and extensively in white than in

red wheats. Therefore, it is important that HWW be grown in areas normally

dry at harvest time. Sprout damage has been a major problem for HWW, as

evidenced by sprouting in the 1999 and 2004 Kansas crops. Conditions that

favor widespread sprouting of white wheats are estimated to occur 1 in every

5 years in eastern Kansas, but less than 1 in every 20 years in western

Kansas (Kansas Wheat Commission and the Kansas Association of Wheat

Growers). Thus from an agronomic standpoint, HWW has brighter prospects

in western Kansas. However, new cultivars in the research pipeline, which

are still about 2-3 years away from commercialization, hold promise for

sprout tolerance. Sprout damage is less an issue in the Pacific Northwest

(PNW), where risk of rainfall at harvest is low—which helps explain why

(soft) white wheats are the chief class there. 

Sprouted wheat results in dough stickiness or bread loaves with gummy

insides and large voids, leading to difficulty in slicing loaves and lower

consumer appeal (Wheat Marketing Center, Inc.). Millers do not accept

wheat with more than minimal sprout damage in U.S. wheat grades and

standards. If the damage is more than minimal, elevators treat the wheat as

feed quality and apply discounts of $1 - $1.50 per bushel. 

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Introduction

1HWW is milled to an ash standard,

which is used by the U.S. flour milling

industry as a proxy to measure flour

color. Ash—the metal and mineral

residue after a test sample of flour has

been incinerated in a very hot oven to

burn off all organic material—is present mainly in the bran layer. Thus, ash

content measures how much bran is

milled into the flour, which in turn

determines the color. All products

made from HWW in General Mills

(except frozen dough) have higher

extraction rates because they are milled

to higher ash standards than HRW

products (Olsen). Higher extraction

rates of HWW can be realized if bakers are willing to accept higher ash

content. These higher extraction rates

are achieved in overseas markets, particularly Asia, where a color standard

applies to noodle products for which

HWW is especially suited.

2FN measures the length of time (in

seconds) that it takes a plunger to fall

from top to bottom through a small

mixture of milled wheat and water. If

wheat is sound (no sprout), the starch

will be thick and the falling number

will be high—above 300 seconds for

bread baking. In contrast, sprouting

can create extra alpha-amylase, resulting in low FN. Flour made from wheat

with a low FN holds less water when

mixed and the dough absorbs less

water during baking. As a result, bakers must use more flour to make the

same number of loaves, which raises

their costs. Test weight is weight per

unit volume as measured in pounds

per Winchester bushel as defined in

the United States, determined by

weighing the quantity of grain

required to fill a 1-quart container. The

international equivalent measure is

kilograms per hectoliter. 
Will HWW, which was established as a new class of wheat in May 1990 by

USDA’s Federal Grain Inspection Service (now the Grain Inspection,

Packers and Stockyards Administration) remain a niche product or will it

become a major class of wheat? The answer clearly depends on whether

HWW will bring in higher net returns than competing classes of wheat,

such as HRW and HRS in the Great Plains or soft white wheat (SWW) in

the PNW. This, in turn, will hinge on HWW’s marketability, the likelihood

of sprout damage, and yield performance in actual commercial production.

For farmers, the critical questions are how HWW yields, how frequently

sprout damage might strike, and whether HWW’s traits translate into a price

premium relative to competing classes of wheat. 

Trial yields for Trego, the most popular HWW variety, were comparable to

Jagger, the most common HRW wheat variety, in 2003 winter wheat

performance tests in western Kansas.3 Other things being equal, this

competitive yield would encourage wider adoption of the new HWW varieties over those released in the early 1990s, which were lower yielding than

then-existing HRW varieties. Results from actual farm experience and a

longer time series will be needed to verify the yield advantages recorded at

experiment stations. 

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3The 2003 trial yields found that

Trego had average yields in the range

of 51-61 bu/ac in southwest and northwest dryland regions, compared with

52-62 bushels in trial yields for Jagger

(Kansas State University). In fact,

some less commonly planted HWW

varieties outyielded both Trego and

Jagger.
During 1998-2002, HWW plantings nearly tripled as market demand

increased. Partly as a result of a government incentive program authorized

in the 2002 Farm Act, plantings of HWW in 2003 nearly tripled again in

just 1 year, approaching 1 million acres. Changes in contract provisions by

major grain companies between 2003 and 2004 and price discounts charged

by some local elevators to HWW, however, put a damper on producers’

interest in growing HWW for the 2004 crop.

The 1998-2002 Expansion

The number of acres planted to HWW is subject to some uncertainty (table

1). Based on a compilation by USDA’s Economic Research Service, U.S.

farmers’ HWW plantings totaled between 263,000 and 354,000 acres for

harvest in 2002, up from 100,000-140,000 acres in 1998 (table 1). Nearly

three-fourths of HWW plantings in 2002 were winter wheat, which requires

cold temperatures for proper growth (vernalization) and thus is typically

planted in fall and harvested the following summer. The rest of HWW

acreage was spring wheat, which has no vernalization requirement and is

planted in spring and harvested in summer. In 2002, HWW accounted for

less than 1 percent of all wheat grown in all the HWW-producing States.

In 2002, Kansas, Colorado, Montana, Idaho, and California were the top

five producing States, accounting for over 90 percent of U.S. HWW

acreage. In Kansas and Colorado, producers planted winter varieties, while

producers in Idaho and Montana planted both spring and winter varieties.

White wheat grown in California is genetically a spring variety, but was

adapted and planted as a winter variety.

Of the major producing States, Kansas and California showed steady

increases in HWW plantings from 1998, reaching 1 percent and nearly 4

percent, respectively, of all wheat grown in these two States in 2002. Yields

of the newly released HWW varieties were competitive with popular HRW

varieties, and in some cases outperformed them. In addition, millers were

offering price premiums to farmers to grow HWW.

Planting patterns in other major producing States were mixed. In Montana

and Colorado, HWW plantings went down from 1998 to 2000, but then

expanded sharply. The release of higher yielding HWW varieties boosted

their adoption by producers. In contrast, HWW plantings in Idaho expanded

in 2000, but contracted in 2002 with the exit of a large farmer cooperative

that dealt with the contract and seed supply of HWW. Production/marketing

contracts, discussed later, are common in private HWW plantings.

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Hard White Wheat Plantings Approached 

1 Million Acres in 2003
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Table 1—Major producing States for hard white wheat in the period 1998-2004

State

HWW planted acres for harvest (1,000)

1998 2000 2002 2004 Variety

Percent of State

wheat acreage

in 2004

Source 

of data

Montana 40.5 17.4 37-75 35.5-45.4 Nufrontier, Nuwest

Golden 66 & 86*

0.76 Montana Agri. Stat. Service;

Montana Wheat Commission; Pro/Mar Select Wheat,

Inc.; NE Wheat Board

Colorado 20-50 13.3 56-75 105.0-170.0 Trego, Platte

Solomon

5.95 Rollin Sears; AgriPro, Inc;

CO Ag. Stat. Service; NE

Wheat Board

Kansas 10-20 25-35 100-125 386.5-485.1 Trego, NuFrontier

Lakin, NuHorizon

Platte, Arlin, Oro

Blanco, Rio Blanco,

KS196

4.40 Rollin Sears; Farmer Direct

Foods; Kansas Wheat

Commission; Nebraska

Wheat Board

Idaho 15 69 22.5-29.0 37.0-45.0 Klasic, ID377S*

NuHorizon,

NuFrontier

3.39 Pro/Mar Select Wheat, Inc.;

Idaho Agri. Stat. Serv.; NE

Wheat Board

California 12 12.6 23.7 41.0-75.0 Blanca Grande

Klasic, Plata

8.66 California Wheat

Commission; Nebraska

Wheat Board

Oregon <2 <2 0.24 0.93 ID377S* 0.09 OR Agri. Stat. Service; NE

Wheat Board

Washington 0.05 24.3 16.0-16.1 42.6-57.0 ID377S* 

Winsome

2.11 Wash. Agri. Stat. Service;

NE Wheat Board

Nebraska 0.58 15 3.3-6.0 25.8-33.2 Platte, NuFrontier 1.51 General Mills; NE Agri.

Stat.Serv.; NE Wheat Board

Others** 0.12 0.12 4.2 53.6 0.25 State Agri. Stat. Services;

NE Wheat Board

Top 5 States 97-137 150.7-

160.7

239.2-

327.7

612.1-

832.1

4.69

All HWW

States***

99.8-

139.8

178.7-

188.7

262.9-

354.2

727.0-

964.3

1.71

*Spring variety (others are winter varieties). **Includes Oklahoma (30,000 acres), Texas (15,300 acres), North Dakota (5,900 acres),

South Dakota (1,000 acres), Utah (1,000 acres), and Wyoming (373 acres) for the 2004 crop. *** HWW accounted for 2.31 percent

of 2004 wheat acreage planted in major HWW-producing States (excluding North Dakota, South Dakota, Utah, Oregon, and

Wyoming). Compiled by Economic Research Service, USDA.
The 2003 HWW Incentive Program

HWW plantings in 2003 accelerated in part because of government interest.

The 2002 Farm Act contains a 3-year HWW incentive program aimed at

stimulating the supply of HWW for domestic milling and exports for crop

years 2003 through 2005. Eligible producers receive production incentive

payments of $0.20 per bushel for U.S. No. 2-or-better HWW, up to a

maximum of 60 bushels per planted acre. An additional incentive of $2 per

acre is provided for each acre planted with certified registered or foundation

seed. The program is funded by the 2002 Farm Act at $20 million. These

incentive payments amounted to a potential increase of about 10 percent, on

average, of the expected farm price for 2003 HWW, contributing to an

expansion of HWW planted acreage. 

HWW plantings for harvest in 2003 are estimated to have been about

900,000 acres, accounting for 2.3 percent of all wheat grown in major

HWW-producing States. Kansas had more than half of U.S. HWW-planted

acreage in 2003 (fig. 1). Compared with the previous year, HWW plantings

in the United States expanded by nearly 600,000 acres, an increase of about

190 percent. The expansion occurred across the board, with the largest

increase in Kansas (fig. 2). HWW grown in Kansas accounted for about 5

percent of all wheat seeded in 2003, more than three times higher than the

2002 level. Trego, a KSU-developed public HWW variety, accounted for

more than half of HWW acreage in Kansas (Kansas Wheat Commission).

Among the major producing States, Colorado, Washington, Nebraska, California, and Oklahoma showed visible increases in 2003 HWW plantings.

HWW plantings in Idaho in 2003 were above the 2002 level, but below that

of 2000. Plantings of HWW in Montana in 2003 showed a slight decline

(based on the mid-point of the range in 2002) due to the exit of a large farm

cooperative offering the production/marketing contract and seed supply of

HWW. 

While the government incentive program was a significant factor in the

dramatic expansion in 2003 HWW plantings, other factors also played an

important role. Superior yield performance of HWW varieties in western

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KS CO WA CA MT NE ID OK Others

0

100

200

300

400

500 489

129

53 52 49 37 36 24 23

Figure 1

Kansas had more than half of U.S. HWW acreage in 2003

1,000 acres

Source: USDA farm program data, Farm Service Agency USDA

ncludes all HWW acreage enrolled under the incentive program.
Kansas (compared with HRW varieties) and above-average quality attributes,

together with attractive contract programs offered by major grain companies,

were at least as important in the expansion. In the southwest Kansas dryland

region, for example, Trego’s average yield and test weight were 2 bu/ac and

2 lb/bu higher than the average, respectively (Kansas State University).

Attractive contract programs offered to producers by major grain companies

were also an important factor. Some companies offered producers an input

subsidy for seeds by charging seeds at bulk wheat prices, which could cut per

acre seed costs by as much as half (Gilpin). Others offered price premiums

for HWW, ranging from 7 to 10 cents per bushel, with incremental increases

in the premium for higher test weight and protein content. 

The 2004 HWW Sprout Damage

HWW plantings for harvest in 2004 totaled around 846,000 acres (based on

the mid-point of the range), down 6 percent from 2003. In Kansas, HWW

plantings declined to about 436,000 acres for the 2004 crop, down from

nearly 500,000 acres. Among other major producing States, Colorado,

Idaho, and California showed modest increases in 2004 HWW plantings,

and Montana showed a decline. 

There were a few key reasons for the overall decline in 2004 HWW plantings. First, changes in contract provisions by major grain companies

between 2003 and 2004 discouraged producers from growing HWW (Stoddard). One grain company, for example, backed out of contracts with

producers growing HWW on dryland to promote that company’s own HWW

variety, which performs well on irrigated acreage. In contrast, another grain

company discontinued contracts on irrigated acreage and switched to

dryland contracts to increase HWW’s protein content. Further, a grain

company reportedly discontinued the price premium it had offered to

producers in the past, believing that the government incentive payments

would be enough to entice producers to grow HWW. In some localities,

HWW was blended with HRW by elevators to avoid the costs of segregation. Further, a few local elevators charged discounts to HWW in order to

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Figure 2

Kansas had the largest increase in 2003 HWW planted acreage

1,000 acres

Source: USDA farm program data, Farm Service Agency USDA.

KS CO WA NE CA OK ID

0

100

200

300

400 376.5

63.5 36.9 32.3 28.3 22 10.2
make up the high costs of segregation associated with the small-scale HWW

volume (Stoddard). 

The 2004 HWW crop suffered widespread sprout damage that cut across

Kansas, Nebraska, Colorado, and even the PNW region. The HWW harvest

was delayed by unusually heavy rain in western Kansas, western Nebraska,

and eastern Colorado. This had adverse consequences for the quality of the

crop, with extensive sprout damage, as indicated by low falling numbers and

low test weight. Sprout damage was particularly severe in Kansas,

impacting 40 to 50 percent of the HWW crop, while it affected 15 to 20

percent of the crop in Nebraska and Colorado (Stoddard).

Producers who suffered sprout damage in 2004 would likely be ineligible

for an incentive payment, which requires that the wheat be graded as U.S.

No. 2 or better. The grade standards for U.S. No. 2 HWW specify a

maximum total of 4-percent damaged kernels, which include sprouted

kernels, and 5-percent total defects (including damaged kernels, foreign

material, and shrunken and broken kernels). If total damaged kernels

exceeded 4 percent and total defects exceeded 5 percent, but were less than

the maximum allowed for a grade of U.S. No. 4—which is 10 percent for

total damaged kernels and 12 percent for total defects—the wheat would

also not qualify for indemnity payments under crop insurance policies for

coverage of quality loss. To trigger compensation under this provision, the

sprout-damaged HWW must be graded as U.S. No. 5 or worse (that is,

sample grade). 

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Flour millers may favor HWW over HRW and HRS because of HWW’s

potentially higher extraction rate and unique end-use characteristics. Soft

white wheat is not generally substitutable for HWW because most varieties

of SWW lack the gluten properties necessary for baking pan bread (i.e.,

loaves) and are used for products such as cakes, cookies, flat breads, steam

buns, and some noodles.

U.S. millers may prefer HWW because it has a flour extraction rate 1-3

percent higher than red wheat when both are milled to similar color standards, since more bran can be included in the HWW flour without darkening it. Millers can use HWW for most of the same uses as HRW. The

higher extraction rate for HWW amounts to about an additional pound of

flour per bushel of wheat, assuming a 74-percent extraction rate for each

bushel. At the flour price of $10.25 per hundredweight in Kansas City

quoted as of August 27, 2004, this extra pound of flour would carry a

market value of about 10 cents. Whole wheat products made from HWW

may be more appealing to consumers who favor whiteness along with

higher fiber and mineral contents, because white bran is less obvious than

red bran in flour and food products. In addition, bran from white wheat is

used in breakfast and snack-type foods and commands a higher price than

bran from red wheat. However, to induce the use of HWW in flour milling,

its advantages to flour millers would have to exceed the price premium they

pay for it.

HWW's end-use characteristics are particularly well suited for whole-wheat

products, pan breads, tortillas, and certain kinds of oriental noodles. HWW

is used to make increasingly popular whole-wheat breads. Bread made from

whole HWW flour is not only lighter colored but also less bitter than bread

made from red wheat; white wheat bran contains less of the phenolic

compounds that give whole red wheat bread a stronger flavor. Thus, less

sugar is needed, which is appealing to nutrition-conscious shoppers.

Tortillas are a traditional Mexican flat bread made from either corn or

wheat. Corn tortillas predominate in Mexico, while wheat tortillas are

preferred 2 to 1 over corn tortillas in the United States. U.S. consumers

reportedly prefer bright white tortillas, which may give HWW an advantage

over HRW (Wheat Marketing Center, Inc.). 

Tortillas made from wheat are used increasingly in the United States as

"wraps" for a variety of non-Mexican foods. This practice began in the mid1990s in California and has been taken up by the Nation's fast-food

industry. While this innovative use of tortillas bodes well for white wheat

demand in the United States, its impact on total wheat demand might be

limited because it substitutes for other wheat products.

Makers of noodle flour and the flour millers in Asia tend to favor white

wheat for noodles. While U.S. soft white wheat is suitable for some of these

noodles, many types require the use of HWW (with low- to medium-level

protein, sometimes referred to as "semi-hard" in Asia), with its superior

dough color and color stability. The United States has struggled with

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Behind the Demand for Hard White Wheat
"bread" quality vs. "Asian noodle" quality in the HWW breeding programs,

but is increasingly developing varieties with good crossover capability.

Light dough color, color stability, and appropriate textual characteristics are

keys to successfully serving Asian markets. Australia provides a large

supply of this kind of HWW because it has a variety-release system that

caters to the export marketing of white wheats tailored to Asian markets,

produced under identity preservation (IP) systems.4 Australian breeding

programs employ these quality objectives in their selection process.

Most Asian noodle manufacturers use flour made from a blend of wheats

based on relative prices and the end-use characteristics desired. Color and

texture imparted by Australian white wheats are particularly suited to these

blends. About half of wheat imported into Asia, primarily supplied by

Australia, is used for noodle production, according to reports from Asian

noodle manufacturers (Oades). The market potential of Asian noodle

demand is considerable. On average, 40 to 50 percent of the total wheat

supply is consumed in the form of noodles and steamed breads in Japan,

South Korea, Taiwan, Indonesia, Thailand, Malaysia, the Philippines,

Vietnam, Hong Kong, and Singapore. China mills over 85 percent of its

domestic and imported wheat for the production of noodles, steamed breads,

dumplings, and Chinese pastry products. 

Noodles from Australian wheats are known for a stable white or yellow

color, essential for a desirable noodle. Compared with wheats from

Australia, U.S. red wheats tend to contain high levels of an enzyme,

polyphenol oxidase (PPO), that U.S. researchers have found to be responsible for noodle discoloration. Raw noodles, along with partially boiled

noodles, are preferred by many Asian consumers, and those made from

some red wheats may discolor to green, brown, or gray within 24 hours of

manufacture. The rate of darkening of fresh noodles is important because

they might not be consumed for 1 or more days after manufacturing. 

The HWW varieties recently released by Kansas State University, together

with those released by other States or private entities, are expected not only

to enhance the supply of HWW for the domestic market in the short run, but

also to compete with mid-protein Australian wheat in international markets.

According to the foreign offices of U.S. Wheat Associates, Asia imports

more than 400 million bushels of wheat for making noodles, with that use

accounting for half of total wheat imports into Asia. (Asia, including China,

accounts for about a third of world wheat imports.)5

Not all HWW varieties have acceptable noodle-making quality. To meet the

minimum requirements of good noodle wheat, the variety must impart good

color stability and noodle texture. Color stability depends largely on low

levels of PPO. In addition, unlike wheat used for bread, which requires high

protein and high gluten, wheat with a low- to mid-protein range and less

gluten strength is desired for most types of noodles. Over the last decade,

U.S. researchers have been making dramatic improvements in the quality of

HWW in order to surpass the quality of Australian wheat for oriental

noodles. According to the Wheat Marketing Center in Portland, Oregon,

flour made from some U.S. HWW varieties performs better than, or equals,

the Australian control flour (Hou). 

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5According to John Oades of U.S.

Wheat Associates, Asia is the fastest

growing wheat market in the world,

and noodles are its fastest growing

segment.

4IP, for purposes of this study, is

broadly defined as a production-handling-distribution process in which

crops are required to be kept separate

to avoid commingling during planting,

harvesting, loading and unloading,

storage, and transportation, so as to

preserve the identity of the crops and

ensure their end-use quality.
Over the last several years, Canada has also made inroads in developing

white wheats for the Asian market. In 2003, Canada produced 185,000 tons

of HWW, enough for sales to key markets, particularly to Asia. With a

second HWW variety being commercialized, Canada is expected to boost its

production to approximately 550,000 tons in 2004. Feedback from

customers on the quality of Canadian HWW has been positive, noting its

ability to produce bright, clean noodles that are free of specks and have

good texture, as well as to produce bread with a bright crumb color. 

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To avoid the loss of price premiums typically stipulated in the contract,

HWW must be kept separate from other classes because mixing (1) eliminates the extraction rate advantage, and (2) possibly lowers the grade if the

level of "contrasting classes of wheat" (e.g., soft white vs. hard white) or of

"wheat of other classes" exceeds the grade limit. Private HWW varieties are

mostly grown under contracts with specifications that lower the risk of

commingling with other classes of wheat. Public varieties, such as Trego,

are generally grown with or without contracts. In either case, segregation of

HWW from other classes through the supply chain to end users is needed

for preserving its identity. However, segregation involves costs above those

for mainstream marketing of bulk wheat. 

Production/Marketing Contracts Are Common

in Private HWW Variety Plantings

Identity preservation of HWW begins at the farm level. To ensure the

delivery of the identity specified by end users, most private HWW varieties

are grown under production/marketing contracts—also called "delivery

agreements" by the industry. In Kansas, about 80-85 percent of the HWW

crop is grown under contracts (Madl). Alternatively, testing for the presence

of a contrasting class or wheat of other classes is used in some regions, such

as California, in lieu of contracting.

Production/marketing contracts for HWW commonly specify the following

safeguards:

• Restricting the HWW varieties that producers are allowed to grow

• Growing HWW only on summer-fallow land to avoid commingling with

volunteer wheat of other classes

• Cleaning farm equipment (e.g., planters and combines) and handling

facilities (e.g., storage bins)

• Scouting the fields and treating the crop for any diseases and insect

infestations

• Submitting a grain sample from each field after harvest for quality check

(e.g., protein content)

• Delivering HWW to a designated receiving point (usually an elevator,

but sometimes a flour mill)

• Barring farmers from retaining seeds for planting in the next season 

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Marketing System Must Adapt to Preserve

HWW Identity 
Segregation Throughout the Supply Chain

Raises Costs 

From seed plantings to end users, the identity of HWW can only be

preserved through segregation. However, segregation activities at each stage

of the supply chain add extra costs. Some of these are out-of-pocket

expenses, while others are opportunity costs, that is, foregone revenues

resulting from segregation activities.

Some out-of-pocket costs that producers, grain handlers, and flour millers

incur in segregating HWW from other classes of wheat, including restrictions on management practices, are for:

• Cleaning farm equipment and grain handling and processing facilities

throughout the supply chain

• Greater input costs, including annual seed purchases, and grain quality

sampling and testing 

• Hauling grain a greater distance for delivery at a receiving point

• Additional expenses for handling a smaller volume of HWW than of

bulk wheat 

• Additional expenses for recruiting farmers to grow HWW and administering the contracting program

• Contracting for a greater volume of HWW than needed to protect against

potential crop failure due to unfavorable weather

• Planting HWW on summer-fallow land to avoid commingling from 

volunteer wheat

In addition, identity preservation of HWW incurs opportunity costs. Due to

its small volume, producers, grain handlers, and processors may not be able

to fully utilize their handling and storage facilities. This is a hidden cost,

which increases the overhead cost per unit of throughput due to lost handling

and storage revenues. Further, segregation restricts the extent of blending to

meet the requirements of contract specification, which is an important source

of the grain handler's gross margin. Finally, there are hidden costs associated

with the loss of flexibility throughout the supply chain (e.g., farmers can only

plant HWW on summer-fallow land in the Great Plains). However, segregation can be managed at the elevators by dedication of single-dump pit elevators to either HRW or HWW. Multiple-dump pit facilities can substantially

reduce the costs of segregation if they designate a dump pit to HRW or

HWW; however, an opportunity cost still exists.

Marketing Will Need to Adapt if HWW

Production Becomes Large-scale

Segregation may be costly initially, but it would become less so if HWW

plantings increased and elevators handled larger volumes. For example,

farmers and elevators in barley areas routinely separate feed barley from

malting barley, and at relatively low cost; also, producers in the northern-tier

States (e.g., North Dakota and Montana) segregate HRS from durum wheat.

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In the PNW, producers and handlers also segregate HRW, HRS, and soft

white wheat.

For production to expand widely, the marketing system will need to

preserve the identity of HWW so that the price premium offered to

producers can be sustained. At present, the identity is preserved largely

through segregation by variety, as stipulated in many contract programs. IP

by variety reflects the fact that HWW varieties differ in their end-use characteristics, and only some varieties are well suited for specific products. For

example, HWW used for oriental noodles requires low- to mid-range protein

content and less gluten strength than HWW for bread. If acreage expands,

HWW could be marketed through IP by class (i.e., a class of wheat with

hard endosperm and white bran) instead of variety, as long as the HWW

quality characteristics for specific end products are maintained. 

Segregation requires that specific HWW varieties be kept separate from

other classes of wheat and other HWW varieties throughout the supply

chain, from production point, handling, storage, and transportation all the

way to end users. Limited onfarm storage space might present more of a

challenge in Kansas as handling volume expands than in the Northern

Plains, where there is typically more farm storage capacity. Also, if production expands, segregating HWW from other classes of wheat may initially

call for hauling the crop to more distant elevators, which increases

marketing costs. However, if HWW increasingly substitutes for red wheat,

nearby storage space may be less of an issue, as was the case with the spike

in 2003 crop production: Elevator space became increasingly available to

handle a larger volume of white wheat. If production expands, grain companies can more readily designate elevators to handle only HWW, reducing the

costs of segregation. Currently, some seed companies or farmer cooperatives

in Kansas contract with selected elevators owned by major grain companies

to handle just HWW. 

While IP is a deviation from the current norm, some other field crops with

specific attributes are produced, handled, and marketed to preserve the

purity of their characteristics. For example, IP corn crops that have already

been commercialized include corn marketed as non-biotech, high oil corn,

hard endosperm or food-grade corn, white corn, waxy corn, nutritionally

enhanced corn, high amylase corn, high lysine corn, seed corn, and organic

corn. However, market viability of HWW is not guaranteed even if the crop

is grown under IP programs, as evidenced by financial difficulties encountered by some suppliers. 

An expansion of HWW production, with the subsequent potential for

export, has implications for contract specifications. Up to this point, sales of

HWW have been largely limited to domestic flour milling. However, there

were cargo shipments during marketing year 2003/04 to Morocco (about

66,400 metric tons), Egypt (37,400 metric tons), South Africa (36,000

metric tons), Lebanon (25,000 metric tons), and other destinations

(including Taiwan, Thailand, Venezuela, Mexico, and the Philippines),

according to GIPSA grain inspection data (USDA). The volume of HWW

exported during the 2003/04 marketing year reached 195,000 metric tons,

accounting for about 20 percent of HWW production, up from 19,400 tons a

year earlier. Current U.S. wheat standards allow a 2-percent limit on

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contrasting classes of wheat and a 5-percent limit on total wheat of other

classes for U.S. No. 2 wheat (the base grade of exported wheat). For pricesensitive buyers, such as those in the Middle East and Indian Subcontinent

(where HWW would be used for making flat breads such as pita because of

its higher extraction rate and lighter color), the standards might be accepted

without requiring tighter contract specifications. However, tighter limits may

be specified in contracts for some quality-sensitive buyers, such as those in

Japan. Buyers who are especially sensitive to purity could contract directly

with U.S. producers under an IP program, even though this kind of contractual arrangement does not exist at present.

How to measure wheat color remains an issue in determining the level of

contrasting classes of wheat. However, the technology to distinguish hard

from soft wheat is available. The single-kernel hardness tester, although

extremely accurate, reportedly costs $50,000 per unit. From the elevator

perspective, whether the cost is affordable depends on the annualized cost

over the unit's lifetime expectancy and the cost per tested bushel, based on

throughput. In contrast, technology for detecting the color of HWW is still

in development. At present, visual inspection is the traditional, less expensive option, but this is becoming more challenging as kernel characteristics

become less standard. For example, some HWW varieties grown in Kansas

in 2001 had the appearance of red wheat, which was mostly attributed to

environmental factors. However, these varieties had all the end-use characteristics of HWW. This technical difficulty was resolved only after a

"waiver" of grain-grading rules was granted through aggressive lobbying by

the Kansas Wheat Commission (i.e., a suspension of color inspection—a

policy that remains in effect). A near-infrared reflectance (NIR) instrument,

which can be used to detect the color of HWW, will not be commercially

available for a few years. 

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Expanded HWW production in the future will depend upon adoption of new

HWW varieties, driven by market demands for this class of wheat. Important factors include the yield potential of new HWW varieties, the likelihood

of sprout damage, the price offered by the market, and any differences in the

costs of production and marketing between HWW and competing classes of

wheat. Differences in producer net returns of HWW and the competing class

depend primarily on yields and prices, since the costs of HWW production

are similar to those of HRW on a per bushel basis (Sears). 

At present, popular HWW varieties (e.g., Trego, a KSU public variety) have

trial yields comparable with those of HRW (e.g, Jagger) in the Central Plains.

Varieties of HWW recently released by major grain companies and farmers'

cooperatives in the private sector (such as GM10005 in northwest Kansas and

Nufrontier in southwest Kansas) were also comparable to Jagger in the 2003

yield trials. Adoption of these yield-improved varieties is promising. However,

it will take time to determine farmer acceptance and to observe if yield gains

in actual farm situations match those in experimental trials. 

Another question revolves around end users' willingness to pay more for

HWW. While there are niche uses in the U.S. for HWW, prices will be

shaped by the market and influenced by competition from other classes of

wheat. The improved extraction rate and favorable color and taste attributes

for specialty products have led buyers to pay price premiums for HWW in

the domestic market. In most cases, price premiums for HWW offered to

producers through contract programs are around 10 cents per bushel

throughout the Great Plains (Taylor).

The expansion of HWW acreage critically depends on whether the increase

in revenues through yield enhancement and price premiums can outweigh

additional marketing costs. A 1999 economic engineering study at KSU

found that in Kansas the cost of segregating wheat into two or three quality

categories ranged from 5.6 cents/bu to 6.5 cents/bu for many country elevators equipped with one drive, one bucket elevator, and two pits (Herrman,

Boland, and Heishman). The cost of segregation was lower for country

elevators equipped with two drives, two bucket elevators, and three pits,

ranging from 2.3 cents/bu to 2.9 cents/bu. If HWW expands beyond the

specialty level, costs will drop with larger volumes and economies of scale.

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Will HWW Returns Outweigh Higher

Marketing Costs?
In the long run, market forces will drive plantings of HWW. The current

incentive program is an important factor, which contributed to a spike in

HWW adoption in 2003 and will have an effect on HWW plantings for

2004-05. Beyond this time, the expansion of HWW plantings can only be

sustained if domestic market forces continue their momentum and export

markets continue to grow.

In addition to market access, farmers will favor HWW plantings if they

receive higher price premiums, which depend on growth in market demand.

Farmers would also favor plantings if HWW has demonstrated yield advantage over HRW varieties, particularly those new HWW varieties recently

released or waiting to be released by private entities. The strategy of

devoting more resources in State breeding programs to HWW in the Plains

and PNW would continue to boost HWW yields relative to HRW varieties.

However, the sprout damage that occurred to the 2004 crop will most likely

put a damper on producers' interest in growing HWW for harvest in 2005.6

This adverse effect could last for more than just a year or two if producers

believe that sprout damage could recur, instead of being a one-time phenomenon. End-use characteristics of whole wheat products made from HWW,

such as less bitter aftertaste and less sugar (and hence fewer calories), white

color, and associated higher fiber content, may appeal to many customers.

Moreover, milling HWW to color standards instead of ash standards would

help sustain price premiums that flour millers are willing to pay HWW

producers due to the resulting higher extraction rate. However, due to strong

competition from Australia—with similar competition developing from

Canada—export markets are not likely to be a major source of price

premiums for HWW in the future. 

Over the next several years, HWW production will be at a crossroads. A

pessimistic view is that plantings of HWW will cease to expand, or will

even decline, if many producers view the recurrence of sprout damage

within a relatively short time as inevitable. These producers can point to

sprout damage that occurred to the 1999 and 2004 HWW crops in Kansas.

However, a more likely scenario is that despite the decline in HWW plantings for the 2004 crop, the acreage will continue to expand, but at a slower

rate. Many HWW producers will probably view the likelihood of sprout

damage recurring soon as slim. In addition, sprout damage-tolerant varieties

could be commercialized in 2-3 years, and this characteristic is an explicit

goal in KSU's HWW breeding program (Madl). 

Ideally, the prospects of HWW plantings over the next decade could be

determined by modeling acreage response to changes in producers' expected

net returns for HWW and competing crops, and to the implementation of

the government incentive program. However, a lack of sufficiently long time

series of HWW data (like that already collected and published by USDA's

National Agricultural Statistics Service for other classes of wheat on

acreage, yield, costs of production, and farm price) makes this modeling

effort practically impossible. As a result, a logistic growth curve, which was

used to measure the growth in the adoption of hybrid corn in the late fifties,

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6Due to seed shortages, some winter wheat producers in Kansas decided

to plant their cropland to HWW for

the 2005 crop. A longstanding

drought, coupled with rains during

harvest time that caused widespread

sprout damage to the 2004 winter

wheat crop, reduced winter wheat seed

production in some areas of Kansas.

Certified seed growers in these areas

reportedly harvested about 30 percent

of the normal production. In contrast,

no seed shortages were reported for

HWW. It is less certain, however,

whether the seed shortages for winter

wheat varieties would translate into an

increase in HWW plantings for harvest

in 2005. 

HWW: Niche or Mainstream?
is used in this study to project the trends in HWW adoption in the United

States (Maddala). The base scenario of the logistic growth curve assumes

that in the long run, producers in major HWW producing States as a whole

will reach an adoption rate of 5 percent—the level achieved in Kansas for

the 2003 crop. 

Results of the logistic growth curve suggest that in the absence of the

government incentive program, HWW would likely account for about 2.5

percent of all wheat grown in major HWW-producing States over the next

decade, up from the current 2.3 percent (fig. 3). The adoption rates of

HWW prior to 2005 are actual data, while those in 2005 and after are trend

projections. 

In addition, the projection for 2005 does not reflect any potential impacts

from sprout damage that occurred to the 2004 crop in the Central Plains

States. Instead, it is part of the logistic growth trend. As indicated earlier,

the government incentive program played an important role in the spike of

the 2003 HWW planted acreage because it offered producers payments that

amounted to a 10-percent increase, on average, in the expected farm price.

Projected adoption rates over the next decade suggest an annual growth rate

of less than 1 percent for HWW, or close to 1 million acres by 2015. At this

level of production, the volume of HWW for cargo shipments to overseas

markets would still be somewhat limited. 

On the other hand, if demand for HWW grows more rapidly than in the

previous several years and is reflected in market premiums, the prospects of

HWW plantings would be brighter than those in the above scenario. Exports

could go to Mexico for making tortillas and pan breads, to Asia and Latin

America for oriental noodles, and to the Middle East and Indian Subcontinent for flat breads. The sustainability of HWW would be enhanced under

this more optimistic scenario in that the adoption rate of HWW in major

producing States is likely to considerably exceed that actually achieved

(about 5 percent) in Kansas in recent years. Needless to say, the expansion

of HWW production would be further accelerated if the government incentive program continues in the future. 

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Figure 3

Logistic growth curve of HWW adoption: 1998-2014

Percent

Source: USDA farm program data, Farm Service Agency USDA.

1998 2000 2002 2004 2006 2008 2010 2012 2014

0

0.5

1.0

1.5

2.0

2.5

Adoption
Gilpin, Justin, Kansas Wheat Commission, Manhattan, Kansas. Personal

communication, Oct. 2004. 

Herrman, Timothy J., Michael Boland, and Adam Heishman. "Economic

Feasibility of Wheat Segregation at Country Elevators." The 2nd Annual

National Wheat Industry Research Forum, Nashville, TN, February 4 and

5, 1999. 

Hou, Gary, Wheat Marketing Center, Inc. Portland, Oregon. Personal communication, Oct. 2004.

Kansas State University. "Kansas Crop Performance Tests, 2003." Available

at http://kscroptests.agron.ksu.edu/03/03wheat/3w-test.asp?N=LR

___________________. 2003 Kansas Performance Tests With Winter Wheat

Varieties, Report of Progress 912, Agricultural Experiment Station and

Cooperative Extension Service. July 2003. 

Kansas Wheat Commission. Kansas Hard White Wheat Quality 2003,

Kansas Wheat Commission Annual Wheat Quality Report, Manhattan,

Kansas. Sept. 2003. Available at http://www.kswheat.com/upload/

HWwheatquality.pdf

Kansas Wheat Commission and the Kansas Association of Wheat Growers.

Hard White Wheat: A Comparison to Hard Red Wheat. Manhattan,

Kansas. (No date)

Maddala, G.S. Econometrics. McGraw-Hill Book Company. 1977.

Madl, Ronald, Wheat Research Center, Kansas State University. Personal

communication, Oct. 2004.

Oades, John, U.S. Wheat Associates at Portland, Oregon. Personal

Communication, Oct. 2004.

Olsen, Ronald, General Mills. Personal communication, Oct. 2004.

Sears, Rollin, Dept. of Agronomy, Kansas State University. Personal communication. May 1998. (Now with AgriPro, Inc.)

Stoddard, Ronald, Nebraska Wheat Board. Personal communication,

September-October 2004.

Taylor, Mykel. Hard White Wheat Industry Profile, Agricultural Marketing

Resource Center, Kansas State University, Jan. 2003. Available at

http://www.agmrc.org/wheat/profiles/hardwhwheatprofile.pdf

U.S. Department of Agriculture, Farm Service Agency. USDA Farm

Program Data. 2004.

U.S. Department of Agriculture (USDA), Grain Inspection, Packers and

Stockyards Administration. U.S. Grain Export Inspection Data. 

June 2004. 

Wheat Marketing Center, Inc. Proceedings of the Washington Wheat

Commission Wheat Quality Workshop, Portland, Oregon. Dec. 13, 2000. 

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References