A Bushel and a Peck

It seemed like the rains were never going to end this year, but they finally did and we finally got our wheat harvested. Now we can sell that wheat and reap what we have sown.

To sell wheat I call Mike Earnhart at Ag Plus and ask him, “How much is wheat going for?” If it was last Friday when I did that, Mike would reply, “$4.50 a bushel.”

A bushel is a measurement of volume. Like inches, feet, and miles, it comes from measurements used in England in the Middle Ages. Our ‘modern’ bushel is based on something called a Winchester bushel which is a cylinder 18 ½ inches in diameter and 8 inches tall. If you calculate the volume of that cylinder you get an irrational number, a fraction that never ends and never repeats, in this case 2150.4201713… cubic inches. To simplify that, in the U.S. we re-defined the bushel to be exactly 2150.42 cubic inches.

However, none of that really matters. Despite the fact that prices for grain are given in bushels, the price is actually based on weight. If you’ve glanced at Ag Plus as you drive by you’ve noticed there’s a big scale out front for weighing trucks and wagons full of grain, but there’s nothing for measuring volume. There isn’t a big pile of bushel baskets sitting in front of the office.

The United States Department of Agriculture sets the standard weight per bushel of all grains. When Mike tells me a bushel of wheat is going for $4.50, he’s actually saying that’s the price for 58 pounds of wheat. To add to the confusion different grains have different weights per bushel, corn for example is 54 pounds per bushel. And different grades of grain have different weights: grade 1 soft red winter wheat is 60 lbs per bushel and grade 2 is 58 lbs per bushel.

You may be thinking this doesn’t make any sense at all, why not just sell all grain by the pound? Pick some nice round number like 100 pounds and price it all that way. Using last Friday’s prices that would be $7.76 per 100 lbs. Then when you rolled over the scales you’d know exactly what you were getting paid, you wouldn’t have to divide by pounds per bushel to figure it out. Wouldn’t that be simpler and clearer?

If you thought that, you’d be right. Like using the metric system for distance and weight, most of the rest of the world prices grain by the metric ton. Checking last week’s prices for Australian wheat shows it’s going for 240 Australian dollars per metric ton. Doing the conversion from metric tons to pounds and Australian dollars to US dollars works out to about $4.61 per bushel in our measurements. I could make an extra 11 cents a bushel by shipping my wheat to Australia instead of Ag Plus!

It’s a long way to Australia, I think I’ll keep hauling my bushels of wheat to Ag Plus.