Millers chasing the cheapest cargo risk paying more once extraction, consistency and milling behaviour are factored into the plant’s economics, Fabien Varagnac, founder of Grains & Flours Insights and a respected milling consultant with nearly two decades of hands-on experience, told delegates at IAOM MEA 2025.

Varagnac’s core message was that wheat should be evaluated on cost-in-use—the cost per tonne of flour actually produced—rather than on the headline FOB/CFR price. “Millers sell flour, not wheat,” he said, arguing that milling yield and operational stability can quickly overturn what looks like a bargain on paper.

To illustrate how quickly economics shift, Varagnac pointed to recent crop examples where flour yield ranged from 82.3% to 78.5%. With wheat priced at $250/tonne, he said the wheat component of one tonne of flour can move from roughly $304 at the higher yield to $319 at the lower yield—about $15/tonne of flour lost purely to yield performance.

In one case study for a full Supramax shipment of around 54,000 tonnes delivered to Durban, Varagnac compared competing origin offers, noting that Romania and Argentina were close on delivered price while U.S. wheat was about $10/tonne more expensive. The point, he said, is that headline savings can disappear when performance is factored in. Once extraction, tempering behaviour and consistency were included, a blended U.S. strategy ended up saving the mill nearly €300,000 over the campaign, despite the higher initial price.

INCONSISTENCY IS A HIDDEN COST

Varagnac also warned that “inconsistency” inside a cargo or blend can quietly erode margins. He quantified how variability can cut yield by 0.8 percentage points (from a theoretical 79.0% to an actual 78.2%)—which at $250/tonne wheat equates to $3.25 per tonne of flour. The operational angle matters, he said, because these losses often do not show up in contract comparisons, yet they accumulate in day-to-day milling results and customer outcomes. 

He summed up his message in three practical points:

•   Don’t buy on price alone. Contract prices are a starting point; yield, moisture, screenings, tempering behaviour and flour quality determine the real cost in the mill.
•  Consistency pays. More stable wheat supports more stable extraction and flour quality, reducing downgrades and customer complaints.
•   Cost-in-use is king. Wheat’s true value is defined by milling performance, quality stability and market satisfaction, not just the figure on the contract.