The Big Wheat Deal

To hear Nikita Khrushchev tell it, the $250 million wheat deal between the U.S. and the Communist bloc was about to crumble like a dry cooky. "I do have a feeling one might not come to an agreement," he told Moscow's visiting U.S. businessmen. "It may well happen that we will let you eat your own grain."

As it turned out, Khrushchev's information was slightly stale. After a month of fruitless haggling, the Russians had indeed been on the verge of calling the whole deal off early last week. Their main complaint was a provision that the wheat must move in U.S. ships, whose rates were as much as $10 a ton higher than foreign rates.

Since the grain deal is tricky politics at best, the Kennedy Administration is doing its best to make it appear no giveaway. Anxious to see the deal go through, U.S. shippers have agreed to trim their prices to within a few dollars of foreign rates. The Administration also has another way around its shipping dilemma: let its eager private dealers sell the grain on a "cost-and-freight" basis, under which they will arrange the shipping themselves, and include the cost in the total package. The dealers will take a chance on getting smaller profits if they have to ship American, but can reap fatter profits if they move the grain in foreign bottoms.

The Russian negotiators in Washington cabled details of the plan to Moscow, and less than 24 hours after he had threatened to break off the talks, Khrushchev declared that "the grain dealers in America have made a reasonable approach." At week's end the Russians accepted the terms, and the scramble was on among grain companies for orders that are expected to total 150 million bushels of wheat.

For U.S. feed grain dealers and elevator operators, the wheat cannot move fast enough. Bumper harvests have gorged Midwestern elevators, and millions of bushels of corn and sorghum have just been dumped on the ground. In Hannibal, Mo., the corn is higher than an elephant's eye. Smack in the middle of lower Broadway lie 57,304 bushels of corn in a pile two stories high. The U.S. has lately sold corn to Hungary. Would Russia like some?

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