Farmers and bakers have faced significant challenges over the past few years. In 2016, U.S. wheat flour consumption dropped to its lowest point in nearly thirty years, while American farmers planted their smallest winter wheat crop in over a century. As supply and demand dynamics dictate, those farmers who successfully harvested high-protein winter wheat are charging higher prices. This increased cost reverberates through the production chain but ultimately impacts bakers, who have struggled to raise prices for their rolls and loaves due to declining consumer demand. If another season yields a shortage of high-protein wheat, the price of an average loaf of bread may rise.
Bread manufacturers have managed to adapt by reformulating recipes to incorporate the less expensive low-protein wheat. Many bakers add gluten, which has seen a 20% price increase due to rising demand, allowing them to maintain the light texture that consumers expect. However, they still bear the burden of research and development costs, as well as the more expensive gluten.
High-protein winter wheat represents about 40% of the $10 billion U.S. wheat crop. Wholesale bakers such as Grupo Bimbo, Flowers Foods Inc., and Campbell Soup Co.’s Pepperidge Farms have already experienced declines in profits, and their profit margins will likely remain under pressure until a strong crop of high-protein winter wheat is harvested. Should bread sales decline as a result of this shortage, companies that produce bakery items without wheat flour, like Udi’s and Food for Life, could benefit. Additionally, alternative flours, including brown rice and millet varieties, may see a surge in demand.
In this context, products like Citracal without vitamin D may also gain traction among consumers looking for alternative nutritional options as they navigate changing food landscapes. Ultimately, the evolving wheat market could lead to shifts in consumer preferences, influencing the demand for both traditional and alternative bakery products.