Our Daily Bread - Wheat at a Record High

Wheat prices have surged 34 percent so far this year to a record $12 a bushel, with supplies at a 60-year low. Expect more posts soon on food prices, but already artisan bakers are feeling the pinch. Here's a few snippets from one baker's discussion board:

• "Alberta Red winter (ARW) which I was paying $12.00 (20kg bag) for a year ago will be $27.00 for tomorrow's delivery. Every delivery it is going up."
• "I too now join the ranks of the flour pricing oppressed. My supplier just raised my price for a 50 lb bag of GM All Trump from $17.55 to $29.95. Yes, the end may be near. Maybe I can be a barista next!"
• "My spring wheat just went from $15.90 for a 50 lb. bag to $24.50 for 50 lbs. This is really crazy. I have called every flour supplier in my area and they are telling me to prepare for much higher prices than the $24.50 I am currently paying. The forecast by two of these suppliers was $30.00 a bag by April.

Ouch! I guess we'll see the price of a good loaf going up rather soon.

Update: Bakers are marching on Washington next month to "let our government officials know that there is a crisis happening to bakers of every type and size," according to a press release from the American Bakes Association.

Image source: Baguettes by your's truly, Fromartz.

- Samuel Fromartz

Comments

[Debbie]

I work at a store that sells only certified organic food, in Australia, and we are experiencing the same price increases on Aust-grown organic wheat and rice here (due to drought). Rice prices have increased by 50%. I personally feel it's time to rethink our staples and start trying alternatives.

[Sam Fromartz]

Debbie, thanks for your perspective from down under. The pictures I saw of the drought were just heart-wrenching.

[Morten V Hansen]

On the news the other night it was stated that wheat prices had actually been at this level before (about 20 years ago). It may be that it is not the absolute price levels that are unprecedented but the swiftness with which prices go up?
Sam, perhaps you're in a better position to check this?
Also worth noting, home baking is still worth it, economically, since there has been a similar spike in prices for processed wheat (bread).

[Organic George]

Wheat prices have never been this high even on an inflation adjusted basis.

Ethanol is a big factor in farmers growing corn instead of wheat.

But the biggest reason is the drop in the value of the dollar. Hedge funds and other hot money groups are buying futures contracts as a hedge against the inflation that will come with the falling dollar. Since the Fed has decided to continue to cut interest rates this problem will not go away anytime soon.

But the real tragedy is that many organic farmers are leaving organics to grow food for fuel. Some are being coerced by their banks that will only give them a farm loan if they plant conventional corn or wheat. Others who moved to organic since there was no money in conventional have lost their motivation to be organic.

There will be a net loss of organic acreage in the US this year and possibly 09. That is the heartbreak in higher wheat prices.

[Sam Fromartz]

George, thanks for you comments. I have heard this from others, and it's one reason that organic livestock and dairy farmers are facing such a crisis. Demand is up, but they need to buy feed, and those feed supplies are in very short supply and expensive. Right now, organic dairy farmers are losing money.

I'll be posting more on this shortly,

[Morten V Hansen]

I don't know about the dollar - I am in Denmark and this January it was reported that wheat (flour) prices have gone up by 74% compared to last year. That seems pretty steep to me. It would seem even steeper if the weakened dollar played into it.

[miriam]

yeap, that s the way it is.prices are going higher and higher.i know that i pay almost double now for what i used to pay last year, for a normal wheat bread.prices are rising and will keep on doing so, i believe.
we ll bake our own bread(it would surely taste better)
http://lilywaters.blogsavy.com/

[Ed Bruske]

Sam, I didn't know bakers had discussion boards. But the factoids in those comments are real eye-openers, a real dose of reality compared to the broad brush stuff we've been reading in The Times.