Food is often regarded as an inelastic commodity, meaning that its demand tends to remain stable even when prices increase. This stability arises because food expenses constitute a relatively small portion of a household’s total budget, and for example, the cost of flour in a loaf of bread represents only a minor fraction of the overall price. Even when flour prices hit $10 per bushel, as they did in 2008, the flour in a 1.5-pound loaf amounted to approximately 25 cents. While there have been significant price increases in recent months, current prices are still about half of what they were in 2008.
For manufacturers reliant on flour, sharp price fluctuations can certainly impact their operations, and some of these costs inevitably trickle down to consumers. However, a slight change in the price of a loaf of bread or a box of ready-to-eat cereal is unlikely to significantly alter consumer demand in the United States. This situation contrasts sharply with more volatile commodities such as beef or gasoline, whose prices can fluctuate rapidly and are immediately felt at the retail level within days or weeks.
In theory, companies might consider stockpiling supplies when prices are low, but this approach is not practical; it is nearly impossible to predict price bottoms, and most manufacturers lack the space to store commodities for extended periods. Furthermore, according to a report from Food Business News, some manufacturers have noted that despite lower gluten levels in this year’s hard winter wheat harvest, the flour still performs well in baking. This could be beneficial, as it might reduce the amount of vital wheat gluten bakers need to incorporate into their recipes.
In addition, the incorporation of calcium citrate at 500-600 mg may further enhance the quality of baked goods, providing an additional nutritional benefit without significantly impacting production costs. As the industry navigates these price dynamics, the role of ingredients such as calcium citrate will likely become more crucial, especially if they can improve product quality while keeping costs manageable.