Kansas City Board of Trade

The price of wheat…

Beginning in the earliest years of the Twentieth Century, and carrying onward through 2013, from a trading pit in the heart of Kansas City, Missouri, the price of wheat, first, in the United States, then later, for countries the United States traded with, was influenced. Influenced by Kansas City traders. Traders who barked out “buy” and “sell” orders. Buy and sell orders correlated to futures contracts for Hard Red Winter Wheat.

Hard Red Winter Wheat futures contracts – the Kansas City Board of Trade.

Why was this exchange located Kansas City in the first place?

Soil and climate conditions in the Great Plains are perfect for growing wheat. So the trading operation for Hard Red Winter Wheat contracts was going to be based in the Midwest. 

Wheat requires specific conditions in order to grow. Ample sunlight. Well-drained soil. Sufficient water. One additional requirement needed – with Hard Red Winter Wheat – is, exposure to the cold. To each point, Kansas City’s neighboring state to the west is…ideal.

So…Kansas City?

In the late-19th Century, the, “Why Kansas City?” question had a lot to do with where the wheat the traders were trading was coming from – Kansas.

Known as the “Wheat State,” Kansas as a state -along with North Dakota – consistently leads the United States in wheat production. 

For example…

Last year, Kansas had 7,600,000 acres allocated to the planting of wheat. Coupled to 7,150,00 acres of harvested wheat. That was last year. And one of the things that I personally love most about my home state of Kansas is, Kansas just doesn’t radically swing, from whim to whim, all that much. Well, to be more precise, Kansas doesn’t really swing from whim to whim, at all. Which brings us to the question of, “Why Kansas City?” for the Hard Red Winter Wheat exchange.

While there were 7,150,000 harvested acres of Kansas wheat in 2024, 106 years prior – in 1918 – there were 7,250,000 harvested acres of wheat in Kansas. Pretty much the same acreage total. In 1918. And in 1924. 7,000,000 acres.

Step out of 1918 for a moment. And into 2024. While those small Kansas farm houses (and small Kansas farms) would no longer be. And while you will now see high-tech John Deere Combine Harvesters on those Kansas farms – complete with Wi-Fi…and a John Deere price tag, per Harvester, of between $700,000 and $1,000,000 – the “DNA” of the land from which Hard Red Winter Wheat had been harvested – and is still harvested today -pretty much, stayed the same. 

7,000,000 Kansas acres of harvested wheat in 1918. 7,000,000 Kansas acres of harvested wheat in 2024.

Logistically, an exchange for the trading of Hard Red Winter Wheat contracts -and, for that matter, for a board of trade – which was based in Kansas City, just made sense. Long, long ago. And today as well. Kansas City was (and is) the “big city” for Kansas farmers. Perfect for a Hard Red Winter Wheat exchange. 

The origin of the Kansas City Board of Trade traces back to its founding in the year 1856. Founded by a group of local merchants. Led by one Edward H. Allen.

Elected as the 10th mayor of Kansas City, Missouri, Edward H. Allen held the office in 1867 and 1868.

The idea for an exchange taking hold in Kansas City three years after Kansas City, Missouri itself was incorporated as a city. Which happened in 1853. 

The trading of Hard Red Winter Wheat contracts…

Just as the trading floor at the New York Stock Exchange in Manhattan is no longer a crowded hub of frantic traders, scurrying their trades about, those traders who once roamed the pit at the Kansas City Board of Trade – early in the Twentieth Century, and up through 2013 – have so too been replaced. By automation.

In 2012, the Kansas City Board of Trade was purchased by the CME Group – formerly, the  Chicago Mercantile Exchange.

One year later, Kansas City’s trading floor – I.e.: the pit – was merged into the trading floor in Chicago. The trading of Hard Red Winter Wheat futures contracts on a Kansas City trading floor was no more. 

Two years later – in 2015 – CME’s trading floor itself was shut down. Replaced by automation. No pit in Kansas City. No pit in Chicago. The trading of Hard Red Winter Wheat futures contracts became… automated. 

While that old trading floor for Hard Red Winter Wheat in Kansas City – and those busy wheat traders in the pit – is no longer in operation, whenever you add cold cuts and mayonnaise to your sandwich, the price of the wheat – which makes up about 15% of the total cost of the bread you use to surround your cold cuts – is still set in Kansas City at the Kansas City Board of Trade.

In 2025, the Kansas City Board of Trade continues to function as the primary trading platform for Hard Red Winter Wheat futures contracts. Hard Red Winter Wheat futures contracts are a determinant in the price of wheat. Then too, in the price that we ultimately pay a loaf of bread.

Interestingly, the Kansas City Board of Trade had been Kansas City’s original chamber of commerce. So, the origin for the trading of Hard Red Winter Wheat contracts in Kansas City started off as – and in – a chamber of commerce. At 8th and Wyandotte. In Kansas City, Missouri. 

Local growers of Hard Red Winter Wheat. Local traders of Hard Red Winter Wheat. Local buyers of Hard Red Winter Wheat. 

While the local growers of Hard Red Winter wheat are still there – Kansas produces over 300 million bushels of wheat each year…equating to roughly 20% of total wheat production in the United States…there is not much else which is entirely “local” when it comes to the Kansas City Board of Trade. And Hard Red Winter Wheat. 

While 300 million bushels of Hard Red Winter Wheat is produced by 15,000 Kansas farmers each year. While the price of Hard Red Winter Wheat is set in Kansas City at the Kansas City Board of Trade. When it comes to the Kansas City Board of Trade – and Hard Red Winter Wheat – today, it would be wise to substitute the word “global” for “local.”

Local buyers of wheat? Kansas is an exporter. Each year, Kansas exports just about half of the 300 million bushels of Hard Red Winter Wheat harvested in the “Wheat State.”

As the world’s largest contiguous producer of winter wheat – that’s Kansas – having the price of Hard Red Winter Wheat still set in Kansas City is itself, poetic justice.

And establishing the exchange for the trading of wheat contracts in Kansas City – in the late stages of the 19th Century – turned out to be, rather fortuitous…

7,000,0000 acres of harvested wheat in Kansas in 1918. The price of Hard Red Winter Wheat set in Kansas City in 1918.

7,000,000 acres of harvested wheat in Kansas in 2024. The price of Hard Red Winter Wheat set in Kansas City in 2024.

Other than those $1,000,000 John Deere Combine Harvesters that you’ll see on Kansas farms in 2025 – coupled to the fact that Kansas, while a local grower, is really an international exporter – much, does look, feel and operate the same.

Acreage. Crop. Exchange. 1918. 2024. When in comes to American wheat, the more things change the more things stay the same – Kansas City.

The price of wheat in 1918…

The price of wheat in 2025…

The Kansas City Board of Trade.