Plentywood herald. [volume] (Plentywood, Mont.) 1908-current, 1928-04-13
BELL POINTS OUT FACTORS
WHICH DETERMINE PAWN
OF PREMIUMS FOR WHEAT

may vary considerably from year to year.
A carload of wheat from Colorado re-
ceived on the market in 1927 tested 1915
per cent protein.
The shortage of such wheat, however,
and the present day demand for uniform
flour OF high protein content to meet
the needs of the baking trade results in
the premiums which nave been paid for
Montana wheat in recent years.
The general wheat price level is de-
termined by the supply of wheat in the
world with factors which have entered
into present marketing systems playing
some part. The premiums paid for high
protein wheat are determined by the do
nestle supply and demand for that
wheat. Premiums vary greatly from day
to day since when wheat of high protein
content is received on the market 1T is
bought and sold very much in the same
way as q piece of machinery at q country
auction sale. Buyers bid against one an
other for a particular carload and the
price paid is determined very largely by
how seriously the wheat is needed and
whether or not there is other wheat of
similar quality available.
The factors which affect premiums are
we'll illustrated by the experiences of the
past four years on the Minneapolis mar
ket. Soon after the war the mills began
testing all wheat for protein. In 1924
the Kansas crop came on with an average
of IL per cent protein and buyers
thought that the supply of high quality
wheat was enough for their needs. Min
nesota and North Dakota, however, had
wheat that averaged only IL per cent
protein and when the small mills OF
these states ordered high protein wheat
from the terminal elevators at Mime
apolis the resultant demand for such
wheat sent premiums skyward. In the
fall of 1924 cash wheat sold at three to
five cents over the future price. After
January l, 1925, wheat with 10 per cent
protein sold at about 10 cents over the
future price and ID per cent protein
wheat brought 20 cents premium.
The 1925 crop had higher protein in
North Dakota and Montana than that of
1924. Also. the volume of high protein
wheat was somewhat greater. Hence, the
premiums in August and early Septem-
Der, 1925, were about six to seven cents
per bushel for IS per cent protein wheat.
These premiums advanced and by the
latter part of October 10 per cent wheat
was bringing IA to is cents over the fu-
ture price. hen buyers noticed they
had all the high protein wheat they
needed but that there was a shortage of
heavy wheat. Consequently some car
loads of heavy. low protein wheat
brought higher premiums than those of
light, high protein wheat.
In 1926 there was much shrivelled
grain Of low test weight and high pro-
tein content. The Kansas crop had suf-
1cient protein to meet milling needs and
mills loaded up on this kind of wheat.
When the spring wheat crop came on to
the market protein needs had been salts
fed and premiums dropped from IL to
four cents on 10 per cent wheat between
August and December. Again substan-
tial premiums were being paid for wheat
OF high test weight.
The wet spring and cool temperatures
of 1927 resulted in q very low average
protein content for both spring and win
ter wheat crops. The wet fall and late
ness of the crop resulted in much wet
wheat. Premiums were being paid for
dry wheat as we'll as for wheat Of high
protein content. AS the shortage of high
protein wheat became more and more ap-
parent protein premiums continued to
advance throughout the marketing sea-
son and In the middle of January
40 cents for 10 per cent wheat.
The high premiums naturally attracted
a flood Of wheat of the desired quality
resulting in some reaction from the high
premiums.
TIL situation during the past four
years indicates that test weight, mois-
ture, foreign materials, may exert an in
upon premiums as we'll as pro-
tein content. although protein content
is usually a factor of greater or less i'm
portance. While Montana farmers could
affect the general level Of wheat
prices they might receive a material
from premiums If they controlled
the marketing of the high protein wheat
produced in this state.