When Wheat Markets Go Wack…
Flour prices are set to rise as extreme drought, market volatility, and skyrocketing input costs have the whole food chain passing costs down to consumers.
Perfect storm: Nearly 98% of the U.S. spring wheat crop is experiencing drought conditions—rated the worst since 1988. Commodity buyers are swapping increasingly expensive corn for wheat in livestock feed, and logistics costs are continuing to climb. That’s leaving mills big and small to compensate—meaning price increases are in the mixing bowl.
Bone dry: In the Pacific Northwest, production of winter white wheat wanted by Asian buyers for sponge cakes and noodles is withering. The drought is shrinking kernels and raising protein levels, rendering the once-premium product useless for anything but cattle feed.
The decline in quality wheat is already sifting out flour production, with second-quarter 2021 production down .6% from the pre-COVID second quarter of 2019.
And while we’re here: For the first time, an apron-wearing rep is entering the battle over biofuels. Baked goods companies complain that blending mandates raise the costs of staple foods—like donuts.
Renewable Fuel Standard proponents say now isn’t the time to dial down biofuel backing, citing the ag industry’s continued rebound from trade wars, weather events, and COVID-19.