Wheat producer Dustin Johnsrud, center, describes how the Barilla contract creates opportunities for his farm's future. Also pictured, from left, are Greg Viers, Barilla; Chris Quamme, Horizon Resources; Ryan Caffrey, CHS; Matt Meter and Cesare Ronchi, Barilla.
North Dakota wheat fills a need for Italy's pasta lovers.
Nestled in northern Italy, the city of Parma is famous for its architecture, art, prosciutto di Parma and Parmigiano-Reggiano cheese. Parma is surrounded by beautiful countryside teeming with agricultural diversity, from wheat to fruit trees and vineyards to dairy farms. The setting distinguishes both the city’s cuisine and its industry.
One Parma-based business that relies on agriculture is Barilla Group S.p.A. Barilla was founded in 1877 when Pietro Barilla Sr. opened a small bread and pasta shop. Four generations later, the family-owned business is the world’s largest pasta maker and a leading European baker.
While the vast wheat fields of North Dakota are half a world away from Parma, they are top of mind for Barilla wheat buyers. Barilla relies on high-quality wheat grown on North Dakota and in its relationship with CHS to source the key ingredient in premium pasta. In late 2018, nearly five dozen wheat producers and their local cooperatives shipped vessels of wheat to Barilla in Italy using a new specialty trait contract production program coordinated by CHS.
Every year, Barilla’s 28 pasta plants around the world turn 1.5 million tons(43 millions bushels) of durum wheat into premium pastas and other wheat into breads,biscuits and snacks for discerning customers in more than 100 countries.
Stefano Serra, left, represents CHS and works with the Barilla team, including Alberto Costella, center, and Emilio Ferrari, to ensure a steady supply of durum wheat to meet rising pasta demand.
The Barilla pasta plant in Parma, built in 1969, is the largest pasta plant in the world. Keeping the plant supplied with enough durum wheat to produce 300,000 tons of pasta annually requires sourcing from not only Italy but also the U.S., Australia and France, explains Emilio Ferrari, Barilla supply chain purchasing director for durum wheat and semolina. Most of the wheat procured for the Parma plant is raised by Italian farmers and cooperatives, but Italian durum production satisfies only about 60 percent of durum demand for Italian food manufacturers.
Italian wheat yield and quality vary each season due to growing conditions, so wheat is imported to fill the need for specific quality factors. When durum production in Italy decreased from approximately 5 million tons in 2016 to 4.5 million tons in 2017, Barilla knew it needed a source to meet the rising global pasta demand. That’s when Barilla reached out to CHS.
Barilla needed a partner that could guarantee quality from the field to the pasta plant and provide traceability on certain sustainable agricultural practices. Procuring durum from CHS guarantees quality, and the cooperative model provides transparency around production methods, Ferrari explains.
“In the future, it will be more important to have transparency of the supply chain. The consumer wants to know how things are produced and where they come from.”
From Field to Fork
When Barilla contacted CHS, Ryan Caffrey, CHS senior merchant, durum and specialty grains, was ready for the challenge. Since CHS is farmer-owned and has access to rail cars and port terminals with agreements that support global grain movement, CHS can deliver end-to-end supply chain traceability, he explains.
“CHS can control the 8,355- mile journey connecting western North Dakota all the way around the world to Parma,” says Caffrey. CHS-sourced wheat is traceable, starting with the agronomic practices used to grow and harvest it and continuing through segregated storage at cooperatives and in rail cars, ocean vessels and trucks.
“The main qualities we need from durum wheat raised in North Dakota are high protein content and gluten quality,” says Ferrari. Protein level and quality directly impact the final pasta product, he explains. He says these characteristics are “easy to find in North Dakota because of the farmers’ practices and the weather conditions.” The European market is also seeking foods raised without glyphosate, he explains.
Miles of pasta are churned out every day at the Barilla pasta plant in Parma, Italy.
Growers who sign up to deliver on Barilla contracts commit to not applying glyphosate as a preharvest treatment and to keeping the wheat segregated. They receive a premium for meeting desired protein content and gluten quality.
“It is very important that all have worked together to produce something the consumer wants,” Ferrari explains. “That may mean changing the way we do things. If we can develop something that is special and specific to consumer needs, it is an opportunity for the farmer and the entire supply chain.
“To have a connection with a cooperative has great value, as it’s a way to know exactly what is going on with how the wheat is grown,” he adds.
Daryn Edwards, general manager of Ray Farmers Union Elevator, Ray, N.D., has seen plenty of change in his 27 years there. He began his career as one of three employees; now he oversees a staff of nearly 20 full-time employees who provide agronomy and grain expertise to growers of wheat, flax, dry peas and beans, lentils, and other specialty crops.
One constant over the years has been Edwards’ relationship with CHS and its grain-buying team. He works closely with Caffrey, who is responsible for finding durum markets around the world. A global market is critical, since about 60 percent of the wheat that moves through Ray Farmers Union Elevator is durum.
Edwards says the 2017 crop was the first Barilla contract CHS offered to growers. “In 2018, we had approximately 20 growers participating in the contract,” he says.
While the contract has specifications to meet Barilla standards, it has some flexibility with wheat color to accommodate conditions at harvest. “If we have a shower or two come through and we lose some color, it still allows that durum to be marketed on the contract,” Edwards says.
Beyond being glyphosate-free, the contract requires no more than 1.5 parts per million vomitoxin, which Edwards says is relatively standard for U.S. milling-grade durum.
The contracts provide other benefits to the cooperative and its farmer-owners. “Knowing we have a shipment window allows the cooperative to prepare,” says Edwards. “The farmer can haul the durum right off the field to the elevator. There’s no need to store it and wait for a better price.”
Daryn Edwards, general manager of Ray (N.D.) Farmers Union Elevator, left, and Donald Knox, right, evaluate wheat Knox is growing for Barilla.
At Horizon Resources of Williston, N.D., 41 growers participated in the Barilla contract in 2018. “CHS is constantly in contact with not only Barilla but also with every other country that is looking for durum wheat and other grains to find homes for our grains,” says Chris Quamme, the cooperative’s grain division manager.
“There’s a premium with the Barilla contract, so there’s enticement for growers to look at the option,” says Quamme. “And growers are interested in knowing where the crop they are growing is going to end up."
Donald Knox, a wheat grower from Ray, N.D. delivered durum for Barilla to Ray Farmers Union Elevator in 2018. Knox says he sees local cooperative presence as vital to the health of the community as a large employer and economic contributor. He chairs the Ray Elevator Farmers Union board of directors.
Doing business with the local cooperative helps ensure its viability and having contracts offering premiums means more opportunity for both farmers and the cooperative, Knox says. “Ray Elevator does a lot of business with CHS. It’s an important relationship when it comes to handling our grain and connecting us to world markets.”
Based near Epping, N.D., Dustin Johnsrud raised durum for Barilla in 2018, delivering his crop to Horizon Resources. “In northwest North Dakota, we need global markets to purchase our high-quality durum,” he says. “The contract offers some flexibility in crop quality for a premium in the contract.”
The price assurance and flexibility is important as Johnsrud, the father of four young children, thinks about his farm’s viability. “My kids will be the fifth generation on this farm, and I’m doing everything I can to maintain a profitable farm for them to take over in the future,” Johnsrud says. “I trust that Horizon Resources and CHS are delivering my high-quality product to global markets to support my farm’s success.”
“Consumers are interested in knowing where crops are grown,” says Emilio Ferrari, Barilla supply chain purchasing director for durum wheat and semolina. They want supply chain transparency from the farm to the dish on the table, he explains.
In 2017, Barilla began communicating the value behind its pasta with a website barilla.com/itit/guarda-tu-stesso where consumers can learn about the supply chain. The site name translates to “look with your eyes.”
“The site showcases durum wheat origination, where it was raised and carried from the field to the table, and the aspects of the transformation process,” Ferrari explains.
While pasta is a traditional food source in many areas of the world, consumer preferences are evolving.
“We have seen pasta consumption change in the last few years,” says Alberto Costella, marketing manager for Barilla in Italy. “For Barilla, quality has become a mantra.
“Quality influences pasta texture,” he explains. “When you mix semolina fl our and water, the proteins make a link — a ‘net’ that gives strength to pasta and bread. The higher the protein content, the stronger the net. With high-quality wheat, such as U.S. durum, we can have a very strong net, which gives pasta its texture.
“Barilla is very particular about its supply chain,” Costella says. “We like to have relationships with producers and cooperatives so we know where the wheat comes from, where it was grown and how it was managed.”
Learn more: Watch a video about grain partnerships.