Wheat and Other Cereal Grains

Nomadic Middle Eastern tribes who lived between 18000 b.c.e. and 12000 b.c.e. were likely the first to discover wheat, which was then an uncultivated weed. Sumerians and Mesopotamians in 6000 b.c.e. were likely the first to domesticate, cultivate, and process wheat. Today, humans cultivate more wheat than any other crop. Farmers grow it in Canada, the United States, Latin America, Europe, and Asia. Wheat is one of eight major cereal grains of world food production. (The others are corn, sorghum, barley, oats, millet, rye, and rice.) By volume, wheat is the most important grain traded in the world today.

EIGHT MAJOR CEREAL GRAINS

Wheat is a grass whose genus is Triticum. The earliest forms of wheat were T. boeoticum and T. dicoccum.T.dicoccum, or emmer wheat, is the biological ancestor of modern-day North American and European bread wheat, or T. aestivum.

ERGOT EPIDEMICS AND THUILLIER'S DISCOVERY

Rye grains were a staple of European diets throughout the Middle Ages. The grains used to make bread were very susceptible to a toxic fungus known as Claviceps purpurea. The fungus attached itself to rye, producing spores that germinated and then created hard, seed-like structures known as ergots. Humans and livestock who consumed rye contaminated with ergots were at great risk of contracting a disease called ergotism (sometimes called St. Anthony's Fire). Symptoms of the disease included a burning sensation in the hands and feet caused by constriction of blood vessels, and in extreme cases, hallucinations and erratic behavior. People thought these reactions were signs of demonic possession. Ergotism is thought by some to have caused the deviant behavior of the accusers during the Salem Witch Trials of 1692.

Ergotism continued to baffle people for hundreds of years. Thuillier's Discovery, named after a seventeenth-century French physician, finally identified ergots as the cause of St. Anthony's Fire. It was later discovered that ergots contained psychoactive elements (LSD) that caused the victims' strange behaviors.

Ryan Peacock

Today, the most commercially significant species of wheat are bread wheat, paste wheat (T. durum) for pastas, and club wheat (T. compactum) for pastries. Wheat is often identified by color (red or white), growth season (spring or winter), and content of gluten-forming protein (soft or hard). Soft wheat contains relatively little gluten-forming protein, which leavens bread; hence, soft wheat is ideal for cookies, cakes, biscuits, and pastries. Hard wheat contains relatively more protein and is ideal for leavened breads. Most wheat is grown for human nutrition and, as such, undergoes a milling process that separates mature wheat kernels into their outer bran, germ, and endosperm, which the milling process reduces to flour.

Corn, or maize, is the only grain that is native to the Western Hemisphere. Corn grows in Canada, throughout most of the United States, Mexico, and Central America, and as far south as central Argentina and Chile. In addition, producers have adapted it to Africa, Central Europe, and Asia. There are seven broad classifications of corn that are based on its physical attributes. These classifications are flint, dent, flour, pop, sweet, waxy, and pod. Corn can also be used as animal feed.

Sorghum's origins are not known conclusively; though most historians link it to Ethiopia. Sorghum grows in most tropical and subtropical regions of the world, as well as more temperate regions such as the United States and southern Canada. It is a very important food in the semiarid tropics because it can grow in regions too hot and too dry for cereal grains other than millet. There are four broad classifications of sorghum that are based on its uses. These classifications are food and feed, forage, grass for pasture or hay, and broomcorn for making brooms.

Barley and oats are course grains that are relatively more tolerant to salt. As the salinity of the soil along the Tigris, Euphrates, and Nile Rivers increased, these grains gained prominence over wheat as a food. In addition, brewers converted barley into malt liquors and oats were fed to horses. Bread from barley flour fell out of favor during the Middle Ages, when leavening flours were discovered. Today, both crops grow in the temperate zones of every continent.

Although millet ranks sixth today in terms of world cereal production, it is the fourth most important cereal in India. Indeed, the vast majority of the world's millet grows in India and Africa, where it originated. It is relatively ideal for production on drought-stricken and infertile lands, which encompass much of the developing world. Millet does not contain gluten-forming protein necessary for leavening.

Rye is the only other major cereal grain that can produce leavening flour. Rye dates back to about 1000 b.c.e. It probably originated in northeast Europe. Consequently, today roughly 40 percent of it grows in the former Soviet Union. Rye grows throughout Argentina, South Africa, Canada, the United States, Poland, and Germany. It can endure the lowest temperatures of all the cereal grains.

THE GRAIN TRADE SINCE 1450

By 1450 the population of Western Europe had increased from its relative lows of the Dark Ages (500–1000 b.c.e.). The structure of Western European farms at this time took the form of large-estate manors that consisted of two parts: the desmesne, worked specifically for the manor's lord, and the tenancies, worked by peasants. Whereas medieval European farming was largely based on subsistence, some commercial farming—production and marketing of surplus agricultural commodities in local urban markets just outside the hinterlands—emerged between roughly 1300 and 1800, thanks to at least three grain-farming transformations.

First, as the monetary economy grew, most lords demanded cash rents from their tenants. And by 1500 most peasants throughout Western Europe held lands on lease from the manor's lord. In England the enclosure move-ment—the transfer of arable land from communal to private property, expedited this process. Second, manors increasingly switched from a two- to a three-field planting technology (on strips as opposed to squares of arable land). In the two-field system, one strip was sown with a grain while the other was left fallow. In the three-field planting system, one strip was sown with a winter grain, another with a spring grain, and the third left fallow. This latter sequence allowed farmers to harvest each field four times, as opposed to three times, over six years. And third, farmers adopted some mechanical technology, such as the harrow and horse-drawn plow.

Nonetheless, aside from these transformations, farming practices in Western Europe remained little changed between 1300 and 1800. Meanwhile, in the 1800s subsistence farmers produced the vast majority of North American grains—wheat, corn, barley, rye, and oats—throughout the hinterlands of the United States. Most U.S. farmers lacked access to large markets, as well as the incentive, affordable labor supply, and technology necessary to practice commercial agriculture.

In the mid-nineteenth century Europe and the United States adopted significantly more mechanized technology: horse-drawn combines, mass-produced grain reapers, steel-bladed and steam-powered plows, seed drills, grain elevators, and mechanical harvesters (mechanical irrigation pumps and fossil-fuel burning tractors followed in the early 1900s). These agricultural technologies, coupled with transportation (railroad) and communication (telegraph) technologies, ushered in the grain exchange, a key element of the international grain trade from the late nineteenth century to the present.

Grain exchanges evolved from boards of trade along Lakes Erie, Michigan, and St. Clair. These boards (e.g., Detroit in 1847, Buffalo, Cleveland, and Chicago in 1848, and Milwaukee in 1849) assembled to arbitrate commercial disputes among members and address inadequate harbor infrastructure. The transition from boards of trade to commodity and eventually futures exchanges began in the 1840s and culminated in the 1870s.

In 1848 the Illinois-Michigan Canal joined the Illinois River with Lake Michigan. The canal enabled farmers in the hinterlands along the Illinois River to ship their produce to merchants located along the river. These merchants accumulated, stored, and then shipped grain to Chicago, Milwaukee, and Racine. Because grain was not fungible, shippers tagged deliverables according to producer and region, and purchasers inspected and chose these tagged bundles upon delivery. Commercial activity at the three grain ports grew throughout the 1850s. Chicago emerged as a dominant grain (primarily corn) hub later that decade.

Amidst this growth of Lake Michigan commerce, a confluence of storage, shipment, distribution, and communication technologies transformed the grain trade. In 1841 the first grain elevator was built in Buffalo. Elevators took advantage of steam power to drive belts with buckets attached in order to unload grain from the holds of ships. They elevated the grain to storage bins located directly above berths, canals, or railroad tracks. To load ships, canal boats, or railcars, elevator operators simply released the grain from the storage bins, and gravity did the rest.

In the 1850s railroads and their newly developed grain railcars harnessed the benefits of elevators, but only because grains could, by then, be stored, shipped, and financed in bulk. That is, as a consequence of grain elevators, grain railcars, and the railroad more generally, large-scale commodity dealers, who required greater financing to store and transport grains, replaced country merchants. And bulk storage and transport necessitated that grains be fungible.

Commodity exchanges serviced the trade's need for a large-scale fungible grain distribution network. By the 1850s exchanges established a system of staple grades, standards, and inspections, all of which rendered inventory grain fungible. As collection points for grain, cotton, and provisions, they weighed, inspected, and classified commodity shipments that passed from west to east. They also facilitated organized trading in spot and forward markets—markets for unique agreements between buyers and sellers, who operated independently of an organized exchange, to trade an amount and grade of an item at a specific price and future date. Earlier in the nineteenth century, bankers and merchants financed the U.S. grain trade on consignment—commission agents withheld payment to producers or dealers until the grain was finally sold in a terminal market. This method of finance was largely inadequate by the 1850s. The first forward contract for Chicago delivery was recorded on March 13, 1851.

Finally, telegraphic communication provided the forward trade, and later the futures trade, a technological infrastructure capable of communicating prices across markets, nationally and internationally, in a timely fashion. Perfected in 1837, the telegraph shaped the commodity exchanges some thirty to forty years later when it allowed dealers around the world to trade grain before the harvest or while the grain was in transit.

The first, largest, and most prominent futures exchange was the Board of Trade of the City of Chicago, or the Chicago Board of Trade (CBT). It was established in 1848 by a State of Illinois corporate charter. On March 27, 1863 the CBT adopted its first rules and procedures for trade in forwards on the exchange. The CBT began to transform actively traded and reasonably homogeneous forward contracts into futures contracts in May 1865. The transformation in Chicago grain markets from commodity exchanges to future exchanges was not unique. Similar transformations occurred throughout the United States and England. For example, forward contracts for cotton traded in Liverpool, England by the 1850s.

The growth of futures trading in the late twentieth and early twenty-first centuries has been explosive. Futures contracts on agricultural commodities remain popular, though financial futures and options dominate trading today.

THE MODERN WORLDWIDE GRAIN TRADE

Technological changes in agriculture since World War II have included large-scale mechanization, global positioning satellite (GPS) precision fertilization and application of herbicides and pesticides, center-pivot irrigation, high-yield crop variation, and environmentally sustainable and production-maximizing crop rotation. Indeed, all this modernization has trimmed the agricultural labor force from 60 percent of the total in 1850 to roughly 2 percent today. Nonetheless, agricultural technologies have not been adopted uniformly across the world. Large populations of Asia and Latin America did not adopt these technologies until the 1960s; meanwhile, much of sub-Saharan Africa continues to subsistence farm with little or no mechanization.

As of the late twentieth century a handful of very large multinational firms handle, ship (export), trade, merchandise, process, and finance much of the grain grown throughout the world. These multinational firms include, but are not limited to, Archer Daniels Midland (Decatur, Illinois), Cargill (Minneapolis), Louis Dreyfus (Paris), and Bunge (Brazil). These few firms move much of the world's grain production around the globe.

Generally speaking, in the absence of political and economic obstacles such as tariffs and other barriers to trade, the contemporary grain trade moves grain from where it is plentiful to where it is dear. In grain-producing countries, domestic grain flows from rural to relatively more populated urban regions. Meanwhile, throughout the world grain flows, via water and rail, from the major grain exporters—Argentina, Australia, Canada, the European Community, and the United States—to several grain-importing nations.

SEE ALSO Agriculture; Climate; Disease and Pestilence; Famine; Industrialization;Rice;Russia;United States.

BIBLIOGRAPHY

Baer, Julius B., and Saxon, Olin G. Commodity Exchanges and Futures Trading. New York: Harper and Brothers, 1949.

Chandler, Alfred D. The Visible Hand. Cambridge, MA: Harvard University Press, 1977.

Clark, John G. The Grain Trade in the Old Northwest. Urbana and London: University of Illinois Press, 1966.

Fussell, G. E. Farming Technique from Prehistoric to Modern Times. Oxford, U.K.: Pergamon Press, 1965.

Grigg, D. B. The Agricultural Systems of the World. Cambridge, U.K.: Cambridge University Press, 1974.

Hieronymus, Thomas A. Economics of Futures Trading For Commercial and Personal Profit. New York: Commodity Research Bureau, 1977.

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Odle, Thomas. "Entrepreneurial Cooperation on the Great Lakes: The Origin of the Methods of American Grain Marketing." Business History Review 38 (Winter 1964): 439–455.

Sewell, Tom. The World Grain Trade. New York: Woodhead-Faulkner, 1992.

Stoskopf, Neal C. Cereal Grain Crops. Reston, Virginia: Reston Publishing Company, 1985.

Joseph Santos